name: Income Tax Act
unofficial_text: # Income Tax Act
  
  RSC 1985, c 1 (5th Supp)
  
  An Act respecting income taxes
  
  ## Short Title 
  
  ### Short Title
  
  1 This Act may be cited as the Income Tax Act.  
  
  # PART I 
  
  ## Income Tax 
  
  # DIVISION A 
  
  ## Liability for Tax 
  
  ### Tax payable by persons resident in Canada
  
  2 (1) An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year. 
  
  ### Taxable income
  
  (2) The taxable income of a taxpayer for a taxation year is the taxpayer’s income for the year plus the additions and minus the deductions permitted by Division C. 
  
  ### Tax payable by non-resident persons
  
  (3) Where a person who is not taxable under subsection 2(1) for a taxation year 
  (a) was employed in Canada, 
  (b) carried on a business in Canada, or 
  (c) disposed of a taxable Canadian property, at any time in the year or a previous year, an income tax shall be paid, as required by this Act, on the person’s taxable income earned in Canada for the year determined in accordance with Division D. 
  
  # DIVISION B 
  
  ## Computation of Income 
  
  ## Basic Rules 
  
  ### Income for taxation year
  
  3 The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules: 
  (a) determine the total of all amounts each of which is the taxpayer’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada, including, without restricting the generality of the foregoing, the taxpayer’s income for the year from each office, employment, business and property, 
  (b) determine the amount, if any, by which 
  (i) the total of 
  (A) all of the taxpayer’s taxable capital gains for the year from dispositions of property other than listed personal property, and 
  (B) the taxpayer’s taxable net gain for the year from dispositions of listed personal property, exceeds 
  (ii) the amount, if any, by which the taxpayer’s allowable capital losses for the year from dispositions of property other than listed personal property exceed the taxpayer’s allowable business investment losses for the year, 
  (c) determine the amount, if any, by which the total determined under paragraph (a) plus the amount determined under paragraph (b) exceeds the total of the deductions permitted by Subdivision E in computing the taxpayer’s income for the year (except to the extent that those deductions, if any, have been taken into account in determining the total referred to in paragraph (a), and 
  (d) determine the amount, if any, by which the amount determined under paragraph (c) exceeds the total of all amounts each of which is the taxpayer’s loss for the year from an office, employment, business or property or the taxpayer’s allowable business investment loss for the year, and for the purposes of this Part, 
  (e) where an amount is determined under paragraph (d) for the year in respect of the taxpayer, the taxpayer’s income for the year is the amount so determined, and 
  (f) in any other case, the taxpayer shall be deemed to have income for the year in an amount equal to zero. 
  
  ### Income or loss from a source or from sources in a place
  
  4 (1) For the purposes of this Act, 
  (a) a taxpayer’s income or loss for a taxation year from an office, employment, business, property or other source, or from sources in a particular place, is the taxpayer’s income or loss, as the case may be, computed in accordance with this Act on the assumption that the taxpayer had during the taxation year no income or loss except from that source or no income or loss except from those sources, as the case may be, and was allowed no deductions in computing the taxpayer’s income for the taxation year except such deductions as may reasonably be regarded as wholly applicable to that source or to those sources, as the case may be, and except such part of any other deductions as may reasonably be regarded as applicable thereto; and 
  (b) where the business carried on by a taxpayer or the duties of the office or employment performed by a taxpayer was carried on or were performed, as the case may be, partly in one place and partly in another place, the taxpayer’s income or loss for the taxation year from the business carried on, or the duties performed, by the taxpayer in a particular place is the taxpayer’s income or loss, as the case may be, computed in accordance with this Act on the assumption that the taxpayer had during the taxation year no income or loss except from the part of the business that was carried on in that particular place or no income or loss except from the part of those duties that were performed in that particular place, as the case may be, and was allowed no deductions in computing the taxpayer’s income for the taxation year except such deductions as may reasonably be regarded as wholly applicable to that part of the business or to those duties, as the case may be, and except such part of any other deductions as may reasonably be regarded as applicable thereto. 
  
  ### Idem
  
  (2) Subject to subsection 4(3), in applying subsection 4(1) for the purposes of this Part, no deductions permitted by sections 60 to 64 apply either wholly or in part to a particular source or to sources in a particular place. 
  
  ### Deductions applicable
  
  (3) In applying subsection 4(1) for the purposes of subsections 104(22) and 104(22.1) and sections 115 and 126, 
  (a) subject to paragraph (b), all deductions permitted in computing a taxpayer’s income for a taxation year for the purposes of this Part, except any deduction permitted by any of paragraphs 60(b) to (o), (p), (r) and (v) to (z), apply either wholly or in part to a particular source or to sources in a particular place; and 
  (b) any deduction permitted by subsection 104(6) or 104(12) shall not apply either wholly or in part to a source in a country other than Canada. 
  (4)  [Repealed, 1996, c. 21, s. 2(1)]  
  
  # SUBDIVISION A 
  
  ## Income or Loss from an Office or Employment 
  
  ## Basic Rules 
  
  ### Income from office or employment
  
  5 (1) Subject to this Part, a taxpayer’s income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year. 
  
  ### Loss from office or employment
  
  (2) A taxpayer’s loss for a taxation year from an office or employment is the amount of the taxpayer’s loss, if any, for the taxation year from that source computed by applying, with such modifications as the circumstances require, the provisions of this Act respecting the computation of income from that source. 
  
  ## Inclusions 
  
  ### Amounts to be included as income from office or employment
  
  6 (1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable 
  
  ### Value of benefits
  
  (a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment, except any benefit 
  (i) derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a pooled registered pension plan, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan, 
  (ii) under a retirement compensation arrangement, an employee benefit plan or an employee trust, 
  (iii) that was a benefit in respect of the use of an automobile, 
  (iv) derived from counselling services in respect of 
  (A) the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or 
  (B) the re-employment or retirement of the taxpayer, 
  (v) under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11), or 
  (vi) that is received or enjoyed by an individual other than the taxpayer under a program provided by the taxpayer’s employer that is designed to assist individuals to further their education, if the taxpayer deals with the employer at arm’s length and it is reasonable to conclude that the benefit is not a substitute for salary, wages or other remuneration of the taxpayer; 
  
  ### Personal or living expenses
  
  (b) all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except 
  (i) travel, personal or living expense allowances 
  (A) expressly fixed in an Act of Parliament, or 
  (B) paid under the authority of the Treasury Board to a person who was appointed or whose services were engaged pursuant to the Inquiries Act, in respect of the discharge of the person’s duties relating to the appointment or engagement,  
  (ii) travel and separation allowances received under service regulations as a member of the Canadian Forces, 
  (iii) representation or other special allowances received in respect of a period of absence from Canada as a person described in paragraph 250(1)(b), (c), (d) or (d.1), 
  (iv) representation or other special allowances received by a person who is an agent-general of a province in respect of a period while the person was in Ottawa as the agent-general of the province, 
  (v) reasonable allowances for travel expenses received by an employee from the employee’s employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employee’s employer, 
  (v.1) allowances for board and lodging of the taxpayer, to a maximum total of $300 for each month of the year, if 
  (A) the taxpayer is, in that month, a registered participant with, or member of, a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age, 
  (B) the allowance is in respect of the taxpayer’s participation or membership and is not attributable to services of the taxpayer as a coach, instructor trainer, referee, administrator or other similar occupation, 
  (C) the employer is a registered charity or a non-profit organization described in paragraph 149(1)(l), and 
  (D) the allowance is reasonably attributable to the cost to the taxpayer of living away from the place where the employee would, but for the employment, ordinarily reside, 
  (vi) reasonable allowances received by a minister or clergyman in charge of or ministering to a diocese, parish or congregation for expenses for transportation incident to the discharge of the duties of that office or employment, 
  (vii) reasonable allowances for travel expenses (other than allowances for the use of a motor vehicle) received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling away from 
  (A) the municipality where the employer’s establishment at which the employee ordinarily worked or to which the employee ordinarily reported was located, and 
  (B) the metropolitan area, if there is one, where that establishment was located, in the performance of the duties of the employee’s office or employment, 
  (vii.1) reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment, 
  (viii)  [Repealed, 1999, c. 22, s. 2]  
  (ix) allowances (not in excess of reasonable amounts) received by an employee from the employee’s employer in respect of any child of the employee living away from the employee’s domestic establishment in the place where the employee is required by reason of the employee’s employment to live and in full-time attendance at a school in which the language primarily used for instruction is the official language of Canada primarily used by the employee if 
  (A) a school suitable for that child primarily using that language of instruction is not available in the place where the employee is so required to live, and 
  (B) the school the child attends primarily uses that language for instruction and is not farther from that place than the community nearest to that place in which there is such a school having suitable boarding facilities, and, for the purposes of subparagraphs (v), (vi) and (vii.1), an allowance received in a taxation year by a taxpayer for the use of a motor vehicle in connection with or in the course of the taxpayer’s office or employment shall be deemed not to be a reasonable allowance 
  (x) where the measurement of the use of the vehicle for the purpose of the allowance is not based solely on the number of kilometres for which the vehicle is used in connection with or in the course of the office or employment, or 
  (xi) where the taxpayer both receives an allowance in respect of that use and is reimbursed in whole or in part for expenses in respect of that use (except where the reimbursement is in respect of supplementary business insurance or toll or ferry charges and the amount of the allowance was determined without reference to those reimbursed expenses); 
  
  ### Director’s or other fees
  
  (c) director’s or other fees received by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment; 
  
  ### Allocations, etc., under profit sharing plan
  
  (d) amounts allocated to the taxpayer in the year by a trustee under an employees profit sharing plan as provided by section 144 except subsection 144(4), and amounts required by subsection 144(7) to be included in computing the taxpayer’s income for the year; 
  
  ### Standby charge for automobile
  
  (e) if at any time in the year an automobile is made available to the taxpayer, or to a particular person who does not deal at arm’s length with the taxpayer, by another person (referred to in this paragraph as “the employer”) because of or as a consequence of a previous, the current or an intended office or employment of the taxpayer, the amount, if any, by which 
  (i) an amount that is a reasonable standby charge for the automobile for the total number of days in the year during which it was made so available exceeds 
  (ii) the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the particular person who does not deal at arm’s length with the taxpayer, to the employer for the use of the automobile; 
  
  ### Group sickness or accident insurance plans
  
  (e.1) the total of all amounts contributed in the year in respect of the taxpayer by the taxpayer’s employer to a group sickness or accident insurance plan, except to the extent that the contributions are attributable to benefits under the plan that, if received by the taxpayer, would be included in the taxpayer’s income under paragraph (f) in the year the benefits are received if that paragraph were read without regard to its subparagraph (v); 
  
  ### Employment insurance benefits
  
  (f) the total of all amounts received by the taxpayer in the year that were payable to the taxpayer on a periodic basis in respect of the loss of all or any part of the taxpayer’s income from an office or employment, pursuant to 
  (i) a sickness or accident insurance plan, 
  (ii) a disability insurance plan, 
  (iii) an income maintenance insurance plan, or 
  (iii.1) a plan described in any of subparagraphs (i) to (iii) that is administered or provided by an employee life and health trust, to or under which the taxpayer’s employer has made a contribution, not exceeding the amount, if any, by which 
  (iv) the total of all such amounts received by the taxpayer pursuant to the plan before the end of the year and 
  (A) where there was a preceding taxation year ending after 1971 in which any such amount was, by virtue of this paragraph, included in computing the taxpayer’s income, after the last such year, and 
  (B) in any other case, after 1971, exceeds 
  (v) the total of the contributions made by the taxpayer under the plan before the end of the year and 
  (A) where there was a preceding taxation year described in clause (iv)(A), after the last such year, and 
  (B) in any other case, after 1967; 
  
  ### Canadian Forces members and veterans amounts
  
  (f.1) the total of all amounts received by the taxpayer in the year on account of 
  (i) an earnings loss benefit, an income replacement benefit (other than an amount determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of the Veterans Well-being Act, as modified, where applicable, under Part 5 of that Act), a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Veterans Well-being Act, or  
  (ii) an amount payable under any of subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of the Veterans Well-being Act ;  
  
  ### Employee benefit plan benefits
  
  (g) the total of all amounts each of which is an amount received by the taxpayer in the year out of or under an employee benefit plan or from the disposition of any interest in any such plan, other than the portion thereof that is 
  (i) a death benefit or an amount that would, but for the deduction provided in the definition of that term in subsection 248(1), be a death benefit, 
  (ii) a return of amounts contributed to the plan by the taxpayer or a deceased employee of whom the taxpayer is an heir or legal representative, to the extent that the amounts were not deducted in computing the taxable income of the taxpayer or the deceased employee for any taxation year, 
  (iii) a superannuation or pension benefit attributable to services rendered by a person in a period throughout which the person was not resident in Canada, or 
  (iv) a designated employee benefit (as defined in subsection 144.1(1)); 
  
  ### Employee trust
  
  (h) amounts allocated to the taxpayer for the year by a trustee under an employee trust; 
  
  ### Salary deferral arrangement payments
  
  (i) the amount, if any, by which the total of all amounts received by any person as benefits (other than amounts received by or from a trust governed by a salary deferral arrangement) in the year out of or under a salary deferral arrangement in respect of the taxpayer exceeds the amount, if any, by which 
  (i) the total of all deferred amounts under the arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for preceding taxation years exceeds 
  (ii) the total of 
  (A) all deferred amounts received by any person in preceding taxation years out of or under the arrangement, and 
  (B) all deferred amounts under the arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years; 
  
  ### Reimbursements and awards
  
  (j) amounts received by the taxpayer in the year as an award or reimbursement in respect of an amount that would, if the taxpayer were entitled to no reimbursements or awards, be deductible under subsection 8(1) in computing the income of the taxpayer, except to the extent that the amounts so received 
  (i) are otherwise included in computing the income of the taxpayer for the year, or 
  (ii) are taken into account in computing the amount that is claimed under subsection 8(1) by the taxpayer for the year or a preceding taxation year; 
  
  ### Automobile operating expense benefit
  
  (k) where 
  (i) an amount is determined under subparagraph 6(1)(e)(i) in respect of an automobile in computing the taxpayer’s income for the year, 
  (ii) amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the employer within the meaning of paragraph (e) that made the automobile available (in this paragraph referred to as the “payor”), and 
  (iii) the total of the amounts so paid or payable is not paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer, the amount in respect of the operation of the automobile determined by the formula is 
  (iv) where the automobile is used primarily in the performance of the duties of the taxpayer’s office or employment during the period or periods referred to in subparagraph (ii) and the taxpayer notifies the employer in writing before the end of the year of the taxpayer’s intention to have this subparagraph apply, 1/2 of the amount determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the taxpayer’s income for the year, and 
  (v) in any other case, the amount equal to the product obtained when the amount prescribed for the year is multiplied by the total number of kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the period or periods referred to in subparagraph 6(1)(k)(ii), and is the total of all amounts in respect of the operation of the automobile in the year paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer; and 
  
  ### Where standby charge does not apply
  
  (l) the value of a benefit in respect of the operation of an automobile (other than a benefit to which paragraph (k) applies or would apply but for subparagraph (k)(iii)) received or enjoyed by the taxpayer, or by a person related to the taxpayer, in the year in respect of, in the course of or because of, the taxpayer’s office or employment. 
  
  ### Parking cost
  
  (1.1) For the purposes of this section, an amount or a benefit in respect of the use of a motor vehicle by a taxpayer does not include any amount or benefit related to the parking of the vehicle. 
  
  ### Deeming rule — amount received
  
  (1.2) For the purposes of paragraph (1)(g), an amount received by an individual out of or under an employee benefit plan is deemed to have been received by a taxpayer and not by the individual if 
  (a) the individual does not deal at arm’s length with the taxpayer; 
  (b) the amount is received in respect of an office or employment of the taxpayer; and 
  (c) the taxpayer is living at the time the amount is received by the individual. 
  
  ### Reasonable standby charge
  
  (2) For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula is 
  (a) the lesser of the total kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the total available days and the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, if 
  (i) the taxpayer is required by the employer to use the automobile in connection with or in the course of the office or employment, and 
  (ii) the distance travelled by the automobile in the total available days is primarily in connection with or in the course of the office or employment, and 
  (b) the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, in any other case; is the product obtained when 1,667 is multiplied by the quotient obtained by dividing the total available days by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers; is the cost of the automobile to the employer where the employer owns the vehicle at any time in the year; is the number obtained by dividing such of the total available days as are days when the employer owns the automobile by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers; is the total of all amounts that may reasonably be regarded as having been payable by the employer to a lessor for the purpose of leasing the automobile during such of the total available days as are days when the automobile is leased to the employer; and is the part of the amount determined for E that may reasonably be regarded as having been payable to the lessor in respect of all or part of the cost to the lessor of insuring against 
  (a) loss of, or damage to, the automobile, or 
  (b) liability resulting from the use or operation of the automobile. 
  
  ### Automobile salesperson
  
  (2.1) Where in a taxation year 
  (a) a taxpayer was employed principally in selling or leasing automobiles, 
  (b) an automobile owned by the taxpayer’s employer was made available by the employer to the taxpayer or to a person related to the taxpayer, and 
  (c) the employer has acquired one or more automobiles, the amount that would otherwise be determined under subsection 6(2) as a reasonable standby charge shall, at the option of the employer, be computed as if 
  (d) the reference in the formula in subsection 6(2) to “2%” were read as a reference to “1 1/2%”, and 
  (e) the cost to the employer of the automobile were the greater of 
  (i) the quotient obtained by dividing 
  (A) the cost to the employer of all new automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business by 
  (B) the number of automobiles described in clause 6(2.1)(e)(i)(A), and 
  (ii) the quotient obtained by dividing 
  (A) the cost to the employer of all automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business by 
  (B) the number of automobiles described in clause 6(2.1)(e)(ii)(A). 
  
  ### COVID-19 — automobile operating expense benefit
  
  (2.2) If a taxpayer met the condition in subparagraph (iv) of the description of A in paragraph (1)(k) for the 2019 taxation year in respect of the use of an automobile made available to the taxpayer, or to a person related to the taxpayer, by an employer (within the meaning assigned by subsection (2)), then for the purpose of applying paragraph (1)(k) in respect of an automobile provided by that employer in 2020 or 2021 (referred to in this subsection as the “relevant year”), the amount determined for A in paragraph (1)(k) in respect of the automobile for the relevant year is deemed to be the lesser of 
  (a) ½ of the amount determined under subparagraph (1)(e)(i) in respect of the automobile for the relevant year, and 
  (b) the amount determined under subparagraph (v) of the description of A in paragraph (1)(k) in respect of the automobile for the relevant year. 
  
  ### COVID-19 — reasonable standby charge
  
  (2.3) A taxpayer is deemed to meet the condition in subparagraph (a)(ii) of the description of A in subsection (2) in respect of an employer (within the meaning assigned by subsection (2)) for the 2020 or 2021 taxation year if the taxpayer met the conditions in subparagraphs (a)(i) and (ii) of the description of A in subsection (2) for the 2019 taxation year in respect of an automobile made available to the taxpayer, or to a person related to the taxpayer, by that employer. 
  
  ### Payments by employer to employee
  
  (3) An amount received by one person from another 
  (a) during a period while the payee was an officer of, or in the employment of, the payer, or 
  (b) on account, in lieu of payment or in satisfaction of an obligation arising out of an agreement made by the payer with the payee immediately prior to, during or immediately after a period that the payee was an officer of, or in the employment of, the payer, shall be deemed, for the purposes of section 5, to be remuneration for the payee’s services rendered as an officer or during the period of employment, unless it is established that, irrespective of when the agreement, if any, under which the amount was received was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received 
  (c) as consideration or partial consideration for accepting the office or entering into the contract of employment, 
  (d) as remuneration or partial remuneration for services as an officer or under the contract of employment, or 
  (e) in consideration or partial consideration for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment. 
  
  ### Amount receivable for covenant
  
  (3.1) If an amount (other than an amount to which paragraph (1)(a) applies because of subsection (11)) is receivable at the end of a taxation year by a taxpayer in respect of a covenant, agreed to by the taxpayer more than 36 months before the end of that taxation year, with reference to what the taxpayer is, or is not, to do, and the amount would be included in the taxpayer’s income for the year under this Subdivision if it were received by the taxpayer in the year, the amount 
  (a) is deemed to be received by the taxpayer at the end of the taxation year for services rendered as an officer or during the period of employment; and 
  (b) is deemed not to be received at any other time. 
  
  ### Group term life insurance
  
  (4) Where at any time in a taxation year a taxpayer’s life is insured under a group term life insurance policy, there shall be included in computing the taxpayer’s income for the year from an office or employment the amount, if any, prescribed for the year in respect of the insurance. 
  (5)  [Repealed, 1995, c. 3, s. 1]  
  
  ### Employment at special work site or remote location
  
  (6) Notwithstanding subsection 6(1), in computing the income of a taxpayer for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the taxpayer in respect of, in the course or by virtue of the office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses the taxpayer has incurred for, 
  (a) the taxpayer’s board and lodging for a period at 
  (i) a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature, if the taxpayer maintained at another location a self-contained domestic establishment as the taxpayer’s principal place of residence 
  (A) that was, throughout the period, available for the taxpayer’s occupancy and not rented by the taxpayer to any other person, and 
  (B) to which, by reason of distance, the taxpayer could not reasonably be expected to have returned daily from the special work site, or 
  (ii) a location at which, by virtue of its remoteness from any established community, the taxpayer could not reasonably be expected to establish and maintain a self-contained domestic establishment, if the period during which the taxpayer was required by the taxpayer’s duties to be away from the taxpayer’s principal place of residence, or to be at the special work site or location, was not less than 36 hours; or 
  (b) transportation between 
  (i) the principal place of residence and the special work site referred to in subparagraph 6(6)(a)(i), or 
  (ii) the location referred to in subparagraph 6(6)(a)(ii) and a location in Canada or a location in the country in which the taxpayer is employed, in respect of a period described in paragraph 6(6)(a) during which the taxpayer received board and lodging, or a reasonable allowance in respect of board and lodging, from the taxpayer’s employer. 
  
  ### Cost of property or service
  
  (7) To the extent that the cost to a person of purchasing a property or service or an amount payable by a person for the purpose of leasing property is taken into account in determining an amount required under this section to be included in computing a taxpayer’s income for a taxation year, that cost or amount payable, as the case may be, shall include any tax that was payable by the person in respect of the property or service or that would have been so payable if the person were not exempt from the payment of that tax because of the nature of the person or the use to which the property or service is to be put. 
  
  ### GST rebates re costs of property or service
  
  (8) If 
  (a) an amount in respect of an outlay or expense is deducted under section 8 in computing the income of a taxpayer for a taxation year from an office or employment, or 
  (b) an amount is included in the capital cost to a taxpayer of a property described in subparagraph 8(1)(j)(ii) or 8(1)(p)(ii), and a particular amount is paid to the taxpayer in a particular taxation year as a rebate under the Excise Tax Act in respect of any goods and services tax included in the amount of the outlay or expense, or the capital cost of the property, as the case may be, the particular amount  
  (c) to the extent that it relates to an outlay or expense referred to in paragraph (a), shall be included in computing the taxpayer’s income from an office or employment for the particular taxation year, and 
  (d) to the extent that it relates to the capital cost of property referred to in paragraph (b), is deemed, for the purposes of subsection 13(7.1), to have been received by the taxpayer in the particular taxation year as assistance from a government for the acquisition of the property. 
  
  ### Amount in respect of interest on employee debt
  
  (9) Where an amount in respect of a loan or debt is deemed by subsection 80.4(1) to be a benefit received in a taxation year by an individual, the amount of the benefit shall be included in computing the income of the individual for the year as income from an office or employment. 
  
  ### Contributions to an employee benefit plan
  
  (10) For the purposes of subparagraph 6(1)(g)(ii), 
  (a) an amount included in the income of an individual in respect of an employee benefit plan for a taxation year preceding the year in which it was paid out of the plan shall be deemed to be an amount contributed to the plan by the individual; and 
  (b) where an amount is received in a taxation year by an individual from an employee benefit plan that was in a preceding year an employee trust, such portion of the amount so received by the individual as does not exceed the amount, if any, by which the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts allocated to the individual or a deceased person of whom the individual is an heir or legal representative by the trustee of the plan at a time when it was an employee trust exceeds 
  (B) the total of all amounts previously paid out of the plan to or for the benefit of the individual or the deceased person at a time when the plan was an employee trust, and 
  (ii) the portion of the amount, if any, by which the cost amount to the plan of its property immediately before it ceased to be an employee trust exceeds its liabilities at that time that 
  (A) the amount determined under subparagraph 6(10)(b)(i) in respect of the individual is of 
  (B) the total of amounts determined under subparagraph 6(10)(b)(i) in respect of all individuals who were beneficiaries under the plan immediately before it ceased to be an employee trust exceeds 
  (iii) the total of all amounts previously received out of the plan by the individual or a deceased person of whom the individual is an heir or legal representative at a time when the plan was an employee benefit plan to the extent that the amounts were deemed by this paragraph to be a return of amounts contributed to the plan shall be deemed to be the return of an amount contributed to the plan by the individual. 
  
  ### Salary deferral arrangement
  
  (11) Where at the end of a taxation year any person has a right under a salary deferral arrangement in respect of a taxpayer to receive a deferred amount, an amount equal to the deferred amount shall be deemed, for the purposes only of paragraph 6(1)(a), to have been received by the taxpayer as a benefit in the year, to the extent that the amount was not otherwise included in computing the taxpayer’s income for the year or any preceding taxation year. 
  
  ### Idem
  
  (12) Where at the end of a taxation year any person has a right under a salary deferral arrangement (other than a trust governed by a salary deferral arrangement) in respect of a taxpayer to receive a deferred amount, an amount equal to any interest or other additional amount that accrued to, or for the benefit of, that person to the end of the year in respect of the deferred amount shall be deemed at the end of the year, for the purposes only of subsection 6(11), to be a deferred amount that the person has a right to receive under the arrangement. 
  
  ### Application
  
  (13) Subsection 6(11) does not apply in respect of a deferred amount under a salary deferral arrangement in respect of a taxpayer that was established primarily for the benefit of one or more non-resident employees in respect of services to be rendered in a country other than Canada, to the extent that the deferred amount 
  (a) was in respect of services rendered by an employee who 
  (i) was not resident in Canada at the time the services were rendered, or 
  (ii) was resident in Canada for a period (in this subsection referred to as an “excluded period”) of not more than 36 of the 72 months preceding the time the services were rendered and was an employee to whom the arrangement applied before the employee became resident in Canada; and 
  (b) cannot reasonably be regarded as being in respect of services rendered or to be rendered during a period (other than an excluded period) when the employee was resident in Canada. 
  
  ### Part of plan or arrangement
  
  (14) Where deferred amounts under a salary deferral arrangement in respect of a taxpayer (in this subsection referred to as “that arrangement”) are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income and that arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts or benefits not related to the deferred amounts are payable or provided, for the purposes of this Act, other than this subsection, 
  (a) that arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and 
  (b) where any person has a right to a deferred amount under that arrangement, an amount received by the person as a benefit at any time out of or under the plan shall be deemed to have been received out of or under that arrangement except to the extent that it exceeds the amount, if any, by which 
  (i) the total of all deferred amounts under that arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for taxation years ending before that time exceeds 
  (ii) the total of 
  (A) all deferred amounts received by any person before that time out of or under the plan that were deemed by this paragraph to have been received out of or under that arrangement, and 
  (B) all deferred amounts under that arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years. 
  
  ### Forgiveness of employee debt
  
  (15) For the purpose of paragraph 6(1)(a), 
  (a) a benefit shall be deemed to have been enjoyed by a taxpayer at any time an obligation issued by any debtor (including the taxpayer) is settled or extinguished; and 
  (b) the value of that benefit shall be deemed to be the forgiven amount at that time in respect of the obligation. 
  
  ### Forgiven amount
  
  (15.1) For the purpose of subsection 6(15), the forgiven amount at any time in respect of an obligation issued by a debtor has the meaning that would be assigned by subsection 80(1) if  
  (a) the obligation were a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the debtor; 
  (b) no amount included in computing income because of the obligation being settled or extinguished at that time were taken into account; 
  (c) the definition forgiven amount in subsection 80(1) were read without reference to paragraphs (f) and (h) of the description of B in that definition; and  
  (d) section 80 were read without reference to paragraphs (2)(b) and (q) of that section. 
  
  ### Disability-related employment benefits
  
  (16) Notwithstanding subsection 6(1), in computing an individual’s income for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the individual in respect of, in the course of or because of the individual’s office or employment that is the value of a benefit relating to, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by the individual for, 
  (a) the transportation of the individual between the individual’s ordinary place of residence and the individual’s work location (including parking near that location) if the individual is blind or is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, because of the individual’s mobility impairment, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year; or 
  (b) an attendant to assist the individual in the performance of the individual’s duties if the individual is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year. 
  
  ### Definitions
  
  (17) The definitions in this subsection apply in this subsection and subsection 6(18).  
  *disability policy* means a group disability insurance policy that provides for periodic payments to individuals in respect of the loss of remuneration from an office or employment. (police d’assurance-invalidité)   
  *employer* of an individual includes a former employer of the individual. (employeur)   
  *top-up disability payment* in respect of an individual means a payment made by an employer of the individual as a consequence of the insolvency of an insurer that was obligated to make payments to the individual under a disability policy where  
  (a) the payment is made to an insurer so that periodic payments made to the individual under the policy will not be reduced because of the insolvency, or will be reduced by a lesser amount, or 
  (b) the following conditions are satisfied: 
  (i) the payment is made to the individual to replace, in whole or in part, periodic payments that would have been made under the policy to the individual but for the insolvency, and 
  (ii) the payment is made under an arrangement by which the individual is required to reimburse the payment to the extent that the individual subsequently receives an amount from an insurer in respect of the portion of the periodic payments that the payment was intended to replace. For the purposes of paragraphs (a) and (b), an insurance policy that replaces a disability policy is deemed to be the same policy as, and a continuation of, the disability policy that was replaced. ( paiement compensatoire pour invalidité)  
  
  ### Group disability benefits — insolvent insurer
  
  (18) Where an employer of an individual makes a top-up disability payment in respect of the individual, 
  (a) the payment is, for the purpose of paragraph 6(1)(a), deemed not to be a benefit received or enjoyed by the individual; 
  (b) the payment is, for the purpose of paragraph 6(1)(f), deemed not to be a contribution made by the employer to or under the disability insurance plan of which the disability policy in respect of which the payment is made is or was a part; and 
  (c) if the payment is made to the individual, it is, for the purpose of paragraph 6(1)(f), deemed to be an amount payable to the individual pursuant to the plan. 
  
  ### Benefit re housing loss
  
  (19) For the purpose of paragraph (1)(a), an amount paid at any time in respect of a housing loss (other than an eligible housing loss) to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment. 
  
  ### Benefit re eligible housing loss
  
  (20) For the purpose of paragraph (1)(a), an amount paid at any time in a taxation year in respect of an eligible housing loss to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment to the extent of the amount, if any, by which 
  (a) one half of the amount, if any, by which the total of all amounts each of which is so paid in the year or in a preceding taxation year exceeds $15,000 exceeds 
  (b) the total of all amounts each of which is an amount included in computing the taxpayer’s income because of this subsection for a preceding taxation year in respect of the loss. 
  
  ### Housing loss
  
  (21) In this section, 
  *housing loss* at any time in respect of a residence of a taxpayer means the amount, if any, by which the greater of  
  (a) the adjusted cost base of the residence at that time to the taxpayer or to another person who does not deal at arm’s length with the taxpayer, and 
  (b) the highest fair market value of the residence within the six-month period that ends at that time exceeds 
  (c) if the residence is disposed of by the taxpayer or the other person before the end of the first taxation year that begins after that time, the lesser of 
  (i) the proceeds of disposition of the residence, and 
  (ii) the fair market value of the residence at that time, and 
  (d) in any other case, the fair market value of the residence at that time. 
  
  ### Eligible housing loss
  
  (22) In this section, 
  *eligible housing loss* in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm’s length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation.  
  
  ### Employer-provided housing subsidies
  
  (23) For greater certainty, an amount paid or the value of assistance provided by any person in respect of, in the course of or because of, an individual’s office or employment in respect of the cost of, the financing of, the use of or the right to use, a residence is, for the purposes of this section, a benefit received by the individual because of the office or employment. 
  
  ### Agreement to issue securities to employees
  
  7 (1) Subject to subsection (1.1), where a particular qualifying person has agreed to sell or issue securities of the particular qualifying person (or of a qualifying person with which the particular qualifying person does not deal at arm’s length) to an employee of the particular qualifying person (or of a qualifying person with which the particular qualifying person does not deal at arm’s length), 
  (a) if the employee has acquired securities under the agreement, a benefit equal to the amount, if any, by which 
  (i) the value of the securities at the time the employee acquired them exceeds the total of 
  (ii) the amount paid or to be paid to the particular qualifying person by the employee for the securities, and 
  (iii) the amount, if any, paid by the employee to acquire the right to acquire the securities is deemed to have been received, in the taxation year in which the employee acquired the securities, by the employee because of the employee’s employment; 
  (b) if the employee has transferred or otherwise disposed of rights under the agreement in respect of some or all of the securities to a person with whom the employee was dealing at arm’s length, a benefit equal to the amount, if any, by which 
  (i) the value of the consideration for the disposition exceeds 
  (ii) the amount, if any, paid by the employee to acquire those rights shall be deemed to have been received, in the taxation year in which the employee made the disposition, by the employee because of the employee’s employment; 
  (b.1) if the employee has transferred or otherwise disposed of rights under the agreement in respect of some or all of the securities to the particular qualifying person (or a qualifying person with which the particular qualifying person does not deal at arm’s length) with whom the employee was not dealing at arm’s length, a benefit equal to the amount, if any, by which 
  (i) the value of the consideration for the disposition exceeds 
  (ii) the amount, if any, paid by the employee to acquire those rights is deemed to have been received, in the taxation year in which the employee made the disposition, by the employee because of the employee’s employment; 
  (c) if rights of the employee under the agreement have, by one or more transactions between persons not dealing at arm’s length, become vested in a person who has acquired securities under the agreement, a benefit equal to the amount, if any, by which 
  (i) the value of the securities at the time the person acquired them exceeds the total of 
  (ii) the amount paid or to be paid to the particular qualifying person by the person for the securities, and 
  (iii) the amount, if any, paid by the employee to acquire the right to acquire the securities, is deemed to have been received, in the taxation year in which the person acquired the securities, by the employee because of the employee’s employment, unless at the time the person acquired the securities the employee was deceased, in which case such a benefit is deemed to have been received by the person in that year as income from the duties of an employment performed by the person in that year in the country in which the employee primarily performed the duties of the employee’s employment; 
  (d) if rights of the employee under the agreement have, by one or more transactions between persons not dealing at arm’s length, become vested in a particular person who has transferred or otherwise disposed of rights under the agreement to another person with whom the particular person was dealing at arm’s length, a benefit equal to the amount, if any, by which 
  (i) the value of the consideration for the disposition exceeds 
  (ii) the amount, if any, paid by the employee to acquire those rights shall be deemed to have been received, in the taxation year in which the particular person made the disposition, by the employee because of the employee’s employment, unless at the time the other person acquired the rights the employee was deceased, in which case such a benefit shall be deemed to have been received by the particular person in that year as income from the duties of an employment performed by the particular person in that year in the country in which the employee primarily performed the duties of the employee’s employment; and 
  (d.1) if rights of the employee under the agreement have, by one or more transactions between persons not dealing at arm’s length, become vested in a particular person who has transferred or otherwise disposed of rights under the agreement to a particular qualifying person (or a qualifying person with which the particular qualifying person does not deal at arm’s length) with whom the particular person was not dealing at arm’s length, a benefit equal to the amount, if any, by which 
  (i) the value of the consideration for the disposition exceeds 
  (ii) the amount, if any, paid by the employee to acquire those rights is deemed to have been received, in the taxation year in which the particular person made the disposition, by the employee because of the employee’s employment, unless at the time of the disposition the employee was deceased, in which case such a benefit is deemed to have been received by the particular person in that year as income from the duties of an employment performed by the particular person in that year in the country in which the employee primarily performed the duties of the employee’s employment; and 
  (e) if the employee has died and immediately before death owned a right to acquire securities under the agreement, a benefit equal to the amount, if any, by which 
  (i) the value of the right immediately after the death exceeds 
  (ii) the amount, if any, paid by the employee to acquire the right shall be deemed to have been received, in the taxation year in which the employee died, by the employee because of the employee’s employment, and paragraphs 7(1)(b), 7(1)(c) and 7(1)(d) do not apply. 
  
  ### Employee stock options
  
  (1.1) Where after March 31, 1977 a Canadian-controlled private corporation (in this subsection referred to as “the corporation”) has agreed to sell or issue a share of the capital stock of the corporation or of a Canadian-controlled private corporation with which it does not deal at arm’s length to an employee of the corporation or of a Canadian-controlled private corporation with which it does not deal at arm’s length and at the time immediately after the agreement was made the employee was dealing at arm’s length with 
  (a) the corporation, 
  (b) the Canadian-controlled private corporation, the share of the capital stock of which has been agreed to be sold by the corporation, and 
  (c) the Canadian-controlled private corporation that is the employer of the employee, in applying paragraph (1)(a) in respect of the employee’s acquisition of the share, the reference in that paragraph to “the taxation year in which the employee acquired the securities” shall be read as a reference to “the taxation year in which the employee disposed of or exchanged the securities”. 
  
  ### Non-arm’s length relationship with trusts
  
  (1.11) For the purposes of this section, a mutual fund trust is deemed not to deal at arm’s length with a corporation only if the trust controls the corporation. 
  
  ### Order of disposition of securities
  
  (1.3) For the purposes of this subsection, subsection (1.1), Subdivision C, paragraph 110(1)(d.01), subparagraph 110(1)(d.1)(ii) and subsections 110(2.1) and 147(10.4), and subject to subsection (1.31), a taxpayer is deemed to dispose of securities that are identical properties in the order in which the taxpayer acquired them and, for this purpose, 
  (a) if a taxpayer acquires a particular security (other than under circumstances to which subsection (1.1) or 147(10.1) applies) at a time when the taxpayer also acquires or holds one or more other securities that are identical to the particular security and are, or were, acquired under circumstances to which subsection (1.1) or 147(10.1) applied, the taxpayer is deemed to have acquired the particular security at the time immediately preceding the earliest of the times at which the taxpayer acquired those other securities; and 
  (b) if a taxpayer acquires, at the same time, two or more identical securities under circumstances to which subsection (1.1) applied, the taxpayer is deemed to have acquired the securities in the order in which the agreements under which the taxpayer acquired the rights to acquire the securities were made. 
  
  ### Disposition of newly-acquired security
  
  (1.31) Where a taxpayer acquires, at a particular time, a particular security under an agreement referred to in subsection (1) and, on a day that is no later than 30 days after the day that includes the particular time, the taxpayer disposes of a security that is identical to the particular security, the particular security is deemed to be the security that is so disposed of if 
  (a) no other securities that are identical to the particular security are acquired, or disposed of, by the taxpayer after the particular time and before the disposition; 
  (b) the taxpayer identifies the particular security as the security so disposed of in the taxpayer’s return of income under this Part for the year in which the disposition occurs; and 
  (c) the taxpayer has not so identified the particular security, in accordance with this subsection, in connection with the disposition of any other security. 
  
  ### Exchange of options
  
  (1.4) Where 
  (a) a taxpayer disposes of rights under an agreement referred to in subsection (1) to acquire securities of a particular qualifying person that made the agreement or of a qualifying person with which it does not deal at arm’s length (which rights and securities are referred to in this subsection as the “exchanged option” and the “old securities”, respectively), 
  (b) the taxpayer receives no consideration for the disposition of the exchanged option other than rights under an agreement with a person (in this subsection referred to as the “designated person”) that is 
  (i) the particular person, 
  (ii) a qualifying person with which the particular person does not deal at arm’s length immediately after the disposition, 
  (iii) a corporation formed on the amalgamation or merger of the particular person and one or more other corporations, 
  (iv) a mutual fund trust to which the particular person has transferred property in circumstances to which subsection 132.2(1) applied, 
  (v) a qualifying person with which the corporation referred to in subparagraph (iii) does not deal at arm’s length immediately after the disposition, or 
  (vi) if the disposition is before 2013 and the old securities were equity in a SIFT wind-up entity that was at the time of the disposition a mutual fund trust, a SIFT wind-up corporation in respect of the SIFT wind-up entity to acquire securities of the designated person or a qualifying person with which the designated person does not deal at arm’s length (which rights and securities are referred to in this subsection as the “new option” and the “new securities”, respectively), and 
  (c) the amount, if any, by which 
  (i) the total value of the new securities immediately after the disposition exceeds 
  (ii) the total amount payable by the taxpayer to acquire the new securities under the new option does not exceed the amount, if any, by which 
  (iii) the total value of the old securities immediately before the disposition exceeds 
  (iv) the amount payable by the taxpayer to acquire the old securities under the exchanged option, for the purposes of this section, 
  (d) the taxpayer is deemed (other than for the purposes of subparagraph (9)(d)(ii)) not to have disposed of the exchanged option and not to have acquired the new option, 
  (e) the new option is deemed to be the same option as, and a continuation of, the exchanged option, and 
  (f) if the designated person is not the particular person, the designated person is deemed to be the same person as, and a continuation of, the particular person. 
  
  ### Rules where securities exchanged
  
  (1.5) For the purposes of this section and paragraphs 110(1)(d) to (d.1), where 
  (a) a taxpayer disposes of or exchanges securities of a particular qualifying person that were acquired by the taxpayer under circumstances to which subsection (1.1) applied (in this subsection referred to as the “exchanged securities”), 
  (b) the taxpayer receives no consideration for the disposition or exchange of the exchanged securities other than securities (in this subsection referred to as the “new securities”) of 
  (i) the particular qualifying person, 
  (ii) a qualifying person with which the particular qualifying person does not deal at arm’s length immediately after the disposition or exchange, 
  (iii) a corporation formed on the amalgamation or merger of the particular qualifying person and one or more other corporations, 
  (iv) a mutual fund trust to which the particular qualifying person has transferred property in circumstances to which subsection 132.2(1) applied, or 
  (v) a qualifying person with which the corporation referred to in subparagraph (iii) does not deal at arm’s length immediately after the disposition or exchange, and 
  (c) the total value of the new securities immediately after the disposition or exchange does not exceed the total value of the old securities immediately before the disposition or exchange, the following rules apply: 
  (d) the taxpayer is deemed not to have disposed of or exchanged the exchanged securities and not to have acquired the new securities, 
  (e) the new securities are deemed to be the same securities as, and a continuation of, the exchanged securities, except for the purpose of determining if the new securities are identical to any other securities, 
  (f) the qualifying person that issued the new securities is deemed to be the same person as, and a continuation of, the qualifying person that issued the exchanged securities, and 
  (g) where the exchanged securities were issued under an agreement, the new securities are deemed to have been issued under that agreement. 
  
  ### Emigrant
  
  (1.6) For the purposes of this section and paragraph 110(1)(d.1), a taxpayer is deemed not to have disposed of a share acquired under circumstances to which subsection (1.1) applied solely because of subsection 128.1(4). 
  
  ### Rights ceasing to be exercisable
  
  (1.7) For the purposes of subsections (1) and 110(1), if a taxpayer receives at a particular time one or more particular amounts in respect of rights of the taxpayer to acquire securities under an agreement referred to in subsection (1) ceasing to be exercisable in accordance with the terms of the agreement, and the cessation would not, if this Act were read without reference to this subsection, constitute a transfer or disposition of those rights by the taxpayer, 
  (a) the taxpayer is deemed to have disposed of those rights at the particular time to a person with whom the taxpayer was dealing at arm’s length and to have received the particular amounts as consideration for the disposition; and 
  (b) for the purpose of determining the amount, if any, of the benefit that is deemed to have been received as a consequence of the disposition referred to in paragraph (a), the taxpayer is deemed to have paid an amount to acquire those rights equal to the amount, if any, by which 
  (i) the amount paid by the taxpayer to acquire those rights (determined without reference to this subsection) exceeds 
  (ii) the total of all amounts each of which is an amount received by the taxpayer before the particular time in respect of the cessation. 
  
  ### Securities held by trustee
  
  (2) If a security is held by a trustee in trust or otherwise, whether absolutely, conditionally or contingently, for an employee, the employee is deemed, for the purposes of this section and paragraphs 110(1)(d) to (d.1), 
  (a) to have acquired the security at the time the trust began to so hold it; and 
  (b) to have exchanged or disposed of the security at the time the trust exchanged it or disposed of it to any person other than the employee. 
  
  ### Special provision
  
  (3) If a particular qualifying person has agreed to sell or issue securities of the particular person, or of a qualifying person with which it does not deal at arm’s length, to an employee of the particular person or of a qualifying person with which it does not deal at arm’s length, 
  (a) except as provided by this section, the employee is deemed to have neither received nor enjoyed any benefit under or because of the agreement; and 
  (b) the income for a taxation year of any person is deemed to be not less than its income for the year would have been if a benefit had not been conferred on the employee by the sale or issue of the securities. 
  
  ### Application of s. (1)
  
  (4) For greater certainty it is hereby declared that, where a person to whom any provision of subsection 7(1) would otherwise apply has ceased to be an employee before all things have happened that would make that provision applicable, subsection 7(1) shall continue to apply as though the person were still an employee and as though the employment were still in existence. 
  
  ### Non-application of this section
  
  (5) This section does not apply if the benefit conferred by the agreement was not received in respect of, in the course of, or by virtue of, the employment. 
  
  ### Sale to trustee for employees
  
  (6) If a particular qualifying person has entered into an arrangement under which securities of the particular person, or of a qualifying person with which it does not deal at arm’s length, are sold or issued by either person to a trustee to be held by the trustee in trust for sale to an employee of the particular person or of a qualifying person with which it does not deal at arm’s length, 
  (a) for the purposes of this section (other than subsection (2)) and paragraphs 110(1)(d) to (d.1), 
  (i) any particular rights of the employee under the arrangement in respect of those securities are deemed to be rights under a particular agreement with the particular person under which the particular person has agreed to sell or issue securities to the employee, 
  (ii) any securities acquired under the arrangement by the employee or by a person in whom the particular rights have become vested are deemed to be securities acquired under the particular agreement, and 
  (iii) any amounts paid or agreed to be paid to the trustee for any securities acquired under the arrangement by the employee or by a person in whom the particular rights have become vested are deemed to be amounts paid or agreed to be paid to the particular person for securities acquired under the particular agreement; and 
  (b) subsection (2) does not apply in respect of securities held by the trustee under the arrangement. 
  
  ### Definitions
  
  (7) The following definitions apply in this section and in subsection 47(3), paragraph 53(1)(j), subsection 110(0.1), paragraphs 110(1)(d), (d.01) and (e) and subsections 110(1.1) to (1.9) and (2.1).  
  *qualifying person* means a corporation or a mutual fund trust. (personne admissible)   
  *security* of a qualifying person means  
  (a) if the person is a corporation, a share of the capital stock of the corporation; and 
  (b) if the person is a mutual fund trust, a unit of the trust. ( titre)  
  (8) to (15)  [Repealed, 2010, c. 25, s. 3]  
  
  ### Prescribed form for deferral
  
  (16) Where, at any time in a taxation year, a taxpayer holds a security that was acquired under circumstances to which subsection (8) applied, the taxpayer shall file with the Minister, with the taxpayer’s return of income for the year, a prescribed form containing prescribed information relating to the taxpayer’s acquisition and disposition of securities under agreements referred to in subsection (1). 
  
  ## Deductions 
  
  ### Deductions allowed
  
  8 (1) In computing a taxpayer’s income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto 
  (a)  [Repealed, 2001, c. 17, s. 3(1)]  
  
  ### Legal expenses of employee
  
  (b) amounts paid by the taxpayer in the year as or on account of legal expenses incurred by the taxpayer to collect, or to establish a right to, an amount owed to the taxpayer that, if received by the taxpayer, would be required by this Subdivision to be included in computing the taxpayer’s income; 
  
  ### Clergy residence
  
  (c) where, in the year, the taxpayer 
  (i) is a member of the clergy or of a religious order or a regular minister of a religious denomination, and 
  (ii) is 
  (A) in charge of a diocese, parish or congregation, 
  (B) ministering to a diocese, parish or congregation, or 
  (C) engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination, the amount, not exceeding the taxpayer’s remuneration for the year from the office or employment, equal to 
  (iii) the total of all amounts including amounts in respect of utilities, included in computing the taxpayer’s income for the year under section 6 in respect of the residence or other living accommodation occupied by the taxpayer in the course of, or because of, the taxpayer’s office or employment as such a member or minister so in charge of or ministering to a diocese, parish or congregation, or so engaged in such administrative service, or 
  (iv) rent and utilities paid by the taxpayer for the taxpayer’s principal place of residence (or other principal living accommodation), ordinarily occupied during the year by the taxpayer, or the fair rental value of such a residence (or other living accommodation), including utilities, owned by the taxpayer or the taxpayer’s spouse or common-law partner, not exceeding the lesser of 
  (A) the greater of 
  (I) $1,000 multiplied by the number of months (to a maximum of ten) in the year, during which the taxpayer is a person described in subparagraphs (i) and (ii), and 
  (II) one-third of the taxpayer’s remuneration for the year from the office or employment, and 
  (B) the amount, if any, by which 
  (I) the rent paid or the fair rental value of the residence or living accommodation, including utilities exceeds 
  (II) the total of all amounts each of which is an amount deducted, in connection with the same accommodation or residence, in computing an individual’s income for the year from an office or employment or from a business (other than an amount deducted under this paragraph by the taxpayer), to the extent that the amount can reasonably be considered to relate to the period, or a portion of the period, in respect of which an amount is claimed by the taxpayer under this paragraph; 
  
  ### Teachers’ exchange fund contribution
  
  (d) a single amount, in respect of all employments of the taxpayer as a teacher, not exceeding $250 paid by the taxpayer in the year to a fund established by the Canadian Education Association for the benefit of teachers from Commonwealth countries present in Canada under a teachers’ exchange arrangement; 
  
  ### Expenses of railway employees
  
  (e) amounts disbursed by the taxpayer in the year for meals and lodging while employed by a railway company 
  (i) away from the taxpayer’s ordinary place of residence as a relieving telegrapher or station agent or on maintenance and repair work, or 
  (ii) away from the municipality and the metropolitan area, if there is one, where the taxpayer’s home terminal was located, and at a location from which, by reason of distance from the place where the taxpayer maintained a self-contained domestic establishment in which the taxpayer resided and actually supported a spouse or common-law partner or a person dependent on the taxpayer for support and connected with the taxpayer by blood relationship, marriage or common-law partnership or adoption, the taxpayer could not reasonably be expected to return daily to that place, to the extent that the taxpayer has not been reimbursed and is not entitled to be reimbursed in respect thereof; 
  
  ### Sales expenses
  
  (f) where the taxpayer was employed in the year in connection with the selling of property or negotiating of contracts for the taxpayer’s employer, and 
  (i) under the contract of employment was required to pay the taxpayer’s own expenses, 
  (ii) was ordinarily required to carry on the duties of the employment away from the employer’s place of business, 
  (iii) was remunerated in whole or part by commissions or other similar amounts fixed by reference to the volume of the sales made or the contracts negotiated, and 
  (iv) was not in receipt of an allowance for travel expenses in respect of the taxation year that was, by virtue of subparagraph 6(1)(b)(v), not included in computing the taxpayer’s income, amounts expended by the taxpayer in the year for the purpose of earning the income from the employment (not exceeding the commissions or other similar amounts referred to in subparagraph 8(1)(f)(iii) and received by the taxpayer in the year) to the extent that those amounts were not 
  (v) outlays, losses or replacements of capital or payments on account of capital, except as described in paragraph 8(1)(j), 
  (vi) outlays or expenses that would, by virtue of paragraph 18(1)(l), not be deductible in computing the taxpayer’s income for the year if the employment were a business carried on by the taxpayer, or 
  (vii) amounts the payment of which reduced the amount that would otherwise be included in computing the taxpayer’s income for the year because of paragraph 6(1)(e); 
  
  ### Transport employee’s expenses
  
  (g) where the taxpayer was an employee of a person whose principal business was passenger, goods, or passenger and goods transport and the duties of the employment required the taxpayer, regularly, 
  (i) to travel, away from the municipality where the employer’s establishment to which the taxpayer reported for work was located and away from the metropolitan area, if there is one, where it was located, on vehicles used by the employer to transport the goods or passengers, and 
  (ii) while so away from that municipality and metropolitan area, to make disbursements for meals and lodging, amounts so disbursed by the taxpayer in the year to the extent that the taxpayer has not been reimbursed and is not entitled to be reimbursed in respect thereof; 
  
  ### Travel expenses
  
  (h) where the taxpayer, in the year, 
  (i) was ordinarily required to carry on the duties of the office or employment away from the employer’s place of business or in different places, and 
  (ii) was required under the contract of employment to pay the travel expenses incurred by the taxpayer in the performance of the duties of the office or employment, amounts expended by the taxpayer in the year (other than motor vehicle expenses) for travelling in the course of the office or employment, except where the taxpayer 
  (iii) received an allowance for travel expenses that was, because of subparagraph 6(1)(b)(v), 6(1)(b)(vi) or 6(1)(b)(vii), not included in computing the taxpayer’s income for the year, or 
  (iv) claims a deduction for the year under paragraph 8(1)(e), 8(1)(f) or 8(1)(g); 
  
  ### Motor vehicle travel expenses
  
  (h.1) where the taxpayer, in the year, 
  (i) was ordinarily required to carry on the duties of the office or employment away from the employer’s place of business or in different places, and 
  (ii) was required under the contract of employment to pay motor vehicle expenses incurred in the performance of the duties of the office or employment, amounts expended by the taxpayer in the year in respect of motor vehicle expenses incurred for travelling in the course of the office or employment, except where the taxpayer 
  (iii) received an allowance for motor vehicle expenses that was, because of paragraph 6(1)(b), not included in computing the taxpayer’s income for the year, or 
  (iv) claims a deduction for the year under paragraph 8(1)(f); 
  
  ### Dues and other expenses of performing duties
  
  (i) an amount paid by the taxpayer in the year, or on behalf of the taxpayer in the year if the amount paid on behalf of the taxpayer is required to be included in the taxpayer’s income for the year, as 
  (i) annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute, 
  (ii) office rent, or salary to an assistant or substitute, the payment of which by the officer or employee was required by the contract of employment, 
  (iii) the cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for, 
  (iv) annual dues to maintain membership in a trade union as defined 
  (A) by section 3 of the Canada Labour Code, or 
  (B) in any provincial statute providing for the investigation, conciliation or settlement of industrial disputes, or to maintain membership in an association of public servants the primary object of which is to promote the improvement of the members’ conditions of employment or work, 
  (v) annual dues that were, pursuant to the provisions of a collective agreement, retained by the taxpayer’s employer from the taxpayer’s remuneration and paid to a trade union or association designated in subparagraph 8(1)(i)(iv) of which the taxpayer was not a member, 
  (vi) dues to a parity or advisory committee or similar body, the payment of which was required under the laws of a province in respect of the employment for the year, and 
  (vii) dues to a professions board, the payment of which was required under the laws of a province, to the extent that the taxpayer has not been reimbursed, and is not entitled to be reimbursed in respect thereof; 
  
  ### Motor vehicle and aircraft costs
  
  (j) where a deduction may be made under paragraph 8(1)(f), 8(1)(h) or 8(1)(h.1) in computing the taxpayer’s income from an office or employment for a taxation year, 
  (i) any interest paid by the taxpayer in the year on borrowed money used for the purpose of acquiring, or on an amount payable for the acquisition of, property that is 
  (A) a motor vehicle that is used, or 
  (B) an aircraft that is required for use in the performance of the duties of the taxpayer’s office or employment, and 
  (ii) such part, if any, of the capital cost to the taxpayer of 
  (A) a motor vehicle that is used, or 
  (B) an aircraft that is required for use in the performance of the duties of the office or employment as is allowed by regulation; 
  
  ### C.P.P. contributions and U.I.A. premiums
  
  (l.1) any amount payable by the taxpayer in the year 
  (i) as an employer’s premium under the employment Insurance Act, or  
  (ii) as an employer’s contribution under the Canada Pension Plan or under a provincial pension plan as defined in section 3 of the Canada Pension Plan,  in respect of salary, wages or other remuneration, including gratuities, paid to an individual employed by the taxpayer as an assistant or substitute to perform the duties of the taxpayer’s office or employment if an amount is deductible by the taxpayer for the year under subparagraph 8(1)(i)(ii) in respect of that individual; 
  
  ### Quebec parental insurance plan
  
  (l.2) an amount payable by the taxpayer in the year as an employer’s premium under the Act respecting parental insurance, R.S.Q., c. A-29.011 in respect of salary, wages or other remuneration, including gratuities, paid to an individual employed by the taxpayer as an assistant or substitute to perform the duties of the taxpayer’s office or employment if an amount is deductible by the taxpayer for the year under subparagraph (i)(ii) in respect of that individual;  
  
  ### Employee’s registered pension plan contributions
  
  (m) the amount in respect of contributions to registered pension plans that, by reason of subsection 147.2(4), is deductible in computing the taxpayer’s income for the year; 
  
  ### Employee RCA contributions
  
  (m.2) an amount contributed by the taxpayer in the year to a pension plan in respect of services rendered by the taxpayer where the plan is a prescribed plan established by an enactment of Canada or a province or where 
  (i) the plan is a retirement compensation arrangement, 
  (ii) the amount was paid to a custodian (within the meaning assigned by the definition 
  *retirement compensation arrangement* in subsection 248(1)) of the arrangement who is resident in Canada, and  
  (iii) either 
  (A) the taxpayer was required, by the terms of the taxpayer’s office or employment, to contribute the amount, and the total of the amounts contributed to the plan in the year by the taxpayer does not exceed the total of the amount contributed to the plan in the year by any other person in respect of the taxpayer, or 
  (B) the plan is a pension plan the registration of which under this Act was revoked (other than a plan the registration of which was revoked as of the effective date of its registration) and the amount was contributed in accordance with the terms of the plan as last registered; 
  (C)  [Repealed, 1994, c. 21, s. 4(2)]  
  
  ### Salary reimbursement
  
  (n) an amount paid by or on behalf of the taxpayer in the year pursuant to an arrangement (other than an arrangement described in subparagraph (b)(ii) of the definition 
  *top-up disability payment* in subsection 6(17)) under which the taxpayer is required to reimburse any amount paid to the taxpayer for a period throughout which the taxpayer did not perform the duties of the office or employment, to the extent that  
  (i) the amount so paid to the taxpayer for the period was included in computing the taxpayer’s income from an office or employment, and 
  (ii) the total of amounts so reimbursed does not exceed the total of amounts received by the taxpayer for the period throughout which the taxpayer did not perform the duties of the office or employment; 
  
  ### Reimbursement of disability payments
  
  (n.1) where, 
  (i) as a consequence of the receipt of a payment (in this paragraph referred to as the “deferred payment”) from an insurer, a payment (in this paragraph referred to as the “reimbursement payment”) is made by or on behalf of an individual to an employer or former employer of the individual pursuant to an arrangement described in subparagraph (b)(ii) of the definition 
  *top-up disability payment* in subsection 6(17), and  
  (ii) the reimbursement payment is made 
  (A) in the year, other than within the first 60 days of the year if the deferred payment was received in the immediately preceding taxation year, or 
  (B) within 60 days after the end of the year, if the deferred payment was received in the year, an amount equal to the lesser of 
  (iii) the amount included under paragraph 6(1)(f) in respect of the deferred payment in computing the individual’s income for any taxation year, and 
  (iv) the amount of the reimbursement payment; 
  
  ### Forfeited amounts
  
  (o) where at the end of the year the rights of any person to receive benefits under a salary deferral arrangement in respect of the taxpayer have been extinguished or no person has any further right to receive any amount under the arrangement, the amount, if any, by which the total of all deferred amounts under the arrangement included in computing the taxpayer’s income for the year and preceding taxation years as benefits under paragraph 6(1)(a) exceeds the total of 
  (i) all such deferred amounts received by any person in that year or preceding taxation years out of or under the arrangement, 
  (ii) all such deferred amounts receivable by any person in subsequent taxation years out of or under the arrangement, and 
  (iii) all amounts deducted under this paragraph in computing the taxpayer’s income for preceding taxation years in respect of deferred amounts under the arrangement; 
  
  ### Idem
  
  (o.1) an amount that is deductible in computing the taxpayer’s income for the year because of subsection 144(9); 
  
  ### Excess EPSP amounts
  
  (o.2) an amount that is an excess EPSP amount (as defined in subsection 207.8(1)) of the taxpayer for the year, other than any portion of the excess EPSP amount for which the taxpayer’s tax for the year under subsection 207.8(2) is waived or cancelled; 
  
  ### Musical instrument costs
  
  (p) where the taxpayer was employed in the year as a musician and as a term of the employment was required to provide a musical instrument for a period in the year, an amount (not exceeding the taxpayer’s income for the year from the employment, computed without reference to this paragraph) equal to the total of 
  (i) amounts expended by the taxpayer before the end of the year for the maintenance, rental or insurance of the instrument for that period, except to the extent that the amounts are otherwise deducted in computing the taxpayer’s income for any taxation year, and 
  (ii) such part, if any, of the capital cost to the taxpayer of the instrument as is allowed by regulation; 
  
  ### Artists’ employment expenses
  
  (q) where the taxpayer’s income for the year from the office or employment includes income from an artistic activity 
  (i) that was the creation by the taxpayer of, but did not include the reproduction of, paintings, prints, etchings, drawings, sculptures or similar works of art, 
  (ii) that was the composition by the taxpayer of a dramatic, musical or literary work, 
  (iii) that was the performance by the taxpayer of a dramatic or musical work as an actor, dancer, singer or musician, or 
  (iv) in respect of which the taxpayer was a member of a professional artists’ association that is certified by the Minister of Communications, amounts paid by the taxpayer before the end of the year in respect of expenses incurred for the purpose of earning the income from those activities to the extent that they were not deductible in computing the taxpayer’s income for a preceding taxation year, but not exceeding a single amount in respect of all such offices and employments of the taxpayer equal to the amount, if any, by which 
  (v) the lesser of $1,000 and 20% of the total of all amounts each of which is the taxpayer’s income from an office or employment for the year, before deducting any amount under this section, that was income from an artistic activity described in any of subparagraphs 8(1)(q)(i) to 8(1)(q)(iv), exceeds 
  (vi) the total of all amounts deducted by the taxpayer for the year under paragraph 8(1)(j) or 8(1)(p) in respect of costs or expenses incurred for the purpose of earning the income from such an activity for the year; 
  
  ### Apprentice mechanics’ tool costs
  
  (r) if the taxpayer was an eligible apprentice mechanic at any time after 2001 and before the end of the taxation year, the amount claimed by the taxpayer for the taxation year under this paragraph not exceeding the lesser of 
  (i) the taxpayer’s income for the taxation year computed without reference to this paragraph, and 
  (ii) the amount determined by the formula is the total of all amounts each of which is the cost to the taxpayer of an eligible tool acquired in the taxation year by the taxpayer or, if the taxpayer first becomes employed as an eligible apprentice mechanic in the taxation year, the cost to the taxpayer of an eligible tool acquired by the taxpayer in the last three months of the preceding taxation year, is the lesser of 
  (A) the value of A for the taxation year in respect of the taxpayer, and 
  (B) the greater of 
  (I) the amount that is the total of the first dollar amount referred to in paragraph (s) and the amount determined for the taxation year for B in subsection 118(10), and 
  (II) 5% of the total of 
  1. the total of all amounts each of which is the taxpayer’s income from employment for the taxation year as an eligible apprentice mechanic, computed without reference to this paragraph, and 
  2. the amount, if any, by which the amount required by paragraph 56(1)(n.1) to be included in computing the taxpayer’s income for the taxation year exceeds the amount required by paragraph 60(p) to be deducted in computing that income, and is the amount by which the amount determined under this subparagraph for the preceding taxation year in respect of the taxpayer exceeds the amount deducted under this paragraph for that preceding taxation year by the taxpayer; 
  
  ### Deduction — tradesperson’s tools
  
  (s) if the taxpayer is employed as a tradesperson at any time in the taxation year, the lesser of $1,000 and the amount determined by the formula is the lesser of 
  (i) the total of all amounts each of which is the cost of an eligible tool acquired by the taxpayer in the year, and 
  (ii) the total of 
  (A) the amount that would, if this subsection were read without reference to this paragraph, be the taxpayer’s income for the taxation year from employment as a trades­person in the taxation year, and 
  (B) the amount, if any, by which the amount required by paragraph 56(1)(n.1) to be included in computing the taxpayer’s income for the taxation year exceeds the amount required by paragraph 60(p) to be deducted in computing that income; and 
  
  ### Labour mobility deduction
  
  (t) if the taxpayer is an eligible tradesperson for the year, an amount equal to the lesser of 
  (i) $4,000, and 
  (ii) the total of all amounts each of which is a temporary relocation deduction of the taxpayer for the year in respect of an eligible temporary relocation of the taxpayer. 
  
  ### General limitation
  
  (2) Except as permitted by this section, no deductions shall be made in computing a taxpayer’s income for a taxation year from an office or employment. 
  
  ### Meals
  
  (4) An amount expended in respect of a meal consumed by a taxpayer who is an officer or employee shall not be included in computing the amount of a deduction under paragraph 8(1)(f) or 8(1)(h) unless the meal was consumed during a period while the taxpayer was required by the taxpayer’s duties to be away, for a period of not less than twelve hours, from the municipality where the employer’s establishment to which the taxpayer ordinarily reported for work was located and away from the metropolitan area, if there is one, where it was located. 
  
  ### Dues not deductible
  
  (5) Notwithstanding subparagraphs 8(1)(i)(i), 8(1)(i)(iv), 8(1)(i)(vi) and 8(1)(i)(vii), dues are not deductible under those subparagraphs in computing a taxpayer’s income from an office or employment to the extent that they are, in effect, levied 
  (a) for or under a superannuation fund or plan; 
  (b) for or under a fund or plan for annuities, insurance (other than professional or malpractice liability insurance that is necessary to maintain a professional status recognized by statute) or similar benefits; or 
  (c) for any other purpose not directly related to the ordinary operating expenses of the committee or similar body, association, board or trade union, as the case may be. 
  
  ### Apprentice mechanics
  
  (6) For the purpose of paragraph (1)(r), 
  (a) a taxpayer is an eligible apprentice mechanic in a taxation year if, at any time in the taxation year, the taxpayer 
  (i) is registered in a program established in accordance with the laws of Canada or of a province that leads to designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles, and 
  (ii) is employed as an apprentice mechanic; 
  (b) an eligible tool is a tool (including ancillary equipment) that 
  (i) is acquired by a taxpayer for use in connection with the taxpayer’s employment as an eligible apprentice mechanic, 
  (ii) has not been used for any purpose before it is acquired by the taxpayer, 
  (iii) is certified in prescribed form by the taxpayer’s employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer’s employment as an eligible apprentice mechanic, and 
  (iv) is, unless the device or equipment can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment; and 
  (c) a taxpayer who, for a taxation year, is not an eligible apprentice mechanic and has an excess amount determined under the description of C in subparagraph (1)(r)(ii) is, for the taxation year, entitled to claim a deduction under that paragraph as if that excess amount were wholly applicable to an employment of the taxpayer. 
  
  ### Eligible tool of tradesperson
  
  (6.1) For the purposes of paragraph (1)(s), an eligible tool of a taxpayer is a tool (including ancillary equipment) that 
  (a) is acquired by the taxpayer on or after May 2, 2006 for use in connection with the taxpayer’s employment as a tradesperson; 
  (b) has not been used for any purpose before it is acquired by the taxpayer; 
  (c) is certified in prescribed form by the taxpayer’s employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer’s employment as a tradesperson; and 
  (d) is, unless the device or equipment can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment. 
  
  ### Cost of tool
  
  (7) Except for the purposes of the description of A in subparagraph (1)(r)(ii) and the description of A in paragraph (1)(s), the cost to a taxpayer of an eligible tool the cost of which was included in determining the value of one or both of those descriptions in respect of the taxpayer for a taxation year is the amount determined by the formula is the cost to the taxpayer of the tool determined without reference to this subsection; is 
  (a) if the tool is a tool to which only paragraph (1)(r) applies in the taxation year, the amount that would be determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year if the value of C in that subparagraph were nil, 
  (b) if the tool is a tool to which only paragraph (1)(s) applies in the taxation year, the amount determined under that paragraph to be deductible by the taxpayer in the taxation year, or 
  (c) if the tool is a tool to which both paragraphs (1)(r) and (s) apply in the taxation year, the amount that is the total of 
  (i) the amount that would be determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year if the value of C in that subparagraph were nil, and 
  (ii) the amount determined under paragraph (1)(s) to be deductible by the taxpayer in the taxation year; and is the amount that is 
  (a) if the tool is a tool to which only paragraph (1)(r) applies in the taxation year, the value of A determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year, 
  (b) if the tool is a tool to which only paragraph (1)(s) applies in the taxation year, the amount determined under subparagraph (i) of the description of A in paragraph (1)(s) in respect of the taxpayer for the taxation year, and 
  (c) if the tool is a tool to which both paragraphs (1)(r) and (s) apply in the taxation year, the amount that is the greater of the value of A determined under subparagraph (1)(r)(ii) in respect of the taxpayer for the taxation year and the amount determined under subparagraph (i) of the description of A in paragraph (1)(s) in respect of the taxpayer for the taxation year. 
  
  ### Presumption
  
  (9) Notwithstanding any other provision of this Act, the total of all amounts that would otherwise be deductible by a taxpayer pursuant to paragraph 8(1)(f), 8(1)(h) or 8(1)(j) for travelling in the course of the taxpayer’s employment in an aircraft that is owned or rented by the taxpayer, may not exceed an amount that is reasonable in the circumstances having regard to the relative cost and availability of other modes of transportation. 
  
  ### Certificate of employer
  
  (10) An amount otherwise deductible for a taxation year under paragraph (1)(c), (f), (h) or (h.1) or subparagraph (1)(i)(ii) or (iii) by a taxpayer shall not be deducted unless the taxpayer’s employer confirms in prescribed form that the conditions set out in the applicable provision were met in the year in respect of the taxpayer and the form is filed with the taxpayer’s return of income for the year. 
  
  ### Goods and services tax
  
  (11) For the purposes of this section and section 6, the amount of any rebate paid or payable to a taxpayer under the Excise Tax Act in respect of the goods and services tax shall be deemed not to be an amount that is reimbursed to the taxpayer or to which the taxpayer is entitled.  
  
  ### Forfeiture of securities by employee
  
  (12) If, in a taxation year, 
  (a) an employee is deemed by subsection 7(2) to have disposed of a security (as defined in subsection 7(7)) held by a trust, 
  (b) the trust disposed of the security to the person that issued the security, 
  (c) the disposition occurred as a result of the employee not meeting the conditions necessary for title to the security to vest in the employee, and 
  (d) the amount paid by the person to acquire the security from the trust or to redeem or cancel the security did not exceed the amount paid to the person for the security, the following rules apply: 
  (e) there may be deducted in computing the employee’s income for the year from employment the amount, if any, by which 
  (i) the amount of the benefit deemed by subsection 7(1) to have been received by the employee in the year or a preceding taxation year in respect of the security exceeds 
  (ii) any amount deducted under paragraph 110(1)(d) or (d.1) in computing the employee’s taxable income for the year or a preceding taxation year in respect of that benefit, and 
  (f) notwithstanding any other provision of this Act, the employee’s gain or loss from the disposition of the security is deemed to be nil and section 84 does not apply to deem a dividend to have been received in respect of the disposition. 
  
  ### Work space in home
  
  (13) Notwithstanding paragraphs 8(1)(f) and 8(1)(i), 
  (a) no amount is deductible in computing an individual’s income for a taxation year from an office or employment in respect of any part (in this subsection referred to as the “work space”) of a self-contained domestic establishment in which the individual resides, except to the extent that the work space is either 
  (i) the place where the individual principally performs the duties of the office or employment, or 
  (ii) used exclusively during the period in respect of which the amount relates for the purpose of earning income from the office or employment and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the duties of the office or employment; 
  (b) where the conditions set out in subparagraph 8(13)(a)(i) or 8(13)(a)(ii) are met, the amount in respect of the work space that is deductible in computing the individual’s income for the year from the office or employment shall not exceed the individual’s income for the year from the office or employment, computed without reference to any deduction in respect of the work space; and 
  (c) any amount in respect of a work space that was, solely because of paragraph 8(13)(b), not deductible in computing the individual’s income for the immediately preceding taxation year from the office or employment shall be deemed to be an amount in respect of a work space that is otherwise deductible in computing the individual’s income for the year from that office or employment and that, subject to paragraph 8(13)(b), may be deducted in computing the individual’s income for the year from the office or employment. 
  
  ### Labour mobility deduction — interpretation
  
  (14) For the purposes of this subsection and paragraph (1)(t), 
  (a) a taxpayer is an eligible tradesperson for a taxation year if, in the taxation year, the taxpayer has income from employment as a tradesperson or apprentice and performs their duties of employment in construction activities described in subsection 238(1) of the Income Tax Regulations ;  
  (b) a temporary work location of a taxpayer is a location in Canada 
  (i) at which the taxpayer performs their duties of employment under a temporary employment contract, and 
  (ii) that is not situated in the locality where the taxpayer is ordinarily employed or carrying on business; 
  (c) an eligible temporary relocation of a taxpayer is a temporary relocation that meets the following conditions: 
  (i) the relocation is undertaken by the taxpayer to enable the taxpayer to perform their duties of employment as an eligible tradesperson at one or more temporary work locations of the taxpayer within the same locality, 
  (ii) prior to the relocation, the taxpayer ordinarily resided at a residence in Canada (in this subsection referred to as the “ordinary residence”), 
  (iii) the taxpayer was required by their duties of employment referred to in subparagraph (i) to be away from the ordinary residence for a period of not less than 36 hours, 
  (iv) during the temporary relocation, the taxpayer temporarily resided at one or more lodgings in Canada (in this subsection referred to as the “temporary lodging”), and 
  (v) the distance between the ordinary residence and each temporary work location of the taxpayer referred to in subparagraph (i) is not less than 150 kilometres greater than the distance between each temporary lodging referred in subparagraph (iv) and each temporary work location of the taxpayer referred to in subparagraph (i); 
  (d) subject to paragraph (e), an eligible temporary relocation expense of a taxpayer for a taxation year is a reasonable expense incurred by the taxpayer during the taxation year, the previous taxation year or prior to February 1 of the following taxation year, in respect of 
  (i) transportation for one round trip per eligible temporary relocation by the taxpayer between the ordinary residence and the temporary lodging, 
  (ii) meals consumed by the taxpayer during the round trip described in subparagraph (i), and 
  (iii) the taxpayer’s temporary lodging if, throughout the period of the taxpayer’s temporary relocation, 
  (A) the taxpayer maintains their ordinary residence as their principal place of residence, and 
  (B) the ordinary residence remains available for the taxpayer’s occupancy and is not rented to any other person; 
  (e) an eligible temporary relocation expense described in paragraph (d) does not include an expense incurred by the taxpayer to the extent that 
  (i) the expense is deducted (other than under paragraph (1)(t)) in computing the taxpayer’s income for any taxation year, 
  (ii) the expense was deductible under paragraph (1)(t) by the taxpayer for the immediately preceding taxation year, or 
  (iii) the taxpayer is entitled to receive a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of the taxpayer and that is not deductible in computing the income of the taxpayer) in respect of the expense; and 
  (f) a taxpayer’s temporary relocation deduction for a taxation year in respect of an eligible temporary relocation of the taxpayer is the lesser of 
  (i) the total eligible temporary relocation expenses of the taxpayer for the taxation year incurred in respect of the eligible temporary relocation, and 
  (ii) half of the taxpayer’s total income for the taxation year from employment as an eligible tradesperson at all temporary work locations referred to in subparagraph (c)(i) in respect of the eligible temporary relocation (computed without reference to this section). 
  
  # SUBDIVISION B 
  
  ## Income or Loss from a Business or Property 
  
  ## Basic Rules 
  
  ### Income
  
  9 (1) Subject to this Part, a taxpayer’s income for a taxation year from a business or property is the taxpayer’s profit from that business or property for the year. 
  
  ### Loss
  
  (2) Subject to section 31, a taxpayer’s loss for a taxation year from a business or property is the amount of the taxpayer’s loss, if any, for the taxation year from that source computed by applying the provisions of this Act respecting computation of income from that source with such modifications as the circumstances require. 
  
  ### Gains and losses not included
  
  (3) In this Act, “income from a property” does not include any capital gain from the disposition of that property and “loss from a property” does not include any capital loss from the disposition of that property. 
  
  ### Valuation of inventory
  
  10 (1) For the purpose of computing a taxpayer’s income for a taxation year from a business that is not an adventure or concern in the nature of trade, property described in an inventory shall be valued at the end of the year at the cost at which the taxpayer acquired the property or its fair market value at the end of the year, whichever is lower, or in a prescribed manner. 
  
  ### Adventures in the nature of trade
  
  (1.01) For the purpose of computing a taxpayer’s income from a business that is an adventure or concern in the nature of trade, property described in an inventory shall be valued at the cost at which the taxpayer acquired the property. 
  
  ### Certain expenses included in cost
  
  (1.1) For the purposes of subsections 10(1), 10(1.01) and 10(10), where land is described in an inventory of a business of a taxpayer, the cost at which the taxpayer acquired the land shall include each amount that is 
  (a) described in paragraph 18(2)(a) or (b) in respect of the land and for which no deduction is permitted to the taxpayer, or to another person or partnership that is 
  (i) a person or partnership with whom the taxpayer does not deal at arm’s length, 
  (ii) if the taxpayer is a corporation, a person or partnership that is a specified shareholder of the taxpayer, or 
  (iii) if the taxpayer is a partnership, a person or partnership whose share of any income or loss of the taxpayer is 10% or more; and 
  (b) not included in or added to the cost to that other person or partnership of any property otherwise than because of paragraph 53(1)(d.3) or subparagraph 53(1)(e)(xi). 
  
  ### Continuation of valuation
  
  (2) Notwithstanding subsection 10(1), for the purpose of computing income for a taxation year from a business, the inventory at the commencement of the year shall be valued at the same amount as the amount at which it was valued at the end of the preceding taxation year for the purpose of computing income for that preceding year. 
  
  ### Methods of valuation to be the same
  
  (2.1) Where property described in an inventory of a taxpayer’s business that is not an adventure or concern in the nature of trade is valued at the end of a taxation year in accordance with a method permitted under this section, that method shall, subject to subsection 10(6), be used in the valuation of property described in the inventory at the end of the following taxation year for the purpose of computing the taxpayer’s income from the business unless the taxpayer, with the concurrence of the Minister and on any terms and conditions that are specified by the Minister, adopts another method permitted under this section. 
  
  ### Incorrect valuation
  
  (3) Where the inventory of a business at the commencement of a taxation year has, according to the method adopted by the taxpayer for computing income from the business for that year, not been valued as required by subsection 10(1), the inventory at the commencement of that year shall, if the Minister so directs, be deemed to have been valued as required by that subsection. 
  
  ### Fair market value
  
  (4) For the purpose of subsection 10(1), the fair market value of property (other than property that is obsolete, damaged or defective or that is held for sale or lease or for the purpose of being processed, fabricated, manufactured, incorporated into, attached to, or otherwise converted into property for sale or lease) that is 
  (a) work in progress at the end of a taxation year of a business that is a profession means the amount that can reasonably be expected to become receivable in respect thereof after the end of the year; and 
  (b) advertising or packaging material, parts, supplies or other property (other than work in progress of a business that is a profession) that is included in inventory means the replacement cost of the property. 
  
  ### Inventory
  
  (5) Without restricting the generality of this section, 
  (a) property (other than capital property) of a taxpayer that is advertising or packaging material, parts or supplies or work in progress of a business that is a profession is, for greater certainty, inventory of the taxpayer; 
  (b) anything used primarily for the purpose of advertising or packaging property that is included in the inventory of a taxpayer shall be deemed not to be property held for sale or lease or for any of the purposes referred to in subsection 10(4); and 
  (c) property of a taxpayer, the cost of which to the taxpayer was deductible by virtue of paragraph 20(1)(mm), is, for greater certainty, inventory of the taxpayer having a cost to the taxpayer, except for the purposes of that paragraph, of nil. 
  
  ### Artistic endeavour
  
  (6) Notwithstanding subsection 10(1), for the purpose of computing the income of an individual other than a trust for a taxation year from a business that is the individual’s artistic endeavour, the value of the inventory of the business for that year shall, if the individual so elects in the individual’s return of income under this Part for the year, be deemed to be nil. 
  
  ### Value in later years
  
  (7) Where an individual has made an election pursuant to subsection 10(6) for a taxation year, the value of the inventory of a business that is the individual’s artistic endeavour shall, for each subsequent taxation year, be deemed to be nil unless the individual, with the concurrence of the Minister and on such terms and conditions as are specified by the Minister, revokes the election. 
  
  ### Definition of 
  *business that is an individual’s artistic endeavour* 
  
  (8) For the purpose of this section, 
  *business that is an individual’s artistic endeavour* means the business of creating paintings, prints, etchings, drawings, sculptures or similar works of art, where such works of art are created by the individual, but does not include a business of reproducing works of art.  
  
  ### Transition
  
  (9) Where, at the end of a taxpayer’s last taxation year at the end of which property described in an inventory of a business that is an adventure or concern in the nature of trade was valued under subsection 10(1), the property was valued at an amount that is less than the cost at which the taxpayer acquired the property, after that time the cost to the taxpayer at which the property was acquired is, subject to subsection 10(10), deemed to be that amount. 
  
  ### Loss restriction event
  
  (10) Notwithstanding subsection (1.01), property described in an inventory of a taxpayer’s business that is an adventure or concern in the nature of trade at the end of the taxpayer’s taxation year that ends immediately before the time at which the taxpayer is subject to a loss restriction event is to be valued at the cost at which the taxpayer acquired the property, or its fair market value at the end of the year, whichever is lower, and after that time the cost at which the taxpayer acquired the property is, subject to a subsequent application of this subsection, deemed to be that lower amount. 
  
  ### Loss restriction event
  
  (11) For the purposes of subsections 88(1.1) and 111(5), a taxpayer’s business that is at any time an adventure or concern in the nature of trade is deemed to be a business carried on at that time by the taxpayer. 
  
  ### Removing property from inventory
  
  (12) If at any time a non-resident taxpayer ceases to use, in connection with a business or part of a business carried on by the taxpayer in Canada immediately before that time, a property that was immediately before that time described in the inventory of the business or the part of the business, as the case may be, (other than a property that was disposed of by the taxpayer at that time), the taxpayer is deemed 
  (a) to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time; and 
  (b) to have received those proceeds immediately before that time in the course of carrying on the business or the part of the business, as the case may be. 
  
  ### Adding property to inventory
  
  (13) If at any time a property becomes included in the inventory of a business or part of a business that a non-resident taxpayer carries on in Canada after that time (other than a property that was, otherwise than because of this subsection, acquired by the taxpayer at that time), the taxpayer is deemed to have acquired the property at that time at a cost equal to its fair market value at that time. 
  (14)  [Repealed, 2017, c. 33, s. 2]  
  (14.1)  [Repealed, 2017, c. 33, s. 2]  
  
  ### Derivatives
  
  (15) For the purposes of this section, property of a taxpayer that is a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement, or any similar agreement is deemed not to be inventory of the taxpayer. 
  
  ### Mark-to-market election
  
  10.1 (1) Subsection (4) applies to a taxpayer in respect of a taxation year and subsequent taxation years if the taxpayer elects to have subsection (4) apply to the taxpayer and has filed that election in prescribed form on or before its filing-due date for the taxation year. 
  
  ### Revocation
  
  (2) The Minister may, on application by the taxpayer in prescribed form, grant permission to the taxpayer to revoke its election under subsection (1). The revocation applies to each taxation year of the taxpayer that begins after the day on which the taxpayer is notified in writing that the Minister concurs with the revocation, on such terms and conditions as are specified by the Minister. 
  
  ### Subsequent election
  
  (3) Notwithstanding subsection (1), if a taxpayer has, under subsection (2), revoked an election, any subsequent election under subsection (1) shall result in subsection (4) applying to the taxpayer in respect of each taxation year that begins after the day on which the prescribed form in respect of the subsequent election is filed by the taxpayer. 
  
  ### Application
  
  (4) If this subsection applies to a taxpayer in respect of a taxation year, 
  (a) if the taxpayer is a financial institution (as defined in subsection 142.2(1)) in the taxation year, each eligible derivative held by the taxpayer at any time in the taxation year is, for the purpose of applying the provisions of this Act and with such modifications as the context requires, deemed to be mark-to-market property (as defined in subsection 142.2(1)) of the taxpayer for the taxation year; and  
  (b) in any other case, subsection (6) applies to the taxpayer in respect of each eligible derivative held by the taxpayer at the end of the taxation year. 
  
  ### Definition of eligible derivative 
  
  (5) For the purposes of this section, an 
  *eligible derivative*, of a taxpayer for a taxation year, means a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement or a similar agreement, held at any time in the taxation year by the taxpayer, if  
  (a) the agreement is not a capital property, a Canadian resource property, a foreign resource property or an obligation on account of capital of the taxpayer; 
  (b) either 
  (i) the taxpayer has produced audited financial statements prepared in accordance with generally accepted accounting principles in respect of the taxation year, or 
  (ii) if the taxpayer has not produced audited financial statements described in subparagraph (i), the agreement has a readily ascertainable fair market value; and 
  (c) where the agreement is held by a financial institution (as defined in subsection 142.2(1)), the agreement is not a tracking property (as defined in subsection 142.2(1)), other than an excluded property (as defined in subsection 142.2(1)), of the financial institution.  
  
  ### Deemed disposition
  
  (6) If this subsection applies to a taxpayer in respect of each eligible derivative held by the taxpayer at the end of a taxation year, for each eligible derivative held by the taxpayer at the end of the taxation year, the taxpayer is deemed 
  (a) to have disposed of the eligible derivative immediately before the end of the year and received proceeds or paid an amount, as the case may be, equal to its fair market value at the time of disposition; and 
  (b) to have reacquired, or reissued or renewed, the eligible derivative at the end of the year at an amount equal to the proceeds or the amount, as the case may be, determined under paragraph (a). 
  
  ### Election year — gains and losses
  
  (7) If a taxpayer holds, at the beginning of its first taxation year in respect of which an election referred to in subsection (1) applies (in this subsection referred to as the “election year”), an eligible derivative and, in the taxation year immediately preceding the election year, the taxpayer did not compute its profit or loss in respect of that eligible derivative in accordance with a method of profit computation that produces a substantially similar effect to subsection (6), then 
  (a) the taxpayer is deemed 
  (i) to have disposed of the eligible derivative immediately before the beginning of the election year and received proceeds or paid an amount, as the case may be, equal to its fair market value at that time, and 
  (ii) to have reacquired, or reissued or renewed, the eligible derivative at the beginning of the election year at an amount equal to the proceeds or the amount, as the case may be, determined under subparagraph (i); 
  (b) the profit or loss that would arise (determined without reference to this paragraph) on the deemed disposition in subparagraph (a)(i) 
  (i) is deemed not to arise in the taxation year immediately preceding the election year, and 
  (ii) is deemed to arise in the taxation year in which the taxpayer disposes of the eligible derivative (otherwise than because of paragraphs (6)(a) or 142.5(2)(a)); and 
  (c) for the purpose of applying subsection 18(15) in respect of the disposition of the eligible derivative referred to in subparagraph (b)(ii), the profit or loss deemed to arise because of that subparagraph is included in determining the amount of the transferor’s loss, if any, from the disposition. 
  
  ### Default realization method
  
  (8) If subsection (4) does not apply to a taxpayer referred to in paragraph (4)(b) in respect of a taxation year, a method of profit computation that produces a substantially similar effect to subsection (6) shall not be used for the purpose of computing the taxpayer’s income from a business or property in respect of a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement or a similar agreement for the taxation year. 
  
  ### Interpretation
  
  (9) For the purposes of subsections (4) to (7), if an agreement that is an eligible derivative of a taxpayer is not a property of the taxpayer, the taxpayer is deemed 
  (a) to hold the eligible derivative at any time while the taxpayer is a party to the agreement; and 
  (b) to have disposed of the eligible derivative when it is settled or extinguished in respect of the taxpayer. 
  
  ### Proprietor of business
  
  11 (1) Subject to section 34.1, if an individual is a proprietor of a business, the individual’s income from the business for a taxation year is deemed to be the individual’s income from the business for the fiscal periods of the business that end in the year. 
  
  ### Reference to “taxation year”
  
  (2) Where an individual’s income for a taxation year includes income from a business the fiscal period of which does not coincide with the calendar year, unless the context otherwise requires, a reference in this Subdivision or section 80.3 to a “taxation year” or “year” shall, in respect of the business, be read as a reference to a fiscal period of the business ending in the year. 
  
  ## Inclusions 
  
  ### Income inclusions
  
  12 (1) There shall be included in computing the income of a taxpayer for a taxation year as income from a business or property such of the following amounts as are applicable 
  
  ### Services, etc., to be rendered
  
  (a) any amount received by the taxpayer in the year in the course of a business 
  (i) that is on account of services not rendered or goods not delivered before the end of the year or that, for any other reason, may be regarded as not having been earned in the year or a previous year, or 
  (ii) under an arrangement or understanding that it is repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer; 
  
  ### Amounts receivable
  
  (b) any amount receivable by the taxpayer in respect of property sold or services rendered in the course of a business in the year, notwithstanding that the amount or any part thereof is not due until a subsequent year, unless the method adopted by the taxpayer for computing income from the business and accepted for the purpose of this Part does not require the taxpayer to include any amount receivable in computing the taxpayer’s income for a taxation year unless it has been received in the year, and for the purposes of this paragraph, an amount shall be deemed to have become receivable in respect of services rendered in the course of a business on the day that is the earlier of 
  (i) the day on which the account in respect of the services was rendered, and 
  (ii) the day on which the account in respect of those services would have been rendered had there been no undue delay in rendering the account in respect of the services; 
  
  ### Interest
  
  (c) subject to subsections (3) and (4.1), any amount received or receivable by the taxpayer in the year (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income) as, on account of, in lieu of payment of or in satisfaction of, interest to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Reserve for doubtful debts
  
  (d) any amount deducted under paragraph 20(1)(l) as a reserve in computing the taxpayer’s income for the immediately preceding taxation year; 
  
  ### Reserve for guarantees, etc.
  
  (d.1) any amount deducted under paragraph 20(1)(l.1) as a reserve in computing the taxpayer’s income for the immediately preceding taxation year; 
  (d.2) any amount deducted under paragraph 20(1)(m.3) as a reserve in computing the taxpayer’s income for the immediately preceding taxation year; 
  
  ### Reserves for certain goods and services, etc.
  
  (e) any amount 
  (i) deducted under paragraph 20(1)(m) (including any amount substituted by virtue of subsection 20(6) for any amount deducted under that paragraph), paragraph 20(1)(m.1) or subsection 20(7), or 
  (ii) deducted under paragraph 20(1)(n), in computing the taxpayer’s income from a business for the immediately preceding year; 
  
  ### Negative reserves
  
  (e.1) where the taxpayer is an insurer, the amount prescribed in respect of the insurer for the year; 
  
  ### Insurance proceeds expended
  
  (f) such part of any amount payable to the taxpayer as compensation for damage to, or under a policy of insurance in respect of damage to, property that is depreciable property of the taxpayer as has been expended by the taxpayer 
  (i) within the year, and 
  (ii) within a reasonable time after the damage, on repairing the damage; 
  
  ### Payments based on production or use
  
  (g) any amount received by the taxpayer in the year that was dependent on the use of or production from property whether or not that amount was an instalment of the sale price of the property, except that an instalment of the sale price of agricultural land is not included by virtue of this paragraph; 
  
  ### Proceeds of disposition of right to receive production
  
  (g.1) any proceeds of disposition to which subsection 18.1(6) applies; 
  
  ### Previous reserve for quadrennial survey
  
  (h) any amount deducted as a reserve under paragraph 20(1)(o) in computing the taxpayer’s income for the immediately preceding year; 
  
  ### Bad debts recovered
  
  (i) any amount, other than an amount referred to in paragraph 12(1)(i.1), received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectable loans or lending assets was made in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Bad debts recovered
  
  (i.1) where an amount is received in the year on account of a debt in respect of which a deduction for bad debts was made under subsection 20(4.2) in computing the taxpayer’s income for a preceding taxation year, the amount determined by the formula is 1/2 of the amount so received, is the amount that was deducted under subsection 20(4.2) in respect of the debt, and is the total of the amount that was so deducted under subsection 20(4.2) and the amount that was deemed by that subsection or subsection 20(4.3) to be an allowable capital loss in respect of the debt; 
  
  ### Dividends from resident corporations
  
  (j) any amount of a dividend in respect of a share of the capital stock of a corporation resident in Canada that is required by Subdivision H to be included in computing the taxpayer’s income for the year; 
  
  ### Foreign corporations, trusts and investment entities
  
  (k) any amount required by Subdivision I to be included in computing the taxpayer’s income for the year; 
  
  ### Partnership income
  
  (l) any amount that is, by virtue of Subdivision J, income of the taxpayer for the year from a business or property; 
  
  ### Partnership — interest deduction add back
  
  (l.1) the total of all amounts, each of which is the amount, if any, determined in respect of a partnership by the formula is the total of all amounts each of which is an amount of interest that is 
  (i) deductible by the partnership, and 
  (ii) paid by the partnership in, or payable by the partnership in respect of, the taxation year of the taxpayer (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income) on a debt amount included in the taxpayer’s outstanding debts to specified non-residents (as defined in subsection 18(5)), is the amount determined under paragraph 18(4)(a) in respect of the taxpayer for the year, is the amount determined under paragraph 18(4)(b) in respect of the taxpayer for the year, and is the total of all amounts each of which is an amount included under subsection 91(1) in computing the income of the taxpayer for the year or a subsequent taxation year, or of the partnership for a fiscal period, that may reasonably be considered to be in respect of interest described in A; 
  
  ### Benefits from trusts
  
  (m) any amount required by Subdivision K or subsection 132.1(1) to be included in computing the taxpayer’s income for the year, except 
  (i) any amount deemed by that subdivision to be a taxable capital gain of the taxpayer, and 
  (ii) any amount paid or payable to the taxpayer out of or under an RCA trust (within the meaning assigned by subsection 207.5(1)); 
  
  ### Employees profit sharing plan
  
  (n) any amount received by the taxpayer in the year out of or under 
  (i) an employees profit sharing plan, or 
  (ii) an employee trust established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length; 
  
  ### Employee benefit plan
  
  (n.1) the amount, if any, by which the total of amounts received by the taxpayer in the year out of or under an employee benefit plan to which the taxpayer has contributed as an employer (other than amounts included in the income of the taxpayer by virtue of paragraph 12(1)(m)) exceeds the amount, if any, by which the total of all amounts 
  (i) so contributed by the taxpayer to the plan, or 
  (ii) included in computing the taxpayer’s income for any preceding taxation year by virtue of this paragraph exceeds the total of all amounts 
  (iii) deducted by the taxpayer in respect of the taxpayer’s contributions to the plan in computing the taxpayer’s income for the year or any preceding taxation year, or 
  (iv) received by the taxpayer out of or under the plan in any preceding taxation year (other than an amount included in the taxpayer’s income by virtue of paragraph 12(1)(m)); 
  
  ### Forfeited salary deferral amounts
  
  (n.2) where deferred amounts under a salary deferral arrangement in respect of another person have been deducted under paragraph 20(1)(oo) in computing the taxpayer’s income for preceding taxation years, any amount in respect of the deferred amounts that was deductible under paragraph 8(1)(o) in computing the income of the person for a taxation year ending in the year; 
  
  ### Retirement compensation arrangement
  
  (n.3) the total of all amounts received by the taxpayer in the year in the course of a business out of or under a retirement compensation arrangement to which the taxpayer, another person who carried on a business that was acquired by the taxpayer, or any person with whom the taxpayer or that other person does not deal at arm’s length, has contributed an amount that was deductible under paragraph 20(1)(r) in computing the contributor’s income for a taxation year; 
  (o)  [Repealed, 2003, c. 28, s. 1(2)]  
  
  ### Foreign oil and gas production taxes
  
  (o.1) the total of all amounts, each of which is the taxpayer’s production tax amount for a foreign oil and gas business of the taxpayer for the year, within the meaning assigned by subsection 126(7); 
  
  ### Certain payments to farmers
  
  (p) any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act ;  
  
  ### Employment tax deduction
  
  (q) any amount deducted under subsection 127(13) or (14) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, by the taxpayer for the year;  
  
  ### Inventory adjustment
  
  (r) the total of all amounts each of which, in respect of a property described in the taxpayer’s inventory at the end of the year and valued at its cost amount to the taxpayer for the purposes of computing the taxpayer’s income for the year, is an allowance in respect of depreciation, obsolescence or depletion included in that cost amount; 
  (s)  [Repealed, 2013, c. 34, s. 173]  
  
  ### Investment tax credit
  
  (t) the amount deducted under subsection 127(5) or 127(6) in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year under this paragraph or is not included in an amount determined under paragraph 13(7.1)(e) or 37(1)(e), subparagraph 53(2)(c)(vi) or 53(2)(h)(ii) or for I in the definition 
  *undepreciated capital cost* in subsection 13(21) or L in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6);  
  
  ### Home insulation or energy conversion grants
  
  (u) the amount of any grant received by the taxpayer in the year under a prescribed program of the Government of Canada relating to home insulation or energy conversion in respect of a property used by the taxpayer principally for the purpose of gaining or producing income from a business or property; 
  
  ### Research and development deductions
  
  (v) the amount, if any, by which the total of amounts determined at the end of the year in respect of the taxpayer under paragraphs 37(1)(d) to 37(1)(h) exceeds the total of amounts determined at the end of the year in respect of the taxpayer under paragraphs 37(1)(a) to 37(1)(c.1); 
  
  ### S. 80.4(1) benefit
  
  (w) where the taxpayer is a corporation that carried on a personal services business at any time in the year or a preceding taxation year, the amount deemed by subsection 80.4(1) to be a benefit received by it in the year from carrying on a personal services business; 
  
  ### Inducement, reimbursement, etc.
  
  (x) any particular amount (other than a prescribed amount) received by the taxpayer in the year, in the course of earning income from a business or property, from 
  (i) a person or partnership (in this paragraph referred to as the “payer”) who pays the particular amount 
  (A) in the course of earning income from a business or property, 
  (B) in order to achieve a benefit or advantage for the payer or for persons with whom the payer does not deal at arm’s length, or 
  (C) in circumstances where it is reasonable to conclude that the payer would not have paid the amount but for the receipt by the payer of amounts from a payer, government, municipality or public authority described in this subparagraph or in subparagraph (ii), or 
  (ii) a government, municipality or other public authority, where the particular amount can reasonably be considered to have been received 
  (iii) as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, or 
  (iv) as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of 
  (A) an amount included in, or deducted as, the cost of property, or 
  (B) an outlay or expense, to the extent that the particular amount 
  (v) was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year, 
  (v.1) is not an amount received by the taxpayer in respect of a restrictive covenant, as defined by subsection 56.4(1), that was included, under subsection 56.4(2), in computing the income of a person related to the taxpayer, 
  (vi) except as provided by subsection 127(11.1), 127(11.5) or 127(11.6), does not reduce, for the purpose of an assessment made or that may be made under this Act, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be, 
  (vii) does not reduce, under subsection 12(2.2) or 13(7.4) or paragraph 53(2)(s), the cost or capital cost of the property or the amount of the outlay or expense, as the case may be, and 
  (viii) may not reasonably be considered to be a payment made in respect of the acquisition by the payer or the public authority of an interest in the taxpayer, an interest in, or for civil law a right in, the taxpayer’s business or an interest in, or for civil law a real right in, the taxpayer’s property; 
  
  ### Fuel tax rebates
  
  (x.1) the total of all amounts each of which is 
  (i) a fuel tax rebate received in the year by the taxpayer under subsection 68.4(3) of the Excise Tax Act, or  
  (ii) the amount determined by the formula is the total of all fuel tax rebates under subsections 68.4(2) and (3.1) of that Act received in the year by the taxpayer, is the total of all amounts, in respect of fuel tax rebates under section 68.4 of that Act received in the year by the taxpayer, repaid by the taxpayer under subsection 68.4(7) of that Act, and is the total of all amounts, in respect of fuel tax rebates under section 68.4 of that Act received in the year, deducted under subsection 111(10) in computing the taxpayer’s non-capital losses for other taxation years; 
  
  ### Crown charge rebates
  
  (x.2) the total of all amounts each of which is an amount that 
  (i) was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by Her Majesty in right of Canada or of a province in respect of 
  (A) the acquisition, development or ownership of a Canadian resource property, or 
  (B) the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or a gas well, and 
  (ii) was not otherwise included in computing the taxpayer’s income for the year or a preceding taxation year; 
  
  ### Automobile provided to partner
  
  (y) where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, the amounts that would be included by reason of paragraph 6(1)(e) in the income of the taxpayer for the year if the taxpayer were employed by the partnership; 
  
  ### Amateur athlete trust payments
  
  (z) any amount in respect of an amateur athlete trust required by section 143.1 to be included in computing the taxpayer’s income for the year; 
  
  ### Qualifying environmental trusts
  
  (z.1) the total of all amounts received by the taxpayer in the year as a beneficiary under a qualifying environmental trust, whether or not the amounts are included because of subsection 107.3(1) in computing the taxpayer’s income for any taxation year; 
  
  ### Dispositions of interests in qualifying environmental trusts
  
  (z.2) the total of all amounts each of which is the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under a qualifying environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust; 
  
  ### Debt forgiveness
  
  (z.3) any amount required because of subsection 80(13) or 80(17) to be included in computing the taxpayer’s income for the year; 
  
  ### Eligible funeral arrangements
  
  (z.4) any amount required because of subsection 148.1(3) to be included in computing the taxpayer’s income for the year; 
  
  ### TFSA amounts
  
  (z.5) any amount required by subsection 146.2(9) or section 207.061 to be included in computing the taxpayer’s income for the year; 
  
  ### Refunds
  
  (z.6) any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph 20(1)(vv) in computing income for any taxation year; and 
  
  ### Derivative forward agreement
  
  (z.7) the total of all amounts each of which is 
  (i) if the taxpayer acquires a property under a derivative forward agreement in the year, the portion of the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property that is attributable to an underlying interest other than an underlying interest referred to in subparagraphs (b)(i) to (iii) of the definition derivative forward agreement in subsection 248(1), or  
  (ii) if the taxpayer disposes of a property under a derivative forward agreement in the year, the portion of the amount by which the proceeds of disposition (within the meaning assigned by Subdivision C) of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in clauses (c)(i)(A) to (C) of the definition derivative forward agreement in subsection 248(1).  
  
  ### Interpretation
  
  (2) Paragraphs 12(1)(a) and 12(1)(b) are enacted for greater certainty and shall not be construed as implying that any amount not referred to in those paragraphs is not to be included in computing income from a business for a taxation year whether it is received or receivable in the year or not. 
  
  ### No deferral of section 9 income under paragraph (1)(g)
  
  (2.01) Paragraph (1)(g) does not defer the inclusion in income of any amount that would, if this section were read without reference to that paragraph, be included in computing the taxpayer’s income in accordance with section 9. 
  
  ### Source of income
  
  (2.02) For the purposes of this Act, if an amount is included in computing the income of a taxpayer for a taxation year because of paragraph (1)(l.1) and the amount is in respect of interest that is deductible by a partnership in computing its income from a particular source or from sources in a particular place, the amount is deemed to be from the particular source or from sources in the particular place, as the case may be. 
  
  ### Receipt of inducement, reimbursement, etc.
  
  (2.1) For the purposes of paragraph 12(1)(x), where at a particular time a taxpayer who is a beneficiary of a trust or a member of a partnership has received an amount as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, in respect of the activities of the trust or partnership, or as a reimbursement, contribution, allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of the cost of property or in respect of an expense of the trust or partnership, the amount shall be deemed to have been received at that time by the trust or partnership, as the case may be, as such an inducement, reimbursement, contribution, allowance or assistance. 
  
  ### Deemed outlay or expense
  
  (2.2) Where 
  (a) in a taxation year a taxpayer receives an amount that would, but for this subsection, be included under paragraph 12(1)(x) in computing the taxpayer’s income for the year in respect of an outlay or expense (other than an outlay or expense in respect of the cost of property of the taxpayer) made or incurred by the taxpayer before the end of the following taxation year, and 
  (b) the taxpayer elects under this subsection on or before the day on or before which the taxpayer’s return of income under this Part for the year is required to be filed, or would be required to be filed if tax under this Part were payable by the taxpayer for the year or, where the outlay or expense is made or incurred in the following taxation year, for that following year, the amount of the outlay or expense shall be deemed for the purpose of computing the taxpayer’s income, other than for the purposes of this subsection and paragraphs 12(1)(x) and 20(1)(hh), to have always been the amount, if any, by which 
  (c) the amount of the outlay or expense exceeds 
  (d) the lesser of the amount elected by the taxpayer under this subsection and the amount so received by the taxpayer, and, notwithstanding subsections 152(4) to 152(5), such assessment or reassessment of the taxpayer’s tax, interest and penalties under this Act for any taxation year shall be made as is necessary to give effect to the election. 
  
  ### Interest income
  
  (3) Subject to subsection (4.1), in computing the income for a taxation year of a corporation, partnership, unit trust or any trust of which a corporation or a partnership is a beneficiary, there shall be included any interest on a debt obligation (other than interest in respect of an income bond, an income debenture, a net income stabilization account or an indexed debt obligation) that accrues to it to the end of the year, or becomes receivable or is received by it before the end of the year, to the extent that the interest was not included in computing its income for a preceding taxation year. 
  
  ### Interest from investment contract
  
  (4) Subject to subsection (4.1), if in a taxation year a taxpayer (other than a taxpayer to whom subsection (3) applies) holds an interest in, or for civil law a right in, an investment contract on any anniversary day of the contract, there shall be included in computing the taxpayer’s income for the year the interest that accrued to the taxpayer to the end of that day with respect to the investment contract, to the extent that the interest was not otherwise included in computing the taxpayer’s income for the year or any preceding taxation year. 
  
  ### Impaired debt obligations
  
  (4.1) Paragraph 12(1)(c) and subsections 12(3) and 12(4) do not apply to a taxpayer in respect of a debt obligation for the part of a taxation year throughout which the obligation is impaired where an amount in respect of the obligation is deductible because of subparagraph 20(1)(l)(ii) in computing the taxpayer’s income for the year. 
  
  ### Deemed accrual
  
  (9) For the purposes of subsections (3), (4) and (11) and 20(14) and (21), if a taxpayer acquires an interest in, or for civil law a right in, a prescribed debt obligation, an amount determined in prescribed manner is deemed to accrue to the taxpayer as interest on the obligation in each taxation year during which the taxpayer holds the interest or the right in the obligation. 
  
  ### Exclusion of proceeds of disposition
  
  (9.1) If a taxpayer disposes of an interest in, or for civil law a right in, a debt obligation that is a debt obligation in respect of which the proportion of the payments of principal to which the taxpayer is entitled is not equal to the proportion of the payments of interest to which the taxpayer is entitled, the portion of the proceeds of disposition received by the taxpayer that can reasonably be considered to represent a recovery of the cost to the taxpayer of the interest or the right in the debt obligation shall, notwithstanding any other provision of this Act, not be included in computing the taxpayer’s income, and for the purpose of this subsection, a debt obligation includes, for greater certainty, all of the issuer’s obligations to pay principal and interest under that obligation. 
  
  ### Income from R.H.O.S.P
  
  (10.1) Notwithstanding any other provision of this Act, where an individual was at the end of 1985 a beneficiary under a registered home ownership savings plan (within the meanings assigned by paragraphs 146.2(1)(a) and (h) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as they read in their application to the 1985 taxation year), that portion of the income that can reasonably be considered to have accrued under the plan before 1986 (other than the portion thereof that can reasonably be considered to be attributable to amounts contributed after May 22, 1985 to or under the plan) shall not be included in computing the income of the individual or of any other person.  
  
  ### NISA receipts
  
  (10.2) There shall be included in computing a taxpayer’s income for a taxation year from a property the total of all amounts each of which is the amount determined by the formula is an amount paid at a particular time in the year out of the taxpayer’s NISA Fund No. 2; and is the amount, if any, by which 
  (a) the total of all amounts each of which is 
  (i) deemed by subsection (10.4) or 104(5.1) or (14.1) (as it read for the taxpayer’s 2015 taxation year) to have been paid out of the taxpayer’s NISA Fund No. 2 before the particular time, or 
  (ii) deemed by subsection 70(5.4) or 73(5) to have been paid out of another person’s NISA Fund No. 2 on being transferred to the taxpayer’s NISA Fund No. 2 before the particular time, exceeds 
  (b) the total of all amounts each of which is the amount by which an amount otherwise determined under this subsection in respect of a payment out of the taxpayer’s NISA Fund No. 2 before the particular time was reduced because of this description. 
  
  ### Amount credited or added not included in income
  
  (10.3) Notwithstanding any other provision of this Act, an amount credited or added to a taxpayer’s NISA Fund No. 2 shall not be included in computing the taxpayer’s income solely because of that crediting or adding. 
  
  ### Acquisition of control — corporate NISA Fund No. 2
  
  (10.4) For the purpose of subsection (10.2), if at any time there is an acquisition of control of a corporation, the balance of the corporation’s NISA Fund No. 2, if any, at that time is deemed to be paid out to the corporation immediately before that time. 
  
  ### Definitions
  
  (11) In this section,  
  *anniversary day* of an investment contract means  
  (a) the day that is one year after the day immediately preceding the date of issue of the contract, 
  (b) the day that occurs at every successive one year interval from the day determined under paragraph (a), and 
  (c) the day on which the contract was disposed of; ( jour anniversaire)   
  *investment contract*, in relation to a taxpayer, means any debt obligation other than  
  (a) a salary deferral arrangement or a plan or arrangement that, but for any of paragraphs (a), (b) and (d) to (l) of the definition 
  *salary deferral arrangement* in subsection 248(1), would be a salary deferral arrangement,  
  (b) a retirement compensation arrangement or a plan or arrangement that, but for any of paragraphs (a), (b), (d) and (f) to (n) of the definition 
  *retirement compensation arrangement* in subsection 248(1), would be a retirement compensation arrangement,  
  (c) an employee benefit plan or a plan or arrangement that, but for any of paragraphs (a) to (e) of the definition 
  *employee benefit plan* in subsection 248(1), would be an employee benefit plan,  
  (d) a foreign retirement arrangement, 
  (d.1) a TFSA, 
  (e) an income bond, 
  (f) an income debenture, 
  (g)  [Repealed, 2023, c. 26, s. 4]  
  (h)  [Repealed, 2023, c. 26, s. 4]  
  (i) an obligation in respect of which the taxpayer has (otherwise than because of subsection (4)) at periodic intervals of not more than one year, included, in computing the taxpayer’s income throughout the period in which the taxpayer held an interest in, or for civil law a right in, the obligation, the income accrued on it for those intervals, 
  (j) an obligation in respect of a net income stabilization account, 
  (k) an indexed debt obligation, and 
  (l) a prescribed contract. ( contrat de placement)  
  
  ### Flipped property — deemed business
  
  (12) For the purposes of this Act, if, absent this subsection and paragraph 40(2)(b), a taxpayer would have had a gain from the disposition of a flipped property, then throughout the period that the taxpayer owned the flipped property 
  (a) the taxpayer is deemed to carry on a business that is an adventure or concern in the nature of trade with respect to the flipped property; 
  (b) the flipped property is deemed to be inventory of the taxpayer’s business; and 
  (c) the flipped property is deemed not to be capital property of the taxpayer. 
  
  ### Definition of flipped property 
  
  (13) For the purposes of subsections (12) and (14), a 
  *flipped property* of a taxpayer means a property (other than a property, or a right to acquire property, that would be inventory of the taxpayer if the definition inventory in subsection 248(1) were read without reference to subsection (12)) that is  
  (a) prior to its disposition by the taxpayer, either 
  (i) a housing unit located in Canada, or 
  (ii) a right to acquire a housing unit located in Canada; and 
  (b) owned or, in the case of a right to acquire, held, by the taxpayer for less than 365 consecutive days prior to its disposition, other than a disposition that can reasonably be considered to occur due to, or in anticipation of, one or more of the following events: 
  (i) the death of the taxpayer or a person related to the taxpayer, 
  (ii) one or more persons related to the taxpayer becoming a member of the taxpayer’s household or the taxpayer becoming a member of the household of a related person, 
  (iii) the breakdown of the marriage or common-law partnership of the taxpayer if the taxpayer has been living separate and apart from their spouse or common-law partner for at least 90 days prior to the disposition, 
  (iv) a threat to the personal safety of the taxpayer or a related person, 
  (v) the taxpayer or a related person suffering from a serious illness or disability, 
  (vi) an eligible relocation of the taxpayer or the taxpayer’s spouse or common-law partner, if the definition eligible relocation were read without reference to the requirements for the new work location and the new residence to be in Canada,  
  (vii) an involuntary termination of the employment of the taxpayer or the taxpayer’s spouse or common-law partner, 
  (viii) the insolvency of the taxpayer, or 
  (ix) the destruction or expropriation of the property. 
  
  ### Flipped property — loss denial
  
  (14) For the purposes of this Part, a taxpayer’s loss from a business in respect of a flipped property is deemed to be nil. 
  
  ### Cash bonus on Canada Savings Bonds
  
  12.1 Notwithstanding any other provision of this Act, where in a taxation year a taxpayer receives an amount from the Government of Canada in respect of a Canada Savings Bond as a cash bonus that the Government of Canada has undertaken to pay (other than any amount of interest, bonus or principal agreed to be paid at the time of the issue of the bond under the terms of the bond), the taxpayer shall, in computing the taxpayer’s income for the year, include as interest in respect of the Canada Savings Bond 1/2 of the cash bonus so received. 
  
  ### Amount to be included
  
  12.2 (1) Where in a taxation year a taxpayer holds an interest, last acquired after 1989, in a life insurance policy that is not 
  (a) an exempt policy, 
  (b) a prescribed annuity contract, and 
  (c) a contract under which the policyholder has, under the terms and conditions of a life insurance policy that was not an annuity contract and that was last acquired before December 2, 1982, received the proceeds therefrom in the form of an annuity contract, on any anniversary day of the policy, there shall be included in computing the taxpayer’s income for the taxation year the amount, if any, by which the accumulating fund on that day in respect of the interest in the policy, as determined in prescribed manner, exceeds the adjusted cost basis to the taxpayer of the interest in the policy on that day. 
  (3)  [Repealed, 1994, c. 7, Sch. II, s. 8(2)]  
  
  ### Idem
  
  (5) Where in a taxation year subsection 12.2(1) applies with respect to a taxpayer’s interest in an annuity contract (or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest), there shall be included in computing the taxpayer’s income for the year the amount, if any, by which 
  (a) the total of all amounts each of which is an amount determined at the end of the year, in respect of the interest, for any of H to L in the definition 
  *adjusted cost basis* in subsection 148(9)  exceeds 
  (b) the total of all amounts each of which is an amount determined at the end of the year, in respect of the interest, for any of A to G in the definition referred to in paragraph 12.2(5)(a). 
  
  ### Deemed acquisition of interest in annuity
  
  (8) For the purposes of this section, the first premium that was not fixed before 1990 and that was paid after 1989 by or on behalf of a taxpayer under an annuity contract, other than a contract described in paragraph (1)(d) of this section, or paragraph 12.2(3)(e) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, or to which subsection (1) of this section or subsection 12.2(4) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, applies (as those paragraphs and subsections, the numbers of which are those in force immediately before December 17, 1991, read in their application to life insurance policies last acquired before 1990) or to which subsection 12(3) applies, last acquired by the taxpayer before 1990 (in this subsection referred to as the “original contract”) shall be deemed to have been paid to acquire, at the time the premium was paid, an interest in a separate annuity contract issued at that time, to the extent that the amount of the premium was not fixed before 1990, and each subsequent premium paid under the original contract shall be deemed to have been paid under that separate contract to the extent that the amount of that subsequent premium was not fixed before 1990.  
  
  ### Riders
  
  (10) For the purposes of this Act, a rider added at any time after 1989 to a life insurance policy last acquired before 1990 that provides additional life insurance is deemed to be a separate life insurance policy issued at that time unless 
  (a) the policy is an exempt policy last acquired after December 1, 1982 or an annuity contract; or 
  (b) the only additional life insurance provided by the rider is an accidental death benefit. 
  
  ### Definitions
  
  (11) In this section and paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,   
  *anniversary day* of a life insurance policy means  
  (a) the day that is one year after the day immediately preceding the day on which the policy was issued, and 
  (b) each day that occurs at each successive one-year interval after the day determined under paragraph (a). ( jour anniversaire)   
  *exempt policy* has the meaning prescribed by regulation. (police exonérée)  
  
  ### Application of ss. 138(12) and 148(9)
  
  (12) The definitions in subsections 138(12) and 148(9) apply to this section. 
  
  ### Application of s. 148(10)
  
  (13) Subsection 148(10) applies to this section. 
  12.3  [Repealed, 2013, c. 34, s. 174]  
  
  ### Bad debt inclusion
  
  12.4 Where, in a taxation year, a taxpayer disposes of a property that was a property described in an inventory of the taxpayer and in the year or a preceding taxation year an amount has been deducted under paragraph 20(1)(p) in computing the taxpayer’s income in respect of the property, there shall be included in computing the taxpayer’s income for the year from the business in which the property was used or held, the amount, if any, by which 
  (a) the total of all amounts deducted under paragraph 20(1)(p) by the taxpayer in respect of the property in computing the taxpayer’s income for the year or a preceding taxation year exceeds 
  (b the total of all amounts included under paragraph 12(1)(i) by the taxpayer in respect of the property in computing the taxpayer’s income for the year or a preceding taxation year. 
  
  ### Definitions
  
  12.5 (1) The definitions in this section apply for the purposes of this section and section 20.4.  
  *base year* of an insurer means the insurer’s taxation year that immediately precedes its transition year. (année de base)   
  *insurance business* of an insurer, is an insurance business carried on by the insurer, other than a life insurance business. (entreprise d’assurance)   
  *reserve transition amount* of an insurer, in respect of an insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula  is the maximum amount that the insurer would be permitted to claim under paragraph 20(7)(c) (and that would be prescribed by section 1400 of the Regulations for the purpose of paragraph 20(7)(c)) as a policy reserve for its base year in respect of its insurance policies if 
  (a) the generally accepted accounting principles that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and 
  (b) section 1400 of the Regulations were read in respect of the insurer’s base year as it reads in respect of its transition year; and is the maximum amount that the insurer is permitted to claim under paragraph 20(7)(c) as a policy reserve for its base year. ( montant transitoire)   
  *transition year* of an insurer means the insurer’s first taxation year that begins after September 2006. (année transitoire)  
  
  ### Transition year income inclusion
  
  (2) There shall be included in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year, the positive amount, if any, of the insurer’s reserve transition amount in respect of that insurance business. 
  
  ### Transition year income deduction reversal
  
  (3) If an amount has been deducted under subsection 20.4(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be included in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula is the amount deducted under subsection 20.4(2) in computing the insurer’s income for the transition year from that insurance business; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Winding-up
  
  (4) If an insurer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the “parent”), and immediately after the winding-up the parent carries on an insurance business, in applying subsections (3) and 20.4(3) in computing the incomes of the insurer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the “start day”) on which assets of the insurer were distributed to the parent on the winding-up, 
  (a) the parent is, on and after the start day, deemed to be the same corporation as and a continuation of the insurer in respect of 
  (i) any amount included under subsection (2) or deducted under subsection 20.4(2) in computing the insurer’s income from an insurance business for its transition year, 
  (ii) any amount included under subsection (3) or deducted under subsection 20.4(3) in computing the insurer’s income from an insurance business for a taxation year of the insurer that begins before the start day, and 
  (iii) any amount that would — in the absence of this subsection and if the insurer existed and carried on an insurance business on each day that is the start day or a subsequent day and on which the parent carries on an insurance business — be required to be included or deducted, in respect of any of those days, under subsection (3) or 20.4(3) in computing the insurer’s income from an insurance business; and 
  (b) the insurer is, in respect of each of its particular taxation years, to determine the value for B in the formulas in subsections (3) and 20.4(3) without reference to the start day and days after the start day. 
  
  ### Amalgamations
  
  (5) If there is an amalgamation (within the meaning assigned by subsection 87(1)) of an insurer with one or more other corporations to form one corporation (referred to in this subsection as the “new corporation”), and immediately after the amalgamation the new corporation carries on an insurance business, in applying subsections (3) and 20.4(3) in computing the new corporation’s income for particular taxation years that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the insurer in respect of 
  (a) any amount included under subsection (2) or deducted under subsection 20.4(2) in computing the insurer’s income from an insurance business for its transition year; 
  (b) any amount included under subsection (3) or deducted under subsection 20.4(3) in computing the insurer’s income from an insurance business for a taxation year of the insurer that begins before the day on which the amalgamation occurred; and 
  (c) any amount that would — in the absence of this subsection and if the insurer existed and carried on an insurance business on each day that is the day on which the amalgamation occurred or a subsequent day and on which the new corporation carries on an insurance business — be required to be included or deducted, in respect of any of those days, under subsection (3) or 20.4(3) in computing the insurer’s income from an insurance business. 
  
  ### Application of subsection (7)
  
  (6) Subsection (7) applies if, at any time, an insurer (referred to in this subsection and subsection (7) as the “transferor”) transfers, to a corporation (referred to in this subsection and subsection (7) as the “transferee”) that is related to the transferor, property in respect of an insurance business carried on by the transferor in Canada (referred to in this subsection and subsection (7) as the “transferred business”) and 
  (a) subsection 138(11.5) or (11.94) applies to the transfer; or 
  (b) subsection 85(1) applies to the transfer, the transfer includes all or substantially all of the property and liabilities of the transferred business and, immediately after the transfer, the transferee carries on an insurance business. 
  
  ### Transfer of insurance business
  
  (7) If this subsection applies in respect of the transfer, at any time, of property 
  (a) the transferee is, at and after that time, deemed to be the same corporation as and a continuation of the transferor in respect of 
  (i) any amount included under subsection (2) or deducted under subsection 20.4(2) in computing the transferor’s income for its transition year that can reasonably be attributed to the transferred business, 
  (ii) any amount included under subsection (3) or deducted under subsection 20.4(3) in computing the transferor’s income for a taxation year of the transferor that begins before that time that can reasonably be attributed to the transferred business, 
  (iii) any amount that would — in the absence of this subsection and if the transferor existed and carried on an insurance business on each day that includes that time or is a subsequent day and on which the transferee carries on an insurance business — be required to be included or deducted, in respect of any of those days, under subsection (3) or 20.4(3) in computing the transferor’s income that can reasonably be attributed to the transferred business; and 
  (b) in determining, in respect of the day that includes that time or any subsequent day, any amount that is required under subsection (3) or 20.4(3) to be included or deducted in computing the transferor’s income for each particular taxation year from the transferred business, the description of A in the formulas in those subsections is deemed to be nil. 
  
  ### Ceasing to carry on business
  
  (8) If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the “discontinued business”), and none of subsections (4) to (6) apply, there shall be included in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula is the amount deducted under subsection 20.4(2) in computing the insurer’s income from the discontinued business for its transition year; and is the total of all amounts each of which is an amount included under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time. 
  
  ### Ceasing to exist
  
  (9) If at any time an insurer that carried on an insurance business ceases to exist (otherwise than as a result of a winding-up or amalgamation described in subsection (4) or (5)), for the purposes of subsections (8) and 20.4(4), the insurer is deemed to have ceased to carry on the insurance business at the earlier of 
  (a) the time (determined without reference to this subsection) at which the insurer ceased to carry on the insurance business, and 
  (b) the time that is immediately before the end of the last taxation year of the insurer that ended at or before the time at which the insurer ceased to exist. 
  
  ### Definitions
  
  12.6 (1) The definitions in section 18.3 apply in this section. 
  
  ### Where subsection (3) applies
  
  (2) Subsection (3) applies for a taxation year of an entity in respect of a security of the entity if 
  (a) the security becomes, at a particular time in the year, a stapled security of the entity and, as a consequence, amounts described in paragraphs 18.3(3)(a) and (b) are not deductible because of subsection 18.3(3); 
  (b) the security (or any security for which the security was substituted) ceased, at an earlier time, to be a stapled security of any entity and, as a consequence, subsection 18.3(3) ceased to apply to deny the deductibility of amounts that would be described in paragraphs 18.3(3)(a) and (b) if the security were a stapled security; and 
  (c) throughout the period that began immediately after the most recent time referred to in paragraph (b) and that ends at the particular time, the security (or any security for which the security was substituted) was not a stapled security of any entity. 
  
  ### Income inclusion
  
  (3) If this subsection applies for a taxation year of an entity in respect of a security of the entity, the entity shall include in computing its income for the year each amount that 
  (a) was deducted by the entity (or by another entity that issued a security for which the security was substituted) in computing its income for a taxation year that includes any part of the period described in paragraph (2)(c); and 
  (b) would not have been deductible if subsection 18.3(3) had applied in respect of the amount. 
  
  ### Deemed excess
  
  (4) For the purposes of subsection 161(1), if an amount described in paragraph (3)(a) is included in the income of an entity for a taxation year under subsection (3), the entity is deemed to have an excess immediately after the entity’s balance-due day for the year computed as if 
  (a) the entity were resident in Canada throughout the year; 
  (b) the entity’s tax payable for the year were equal to the tax payable by the entity on its taxable income for the year; 
  (c) the amount were the entity’s only taxable income for the year; 
  (d) the entity claimed no deductions under Division E for the year; 
  (e) the entity had not paid any amounts on account of its tax payable for the year; and 
  (f) the tax payable determined under paragraph (b) had been outstanding throughout the period that begins immediately after the end of the taxation year for which the amount was deducted and that ends on the entity’s balance-due day for the year. 
  
  ### Recaptured depreciation
  
  13 (1) If, at the end of a taxation year, the total of the amounts determined for E to K in the definition 
  *undepreciated capital cost* in subsection (21) in respect of a taxpayer’s depreciable property of a particular prescribed class exceeds the total of the amounts determined for A to D.1 in that definition in respect of that property, the excess shall be included in computing the taxpayer’s income of the year.  
  
  ### Recapture — Class 10.1 Passenger Vehicle
  
  (2) Notwithstanding subsection 13(1), where an excess amount is determined under that subsection at the end of a taxation year in respect of a passenger vehicle having a cost to a taxpayer in excess of $20,000 or such other amount as may be prescribed, unless it was, at any time, designated immediate expensing property as defined in subsection 1104(3.1) of the Income Tax Regulations, that excess amount shall not be included in computing the taxpayer’s income for the year but shall be deemed, for the purposes of B in the definition undepreciated capital cost in subsection 13(21), to be an amount included in the taxpayer’s income for the year by reason of this section.  
  
  ### “Taxation year”, “year” and “income” of individual
  
  (3) Where a taxpayer is an individual whose income for a taxation year includes income from a business the fiscal period of which does not coincide with the calendar year and depreciable property acquired for the purpose of gaining or producing income from the business has been disposed of, 
  (a) for greater certainty, each reference in subsections 13(1) and 13(2) to a “taxation year” and “year” shall be read as a reference to a “fiscal period”; and 
  (b) a reference in subsection 13(1) to “the income” shall be read as a reference to “the income from the business”. 
  
  ### Exchanges of property
  
  (4) Where an amount in respect of the disposition in a taxation year (in this subsection referred to as the “initial year”) of depreciable property (in this section referred to as the “former property”) of a prescribed class of a taxpayer would, but for this subsection, be the amount determined for F or G in the definition 
  *undepreciated capital cost* in subsection 13(21) in respect of the disposition of the former property that is either  
  (a) property the proceeds of disposition of which were proceeds referred to in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in subsection 13(21), or  
  (b) a property that was, immediately before the disposition, a former business property of the taxpayer, and the taxpayer so elects under this subsection in the taxpayer’s return of income for the taxation year in which the taxpayer acquires a depreciable property of a prescribed class of the taxpayer that is a replacement property for the taxpayer’s former property, 
  (c) the amount otherwise determined for F or G in the definition 
  *undepreciated capital cost* in subsection 13(21) in respect of the disposition of the former property shall be reduced by the lesser of  
  (i) the amount, if any, by which the amount otherwise determined for F or G in that definition exceeds the undepreciated capital cost to the taxpayer of property of the prescribed class to which the former property belonged at the time immediately before the time that the former property was disposed of, and 
  (ii) the amount that has been used by the taxpayer to acquire 
  (A) if the former property is described in paragraph (a), before the later of the end of the second taxation year following the initial year and 24 months after the end of the initial year, or 
  (B) in any other case, before the later of the end of the first taxation year following the initial year and 12 months after the end of the initial year, a replacement property of a prescribed class that has not been disposed of by the taxpayer before the time at which the taxpayer disposed of the former property, and 
  (d) the amount of the reduction determined under paragraph 13(4)(c) shall be deemed to be proceeds of disposition of a depreciable property of the taxpayer that had a capital cost equal to that amount and that was property of the same class as the replacement property, from a disposition made on the later of 
  (i) the time the replacement property was acquired by the taxpayer, and 
  (ii) the time the former property was disposed of by the taxpayer. 
  
  ### Replacement for a former property
  
  (4.1) For the purposes of subsection 13(4), a particular depreciable property of a prescribed class of a taxpayer is a replacement for a former property of the taxpayer if 
  (a) it is reasonable to conclude that the property was acquired by the taxpayer to replace the former property; 
  (a.1) it was acquired by the taxpayer and used by the taxpayer or a person related to the taxpayer for a use that is the same as or similar to the use to which the taxpayer or a person related to the taxpayer put the former property; 
  (b) where the former property was used by the taxpayer or a person related to the taxpayer for the purpose of gaining or producing income from a business, the particular depreciable property was acquired for the purpose of gaining or producing income from that or a similar business or for use by a person related to the taxpayer for such a purpose; 
  (c) where the former property was a taxable Canadian property of the taxpayer, the particular depreciable property is a taxable Canadian property of the taxpayer; and 
  (d) where the former property was a taxable Canadian property (other than treaty-protected property) of the taxpayer, the particular depreciable property is a taxable Canadian property (other than treaty-protected property) of the taxpayer. 
  
  ### Election — limited period franchise, concession or license
  
  (4.2) Subsection (4.3) applies if 
  (a) a taxpayer (in this subsection and subsection (4.3) referred to as the “transferor”) has, pursuant to a written agreement with a person or partnership (in this subsection and subsection (4.3) referred to as the “transferee”), at any time disposed of or terminated a former property that is a franchise, concession or licence for a limited period that is wholly attributable to the carrying on of a business at a fixed place; 
  (b) the transferee acquired the former property from the transferor or, on the termination, acquired a similar property in respect of the same fixed place from another person or partnership; and 
  (c) the transferor and the transferee jointly elect in their returns of income for their taxation years that include that time to have subsection (4.3) apply in respect of the acquisition and the disposition or termination. 
  
  ### Effect of election
  
  (4.3) If this subsection applies in respect of an acquisition and a disposition or termination, 
  (a) if the transferee acquired a similar property referred to in paragraph (4.2)(b), the transferee is deemed to have also acquired the former property at the time that the former property was terminated and to own the former property until the transferee no longer owns the similar property; 
  (b) if the transferee acquired the former property referred to in paragraph (4.2)(b), the transferee is deemed to own the former property until such time as the transferee owns neither the former property nor a similar property in respect of the same fixed place to which the former property related; 
  (c) for the purpose of calculating the amount deductible under paragraph 20(1)(a) in respect of the former property in computing the transferee’s income, the life of the former property remaining on its acquisition by the transferee is deemed to be equal to the period that was the life of the former property remaining on its acquisition by the transferor; and 
  (d) any amount that would, if this Act were read without reference to this subsection, be included in the cost of a property of the transferee included in Class 14.1 of Schedule II to the Income Tax Regulations (including a deemed acquisition under subsection (35)) or included in the proceeds of disposition of a property of the transferor included in that Class (including a deemed disposition under subsection (37)) in respect of the disposition or termination of the former property by the transferor is deemed to be  
  (i) neither included in the cost nor the proceeds of disposition of property included in that Class, 
  (ii) an amount required to be included in computing the capital cost to the transferee of the former property, and 
  (iii) an amount required to be included in computing the proceeds of disposition to the transferor in respect of a disposition of the former property. 
  
  ### Reclassification of property
  
  (5) Where one or more depreciable properties of a taxpayer that were included in a prescribed class (in this subsection referred to as the “old class”) become included at any time (in this subsection referred to as the “transfer time”) in another prescribed class (in this subsection referred to as the “new class”), for the purpose of determining at any subsequent time the undepreciated capital cost to the taxpayer of depreciable property of the old class and the new class 
  (a) the value of A in the definition 
  *undepreciated capital cost* in subsection 13(21) shall be determined as if each of those depreciable properties were  
  (i) properties of the new class acquired before the subsequent time, and 
  (ii) never included in the old class; and 
  (b) there shall be deducted in computing the total depreciation allowed to the taxpayer for property of the old class before the subsequent time, and added in computing the total depreciation allowed to the taxpayer for property of the new class before the subsequent time, the greater of 
  (i) the amount determined by the formula is the total of all amounts each of which is the capital cost to the taxpayer of each of those depreciable properties, and is the undepreciated capital cost to the taxpayer of depreciable property of the old class at the transfer time, and 
  (ii) the total of all amounts each of which is an amount that would have been deducted under paragraph 20(1)(a) in respect of a depreciable property that is one of those properties in computing the taxpayer’s income for a taxation year that ended before the transfer time and at the end of which the property was included in the old class if 
  (A) the property had been the only property included in a separate prescribed class, and 
  (B) the rate allowed by the regulations made for the purpose of paragraph 20(1)(a) in respect of that separate class had been the effective rate that was used by the taxpayer to calculate a deduction under that paragraph in respect of the old class for the year. 
  
  ### Rules applicable
  
  (5.1) Where at any time in a taxation year a taxpayer acquires a particular property in respect of which, immediately before that time, the taxpayer had a leasehold interest that was included in a prescribed class, for the purposes of this section, section 20 and any regulations made under paragraph 20(1)(a), the following rules apply: 
  (a) the leasehold interest shall be deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to the amount, if any, by which 
  (i) the capital cost immediately before that time of the leasehold interest exceeds 
  (ii) the total of all amounts claimed by the taxpayer in respect of the leasehold interest and deductible under paragraph 20(1)(a) in computing the taxpayer’s income in previous taxation years; 
  (b) the particular property shall be deemed to be depreciable property of a prescribed class of the taxpayer acquired by the taxpayer at that time and there shall be added to the capital cost to the taxpayer of the property an amount equal to the capital cost referred to in subparagraph 13(5.1)(a)(i); and 
  (c) the total referred to in subparagraph 13(5.1)(a)(ii) shall be added to the total depreciation allowed to the taxpayer before that time in respect of the class to which the particular property belongs. 
  
  ### Deemed cost and depreciation
  
  (5.2) If, at any time, a taxpayer has acquired a capital property that is depreciable property or real or immovable property in respect of which, before that time, the taxpayer or any person with whom the taxpayer was not dealing at arm’s length was entitled to a deduction in computing income in respect of any amount paid or payable for the use of, or the right to use, the property and the cost or the capital cost (determined without reference to this subsection) at that time of the property to the taxpayer is less than the fair market value thereof at that time determined without reference to any option with respect to that property, for the purposes of this section, section 20 and any regulations made under paragraph 20(1)(a), the following rules apply: 
  (a) the property shall be deemed to have been acquired by the taxpayer at that time at a cost equal to the lesser of 
  (i) the fair market value of the property at that time determined without reference to any option with respect to that property, and 
  (ii) the total of the cost or the capital cost (determined without reference to this subsection) of the property to the taxpayer and all amounts (other than amounts paid or payable to a person with whom the taxpayer was not dealing at arm’s length) each of which is an outlay or expense made or incurred by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length at any time for the use of, or the right to use, the property, and for the purposes of this paragraph and subsection 13(5.3), where a particular corporation has been incorporated or otherwise formed after the time any other corporation with which the particular corporation would not have been dealing at arm’s length had the particular corporation been in existence before that time, the particular corporation shall be deemed to have been in existence from the time of the formation of the other corporation and to have been not dealing at arm’s length with the other corporation; 
  (b) the amount by which the cost to the taxpayer of the property determined under paragraph 13(5.2)(a) exceeds the cost or the capital cost thereof (determined without reference to this subsection) shall be added to the total depreciation allowed to the taxpayer before that time in respect of the prescribed class to which the property belongs; and 
  (c) where the property would, but for this paragraph, not be depreciable property of the taxpayer, it shall be deemed to be depreciable property of a separate prescribed class of the taxpayer. 
  
  ### Deemed recapture
  
  (5.3) If, at any time in a taxation year, a taxpayer has disposed of a capital property that is an option with respect to depreciable property or real or immovable property in respect of which the taxpayer or any person with whom the taxpayer was not dealing at arm’s length was entitled to a deduction in computing income in respect of any amount paid for the use of, or the right to use, the property, for the purposes of this section, the amount, if any, by which the proceeds of disposition to the taxpayer of the option exceed the taxpayer’s cost in respect thereof is deemed to be an excess referred to in subsection (1) in respect of the taxpayer for the year. 
  
  ### Idem
  
  (5.4) Where, before the time of disposition of a capital property that was depreciable property of a taxpayer, the taxpayer, or any person with whom the taxpayer was not dealing at arm’s length, was entitled to a deduction in computing income in respect of any outlay or expense made or incurred for the use of, or the right to use, during a period of time, that capital property (other than an outlay or expense made or incurred by the taxpayer or a person with whom the taxpayer was not dealing at arm’s length before the acquisition of the property), except where the taxpayer disposed of the property to a person with whom the taxpayer was not dealing at arm’s length and that person was subject to the provisions of subsection 13(5.2) with respect to the acquisition by that person of the property, the following rules apply: 
  (a) an amount equal to the lesser of 
  (i) the total of all amounts (other than amounts paid or payable to the taxpayer or a person with whom the taxpayer was not dealing at arm’s length) each of which was a deductible outlay or expense made or incurred before the time of disposition by the taxpayer, or by a person with whom the taxpayer was not dealing at arm’s length, for the use of, or the right to use, during the period of time, the property, and 
  (ii) the amount, if any, by which the fair market value of the property at the earlier of 
  (A) the expiration of the last period of time in respect of which the deductible outlay or expense referred to in subparagraph 13(5.4)(a)(i) was made or incurred, and 
  (B) the time of the disposition exceeds the capital cost to the taxpayer of the property immediately before that time shall immediately before the time of the disposition, be added to the capital cost of the property to the person who owned the property at that time; and 
  (b) the amount added to the capital cost to the taxpayer of the property pursuant to paragraph 13(5.4)(a) shall be added immediately before the time of the disposition to the total depreciation allowed to the taxpayer before that time in respect of the prescribed class to which the property belongs. 
  
  ### Lease cancellation payment
  
  (5.5) For the purposes of subsection 13(5.4), an amount deductible by a taxpayer under paragraph 20(1)(z) or 20(1)(z.1) in respect of a cancellation of a lease of property shall, for greater certainty, be deemed not to be an outlay or expense that was made or incurred by the taxpayer for the use of, or the right to use, the property. 
  
  ### Misclassified property
  
  (6) Where, in calculating the amount of a deduction allowed to a taxpayer under subsection 20(16) or regulations made for the purposes of paragraph 20(1)(a) in respect of depreciable property of the taxpayer of a prescribed class (in this subsection referred to as the “particular class”), there has been added to the capital cost to the taxpayer of depreciable property of the particular class the capital cost of depreciable property (in this subsection referred to as “added property”) of another prescribed class, for the purposes of this section, section 20 and any regulations made for the purposes of paragraph 20(1)(a), the added property shall, if the Minister so directs with respect to any taxation year for which, under subsection 152(4), the Minister may make any reassessment or additional assessment or assess tax, interest or penalties under this Part, be deemed to have been property of the particular class and not of the other class at all times before the beginning of the year and, except to the extent that the added property or any part thereof has been disposed of by the taxpayer before the beginning of the year, to have been transferred from the particular class to the other class at the beginning of the year. 
  
  ### Rules applicable
  
  (7) Subject to subsection 70(13), for the purposes of paragraphs 8(1)(j) and 8(1)(p), this section, section 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (a) where a taxpayer, having acquired property for the purpose of gaining or producing income, has begun at a later time to use it for some other purpose, the taxpayer shall be deemed to have disposed of it at that later time for proceeds of disposition equal to its fair market value at that time and to have reacquired it immediately thereafter at a cost equal to that fair market value; 
  (b) where a taxpayer, having acquired property for some other purpose, has begun at a later time to use it for the purpose of gaining or producing income, the taxpayer shall be deemed to have acquired it at that later time at a capital cost to the taxpayer equal to the lesser of 
  (i) the fair market value of the property at that later time, and 
  (ii) the total of 
  (A) the cost to the taxpayer of the property at that later time determined without reference to this paragraph, paragraph 13(7)(a) and subparagraph 13(7)(d)(ii), and 
  (B) 1/2 of the amount, if any, by which 
  (I) the fair market value of the property at that later time exceeds the total of 
  (II) the cost to the taxpayer of the property as determined under clause 13(7)(b)(ii)(A), and 
  (III) twice the amount deducted by the taxpayer under section 110.6 in respect of the amount, if any, by which the fair market value of the property at that later time exceeds the cost to the taxpayer of the property as determined under clause 13(7)(b)(ii)(A); 
  (c) where property has, since it was acquired by a taxpayer, been regularly used in part for the purpose of gaining or producing income and in part for some other purpose, the taxpayer shall be deemed to have acquired, for the purpose of gaining or producing income, the proportion of the property that the use regularly made of the property for gaining or producing income is of the whole use regularly made of the property at a capital cost to the taxpayer equal to the same proportion of the capital cost to the taxpayer of the whole property and, if the property has, in such a case, been disposed of, the proceeds of disposition of the proportion of the property deemed to have been acquired for gaining or producing income shall be deemed to be the same proportion of the proceeds of disposition of the whole property; 
  (d) where, at any time after a taxpayer has acquired property, there has been a change in the relation between the use regularly made by the taxpayer of the property for gaining or producing income and the use regularly made of the property for other purposes, 
  (i) if the use regularly made by the taxpayer of the property for the purpose of gaining or producing income has increased, the taxpayer shall be deemed to have acquired at that time depreciable property of that class at a capital cost equal to the total of 
  (A) the proportion of the lesser of 
  (I) its fair market value at that time, and 
  (II) its cost to the taxpayer at that time determined without reference to this subparagraph, subparagraph 13(7)(d)(ii) and paragraph 13(7)(a) that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and 
  (B) 1/2 of the amount, if any, by which 
  (I) the amount deemed under subparagraph 45(1)(c)(ii) to be the taxpayer’s proceeds of disposition of the property in respect of the change exceeds the total of 
  (II) that proportion of the cost to the taxpayer of the property as determined under subclause 13(7)(d)(i)(A)(II) that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and 
  (III) twice the amount deducted by the taxpayer under section 110.6 in respect of the amount, if any, by which the amount determined under subclause 13(7)(d)(i)(B)(I) exceeds the amount determined under subclause 13(7)(d)(i)(B)(II), and 
  (ii) if the use regularly made of the property for the purpose of gaining or producing income has decreased, the taxpayer shall be deemed to have disposed at that time of depreciable property of that class and the proceeds of disposition shall be deemed to be an amount equal to the proportion of the fair market value of the property as of that time that the amount of the decrease in the use regularly made by the taxpayer of the property for that purpose is of the whole use regularly made of the property; 
  (e) notwithstanding any other provision of this Act except subsection 70(13), where at a particular time a person or partnership (in this paragraph referred to as the “taxpayer”) has, directly or indirectly, in any manner whatever, acquired (otherwise than as a consequence of the death of the transferor) a depreciable property (other than a timber resource property) of a prescribed class from a person or partnership with whom the taxpayer did not deal at arm’s length (in this paragraph referred to as the “transferor”) and, immediately before the transfer, the property was a capital property of the transferor, 
  (i) where the transferor was an individual resident in Canada or a partnership any member of which was either an individual resident in Canada or another partnership and the cost of the property to the taxpayer at the particular time determined without reference to this paragraph exceeds the cost, or where the property was depreciable property, the capital cost of the property to the transferor immediately before the transferor disposed of it, the capital cost of the property to the taxpayer at the particular time shall be deemed to be the amount that is equal to the total of 
  (A) the cost or capital cost, as the case may be, of the property to the transferor immediately before the particular time, and 
  (B) 1/2 of the amount, if any, by which 
  (I) the transferor’s proceeds of disposition of the property exceed the total of 
  (II) the cost or capital cost, as the case may be, to the transferor immediately before the particular time, 
  (III) twice the amount deducted by any person under section 110.6 in respect of the amount, if any, by which the amount determined under subclause 13(7)(e)(i)(B)(I) exceeds the amount determined under subclause 13(7)(e)(i)(B)(II), and 
  (IV) the amount, if any, required by subsection 110.6(21) to be deducted in computing the capital cost to the taxpayer of the property at that time and for the purposes of paragraph 13(7)(b) and subparagraph 13(7)(d)(i), the cost of the property to the taxpayer shall be deemed to be the same amount, 
  (ii) where the transferor was neither an individual resident in Canada nor a partnership any member of which was either an individual resident in Canada or another partnership and the cost of the property to the taxpayer at the particular time determined without reference to this paragraph exceeds the cost, or where the property was depreciable property, the capital cost of the property to the transferor immediately before the transferor disposed of it, the capital cost of the property to the taxpayer at that time shall be deemed to be the amount that is equal to the total of 
  (A) the cost or capital cost, as the case may be, of the property to the transferor immediately before the particular time, and 
  (B) 1/2 of the amount, if any, by which the transferor’s proceeds of disposition of the property exceed the cost or capital cost, as the case may be, to the transferor immediately before the particular time and for the purposes of paragraph 13(7)(b) and subparagraph 13(7)(d)(i), the cost of the property to the taxpayer shall be deemed to be the same amount, and 
  (iii) where the cost or capital cost, as the case may be, of the property to the transferor immediately before the transferor disposed of it exceeds the capital cost of the property to the taxpayer at that time determined without reference to this paragraph, the capital cost of the property to the taxpayer at that time shall be deemed to be the amount that was the cost or capital cost, as the case may be, of the property to the transferor immediately before the transferor disposed of it and the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing the taxpayer’s income for taxation years ending before the acquisition of the property by the taxpayer; 
  (e.1) where a taxpayer is deemed by paragraph 110.6(19)(a) to have disposed of and reacquired a property that immediately before the disposition was a depreciable property, the taxpayer shall be deemed to have acquired the property from himself, herself or itself and, in so having acquired the property, not to have been dealing with himself, herself or itself at arm’s length; 
  (f) if a taxpayer is deemed under paragraph 111(4)(e) to have disposed of and reacquired depreciable property (other than a timber resource property), the capital cost to the taxpayer of the property at the time of the reacquisition is deemed to be equal to the total of 
  (i) the capital cost to the taxpayer of the property at the time of the disposition, and 
  (ii) 1/2 of the amount, if any, by which the taxpayer’s proceeds of disposition of the property exceed the capital cost to the taxpayer of the property at the time of the disposition; 
  (g) where the cost to a taxpayer of a passenger vehicle exceeds $20,000 or such other amount as is prescribed, the capital cost to the taxpayer of the vehicle shall be deemed to be $20,000 or that other prescribed amount, as the case may be; 
  (h) notwithstanding paragraph 13(7)(g), where a passenger vehicle is acquired by a taxpayer at any time from a person with whom the taxpayer does not deal at arm’s length, the capital cost at that time to the taxpayer of the vehicle shall be deemed to be the least of 
  (i) the fair market value of the vehicle at that time, 
  (ii) the amount that immediately before that time was the cost amount to that person of the vehicle, and 
  (iii) $20,000 or such other amount as is prescribed; and 
  (i) if the cost to a taxpayer of a zero-emission passenger vehicle exceeds the prescribed amount in subsection 7307(1.1) of the Income Tax Regulations, or if the cost of a passenger vehicle that was, at any time, designated immediate expensing property as defined in subsection 1104(3.1) of the Income Tax Regulations exceeds the prescribed amount in subsection 7307(1) of the Income Tax Regulations,  
  (i) the capital cost to the taxpayer of the vehicle is deemed to be equal to the prescribed amount under subsection 7307(1) or (1.1), as the case may be, and 
  (ii) for the purposes of paragraph (a) of the description of F in the definition undepreciated capital cost in subsection (21), the proceeds of disposition of the vehicle are deemed to be the amount determined by the formula  is the amount that would, in the absence of this subparagraph, be the proceeds of disposition of the vehicle, is 
  (A) if the vehicle is disposed of to a person or partnership with which the taxpayer deals at arm’s length, the capital cost to the taxpayer of the vehicle, and 
  (B) in any other case, the amount determined for C, and is the amount determined by the formula is the cost to the taxpayer of the vehicle, is the amount determined under paragraph (7.1)(d) in respect of the vehicle at the time of disposition, is the maximum amount determined for C in the definition undepreciated capital cost in subsection (21) in respect of the vehicle,  is the amount determined under paragraph (7.1)(f) in respect of the vehicle at the time of disposition, and is the maximum amount determined for J in the definition undepreciated capital cost in subsection (21) in respect of the vehicle.  
  
  ### Deemed capital cost of certain property
  
  (7.1) For the purposes of this Act, where section 80 applied to reduce the capital cost to a taxpayer of a depreciable property or a taxpayer deducted an amount under subsection 127(5) or 127(6) in respect of a depreciable property or received or is entitled to receive assistance from a government, municipality or other public authority in respect of, or for the acquisition of, depreciable property, whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than 
  (a) an amount described in paragraph 37(1)(d), 
  (b) an amount deducted as an allowance under section 65, or 
  (b.1) an amount included in income by virtue of paragraph 12(1)(u) or 56(1)(s), the capital cost of the property to the taxpayer at any particular time shall be deemed to be the amount, if any, by which the total of 
  (c) the capital cost of the property to the taxpayer, determined without reference to this subsection, subsection 13(7.4) and section 80, and 
  (d) such part, if any, of the assistance as has been repaid by the taxpayer, pursuant to an obligation to repay all or any part of that assistance, in respect of that property before the disposition thereof by the taxpayer and before the particular time exceeds the total of 
  (e) where the property was acquired in a taxation year ending before the particular time, all amounts deducted under subsection 127(5) or 127(6) by the taxpayer for a taxation year ending before the particular time, 
  (f) the amount of assistance the taxpayer has received or is entitled, before the particular time, to receive, and 
  (g) all amounts by which the capital cost of the property to the taxpayer is required because of section 80 to be reduced at or before that time, in respect of that property before the disposition thereof by the taxpayer. 
  
  ### Receipt of public assistance
  
  (7.2) For the purposes of subsection 13(7.1), where at any time a taxpayer who is a beneficiary of a trust or a member of a partnership has received or is entitled to receive assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, the amount of the assistance that may reasonably be considered to be in respect of, or for the acquisition of, depreciable property of the trust or partnership shall be deemed to have been received at that time by the trust or partnership, as the case may be, as assistance from the government, municipality or other public authority for the acquisition of depreciable property. 
  
  ### Control of corporations by one trustee
  
  (7.3) For the purposes of paragraph (7)(e), where at a particular time one corporation would, but for this subsection, be related to another corporation by reason of both corporations being controlled by the same executor, liquidator of a succession or trustee and it is established that 
  (a) the executor, liquidator or trustee did not acquire control of the corporations as a result of one or more estates or trusts created by the same individual or by two or more individuals not dealing with each other at arm’s length, and 
  (b) the estate or trust under which the executor, liquidator or trustee acquired control of each of the corporations arose only on the death of the individual creating the estate or trust, the two corporations are deemed not to be related to each other at the particular time. 
  
  ### Deemed capital cost
  
  (7.4) Notwithstanding subsection 13(7.1), where a taxpayer has in a taxation year received an amount that would, but for this subsection, be included in the taxpayer’s income under paragraph 12(1)(x) in respect of the cost of a depreciable property acquired by the taxpayer in the year, in the three taxation years immediately preceding the year or in the taxation year immediately following the year and the taxpayer elects under this subsection on or before the day on or before which the taxpayer is required to file the taxpayer’s return of income under this Part for the year, or, where the property is acquired in the taxation year immediately following the year, for that following year, the capital cost of the property to the taxpayer shall be deemed to be the amount by which the total of 
  (a) the capital cost of the property to the taxpayer otherwise determined, applying the provisions of subsection 13(7.1), where necessary, and 
  (b) such part, if any, of the amount received by the taxpayer as has been repaid by the taxpayer pursuant to a legal obligation to repay all or any part of that amount, in respect of that property and before the disposition thereof by the taxpayer, and as may reasonably be considered to be in respect of the amount elected under this subsection in respect of the property exceeds the amount elected by the taxpayer under this subsection, but in no case shall the amount elected under this subsection exceed the least of 
  (c) the amount so received by the taxpayer, 
  (d) the capital cost of the property to the taxpayer otherwise determined, and 
  (e) where the taxpayer has disposed of the property before the year, nil. 
  
  ### Deemed capital cost
  
  (7.41) Subsection (38) applies in respect of an amount repaid after 2016 as if that amount was repaid immediately before 2017, if 
  (a) the amount is repaid by the taxpayer under a legal obligation to repay all or part of an amount the taxpayer received or was entitled to receive that was assistance from a government, municipality or other public authority (whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance) in respect of, or for the acquisition of, property the cost of which was an eligible capital expenditure of the taxpayer in respect of the business; 
  (b) the amount of an eligible capital expenditure of the taxpayer in respect of the business was reduced by paragraph 14(10)(c) because of the assistance referred to in paragraph (a); and 
  (c) paragraph 20(1)(hh.1) does not apply in respect of the amount repaid. 
  
  ### Timing of deduction
  
  (7.42) No amount may be deducted under paragraph 20(1)(a) in respect of an amount of repaid assistance referred to in subsection (7.41) for any taxation year prior to the taxation year in which the assistance is repaid. 
  
  ### Deemed capital cost
  
  (7.5) For the purposes of this Act, 
  (a) where a taxpayer, to acquire a property prescribed in respect of the taxpayer, is required under the terms of a contract made after March 6, 1996 to make a payment to Her Majesty in right of Canada or a province or to a Canadian municipality in respect of costs incurred or to be incurred by the recipient of the payment 
  (i) the taxpayer is deemed to have acquired the property at a capital cost equal to the portion of that payment made by the taxpayer that can reasonably be regarded as being in respect of those costs, and 
  (ii) the time of acquisition of the property by the taxpayer is deemed to be the later of the time the payment is made and the time at which those costs are incurred; 
  (b) where 
  (i) at any time after March 6, 1996 a taxpayer incurs a cost on account of capital for the building of, for the right to use or in respect of, a prescribed property, and 
  (ii) the amount of the cost would, if this paragraph did not apply, not be included in the capital cost to the taxpayer of depreciable property of a prescribed class, the taxpayer is deemed to have acquired the property at that time at a capital cost equal to the amount of the cost; 
  (c) if a taxpayer acquires an intangible property, or for civil law an incorporeal property, as a consequence of making a payment to which paragraph (a) applies or incurring a cost to which paragraph (b) applies, 
  (i) the property referred to in paragraph (a) or (b) is deemed to include the intangible or incorporeal property, and 
  (ii) the portion of the capital cost referred to in paragraph (a) or (b) that applies to the intangible or incorporeal property is deemed to be the amount determined by the formula is the lesser of the amount of the payment made or cost incurred and the amount determined for C, is the fair market value of the intangible or incorporeal property at the time the payment was made or the cost was incurred, and is the fair market value at the time the payment was made or the cost was incurred of all intangible or incorporeal properties acquired as a consequence of making the payment or incurring the cost; and 
  (d) any property deemed by paragraph 13(7.5)(a) or (b) to have been acquired at any time by a taxpayer as a consequence of making a payment or incurring a cost 
  (i) is deemed to have been acquired for the purpose for which the payment was made or the cost was incurred, and 
  (ii) is deemed to be owned by the taxpayer at any subsequent time that the taxpayer benefits from the property. 
  
  ### Disposition after ceasing business
  
  (8) Notwithstanding subsections 13(3) and 11(2), where a taxpayer, after ceasing to carry on a business, has disposed of depreciable property of the taxpayer of a prescribed class that was acquired by the taxpayer for the purpose of gaining or producing income from the business and that was not subsequently used by the taxpayer for some other purpose, in applying subsection 13(1) or 13(2), each reference therein to a “taxation year” and “year” shall not be read as a reference to a “fiscal period”. 
  
  ### Meaning of 
  *gaining or producing income* 
  
  (9) In applying paragraphs 13(7)(a) to 13(7)(d) in respect of a non-resident taxpayer, a reference to 
  *gaining or producing income* in relation to a business shall be read as a reference to “gaining or producing income from a business wholly carried on in Canada or such part of a business as is wholly carried on in Canada”.  
  
  ### Deemed capital cost
  
  (10) For the purposes of this Act, where a taxpayer has, after December 3, 1970 and before April 1, 1972, acquired prescribed property 
  (a) for use in a prescribed manufacturing or processing business carried on by the taxpayer, and 
  (b) that was not used for any purpose whatever before it was acquired by the taxpayer, the taxpayer shall be deemed to have acquired that property at a capital cost to the taxpayer equal to 115% of the amount that, but for this subsection and section 21, would have been the capital cost to the taxpayer of that property. 
  
  ### Deduction in respect of property used in performance of duties
  
  (11) Any amount deducted under subparagraph 8(1)(j)(ii) or 8(1)(p)(ii) of this Act or subsection 11(11) of The Income Tax Act, chapter 52 of the Statutes of Canada, 1948, shall be deemed, for the purposes of this section to have been deducted under regulations made under paragraph 20(1)(a).  
  
  ### Application of para. 20(1)(cc)
  
  (12) Where, in computing the income of a taxpayer for a taxation year, an amount has been deducted under paragraph 20(1)(cc) or the taxpayer has elected under subsection 20(9) to make a deduction in respect of an amount that would otherwise have been deductible under that paragraph, the amount shall, if it was a payment on account of the capital cost of depreciable property, be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing the income of the taxpayer 
  (a) for the year, or 
  (b) for the year in which the property was acquired, whichever is the later. 
  
  ### Deduction under Canadian Vessel Construction Assistance Act 
  
  (13) Where a deduction has been made under the Canadian Vessel Construction Assistance Act for any taxation year, subsection 13(1) is applicable in respect of the prescribed class created by that Act or any other prescribed class to which the vessel may have been transferred.  
  
  ### Conversion cost
  
  (14) For the purposes of this section, section 20 and any regulations made under paragraph 20(1)(a), a vessel in respect of which any conversion cost is incurred after March 23, 1967 shall, to the extent of the conversion cost, be deemed to be included in a separate prescribed class. 
  
  ### Where s. (1) and Subdivision C do not apply
  
  (15) Where a vessel owned by a taxpayer on January 1, 1966 or constructed pursuant to a construction contract entered into by the taxpayer prior to 1966 and not completed by that date was disposed of by the taxpayer before 1974, 
  (a) subsection 13(1) and Subdivision C do not apply to the proceeds of disposition 
  (i) if an amount at least equal to the proceeds of disposition was used by the taxpayer, before May, 1974 and during the taxation year of the taxpayer in which the vessel was disposed of or within 4 months after the end of that taxation year, under conditions satisfactory to the appropriate minister, either for replacement or to incur any conversion cost with respect to a vessel owned by the taxpayer, or 
  (ii) if the appropriate minister certified that the taxpayer had, on satisfactory terms, deposited 
  (A) on or before the day on which the taxpayer was required to file a return of the taxpayer’s income for the taxation year in which the vessel was disposed of, or 
  (B) on or before such day subsequent to the day referred to in clause 13(15)(a)(ii)(A) as the appropriate minister specified in respect of the taxpayer, an amount at least equal to the tax that would, but for this subsection, have been payable by the taxpayer under this Part in respect of the proceeds of disposition, or satisfactory security therefor, as a guarantee that the proceeds of disposition would be used before 1975 for replacement; and 
  (b) if within the time specified for the filing of a return of the taxpayer’s income for the taxation year in which the vessel was disposed of 
  (i) the taxpayer elected to have the vessel constituted a prescribed class, or 
  (ii) where any conversion cost in respect of the vessel was included in a separate prescribed class, the taxpayer elected to have the vessel transferred to that class, the vessel shall be deemed to have been so transferred immediately before the disposition thereof, but this paragraph does not apply unless the proceeds of disposition of the vessel exceed the amount that would be the undepreciated capital cost of property of the class to which it would be so transferred. 
  
  ### Election concerning vessel
  
  (16) Where a vessel owned by a taxpayer is disposed of by the taxpayer, the taxpayer may, if subsection 13(15) does not apply to the proceeds of disposition or if the taxpayer did not make an election under paragraph 13(15)(b) in respect of the vessel, within the time specified for the filing of a return of the taxpayer’s income for the taxation year in which the vessel was disposed of, elect to have the proceeds that would be included in computing the taxpayer’s income for the year under this Part treated as proceeds of disposition of property of another prescribed class that includes a vessel owned by the taxpayer. 
  
  ### Separate prescribed class concerning vessel
  
  (17) Where a separate prescribed class has been constituted either under this Act or the Canadian Vessel Construction Assistance Act by reason of the conversion of a vessel owned by a taxpayer and the vessel is disposed of by the taxpayer, if no election in respect of the vessel was made under paragraph 13(15)(b), the separate prescribed class constituted by reason of the conversion shall be deemed to have been transferred to the class in which the vessel was included immediately before the disposition thereof.  
  
  ### Reassessments
  
  (18) Notwithstanding any other provision of this Act, where a taxpayer has 
  (a) used an amount as described in paragraph 13(4)(c), or 
  (b) made an election under paragraph 13(15)(b) in respect of a vessel and the proceeds of disposition of the vessel were used before 1975 for replacement under conditions satisfactory to the appropriate minister, such reassessments of tax, interest or penalties shall be made as are necessary to give effect to subsections 13(4) and 13(15). 
  
  ### Ascertainment of certain property
  
  (18.1) For the purpose of determining whether property meets the criteria set out in the Income Tax Regulations in respect of prescribed energy conservation property, the Technical Guide to Class 43.1 and 43.2, as amended from time to time and published by the Department of Natural Resources, shall apply conclusively with respect to engineering and scientific matters.  
  
  ### Disposition of deposit
  
  (19) All or any part of a deposit made under subparagraph 13(15)(a)(ii) or under the Canadian Vessel Construction Assistance Act may be paid out to or on behalf of any person who, under conditions satisfactory to the appropriate minister and as a replacement for the vessel disposed of, acquires a vessel before 1975  
  (a) that was constructed in Canada and is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the British Commonwealth Merchant Shipping Agreement, signed at London on December 10, 1931, applies, and 
  (b) in respect of the capital cost of which no allowance has been made to any other taxpayer under this Act or the Canadian Vessel Construction Assistance Act,  or incurs any conversion cost with respect to a vessel owned by that person that is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the agreement referred to in paragraph 13(19)(a) applies, but the ratio of the amount paid out to the amount of the deposit shall not exceed the ratio of the capital cost to that person of the vessel or the conversion cost to that person of the vessel, as the case may be, to the proceeds of disposition of the vessel disposed of, and any deposit or part of a deposit not so paid out before July 1, 1975 or not paid out pursuant to subsection 13(20) shall be paid to the Receiver General and form part of the Consolidated Revenue Fund. 
  
  ### Idem
  
  (20) Notwithstanding any other provision of this section, where a taxpayer made a deposit under subparagraph 13(15)(a)(ii) and the proceeds of disposition in respect of which the deposit was made were not used by any person before 1975 under conditions satisfactory to the appropriate minister as a replacement for the vessel disposed of, 
  (a) to acquire a vessel described in paragraphs 13(19)(a) and 13(19)(b), or 
  (b) to incur any conversion cost with respect to a vessel owned by that person that is registered in Canada or is registered under conditions satisfactory to the appropriate minister in any country or territory to which the agreement referred to in paragraph 13(19)(a) applies, the appropriate minister may refund to the taxpayer the deposit, or the part thereof not paid out to the taxpayer under subsection 13(19), as the case may be, in which case there shall be added, in computing the income of the taxpayer for the taxation year of the taxpayer in which the vessel was disposed of, that proportion of the amount that would have been included in computing the income for the year under this Part had the deposit not been made under subparagraph 13(15)(a)(ii) that the portion of the proceeds of disposition not so used before 1975 as such a replacement is of the proceeds of disposition, and, notwithstanding any other provision of this Act, such reassessments of tax, interest or penalties shall be made as are necessary to give effect to this subsection. 
  
  ### Definitions
  
  (21) In this section,  
  *appropriate minister* means the Canadian Maritime Commission, the Minister of Industry, Trade and Commerce, the Minister of Regional Industrial Expansion, the Minister of Industry, Science and Technology or the Minister of Industry or any other minister or body that was or is legally authorized to perform the act referred to in the provision in which this expression occurs at the time the act was or is performed; (ministre compétent)   
  *conversion*, in respect of a vessel, means a conversion or major alteration in Canada by a taxpayer; (conversion)   
  *conversion cost*, in respect of a vessel, means the cost of a conversion; (frais de conversion)   
  *depreciable property* of a taxpayer as of any time in a taxation year means property acquired by the taxpayer in respect of which the taxpayer has been allowed, or would, if the taxpayer owned the property at the end of the year and this Act were read without reference to subsection 13(26), be entitled to, a deduction under paragraph 20(1)(a) in computing income for that year or a preceding taxation year; (bien amortissable)   
  *disposition of property* [Repealed, 2001, c. 17, s. 6]   
  *proceeds of disposition* of property includes  
  (a) the sale price of property that has been sold, 
  (b) compensation for property unlawfully taken, 
  (c) compensation for property destroyed and any amount payable under a policy of insurance in respect of loss or destruction of property, 
  (d) compensation for property taken under statutory authority or the sale price of property sold to a person by whom notice of an intention to take it under statutory authority was given, 
  (e) compensation for property injuriously affected, whether lawfully or unlawfully or under statutory authority or otherwise, 
  (f) compensation for property damaged and any amount payable under a policy of insurance in respect of damage to property, except to the extent that the compensation or amount, as the case may be, has within a reasonable time after the damage been expended on repairing the damage, 
  (g) an amount by which the liability of a taxpayer to a mortgagee or hypothecary creditor is reduced as a result of the sale of mortgaged or hypothecated property under a provision of the mortgage or hypothec, plus any amount received by the taxpayer out of the proceeds of the sale, and 
  (h) any amount included because of section 79 in computing a taxpayer’s proceeds of disposition of the property; ( produit de disposition)   
  *timber resource property* of a taxpayer means  
  (a) a right or licence to cut or remove timber from a limit or area in Canada (in this definition referred to as an “original right”) if 
  (i) that original right was acquired by the taxpayer (other than in the manner referred to in paragraph 13(21) 
  *timber resource property* (b)) after May 6, 1974, and  
  (ii) at the time of the acquisition of the original right 
  (A) the taxpayer may reasonably be regarded as having acquired, directly or indirectly, the right to extend or renew that original right or to acquire another such right or licence in substitution therefor, or 
  (B) in the ordinary course of events, the taxpayer may reasonably expect to be able to extend or renew that original right or to acquire another such right or licence in substitution therefor, or 
  (b) any right or licence owned by the taxpayer to cut or remove timber from a limit or area in Canada if that right or licence may reasonably be regarded 
  (i) as an extension or renewal of or as one of a series of extensions or renewals of an original right of the taxpayer, or 
  (ii) as having been acquired in substitution for or as one of a series of substitutions for an original right of the taxpayer or any renewal or extension thereof; ( avoir forestier)   
  *total depreciation* allowed to a taxpayer before any time for property of a prescribed class means the total of all amounts each of which is an amount deducted by the taxpayer under paragraph 20(1)(a) in respect of property of that class or an amount deducted under subsection 20(16), or that would have been so deducted but for subsection 20(16.1), in computing the taxpayer’s income for taxation years ending before that time; (amortissement total)   
  *undepreciated capital cost* to a taxpayer of depreciable property of a prescribed class as of any time means the amount determined by the formula  is the total of all amounts each of which is the capital cost to the taxpayer of a depreciable property of the class acquired before that time, is the total of all amounts included in the taxpayer’s income under this section for a taxation year ending before that time, to the extent that those amounts relate to depreciable property of the class, is the total of all amounts each of which is such part of any assistance as has been repaid by the taxpayer, pursuant to an obligation to repay all or any part of that assistance, in respect of a depreciable property of the class subsequent to the disposition thereof by the taxpayer that would have been included in an amount determined under paragraph 13(7.1)(d) had the repayment been made before the disposition, is the total of all amounts each of which is an amount repaid in respect of a property of the class subsequent to the disposition thereof by the taxpayer that would have been an amount described in paragraph 13(7.4)(b) had the repayment been made before the disposition, is the total of all amounts each of which is an amount paid by the taxpayer before that time as or on account of an existing or proposed countervailing or anti-dumping duty in respect of depreciable property of the class, is the total depreciation allowed to the taxpayer for property of the class before that time, including, if the taxpayer is an insurer, depreciation deemed to have been allowed before that time under subsection (22) or (23) as they read in their application to the taxpayer’s last taxation year that began before November 2011, is the total of all amounts each of which is an amount by which the undepreciated capital cost to the taxpayer of depreciable property of that class is required (otherwise than because of a reduction in the capital cost to the taxpayer of depreciable property) to be reduced at or before that time because of subsection 80(5), is the total of all amounts each of which is an amount in respect of a disposition before that time of property (other than a timber resource property) of the taxpayer of the class, and is the lesser of 
  (a) the proceeds of disposition of the property minus any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, and 
  (b) the capital cost to the taxpayer of the property, is the total of all amounts each of which is the proceeds of disposition before that time of a timber resource property of the taxpayer of the class minus any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, is, where the property of the class was acquired by the taxpayer for the purpose of gaining or producing income from a mine and the taxpayer so elects in prescribed manner and within a prescribed time in respect of that property, the amount equal to that portion of the income derived from the operation of the mine that is, by virtue of the provisions of the Income Tax Application Rules relating to income from the operation of new mines, not included in computing income of the taxpayer or any other person,  is the total of all amounts deducted under subsection 127(5) or 127(6), in respect of a depreciable property of the class of the taxpayer, in computing the taxpayers tax payable for a taxation year ending before that time and subsequent to the disposition of that property by the taxpayer, is the total of all amounts of assistance that the taxpayer received or was entitled to receive before that time, in respect of or for the acquisition of a depreciable property of the class of the taxpayer subsequent to the disposition of that property by the taxpayer, that would have been included in an amount determined under paragraph 13(7.1)(f) had the assistance been received before the disposition, and is the total of all amounts each of which is an amount received by the taxpayer before that time in respect of a refund of an amount added to the undepreciated capital cost of depreciable property of the class because of the description of D.1; ( fraction non amortie du coût en capital)   
  *vessel* means a vessel as defined in the Canada Shipping Act. (navire)  
  
  ### Disposition of building
  
  (21.1) Notwithstanding subsection 13(7) and the definition 
  *proceeds of disposition* in section 54, where at any particular time in a taxation year a taxpayer disposes of a building of a prescribed class and the proceeds of disposition of the building determined without reference to this subsection and subsection 13(21.2) are less than the lesser of the cost amount and the capital cost to the taxpayer of the building immediately before the disposition, for the purposes of paragraph (a) of the description of F in the definition 
  *undepreciated capital cost* in subsection 13(21) and Subdivision C,  
  (a) where in the year the taxpayer or a person with whom the taxpayer does not deal at arm’s length disposes of land subjacent to, or immediately contiguous to and necessary for the use of, the building, the proceeds of disposition of the building are deemed to be the lesser of 
  (i) the amount, if any, by which 
  (A) the total of the fair market value of the building at the particular time and the fair market value of the land immediately before its disposition exceeds 
  (B) the lesser of the fair market value of the land immediately before its disposition and the amount, if any, by which the cost amount to the vendor of the land (determined without reference to this subsection) exceeds the total of the capital gains (determined without reference to subparagraphs 40(1)(a)(ii) and (iii)) in respect of dispositions of the land within 3 years before the particular time by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length to the taxpayer or to another person with whom the taxpayer was not dealing at arm’s length, and 
  (ii) the greater of 
  (A) the fair market value of the building at the particular time, and 
  (B) the lesser of the cost amount and the capital cost to the taxpayer of the building immediately before its disposition, and notwithstanding any other provision of this Act, the proceeds of disposition of the land are deemed to be the amount, if any, by which 
  (iii) the total of the proceeds of disposition of the building and of the land determined without reference to this subsection and subsection 13(21.2) exceeds 
  (iv) the proceeds of disposition of the building as determined under this paragraph, and the cost to the purchaser of the land shall be determined without reference to this subsection; and 
  (b) where paragraph 13(21.1)(a) does not apply with respect to the disposition and, at any time before the disposition, the taxpayer or a person with whom the taxpayer did not deal at arm’s length owned the land subjacent to, or immediately contiguous to and necessary for the use of, the building, the proceeds of disposition of the building are deemed to be an amount equal to the total of 
  (i) the proceeds of disposition of the building determined without reference to this subsection and subsection 13(21.2), and 
  (ii) 1/2 of the amount by which the greater of 
  (A) the cost amount to the taxpayer of the building, and 
  (B) the fair market value of the building immediately before its disposition exceeds the proceeds of disposition referred to in subparagraph 13(21.1)(b)(i). 
  
  ### Loss on certain transfers
  
  (21.2) Where 
  (a) a person or partnership (in this subsection referred to as the “transferor”) disposes at a particular time (otherwise than in a disposition described in any of paragraphs (c) to (g) of the definition 
  *superficial loss* in section 54) of a depreciable property — other than, for the purposes of computing the exempt surplus or exempt deficit and taxable surplus or taxable deficit of a foreign affiliate of a taxpayer, in respect of the taxpayer, where the transferor is the affiliate or is a partnership of which the affiliate is a member, depreciable property that is, or would be, if the transferor were a foreign affiliate of the taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the transferor — of a particular prescribed class of the transferor,  
  (b) the lesser of 
  (i) the capital cost to the transferor of the transferred property, and 
  (ii) the proportion of the undepreciated capital cost to the transferor of all property of the particular class immediately before that time that 
  (A) the fair market value of the transferred property at that time is of 
  (B) the fair market value of all property of the particular class immediately before that time exceeds the amount that would otherwise be the transferor’s proceeds of disposition of the transferred property at the particular time, and 
  (c) on the 30th day after the particular time, a person or partnership (in this subsection referred to as the “subsequent owner”) who is the transferor or a person affiliated with the transferor owns or has a right to acquire the transferred property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation), the following rules apply: 
  (d) sections 85 and 97 do not apply to the disposition, 
  (e) for the purposes of applying this section and section 20 and any regulations made for the purpose of paragraph 20(1)(a) to the transferor for taxation years that end after the particular time, 
  (i) the transferor is deemed to have disposed of the transferred property for proceeds equal to the lesser of the amounts determined under subparagraphs 13(21.2)(b)(i) and 13(21.2)(b)(ii) with respect to the transferred property, 
  (ii) where two or more properties of a prescribed class of the transferor are disposed of at the same time, subparagraph (i) applies as if each property so disposed of had been separately disposed of in the order designated by the transferor or, if the transferor does not designate an order, in the order designated by the Minister, 
  (iii) the transferor is deemed to own a property that was acquired before the beginning of the taxation year that includes the particular time at a capital cost equal to the amount of the excess described in paragraph 13(21.2)(b), and that is property of the particular class, until the time that is immediately before the first time, after the particular time, 
  (A) at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns or has a right to acquire the transferred property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation), 
  (B) at which the transferred property is not used by the transferor or a person affiliated with the transferor for the purpose of earning income and is used for another purpose, 
  (C) at which the transferred property would, if it were owned by the transferor, be deemed by section 128.1 or subsection 149(10) to have been disposed of by the transferor, 
  (D) that is immediately before the transferor is subject to a loss restriction event, or 
  (E) if the transferor is a corporation, 
  (I) for the purposes of computing the transferor’s foreign accrual property income, exempt surplus or exempt deficit, and taxable surplus or taxable deficit, in respect of a taxpayer for a taxation year of the transferor where the transferor is a foreign affiliate of the taxpayer, at which the liquidation and dissolution of the transferor begins, unless the liquidation and dissolution is 
  1 a qualifying liquidation and dissolution (within the meaning assigned by subsection 88(3.1)) of the transferor, or 
  2 a designated liquidation and dissolution (within the meaning assigned by subsection 95(1)) of the transferor, and 
  (II) for any other purposes, at which the winding-up (other than a winding-up to which subsection 88(1) applies) of the transferor begins, and 
  (iv) the property described in subparagraph 13(21.2)(e)(iii) is considered to have become available for use by the transferor at the time at which the transferred property is considered to have become available for use by the subsequent owner, 
  (f) for the purposes of subparagraphs 13(21.2)(e)(iii) and 13(21.2)(e)(iv), where a partnership otherwise ceases to exist at any time after the particular time, the partnership is deemed not to have ceased to exist, and each person who was a member of the partnership immediately before the partnership would, but for this paragraph, have ceased to exist is deemed to remain a member of the partnership, until the time that is immediately after the first time described in clauses 13(21.2)(e)(iii)(A) to 13(21.2)(e)(iii)(E), and 
  (g) for the purposes of applying this section and section 20 and any regulations made for the purpose of paragraph 20(1)(a) to the subsequent owner, 
  (i) the subsequent owner’s capital cost of the transferred property is deemed to be the amount that was the transferor’s capital cost of the transferred property, and 
  (ii) the amount by which the transferor’s capital cost of the transferred property exceeds its fair market value at the particular time is deemed to have been deducted under paragraph 20(1)(a) by the subsequent owner in respect of property of that class in computing income for taxation years that ended before the particular time. 
  (22) to (23.1)  [Repealed, 2013, c. 34, s. 175]  
  
  ### Loss restriction event
  
  (24) If at any time a taxpayer is subject to a loss restriction event and, within the 12-month period that ended immediately before that time, the taxpayer, a partnership of which the taxpayer was a majority-interest partner or a trust of which the taxpayer was a majority-interest beneficiary (as defined in subsection 251.1(3)) acquired depreciable property (other than property that was held, by the taxpayer, partnership or trust or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition 
  *controlled* in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer, partnership or trust) that was not used, or acquired for use, by the taxpayer, partnership or trust in a business that was carried on by it immediately before the 12-month period began  
  (a) subject to paragraph (b), for the purposes of the description of A in the definition 
  *undepreciated capital cost* in subsection (21) and of sections 127 and 127.1, the property is deemed  
  (i) not to have been acquired by the taxpayer, partnership or trust, as the case may be, before that time, and 
  (ii) to have been acquired by it immediately after that time; and 
  (b) if the property was disposed of by the taxpayer, partnership or trust, as the case may be, before that time and was not reacquired by it before that time, for the purposes of the description of A in that definition, the property is deemed to have been acquired by it immediately before the property was disposed of. 
  
  ### Affiliation — subsection (24)
  
  (25) For the purposes of subsection (24), if the taxpayer referred to in that subsection was formed or created in the 12-month period referred to in that subsection, the taxpayer is deemed to have been, throughout the period that began immediately before the 12-month period and ended immediately after it was formed or created, 
  (a) in existence; and 
  (b) affiliated with every person with whom it was affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) throughout the period that began when it was formed or created and that ended immediately before the time at which the taxpayer was subject to the loss restriction event referred to in that subsection. 
  
  ### Restriction on deduction before available for use
  
  (26) In applying the definition 
  *undepreciated capital cost* in subsection 13(21) for the purpose of paragraph 20(1)(a) and any regulations made for the purpose of that paragraph, in computing a taxpayer’s income for a taxation year from a business or property, no amount shall be included in calculating the undepreciated capital cost to the taxpayer of depreciable property of a prescribed class in respect of the capital cost to the taxpayer of a property of that class (other than property that is a certified production, as defined by regulations made for the purpose of paragraph 20(1)(a)) before the time the property is considered to have become available for use by the taxpayer.  
  
  ### Interpretation — available for use
  
  (27) For the purposes of subsection 13(26) and subject to subsection 13(29), property (other than a building or part thereof) acquired by a taxpayer shall be considered to have become available for use by the taxpayer at the earliest of 
  (a) the time the property is first used by the taxpayer for the purpose of earning income, 
  (b) the time that is immediately after the beginning of the first taxation year of the taxpayer that begins more than 357 days after the end of the taxation year of the taxpayer in which the property was acquired by the taxpayer, 
  (c) the time that is immediately before the disposition of the property by the taxpayer, 
  (d) the time the property 
  (i) is delivered to the taxpayer, or to a person or partnership (in this paragraph referred to as the “other person”) that will use the property for the benefit of the taxpayer, or, where the property is not of a type that is deliverable, is made available to the taxpayer or the other person, and 
  (ii) is capable, either alone or in combination with other property in the possession at that time of the taxpayer or the other person, of being used by or for the benefit of the taxpayer or the other person to produce a commercially saleable product or to perform a commercially saleable service, including an intermediate product or service that is used or consumed, or to be used or consumed, by or for the benefit of the taxpayer or the other person in producing or performing any such product or service, 
  (e) in the case of property acquired by the taxpayer for the prevention, reduction or elimination of air or water pollution created by operations carried on by the taxpayer or that would be created by such operations if the property had not been acquired, the time at which the property is installed and capable of performing the function for which it was acquired, 
  (f) in the case of property acquired by 
  (i) a corporation a class of shares of the capital stock of which is listed on a designated stock exchange, 
  (ii) a corporation that is a public corporation because of an election made under subparagraph (b)(i) of the definition 
  *public corporation* in subsection 89(1) or a designation made by the Minister in a notice to the corporation under subparagraph (b)(ii) of that definition, or  
  (iii) a subsidiary wholly-owned corporation of a corporation described in subparagraph 13(27)(f)(i) or 13(27)(f)(ii), the end of the taxation year for which depreciation in respect of the property is first deducted in computing the earnings of the corporation in accordance with generally accepted accounting principles and for the purpose of the financial statements of the corporation for the year presented to its shareholders, 
  (g) in the case of property acquired by the taxpayer in the course of carrying on a business of farming or fishing, the time at which the property has been delivered to the taxpayer and is capable of performing the function for which it was acquired, 
  (h) in the case of property of a taxpayer that is a motor vehicle, trailer, trolley bus, aircraft or vessel for which one or more permits, certificates or licences evidencing that the property may be operated by the taxpayer in accordance with any laws regulating the use of such property are required to be obtained, the time all those permits, certificates or licences have been obtained, 
  (i) in the case of property that is a spare part intended to replace a part of another property of the taxpayer if required due to a breakdown of that other property, the time the other property became available for use by the taxpayer, 
  (j) in the case of a concrete gravity base structure and topside modules intended to be used at an oil production facility in a commercial discovery area (within the meaning assigned by section 2 of the Canada Petroleum Resources Act) on which the drilling of the first well that indicated the discovery began before March 5, 1982, in an offshore region prescribed for the purposes of subsection 127(9), the time the gravity base structure deballasts and lifts the assembled topside modules, and  
  (k) where the property is (within the meaning assigned by subsection 13(4.1)) a replacement for a former property described in paragraph 13(4)(a) that was acquired before 1990 or that became available for use at or before the time the replacement property is acquired, the time the replacement property is acquired, and, for the purposes of paragraph 13(27)(f), where depreciation is calculated by reference to a portion of the cost of the property, only that portion of the property shall be considered to have become available for use at the end of the taxation year referred to in that paragraph. 
  
  ### Idem
  
  (28) For the purposes of subsection 13(26) and subject to subsection 13(29), property that is a building or part thereof of a taxpayer shall be considered to have become available for use by the taxpayer at the earliest of 
  (a) the time all or substantially all of the building is first used by the taxpayer for the purpose for which it was acquired, 
  (b) the time the construction of the building is complete, 
  (c) the time that is immediately after the beginning of the taxpayer’s first taxation year that begins more than 357 days after the end of the taxpayer’s taxation year in which the property was acquired by the taxpayer, 
  (d) the time that is immediately before the disposition of the property by the taxpayer, and 
  (e) where the property is (within the meaning assigned by subsection 13(4.1)) a replacement for a former property described in paragraph 13(4)(a) that was acquired before 1990 or that became available for use at or before the time the replacement property is acquired, the time the replacement property is acquired, and, for the purpose of this subsection, a renovation, alteration or addition to a particular building shall be considered to be a building separate from the particular building. 
  
  ### Idem
  
  (29) For the purposes of subsection 13(26), where a taxpayer acquires property (other than a building that is used or is to be used by the taxpayer principally for the purpose of gaining or producing gross revenue that is rent) in the taxpayer’s first taxation year (in this subsection referred to as the “particular year”) that begins more than 357 days after the end of the taxpayer’s taxation year in which the taxpayer first acquired property after 1989, that is part of a project of the taxpayer, or in a taxation year subsequent to the particular year, and at the end of any taxation year (in this subsection referred to as the “inclusion year”) of the taxpayer 
  (a) the property can reasonably be considered to be part of the project, and 
  (b) the property has not otherwise become available for use, if the taxpayer so elects in prescribed form filed with the taxpayer’s return of income under this Part for the particular year, that particular portion of the property the capital cost of which does not exceed the amount, if any, by which 
  (c) the total of all amounts each of which is the capital cost to the taxpayer of a depreciable property (other than a building that is used or is to be used by the taxpayer principally for the purpose of gaining or producing gross revenue that is rent) that is part of the project, that was acquired by the taxpayer after 1989 and before the end of the taxpayer’s last taxation year that ends more than 357 days before the beginning of the inclusion year and that has not become available for use at or before the end of the inclusion year (except where the property has first become available for use before the end of the inclusion year because of this subsection or paragraph 13(27)(b) or 13(28)(c)) exceeds 
  (d) the total of all amounts each of which is the capital cost to the taxpayer of a depreciable property, other than the particular portion of the property, that is part of the project to the extent that the property is considered, because of this subsection, to have become available for use before the end of the inclusion year shall be considered to have become available for use immediately before the end of the inclusion year. 
  
  ### Transfers of property
  
  (30) Notwithstanding subsections 13(27) to 13(29), for the purpose of subsection 13(26), property of a taxpayer shall be deemed to have become available for use by the taxpayer at the earlier of the time the property was acquired by the taxpayer and, if applicable, a prescribed time, where 
  (a) the property was acquired 
  (i) from a person with whom the taxpayer was not dealing at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)) at the time the property was acquired by the taxpayer, or 
  (ii) in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, subsection 55(2) would not apply to the dividend because of paragraph 55(3)(b); and 
  (b) before the property was acquired by the taxpayer, it became available for use (determined without reference to paragraphs 13(27)(c) and 13(28)(d)) by the person from whom it was acquired. 
  
  ### Idem
  
  (31) For the purposes of paragraphs 13(27)(b) and 13(28)(c) and subsection 13(29), where a property of a taxpayer was acquired from a person (in this subsection referred to as “the transferor”) 
  (a) with whom the taxpayer was, at the time the taxpayer acquired the property, not dealing at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)), or 
  (b) in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, subsection 55(2) would not apply to the dividend because of the application of paragraph 55(3)(b), the taxpayer shall be deemed to have acquired the property at the time it was acquired by the transferor. 
  
  ### Leased property
  
  (32) Where a taxpayer has leased property that is depreciable property of a person with whom the taxpayer does not deal at arm’s length, the amount, if any, by which 
  (a) the total of all amounts paid or payable by the taxpayer for the use of, or the right to use, the property in a particular taxation year and before the time the property would have been considered to have become available for use by the taxpayer if the taxpayer had acquired the property, and that, but for this subsection, would be deductible in computing the taxpayer’s income for any taxation year exceeds 
  (b) the total of all amounts received or receivable by the taxpayer for the use of, or the right to use, the property in the particular taxation year and before that time and that are included in the income of the taxpayer for any taxation year shall be deemed to be a cost to the taxpayer of a property included in Class 13 in Schedule II to the Income Tax Regulations and not to be an amount paid or payable for the use of, or the right to use, the property.  
  
  ### Consideration given for depreciable property
  
  (33) For greater certainty, where a person acquires a depreciable property for consideration that can reasonably be considered to include a transfer of property, the portion of the cost to the person of the depreciable property attributable to the transfer shall not exceed the fair market value of the transferred property. 
  
  ### Goodwill
  
  (34) Where a taxpayer carries on a particular business, 
  (a) there is deemed to be a single goodwill property in respect of the particular business; 
  (b) if at any time the taxpayer acquires goodwill as part of an acquisition of all or a part of another business that is carried on, after the acquisition, as part of the particular business — or is deemed by subsection (35) to acquire goodwill in respect of the particular business — the cost of the goodwill is added at that time to the cost of the goodwill property in respect of the particular business; 
  (c) if at any time the taxpayer disposes of goodwill as part of the disposition of part of the particular business, receives proceeds of disposition a portion of which is attributable to goodwill and continues to carry on the particular business or is deemed by subsection (37) to dispose of goodwill in respect of the particular business, 
  (i) the taxpayer is deemed to dispose at that time of a portion of the goodwill property in respect of the particular business having a cost equal to the lesser of the cost of the goodwill property in respect of the particular business otherwise determined and the portion of the proceeds attributable to goodwill, and 
  (ii) the cost of the goodwill property in respect of the particular business is reduced at that time by the amount determined under subparagraph (i); and 
  (d) if paragraph (c) applies to more than one disposition of goodwill at the same time, that paragraph and subsection (39) apply as if each disposition had occurred separately in the order designated by the taxpayer or, if the taxpayer does not designate an order, in the order designated by the Minister. 
  
  ### Outlays not relating to property
  
  (35) If at any time a taxpayer makes or incurs an outlay or expense on account of capital for the purpose of gaining or producing income from a business carried on by the taxpayer, the taxpayer is deemed to acquire at that time goodwill in respect of the business with a cost equal to the amount of the outlay or expense if no portion of the amount is 
  (a) the cost, or any part of the cost, of a property; 
  (b) deductible in computing the taxpayer’s income from the business (determined without reference to this subsection); 
  (c) not deductible in computing the taxpayer’s income from the business because of any provision of this Act (other than paragraph 18(1)(b)) or the Income Tax Regulations ;  
  (d) paid or payable to a creditor of the taxpayer as, on account of or in lieu of payment of, any debt, or on account of the redemption, cancellation or purchase of any bond or debenture; or 
  (e) where the taxpayer is a corporation, partnership or trust, paid or payable to a person as a shareholder, partner or beneficiary, as the case may be, of the taxpayer. 
  
  ### No addition to goodwill
  
  (36) For greater certainty, no amount paid or payable may be included in Class 14.1 of Schedule II to the Income Tax Regulations, if the amount is  
  (a) in consideration for the purchase of shares; or 
  (b) in consideration for the cancellation or assignment of an obligation to pay consideration referred to in paragraph (a). 
  
  ### Receipts not relating to property
  
  (37) If at any time in a taxation year a taxpayer has or may become entitled to receive an amount (in this subsection referred to as the 
  *receipt*) on account of capital in respect of a business that is or was carried on by the taxpayer, the taxpayer is deemed to dispose, at that time, of goodwill in respect of the business for proceeds of disposition equal to the amount by which the receipt exceeds the total of all outlays or expenses that were made or incurred by the taxpayer for the purpose of obtaining the receipt and that were not otherwise deductible in computing the taxpayer’s income, if the following conditions are satisfied (determined without reference to this subsection):  
  (a) the receipt is not included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts for the taxation year or a preceding taxation year; 
  (b) the receipt does not reduce the cost or capital cost of a property or the amount of an outlay or expense; and 
  (c) the receipt is not included in computing any gain or loss of the taxpayer from a disposition of a capital property. 
  
  ### Class 14.1 — transitional rules
  
  (38) If a taxpayer has incurred an eligible capital expenditure in respect of a business before January 1, 2017, 
  (a) at the beginning of that day, the total capital cost of all property of the taxpayer included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of the business, each of which was an eligible capital property of the taxpayer immediately before that day or is the goodwill property in respect of the business, is deemed to be the amount determined by the formula  is the amount that is the cumulative eligible capital in respect of the business at the beginning of that day, is the amount determined for F in the definition 
  *cumulative eligible capital* in subsection 14(5) (as that subsection applied immediately before that day) in respect of the business at the beginning of that day, and  is the amount by which the total of all amounts determined, in respect of the business, for E or F in the definition 
  *cumulative eligible capital* in subsection 14(5) (as that subsection applied immediately before that day), exceeds the total of all amounts determined for A to D.1 in that definition in respect of the business at the beginning of that day, including any adjustment required by subparagraph (d)(i);  
  (b) at the beginning of that day, the capital cost of each property of the taxpayer included in the class in respect of the business, each of which was an eligible capital property of the taxpayer immediately before that day or is the goodwill property in respect of the business, is to be determined as follows: 
  (i) the taxpayer shall designate the order in which the capital cost of each property that is not the goodwill property is determined and, if the taxpayer does not designate an order, the Minister may designate the order, 
  (ii) the capital cost of a particular property that is not the goodwill property in respect of the business is deemed to be the lesser of the eligible capital expenditure of the taxpayer in respect of the particular property and the amount by which the total capital cost of the class determined under paragraph (a) exceeds the total of all amounts each of which is an amount deemed by this subparagraph to be the capital cost of a property that is determined in advance of the determination of the capital cost of the particular property, and 
  (iii) the capital cost of the goodwill property is deemed to be the amount by which the total capital cost of the class exceeds the total of all amounts each of which is an amount deemed by subparagraph (ii) to be the capital cost of a property; 
  (c) an amount is deemed to have been allowed to the taxpayer in respect of property of the class under regulations made under paragraph 20(1)(a) in computing the taxpayer’s income for taxation years ending before that day equal to the amount by which 
  (i) the total of the total capital cost of the class and the amount determined for C in paragraph (a) exceeds 
  (ii) the amount determined for A in paragraph (a); and 
  (d) if no taxation year of the taxpayer ends immediately before that day and the taxpayer would have had a particular amount included, because of paragraph 14(1)(b) (as that paragraph applied immediately before that day), in computing the taxpayer’s income from the business for the particular taxation year that includes that day if the particular year had ended immediately before that day, 
  (i) for the purposes of the formula in paragraph (a), 3/2 of the particular amount is to be included in computing the amount for B of the definition 
  *cumulative eligible capital* in subsection 14(5) (as that subsection applied immediately before that day),  
  (ii) the taxpayer is deemed to dispose of a capital property in respect of the business immediately before that day for proceeds of disposition equal to twice the particular amount, 
  (iii) if the taxpayer elects in writing to have this subparagraph apply and files that election with the Minister on or before the filing-due date for the particular year, subparagraph (ii) does not apply and an amount equal to the particular amount is to be included in computing the taxpayer’s income from the business for the particular year, 
  (iv) if, on or after that day and in the particular year, the taxpayer acquires a property included in the class in respect of the business, or is deemed by subsection (35) to acquire goodwill in respect of the business, and the taxpayer elects in writing to have this subparagraph apply and files that election with the Minister on or before the filing-due date for the particular year, 
  (A) for the purposes of subparagraphs (ii) and (iii), the particular amount is to be reduced by the lesser of the particular amount otherwise determined and 1/2 of the capital cost of the property or goodwill acquired (determined without reference to clause (B)), and 
  (B) the capital cost of the property or goodwill acquired, as the case may be, is to be reduced by twice the amount by which the particular amount is reduced under clause (A), and 
  (v) if, in the particular year and before that day, the taxpayer disposed of a 
  *qualified farm or fishing property* (as defined in subsection 110.6(1)) that was an eligible capital property of the taxpayer, the capital property disposed of under subparagraph (ii), if any, is deemed to be a qualified farm or fishing property to the extent of the lesser of  
  (A) the proceeds of disposition of the capital property, and 
  (B) the amount by which the proceeds of disposition of the qualified farm or fishing property exceed its cost. 
  
  ### Class 14.1 — transitional rule
  
  (39) If at any time a taxpayer disposes of a particular property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of a business and none of subsections 24(2), 70(5.1), 73(3.1), 85(1), 88(1), 98(3) and (5), 107(2) and 107.4(3) apply to the disposition, then for the purpose of determining the undepreciated capital cost of the class, the taxpayer is deemed to have acquired a property of the class immediately before that time with a capital cost equal to the least of 1/4 of the proceeds of disposition of the particular property, 1/4 of the capital cost of the particular property and  
  (a) if the particular property is not goodwill and is acquired before January 1, 2017 by the taxpayer, 1/4 of the capital cost of the particular property; 
  (b) if the particular property is not goodwill, is acquired on or after that day by the taxpayer and subsection (40) deems an amount to have been allowed under paragraph 20(1)(a) in respect of the taxpayer’s acquisition of the particular property, that amount; 
  (c) if the particular property (other than a property to which paragraph (b) applies) is not goodwill and is acquired on or after that day by the taxpayer — in circumstances under which any of subsections 24(2), 70(5.1), 73(3.1), 85(1), 88(1), 98(3) and (5), 107(2) and 107.4(3) apply — from a person or partnership that would have been deemed under this subsection to have acquired a property if none of those subsections had applied, the capital cost of the property that would have been deemed under this subsection to have been acquired by the person or partnership; 
  (d) if the particular property is goodwill, the amount by which 
  (i) the total of all amounts each of which is 
  (A) 1/4 of the amount determined under subparagraph (38)(b)(iii) in respect of the business, 
  (B) if goodwill is acquired on or after that day by the taxpayer and subsection (40) deems an amount to have been allowed under paragraph 20(1)(a) in respect of the taxpayer’s acquisition of the goodwill, that amount, or 
  (C) if goodwill is acquired (other than an acquisition in respect of which clause (B) applies) on or after that day by the taxpayer — in circumstances under which any of subsections 24(2), 70(5.1), 73(3.1), 85(1), 88(1), 98(3) and (5), 107(2) and 107.4(3) apply — from a person or partnership that would have been deemed under this subsection to have acquired a property if none of those subsections had applied, the capital cost of the property that would have been deemed under this subsection to have been acquired by the person or partnership exceeds 
  (ii) the total of all amounts each of which is the capital cost of a property deemed by this subsection to have been acquired by the taxpayer at or before that time in respect of another disposition of goodwill in respect of the business; and 
  (e) in any other case, nil. 
  
  ### Class 14.1 — transitional rule
  
  (40) If at any time a taxpayer acquires a particular property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of a business, the acquisition of the particular property is part of a transaction or series of transactions or events that includes a disposition (in this subsection referred to as the 
  *prior disposition*) at or before that time of the particular property, or a similar property, by the taxpayer or a person or partnership that does not deal at arm’s length with the taxpayer and subsection (39) applies in respect of the prior disposition, then for the purpose of determining the undepreciated capital cost of the class, an amount is deemed to have been allowed under paragraph 20(1)(a) to the taxpayer in respect of the particular property in computing the taxpayer’s income for taxation years ending before the acquisition equal to the lesser of the capital cost of the property deemed by subsection (39) to be acquired in respect of the prior disposition and 1/4 of the capital cost of the particular property.  
  
  ### Class 14.1 — transitional rule
  
  (41) For the purposes of subsections (38) to (40) and (42), paragraph 20(1)(hh.1), subsections 40(13) to (16) and paragraph 79(4)(b), 
  *cumulative eligible capital*, 
  *eligible capital expenditure*, 
  *eligible capital property* and 
  *exempt gains balance* have the meanings that would be assigned to those expressions if the Act read as it did immediately before 2017.  
  
  ### Class 14.1 — transitional rules
  
  (42) If a taxpayer owns property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of a business at the beginning of 2017, that was an eligible capital property in respect of the business immediately before 2017,  
  (a) for the purposes of the Act and its regulations (other than this section, section 20 and any regulations made for the purposes of paragraph 20(1)(a)), if the amount determined for A in the definition 
  *cumulative eligible capital* in subsection 14(5) would have been increased immediately before 2017 if the property had been disposed of immediately before that time, the capital cost of the property is deemed to be increased by 4/3 of the amount of that increase;  
  (b) for purposes of this section, section 20 and any regulations made for the purposes of paragraph 20(1)(a), if the taxpayer was deemed by subsection 14(12) to continue to own eligible capital property in respect of the business and not to have ceased to carry on the business until a time that is after 2016, the taxpayer is deemed to continue to own the property and to continue to carry on the business until the time that is immediately before the first time one of the events that would be described in any of paragraphs 14(12)(c) to (g) (as they read immediately before 2017, if the reference to “eligible capital property” in paragraph 14(12)(d) were read as “eligible capital property or capital property”) occurs; 
  (c) for the purposes of the descriptions of D.1 and K in the definition 
  *undepreciated capital cost* in subsection (21), the taxpayer is deemed not to have paid or received any amounts before 2017 as or on account of an existing or proposed countervailing or anti-dumping duty in respect of depreciable property of the class; and  
  (d) subsection (7.1) does not apply to assistance that a taxpayer received or is entitled to receive before 2017 in respect of a property that was an eligible capital property immediately before 2017. 
  
  ### Transitional rule
  
  (43) An amount is to be included in computing a taxpayer’s income from a business for a taxation year, and is deemed not to be a taxable capital gain (other than for the purposes of the definition capital dividend account in subsection 89(1)), to the extent  
  (a) the amount is part of the proceeds of disposition of eligible capital property (as defined in section 54, as it read on December 31, 2016) that is in respect of the business;  
  (b) the disposition is under an agreement between the taxpayer and a purchaser that deals at arm’s length with the taxpayer; 
  (c) the disposition occurred before March 22, 2016; 
  (d) the amount becomes receivable under the agreement after 2016 and before 2024 because of a condition of the agreement, if 
  (i) at the end of 2016, it was uncertain whether the condition would be met, and 
  (ii) the condition is met after 2016; 
  (e) the amount would, in the absence of this subsection, be a taxable capital gain; 
  (f) the amount would have been included in computing the taxpayer’s income from the business if the amount had become receivable on December 31, 2016; and 
  (g) the taxpayer files an election with the Minister, no later than the filing-due date for the taxpayer’s first taxation year that ends after August 9, 2022 to have this subsection apply in respect of the amount. 
  14  [Repealed, 2016, c. 12, s. 4]  
  
  ### Benefit conferred on shareholder
  
  15 (1) If, at any time, a benefit is conferred by a corporation on a shareholder of the corporation, on a member of a partnership that is a shareholder of the corporation or on a contemplated shareholder of the corporation, then the amount or value of the benefit is to be included in computing the income of the shareholder, member or contemplated shareholder, as the case may be, for its taxation year that includes the time, except to the extent that the amount or value of the benefit is deemed by section 84 to be a dividend or that the benefit is conferred on the shareholder 
  (a) where the corporation is resident in Canada at the time, 
  (i) by the reduction of the paid-up capital of the corporation, 
  (ii) by the redemption, acquisition or cancellation by the corporation of shares of its capital stock, 
  (iii) on the winding-up, discontinuance or reorganization of the corporation’s business, or 
  (iv) by way of a transaction to which subsection 88(1) or (2) applies; 
  (a.1) where the corporation is not resident in Canada at the time, 
  (i) by way of a distribution to which subsection 86.1(1) applies, 
  (ii) by a reduction of the paid-up capital of the corporation to which subclause 53(2)(b)(i)(B)(II) or subparagraph 53(2)(b)(ii) applies, 
  (iii) by the redemption, acquisition or cancellation by the corporation of shares of its capital stock, or 
  (iv) on the winding-up, or liquidation and dissolution, of the corporation; 
  (b) by the payment of a dividend or a stock dividend; 
  (c) by conferring, on all owners of common shares of the capital stock of the corporation at that time, a right in respect of each common share, that is identical to every other right conferred at that time in respect of each other such share, to acquire additional shares of the capital stock of the corporation, and, for the purposes of this paragraph, 
  (i) the shares of a particular class of common shares of the capital stock of the corporation are deemed to be property that is identical to the shares of another class of common shares of the capital stock of the corporation if 
  (A) the voting rights attached to the particular class differ from the voting rights attached to the other class, and 
  (B) there are no other differences between the terms and conditions of the classes of shares that could cause the fair market value of a share of the particular class to differ materially from the fair market value of a share of the other class, and 
  (ii) rights are not considered identical if the cost of acquiring the rights differs; or 
  (d) by an action to which paragraph 84(1)(c.1), (c.2) or (c.3) applies. 
  
  ### Conferring of benefit
  
  (1.1) Notwithstanding subsection (1), if in a taxation year a corporation has paid a stock dividend to a person and it may reasonably be considered that one of the purposes of that payment was to significantly alter the value of the interest of any specified shareholder of the corporation, the fair market value of the stock dividend shall, except to the extent that it is otherwise included in computing that person’s income under any of paragraphs 82(1)(a), (a.1) and (c) to (e), be included in computing the income of that person for the year. 
  
  ### Forgiveness of shareholder debt
  
  (1.2) For the purpose of subsection 15(1), the value of the benefit where an obligation issued by a debtor is settled or extinguished at any time shall be deemed to be the forgiven amount at that time in respect of the obligation. 
  
  ### Forgiven amount
  
  (1.21) For the purpose of subsection 15(1.2), the 
  *forgiven amount* at any time in respect of an obligation issued by a debtor has the meaning that would be assigned by subsection 80(1) if  
  (a) the obligation were a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the debtor; 
  (b) no amount included in computing income (otherwise than because of paragraph 6(1)(a)) because of the obligation being settled or extinguished were taken into account; 
  (c) the definition 
  *forgiven amount* in subsection 80(1) were read without reference to paragraphs (f) and (h) of the description B in that definition; and  
  (d) section 80 were read without reference to paragraphs (2)(b) and (q) of that section. 
  
  ### Cost of property or service
  
  (1.3) To the extent that the cost to a person of purchasing a property or service or an amount payable by a person for the purpose of leasing property is taken into account in determining an amount required under this section to be included in computing a taxpayer’s income for a taxation year, that cost or amount payable, as the case may be, shall include any tax that was payable by the person in respect of the property or service or that would have been so payable if the person were not exempt from the payment of that tax because of the nature of the person or the use to which the property or service is to be put. 
  
  ### Interpretation — subsection (1)
  
  (1.4) For the purposes of this subsection and subsection (1), 
  (a) a contemplated shareholder of a corporation is 
  (i) a person or partnership on whom a benefit is conferred by the corporation in contemplation of the person or partnership becoming a shareholder of the corporation, or 
  (ii) a member of a partnership on whom a benefit is conferred by the corporation in contemplation of the partnership becoming a shareholder of the corporation; 
  (b) a person or partnership that is (or is deemed by this paragraph to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership; 
  (c) a benefit conferred by a corporation on an individual is a benefit conferred on a shareholder of the corporation, a member of a partnership that is a shareholder of the corporation or a contemplated shareholder of the corporation — except to the extent that the amount or value of the benefit is included in computing the income of the individual or any other person — if the individual is an individual, other than an excluded trust in respect of the corporation, who does not deal at arm’s length with, or is affiliated with, the shareholder, member of the partnership or contemplated shareholder, as the case may be; and 
  (d) for the purposes of paragraph (c), an excluded trust in respect of a corporation is a trust in which no individual (other than an excluded trust in respect of the corporation) who does not deal at arm’s length with, or is affiliated with, a shareholder of the corporation, a member of a partnership that is a shareholder of the corporation or a contemplated shareholder of the corporation, is beneficially interested. 
  (e)  [Repealed, 2018, c. 27, s. 2]  
  
  ### Division of corporation under foreign laws
  
  (1.5) If a non-resident corporation (in this subsection referred to as the “original corporation”) governed by the laws of a foreign jurisdiction undergoes a division under those laws that results in all or part of its property and liabilities becoming the property and liabilities of one or more other non-resident corporations (each of which is referred to in this subsection as a “new corporation”) and, as a consequence of the division, a shareholder of the original corporation acquires one or more shares (referred to in this subsection as “new shares”) of the capital stock of a new corporation at a particular time, the following rules apply: 
  (a) except to the extent that any of subparagraphs (1)(a.1)(i) to (iii) and paragraph (1)(b) applies (determined without reference to this subsection) to the acquisition of the new shares 
  (i) in the case where, for each class of shares of the capital stock of the original corporation of which shares are held by the shareholder immediately before the division, new shares are received at the particular time by shareholders of that class on a pro rata basis in respect of all the shares (referred to in this subsection as the “original shares”) of that class 
  (A) at the particular time, the original corporation is deemed to have distributed, and the shareholder is deemed to have received, as a dividend in kind in respect of the original shares, the new shares acquired by the shareholder at the particular time, and 
  (B) the amount of the dividend in kind received by the shareholder in respect of an original share is deemed to be equal to the fair market value, immediately after the particular time, of the new shares acquired by the shareholder at the particular time in respect of the original share, and 
  (ii) in any case where subparagraph (i) does not apply, the original corporation is deemed, at the particular time, to have conferred a benefit on the shareholder equal to the total fair market value, at that time, of the new shares acquired by the shareholder as a consequence of the division; 
  (b) any gain or loss of the original corporation from a distribution of the new shares as a consequence of the division is deemed to be nil; and 
  (c) each property of the original corporation that becomes at any time (referred to in this paragraph as the “disposition time”) property of the new corporation as a consequence of the division is deemed to be 
  (i) disposed of by the original corporation immediately before the disposition time for proceeds of disposition equal to the property’s fair market value, and 
  (ii) acquired by the new corporation at the disposition time at a cost equal to the amount determined under subparagraph (i) to be the original corporation’s proceeds of disposition. 
  
  ### Shareholder debt
  
  (2) Where a person (other than a corporation resident in Canada) or a partnership (other than a partnership each member of which is a corporation resident in Canada) is 
  (a) a shareholder of a particular corporation, 
  (b) connected with a shareholder of a particular corporation, or 
  (c) a member of a partnership, or a beneficiary of a trust, that is a shareholder of a particular corporation and the person or partnership has in a taxation year received a loan from or become indebted to (otherwise than by way of a pertinent loan or indebtedness) the particular corporation, any other corporation related to the particular corporation or a partnership of which the particular corporation or a corporation related to the particular corporation is a member, the amount of the loan or indebtedness is included in computing the income for the year of the person or partnership. 
  
  ### Meaning of connected
  
  (2.1) For the purposes of subsection (2), a person or partnership is connected with a shareholder of a particular corporation if that person or partnership does not deal at arm’s length with, or is affiliated with, the shareholder, unless, in the case of a person, that person is 
  (a) a foreign affiliate of the particular corporation; or 
  (b) a foreign affiliate of a person resident in Canada with which the particular corporation does not deal at arm’s length. 
  
  ### Pertinent loan or indebtedness
  
  (2.11) For the purposes of subsection (2) and subject to subsection 17.1(3), 
  *pertinent loan or indebtedness* means a loan received, or an indebtedness incurred, at any time, by a non-resident corporation (in this subsection referred to as the “subject corporation”), or by a partnership of which the subject corporation is, at that time, a member, that is an amount owing to a corporation resident in Canada (in this subsection and subsections (2.12) and (2.14) referred to as the “CRIC”) or to a qualifying Canadian partnership in respect of the CRIC and in respect of which amount owing all of the following apply:  
  (a) subsection (2) would, in the absence of this subsection, apply to the amount owing; 
  (b) the amount becomes owing after March 28, 2012; 
  (c) at that time, the CRIC is controlled by a non-resident corporation that 
  (i) is the subject corporation, or 
  (ii) does not deal at arm’s length with the subject corporation; and 
  (d) either 
  (i) in the case of an amount owing to the CRIC, the CRIC and a non-resident corporation that controls the CRIC jointly elect in writing under this subparagraph in respect of the amount owing and file the election with the Minister on or before the filing-due date of the CRIC for the taxation year that includes that time, or 
  (ii) in the case of an amount owing to the qualifying Canadian partnership, all the members of the qualifying Canadian partnership and a non-resident corporation that controls the CRIC jointly elect in writing under this subparagraph in respect of the amount owing and file the election with the Minister on or before the filing-due date of the CRIC for its taxation year in which ends the fiscal period of the qualifying Canadian partnership that includes that time. 
  
  ### Late-filed elections
  
  (2.12) Where an election referred to in paragraph (2.11)(d) was not made on or before the day on or before which the election was required by that paragraph to be made, the election is deemed to have been made on that day if the election is made on or before the day that is three years after that day and the penalty in respect of the election is paid by the CRIC when the election is made. 
  
  ### Penalty for late-filed election
  
  (2.13) For the purposes of subsection (2.12), the penalty in respect of an election referred to in that subsection is the amount equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period commencing with the day on or before which the election is required by paragraph (2.11)(d) to be made and ending on the day the election is made. 
  
  ### Partnerships
  
  (2.14) For purposes of this subsection, subsection (2.11), section 17.1 and subsection 18(5), 
  (a) a 
  *qualifying Canadian partnership*, at any time in respect of a CRIC, means a partnership each member of which is, at that time, the CRIC or another corporation resident in Canada to which the CRIC is, at that time, related; and  
  (b) a person or partnership that is (or is deemed by this paragraph to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership. 
  
  ### Mergers
  
  (2.15) For the purposes of subsections (2.11) and (2.14), 
  (a) if there has been an amalgamation to which subsection 87(1) applies, the new corporation referred to in that subsection is deemed to be the same corporation as, and a continuation of, each predecessor corporation referred to in that subsection; and 
  (b) if there has been a winding-up to which subsection 88(1) applies, the parent referred to in that subsection is deemed to be the same corporation as, and a continuation of, the subsidiary referred to in that subsection. 
  
  ### Back-to-back arrangement — application
  
  (2.16) Subsection (2.17) applies at any time if 
  (a) at that time, a person or partnership (referred to in this subsection and subsections (2.17) to (2.192) as the 
  *intended borrower*) has an amount outstanding as or on account of a debt or other obligation to pay an amount (in this subsection and subsections (2.17) to (2.192) referred to as the 
  *shareholder debt*) to a person or partnership (in this subsection and subsections (2.17) to (2.192) referred to as the 
  *immediate funder*);  
  (b) subsection (2) would not, in the absence of this subsection and subsection (2.17), apply to the shareholder debt; 
  (c) at that time, a funder, in respect of a particular funding arrangement, 
  (i) has an amount outstanding as or on account of a debt or other obligation to pay an amount (other than a debt or other obligation to pay an amount to which subsection (2) applies or would apply if it were not a 
  *pertinent loan or indebtedness*, as defined in subsection (2.11)) to a person or partnership that meets either of the following conditions:  
  (A) recourse in respect of the debt or other obligation is limited in whole or in part, either immediately or in the future and either absolutely or contingently, to a funding arrangement, or 
  (B) it can reasonably be concluded that all or a portion of the particular funding arrangement was entered into or was permitted to remain outstanding because 
  (I) all or a portion of the debt or other obligation was entered into or was permitted to remain outstanding, or 
  (II) the funder anticipated that all or a portion of the debt or other obligation would become owing or remain outstanding, or 
  (ii) has a specified right in respect of a particular property that was granted directly or indirectly by a person or partnership and 
  (A) the existence of the specified right is required under the terms and conditions of the particular funding arrangement, or 
  (B) it can reasonably be concluded that all or a portion of the particular funding arrangement was entered into, or was permitted to remain in effect, because 
  (I) the specified right was granted, or 
  (II) the funder anticipated that the specified right would be granted; and 
  (d) at that time, one or more funders is an ultimate funder. 
  
  ### Back-to-back arrangement — consequences
  
  (2.17) If this subsection applies at a particular time, then for the purposes of this section and section 80.4, the intended borrower is deemed to receive a loan from each particular ultimate funder at the particular time, the amount of which is equal to the amount determined by the formula is the lesser of 
  (a) the amount outstanding as or on account of the shareholder debt at the particular time, and 
  (b) the total of all amounts, each of which is, at the particular time, 
  (i) an amount outstanding as or on account of a debt or other obligation that is owed by a funder (other than an ultimate funder) to an ultimate funder under a funding arrangement in respect of the shareholder debt, or 
  (ii) the fair market value of a particular property in respect of which an ultimate funder has granted a specified right to a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt; is the total of all amounts, each of which is, at the particular time, 
  (a) an amount outstanding as or on account of a debt or other obligation that is owed by a funder (other than an ultimate funder) to the particular ultimate funder under a funding arrangement in respect of the shareholder debt, or 
  (b) the fair market value of a particular property in respect of which the particular ultimate funder has granted a specified right to a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt; is the total amount determined under paragraph (b) of the description of A; is the total of all amounts, each of which is, in respect of the shareholder debt, an amount that the intended borrower has been deemed by this subsection to have received from the particular ultimate funder as a loan at any time before the particular time; and is the total amount of any repayments deemed by subsections (2.19) and (2.191) to have occurred before the particular time, in respect of any deemed loans from the particular ultimate funder that are referred to in the description of D. 
  
  ### Back-to-back arrangement — conditions for deemed repayment
  
  (2.18) Subsection (2.19) applies in respect of an intended borrower and a particular ultimate funder at a particular time if 
  (a) prior to the particular time, subsection (2.17) has applied in respect of a shareholder debt to deem one or more loans to have been received by the intended borrower from the particular ultimate funder; and 
  (b) at the particular time, 
  (i) an amount owing in respect of the shareholder debt is repaid in whole or in part, 
  (ii) an amount owing in respect of a debt or other obligation owing to the particular ultimate funder by a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt is repaid in whole or in part, or 
  (iii) either 
  (A) there is a decrease in the fair market value of a property in respect of which a specified right was granted by the particular ultimate funder to a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt, or 
  (B) a right described in clause (A) is extinguished. 
  
  ### Back-to-back arrangement — deemed repayment
  
  (2.19) If this subsection applies in respect of an intended borrower and a particular ultimate funder at a particular time, 
  (a) the intended borrower is deemed, for the purposes of this section, paragraph 20(1)(j), section 80.4 and subsection 227(6.1), to repay, in whole or in part, one or more of the deemed loans referred to in paragraph (2.18)(a) at the particular time; and 
  (b) the total amount of the deemed repayments referred to in paragraph (a) is to be determined by the following formula: is the total of all amounts, each of which is the amount of a loan deemed by subsection (2.17) to have been received, at any time before the particular time, by the intended borrower from the particular ultimate funder in respect of the shareholder debt, is the total of all amounts deemed by this subsection to have been repaid, at any time before the particular time, by the intended borrower in respect of any loans referred to in the description of A, and is the amount determined by the formula is the lesser of 
  (i) the amount outstanding as or on account of the shareholder debt, immediately after the particular time, and 
  (ii) the total of all amounts, each of which is, immediately after the particular time, 
  (A) an amount outstanding as or on account of a debt or other obligation that is owed by a funder (other than an ultimate funder) to an ultimate funder under a funding arrangement in respect of the shareholder debt, or 
  (B) the fair market value of a particular property in respect of which an ultimate funder has granted a specified right to a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt, is the total of all amounts, each of which is, immediately after the particular time 
  (i) an amount outstanding as or on account of a debt or other obligation that is owed by a funder (other than an ultimate funder) to the particular ultimate funder under a funding arrangement in respect of the shareholder debt, or 
  (ii) the fair market value of a particular property in respect of which the particular ultimate funder has granted a specified right to a funder (other than an ultimate funder) under a funding arrangement in respect of the shareholder debt, and is the amount determined under subparagraph (ii) in the description of D. 
  
  ### Negative amounts
  
  (2.191) If, in the absence of section 257, the formula in subsection (2.17) would result in a negative amount at a particular time, 
  (a) the intended borrower is deemed, for the purposes of this section, paragraph 20(1)(j), section 80.4 and subsection 227(6.1), to repay, in whole or in part, one or more of the loans deemed by subsection (2.17) to have been received by the intended borrower from the particular ultimate funder before the particular time; and 
  (b) the total amount of the deemed repayments referred to in paragraph (a) is equal to the absolute value of that negative amount. 
  
  ### Back-to-back arrangement — definitions
  
  (2.192) The following definitions apply in this subsection and subsections (2.16) to (2.191).  
  *funder*, in respect of a funding arrangement, means  
  (a) if the funding arrangement is described in paragraph (a) of the definition funding arrangement, the immediate funder;  
  (b) if the funding arrangement is described in paragraph (b) of the definition funding arrangement, the creditor in respect of the debt or other obligation or the grantor of the specified right, as the case may be; and  
  (c) a person or partnership that does not deal at arm’s length with a person or partnership referred to in paragraph (a) or (b). ( bailleur de fonds)   
  *funding arrangement* means  
  (a) the shareholder debt; and 
  (b) each debt or other obligation or specified right, owing by or granted to a funder, in respect of a particular funding arrangement, if the debt or other obligation or specified right meets the conditions in subparagraph (2.16)(c)(i) or (ii) in respect of a funding arrangement. ( mécanisme de financement)   
  *specified right* has the same meaning as in subsection 18(5). (droit déterminé)   
  *ultimate funder* means a funder, if subsection (2) would apply to the shareholder debt if the creditor under the shareholder debt were the funder instead of the immediate funder. (bailleur de fonds ultime)  
  
  ### When s. 15(2) not to apply — non-resident persons
  
  (2.2) Subsection 15(2) does not apply to indebtedness between non-resident persons. 
  
  ### When s. 15(2) not to apply – ordinary lending business
  
  (2.3) Subsection (2) does not apply to a debt that arose in the ordinary course of the creditor’s business or a loan made in the ordinary course of the lender’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the lender) where, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the debt or loan within a reasonable time.  
  
  ### Interpretation – partnerships
  
  (2.31) For the purposes of this subsection and subsection (2.3), 
  (a) a person or partnership that is a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership; and 
  (b) a borrower shall be considered to deal at arm’s length with a lender only if 
  (i) for greater certainty, the borrower and the lender deal with each other at arm’s length, 
  (ii) where either the borrower or the lender is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party, and 
  (iii) where both the borrower and the lender are partnerships, the borrower and each member of the borrower deal at arm’s length with the lender and each member of the lender. 
  
  ### When s. 15(2) not to apply — certain employees
  
  (2.4) Subsection 15(2) does not apply to a loan made or a debt that arose 
  (a) in respect of an individual who is an employee of the lender or creditor but not a specified employee of the lender or creditor, 
  (b) in respect of an individual who is an employee of the lender or creditor or who is the spouse or common-law partner of an employee of the lender or creditor to enable or assist the individual to acquire a dwelling or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit a dwelling owned by the corporation, where the dwelling is for the individual’s habitation, 
  (c) where the lender or creditor is a particular corporation, in respect of an employee of the particular corporation or of another corporation that is related to the particular corporation, to enable or assist the employee to acquire from the particular corporation, or from another corporation related to the particular corporation, previously unissued fully paid shares of the capital stock of the particular corporation or the related corporation, as the case may be, to be held by the employee for the employee’s own benefit, or 
  (d) in respect of an employee of the lender or creditor to enable or assist the employee to acquire a motor vehicle to be used by the employee in the performance of the duties of the employee’s office or employment, where 
  (e) it is reasonable to conclude that the employee or the employee’s spouse or common-law partner received the loan, or became indebted, because of the employee’s employment and not because of any person’s share-holdings, and 
  (f) at the time the loan was made or the debt was incurred, bona fide arrangements were made for repayment of the loan or debt within a reasonable time.  
  
  ### When s. 15(2) not to apply — certain trusts
  
  (2.5) Subsection 15(2) does not apply to a loan made or a debt that arose in respect of a trust where 
  (a) the lender or creditor is a private corporation; 
  (b) the corporation is the settlor and sole beneficiary of the trust; 
  (c) the sole purpose of the trust is to facilitate the purchase and sale of the shares of the corporation, or of another corporation related to the corporation, for an amount equal to their fair market value at the time of the purchase or sale, as the case may be, from or to the employees of the corporation or of the related corporation (other than employees who are specified employees of the corporation or of another corporation related to the corporation), as the case may be; and 
  (d) at the time the loan was made or the debt incurred, bona fide arrangements were made for repayment of the loan or debt within a reasonable time.  
  
  ### When s. 15(2) not to apply — repayment within one year
  
  (2.6) Subsection 15(2) does not apply to a loan or an indebtedness repaid within one year after the end of the taxation year of the lender or creditor in which the loan was made or the indebtedness arose, where it is established, by subsequent events or otherwise, that the repayment was not part of a series of loans or other transactions and repayments. 
  
  ### Employee of partnership
  
  (2.7) For the purpose of this section, an individual who is an employee of a partnership is deemed to be a specified employee of the partnership where the individual is a specified shareholder of one or more corporations that, in total, are entitled, directly or indirectly, to a share of any income or loss of the partnership, which share is not less than 10% of the income or loss. 
  
  ### Interest or dividend on income bond or debenture
  
  (3) An amount paid as interest or a dividend by a corporation resident in Canada to a taxpayer in respect of an income bond or income debenture shall be deemed to have been paid by the corporation and received by the taxpayer as a dividend on a share of the capital stock of the corporation, unless the corporation is entitled to deduct the amount so paid in computing its income. 
  
  ### Idem, where corporation not resident
  
  (4) An amount paid as interest or a dividend by a corporation not resident in Canada to a taxpayer in respect of an income bond or income debenture shall be deemed to have been received by the taxpayer as a dividend on a share of the capital stock of the corporation unless the amount so paid was, under the laws of the country in which the corporation was resident, deductible in computing the amount for the year on which the corporation was liable to pay income or profits tax imposed by the government of that country. 
  
  ### Automobile benefit
  
  (5) For the purposes of subsection (1), the value of the benefit to be included in computing a shareholder’s income for a taxation year with respect to an automobile made available to the shareholder, or a person related to the shareholder, by a corporation shall (except where an amount is determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the shareholder’s income for the year) be computed on the assumption that subsections 6(1), (1.1), (2) and (7) apply, with such modifications as the circumstances require, and as though references therein to “the employer” were read as “the corporation”. 
  
  ### Application of ss. (1), (2) and (5)
  
  (7) For greater certainty, subsections 15(1), (2) and (5) are applicable in computing, for the purposes of this Part, the income of a shareholder or of a person or partnership whether or not the corporation, or the lender or creditor, as the case may be, was resident or carried on business in Canada. 
  (8)  [Repealed, 1998, c. 19, s. 75(3)]  
  
  ### Deemed benefit to shareholder by corporation
  
  (9) Where an amount in respect of a loan or debt is deemed by section 80.4 to be a benefit received by a person or partnership in a taxation year, the amount is deemed for the purpose of subsection 15(1) to be a benefit conferred in the year on a shareholder, unless subsection 6(9) or paragraph 12(1)(w) applies to the amount. 
  15.1  [Repealed, 2023, c. 26, s. 7]  
  15.2  [Repealed, 2023, c. 26, s. 7]  
  
  ### Income and capital combined
  
  16 (1) Where, under a contract or other arrangement, an amount can reasonably be regarded as being in part interest or other amount of an income nature and in part an amount of a capital nature, the following rules apply: 
  (a) the part of the amount that can reasonably be regarded as interest shall, irrespective of when the contract or arrangement was made or the form or legal effect thereof, be deemed to be interest on a debt obligation held by the person to whom the amount is paid or payable; and 
  (b) the part of the amount that can reasonably be regarded as an amount of an income nature, other than interest, shall, irrespective of when the contract or arrangement was made or the form or legal effect thereof, be included in the income of the taxpayer to whom the amount is paid or payable for the taxation year in which the amount was received or became due to the extent it has not otherwise been included in the taxpayer’s income. 
  
  ### Obligation issued at discount
  
  (2) Where, in the case of a bond, debenture, bill, note, mortgage or similar obligation issued after December 20, 1960 and before June 19, 1971 by a person exempt from tax under section 149, a non-resident person not carrying on business in Canada, or a government, municipality or municipal or other public body performing a function of government, 
  (a) the obligation was issued for an amount that is less than the principal amount of the obligation, 
  (b) the interest stipulated to be payable on the obligation, expressed in terms of an annual rate on 
  (i) the principal amount thereof, if no amount is payable on account of the principal amount before the maturity of the obligation, or 
  (ii) the amount outstanding from time to time as or on account of the principal amount thereof, in any other case, is less than 5%, and 
  (c) the yield from the obligation, expressed in terms of an annual rate on the amount for which the obligation was issued (which annual rate shall, if the terms of the obligation or any agreement relating thereto conferred on the holder thereof a right to demand payment of the principal amount of the obligation or the amount outstanding as or on account of the principal amount, as the case may be, before the maturity of the obligation, be calculated on the basis of the yield that produces the highest annual rate obtainable either on the maturity of the obligation or conditional on the exercise of any such right) exceeds the annual rate determined under paragraph 16(2)(b) by more than 1/3 thereof, the amount by which the principal amount of the obligation exceeds the amount for which the obligation was issued shall be included in computing the income of the first owner of the obligation who is a resident of Canada and is not a person exempt from tax under section 149 or a government, for the taxation year of that owner of the obligation in which he, she or it became the owner thereof. 
  
  ### Obligation issued at discount
  
  (3) Where, in the case of a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation (other than an obligation that is a prescribed debt obligation for the purpose of subsection 12(9)) issued after June 18, 1971 by a person exempt, because of section 149, from Part I tax on part or on all of the person’s income, a non-resident person not carrying on business in Canada or a government, municipality or municipal or other public body performing a function of government, 
  (a) the obligation was issued for an amount that is less than the principal amount of the obligation, and 
  (b) the yield from the obligation, expressed in terms of an annual rate on the amount for which the obligation was issued (which annual rate shall, if the terms of the obligation or any agreement relating thereto conferred on the holder thereof a right to demand payment of the principal amount of the obligation or the amount outstanding as or on account of the principal amount, as the case may be, before the maturity of the obligation, be calculated on the basis of the yield that produces the highest annual rate obtainable either on the maturity of the obligation or conditional on the exercise of any such right) exceeds 4/3 of the interest stipulated to be payable on the obligation, expressed in terms of an annual rate on 
  (i) the principal amount of the obligation, if no amount is payable on account of the principal amount before the maturity of the obligation, or 
  (ii) the amount outstanding from time to time as or on account of the principal amount thereof, in any other case, the amount by which the principal amount of the obligation exceeds the amount for which the obligation was issued shall be included in computing the income of the first owner of the obligation 
  (c) who is resident in Canada, 
  (d) who is not a government nor a person exempt, because of section 149, from tax under this Part on all or part of the person’s taxable income, and 
  (e) of whom the obligation is a capital property, for the taxation year in which the owner acquired the obligation. 
  
  ### Where s. (1) does not apply
  
  (4) Subsection 16(1) does not apply to any amount received by a taxpayer in a taxation year 
  (a) as an annuity payment; or 
  (b) in satisfaction of the taxpayer’s rights under an annuity contract. 
  
  ### Idem
  
  (5) Subsection 16(1) does not apply in any case where subsection 16(2) or 16(3) applies. 
  
  ### Indexed debt obligations
  
  (6) Subject to subsection 16(7) and for the purposes of this Act, where at any time in a taxpayer’s taxation year 
  (a) an interest in an indexed debt obligation is held by the taxpayer, 
  (i) an amount determined in prescribed manner shall be deemed to be received and receivable by the taxpayer in the year as interest in respect of the obligation, and 
  (ii) an amount determined in prescribed manner shall be deemed to be paid and payable in respect of the year by the taxpayer as interest under a legal obligation of the taxpayer to pay interest on borrowed money used for the purpose of earning income from a business or property; 
  (b) an indexed debt obligation is an obligation of the taxpayer, 
  (i) an amount determined in prescribed manner shall be deemed to be payable in respect of the year by the taxpayer as interest in respect of the obligation, and 
  (ii) an amount determined in prescribed manner shall be deemed to be received and receivable by the taxpayer in the year as interest in respect of the obligation; and 
  (c) the taxpayer pays or credits an amount in respect of an amount determined under subparagraph 16(6)(b)(i) in respect of an indexed debt obligation, the payment or crediting shall be deemed to be a payment or crediting of interest on the obligation. 
  
  ### Impaired indexed debt obligations
  
  (7) Paragraph 16(6)(a) does not apply to a taxpayer in respect of an indexed debt obligation for the part of a taxation year throughout which the obligation is impaired where an amount in respect of the obligation is deductible because of subparagraph 20(1)(l)(ii) in computing the taxpayer’s income for the year. 
  
  ### Leasing properties
  
  16.1 (1) Where a taxpayer (in this section referred to as the “lessee”) leases tangible property, or for civil law corporeal property, that is not prescribed property and that would, if the lessee acquired the property, be depreciable property of the lessee, from a person resident in Canada other than a person whose taxable income is exempt from tax under this Part, or from a non-resident person who holds the lease in the course of carrying on a business through a permanent establishment in Canada, as defined by regulation, any income from which is subject to tax under this Part, who owns the property and with whom the lessee was dealing at arm’s length (in this section referred to as the “lessor”) for a term of more than one year, if the lessee and the lessor jointly elect in prescribed form filed with their returns of income for their respective taxation years that include the particular time when the lease began, the following rules apply for the purpose of computing the income of the lessee for the taxation year that includes the particular time and for all subsequent taxation years: 
  (a) in respect of amounts paid or payable for the use of, or for the right to use, the property, the lease shall be deemed not to be a lease; 
  (b) the lessee shall be deemed to have acquired the property from the lessor at the particular time at a cost equal to its fair market value at that time; 
  (c) the lessee shall be deemed to have borrowed money from the lessor at the particular time, for the purpose of acquiring the property, in a principal amount equal to the fair market value of the property at that time; 
  (d) interest shall be deemed to accrue on the principal amount of the borrowed money outstanding from time to time, compounded semi-annually, not in advance, at the prescribed rate in effect 
  (i) at the earlier of 
  (A) the time, if any, before the particular time, at which the lessee last entered into an agreement to lease the property, and 
  (B) the particular time, or 
  (ii) where the lease provides that the amount payable by the lessee for the use of, or the right to use, the property varies according to prevailing interest rates in effect from time to time, and the lessee so elects, in respect of all of the property that is subject to the lease, in the lessee’s return of income under this Part for the taxation year of the lessee in which the lease began, at the beginning of the period for which the interest is being calculated; 
  (e) all amounts paid or payable by or on behalf of the lessee for the use of, or the right to use, the property in the year shall be deemed to be blended payments, paid or payable by the lessee, of principal and interest on the borrowed money outstanding from time to time, calculated in accordance with paragraph 16.1(1)(d), applied firstly on account of interest on principal, secondly on account of interest on unpaid interest and thirdly on account of unpaid principal, if any, and the amount, if any, by which any such payment exceeds the total of those amounts shall be deemed to be paid or payable on account of interest, and any amount deemed by reason of this paragraph to be a payment of interest shall be deemed to have been an amount paid or payable, as the case may be, pursuant to a legal obligation to pay interest in respect of the year on the borrowed money; 
  (f) at the time of the expiration or cancellation of the lease, the assignment of the lease or the sublease of the property by the lessee, the lessee shall (except where subsection 16.1(4) applies) be deemed to have disposed of the property at that time for proceeds of disposition equal to the amount, if any, by which 
  (i) the total of 
  (A) the amount referred to in paragraph 16.1(1)(c), and 
  (B) all amounts received or receivable by the lessee in respect of the cancellation or assignment of the lease or the sublease of the property exceeds 
  (ii) the total of 
  (A) all amounts deemed under paragraph 16.1(1)(e) to have been paid or payable, as the case may be, by the lessee on account of the principal amount of the borrowed money, and 
  (B) all amounts paid or payable by or on behalf of the lessee in respect of the cancellation or assignment of the lease or the sublease of the property; 
  (g) for the purposes of subsections 13(5.2) and 13(5.3), each amount paid or payable by or on behalf of the lessee that would, but for this subsection, have been an amount paid or payable for the use of, or the right to use, the property shall be deemed to have been deducted in computing the lessee’s income as an amount paid or payable by the lessee for the use of, or the right to use, the property after the particular time; 
  (h) any amount paid or payable by or on behalf of the lessee in respect of the granting or assignment of the lease or the sublease of the property that would, but for this paragraph, be the capital cost to the lessee of a leasehold interest in the property shall be deemed to be an amount paid or payable, as the case may be, by the lessee for the use of, or the right to use, the property for the remaining term of the lease; and 
  (i) where the lessee elects under this subsection in respect of a property and, at any time after the lease was entered into, the owner of the property is a non-resident person who does not hold the lease in the course of carrying on a business through a permanent establishment in Canada, as defined by regulation, any income from which is subject to tax under this Part, for the purposes of this subsection the lease shall be deemed to have been cancelled at that time. 
  
  ### Assignments and subleases
  
  (2) Subject to subsections 16.1(3) and 16.1(4), where at any particular time a lessee who has made an election under subsection 16.1(1) in respect of a leased property assigns the lease or subleases the property to another person (in this section referred to as the “assignee”), 
  (a) subsection 16.1(1) shall not apply in computing the income of the lessee in respect of the lease for any period after the particular time; and 
  (b) if the lessee and the assignee jointly elect in prescribed form filed with their returns of income under this Part for their respective taxation years that include the particular time, subsection 16.1(1) shall apply to the assignee as if 
  (i) the assignee leased the property at the particular time from the owner of the property for a term of more than one year, and 
  (ii) the assignee and the owner of the property jointly elected under subsection 16.1(1) in respect of the property with their returns of income under this Part for their respective taxation years that include the particular time. 
  
  ### Idem
  
  (3) Subject to subsection 16.1(4), where at any particular time a lessee who has made an election under subsection 16.1(1) in respect of a leased property assigns the lease or subleases the property to another person with whom the lessee is not dealing at arm’s length, the other person shall, for the purposes of subsection 16.1(1) and for the purposes of computing that person’s income in respect of the lease for any period after the particular time, be deemed to be the same person as, and a continuation of, the lessee, except that, notwithstanding paragraph 16.1(1)(b), that other person shall be deemed to have acquired the property from the lessee at the time that it was acquired by the lessee at a cost equal to the amount that would be the lessee’s proceeds of disposition of the property determined under paragraph 16.1(1)(f) if that amount were determined without reference to clauses 16.1(1)(f)(i)(B) and (ii)(B). 
  
  ### Amalgamations and windings-up
  
  (4) Notwithstanding subsection 16.1(2), where at any time a particular corporation that has made an election under subsection 16.1(1) in respect of a lease assigns the lease 
  (a) by reason of an amalgamation (within the meaning assigned by subsection 87(1)), or 
  (b) in the course of the winding-up of a Canadian corporation in respect of which subsection 88(1) applies, to another corporation with which it does not deal at arm’s length, the other corporation shall, for the purposes of subsection 16.1(1) and for the purposes of computing its income in respect of the lease after that time, be deemed to be the same person as, and a continuation of, the particular corporation. 
  
  ### Replacement property
  
  (5) For the purposes of subsection 16.1(1), where at any time a property (in this subsection referred to as a “replacement property”) is provided by a lessor to a lessee as a replacement for a similar property of the lessor (in this subsection referred to as the “original property”) that was leased by the lessor to the lessee, and the amount payable by the lessee for the use of, or the right to use, the replacement property is the same as the amount that was so payable in respect of the original property, the replacement property shall be deemed to be the same property as the original property. 
  
  ### Additional property
  
  (6) For the purposes of subsection 16.1(1), where at any particular time 
  (a) an addition or alteration (in this subsection referred to as “additional property”) is made by a lessor to a property (in this subsection referred to as the “original property”) of the lessor that is the subject of a lease, 
  (b) the lessor and the lessee of the original property have jointly elected under subsection 16.1(1) in respect of the original property, and 
  (c) as a consequence of the addition or alteration, the total amount payable by the lessee for the use of, or the right to use, the original property and the additional property exceeds the amount so payable in respect of the original property, the following rules apply: 
  (d) the lessee shall be deemed to have leased the additional property from the lessor at the particular time, 
  (e) the term of the lease of the additional property shall be deemed to be greater than one year, 
  (f) the lessor and the lessee shall be deemed to have jointly elected under subsection 16.1(1) in respect of the additional property, 
  (g) the prescribed rate in effect at the particular time in respect of the additional property shall be deemed to be equal to the prescribed rate in effect in respect of the original property at the particular time, 
  (h) the additional property shall be deemed not to be prescribed property, and 
  (i) the excess referred to in paragraph 16.1(6)(c) shall be deemed to be an amount payable by the lessee for the use of, or the right to use, the additional property. 
  
  ### Renegotiation of lease
  
  (7) For the purposes of subsection 16.1(1), where at any time 
  (a) a lease (in this subsection referred to as the “original lease”) of property is renegotiated in the course of a bona fide renegotiation, and  
  (b) as a result of the renegotiation, the amount payable by the lessee of the property for the use of, or the right to use, the property is altered in respect of a period after that time (otherwise than because of an addition or alteration to which subsection 16.1(6) applies), the original lease shall be deemed to have expired and the renegotiated lease shall be deemed to be a new lease of the property entered into at that time. 
  
  ### Amount owing by non-resident
  
  17 (1) If this subsection applies to a corporation resident in Canada in respect of an amount owing to the corporation (in this subsection referred to as the “debt”), the corporation shall include in computing its income for a taxation year the amount determined by the formula is the amount of interest that would be included in computing the corporation’s income for the year in respect of the debt if interest on the debt were computed at the prescribed rate for the period in the year during which the debt was outstanding; and is the total of all amounts each of which is 
  (a) an amount included in computing the corporation’s income for the year as, on account of, in lieu of or in satisfaction of, interest in respect of the debt, 
  (b) an amount received or receivable by the corporation from a trust that is included in computing the corporation’s income for the year or a subsequent taxation year and that can reasonably be attributed to interest on the debt for the period in the year during which the debt was outstanding, or 
  (c) an amount included in computing the corporation’s income for the year or a subsequent taxation year under subsection 91(1) that can reasonably be attributed to interest on an amount owing (in this paragraph referred to as the “original debt”) — or if the amount of the original debt exceeds the amount of the debt, a portion of the original debt that is equal to the amount of the debt  — for the period in the year during which the debt was outstanding if 
  (i) without the existence of the original debt, subsection (2) would not have deemed the debt to be owed by the non-resident person referred to in paragraph (1.1)(a), 
  (ii) the original debt was owed by a non-resident person or a partnership each member of which is a non-resident person, and 
  (iii) where subsection (11.2) applies to the original debt, 
  (A) an amount determined under paragraph (11.2)(a) or (b) in respect of the original debt is an amount referred to in paragraph (2)(a), and because of the amount referred to in paragraph (2)(a), the debt is deemed to be owed by the non-resident person referred to in paragraph (1.1)(a), and 
  (B) the original debt was owing by an intermediate lender to an initial lender or by an intended borrower to an intermediate lender (within the meanings of those terms assigned by subsection (11.2)). 
  
  ### Amount owing by non-resident
  
  (1.1) Subsection (1) applies to a corporation resident in Canada in respect of an amount owing to the corporation if, at any time in a taxation year of the corporation, 
  (a) a non-resident person owes the amount to the corporation; 
  (b) the amount has been or remains outstanding for more than a year; and 
  (c) the amount that would be determined for B in subsection (1), if that subsection applied, for the year in respect of the amount owing is less than the amount of interest that would be included in computing the corporation’s income for the year in respect of the amount owing if that interest were computed at a reasonable rate for the period in the year during which the amount was outstanding. 
  
  ### Anti-avoidance rule — indirect loan
  
  (2) For the purpose of this section and subject to subsection (3), where 
  (a) a non-resident person owes an amount at any time to a particular person or partnership (other than a corporation resident in Canada), and 
  (b) it is reasonable to conclude that the amount or a portion of the amount became owing, or was permitted to remain owing, to the particular person or partnership because 
  (i) a corporation resident in Canada made a loan or transfer of property, or 
  (ii) the particular person or partnership anticipated that a corporation resident in Canada would make a loan or transfer of property, either directly or indirectly, in any manner whatever, to or for the benefit of any person or partnership (other than an exempt loan or transfer), the non-resident person is deemed at that time to owe to the corporation an amount equal to the amount, or the portion of the amount, as the case may be, owing to the particular person or partnership. 
  
  ### Exception to anti-avoidance rule — indirect loan
  
  (3) Subsection (2) does not apply to an amount owing at any time by a non-resident person to a particular person or partnership where 
  (a) at that time, the non-resident person and the particular person or each member of the particular partnership, as the case may be, are controlled foreign affiliates of the corporation resident in Canada; or 
  (b) at that time, 
  (i) the non-resident person and the particular person are not related or the non-resident person and each member of the particular partnership are not related, as the case may be, 
  (ii) the terms or conditions made or imposed in respect of the amount owing, determined without reference to any loan or transfer of property by a corporation resident in Canada described in paragraph (2)(b) in respect of the amount owing, are such that persons dealing at arm’s length would have been willing to enter into them at the time that they were entered into, and 
  (iii) if there were an amount of interest payable on the amount owing at that time that would be required to be included in computing the income of a foreign affiliate of the corporation resident in Canada for a taxation year, that amount of interest would not be required to be included in computing the foreign accrual property income of the affiliate for that year. 
  
  ### Anti-avoidance rule — loan through partnership
  
  (4) For the purpose of this section, where a non-resident person owes an amount at any time to a partnership and subsection (2) does not deem the non-resident person to owe an amount equal to that amount to a corporation resident in Canada, the non-resident person is deemed at that time to owe to each member of the partnership, on the same terms as those that apply in respect of the amount owing to the partnership, that proportion of the amount owing to the partnership at that time that 
  (a) the fair market value of the member’s interest in the partnership at that time is of 
  (b) the fair market value of all interests in the partnership at that time. 
  
  ### Anti-avoidance rule — loan through trust
  
  (5) For the purpose of this section, where a non-resident person owes an amount at any time to a trust and subsection (2) does not deem the non-resident person to owe an amount equal to that amount to a corporation resident in Canada, 
  (a) where the trust is a non-discretionary trust at that time, the non-resident person is deemed at that time to owe to each beneficiary of the trust, on the same terms as those that apply in respect of the amount owing to the trust, that proportion of the amount owing to the trust that 
  (i) the fair market value of the beneficiary’s interest in the trust at that time is of 
  (ii) the fair market value of all the beneficial interests in the trust at that time; and 
  (b) in any other case, the non-resident person is deemed at that time to owe to each settlor in respect of the trust, on the same terms as those that apply in respect of the amount owing to the trust, an amount equal to the amount owing to the trust. 
  
  ### Anti-avoidance rule — loan to partnership
  
  (6) For the purpose of this section, where a particular partnership owes an amount at any time to any person or any other partnership (in this subsection referred to as the “lender”), each member of the particular partnership is deemed to owe at that time to the lender, on the same terms as those that apply in respect of the amount owing by the particular partnership to the lender, that proportion of the amount owing to the lender that 
  (a) the fair market value of the member’s interest in the particular partnership at that time is of 
  (b) the fair market value of all interests in the particular partnership at that time. 
  
  ### Exception
  
  (7) Subsection (1) does not apply in respect of an amount owing to a corporation resident in Canada by a non-resident person if a tax has been paid under Part XIII on the amount owing, except that, for the purpose of this subsection, tax under Part XIII is deemed not to have been paid on that portion of the amount owing in respect of which an amount was repaid or applied under subsection 227(6.1). 
  
  ### Exception
  
  (8) Subsection (1) does not apply to a corporation resident in Canada for a taxation year of the corporation in respect of an amount owing to the corporation by a non-resident person if the non-resident person is a controlled foreign affiliate of the corporation throughout the period in the year during which the amount is owing to the extent that it is established that the amount owing 
  (a) arose as a loan or advance of money to the affiliate that the affiliate has used, throughout the period that began when the loan or advance was made and that ended at the earlier of the end of the year and the time at which the amount was repaid, 
  (i) for the purpose of earning 
  (A) income from an active business, as defined in subsection 95(1), of the affiliate, or 
  (B) income that was included in computing the income from an active business of the affiliate under subsection 95(2), or 
  (ii) for the purpose of making a loan or advance to another controlled foreign affiliate of the corporation where, if interest became payable on the loan or advance at any time in the period and the affiliate was required to include the interest in computing its income for a taxation year, that interest would not be required to be included in computing the affiliate’s foreign accrual property income for that year; or 
  (b) arose in the course of an active business, as defined in subsection 95(1), carried on by the affiliate throughout the period that began when the amount owing arose and that ended at the earlier of the end of the year and the time at which the amount was repaid. 
  
  ### Borrowed money
  
  (8.1) Subsection (8.2) applies in respect of money (referred to in this subsection and in subsection (8.2) as “new borrowings”) that a controlled foreign affiliate of a particular corporation resident in Canada has borrowed from the particular corporation to the extent that the affiliate has used the new borrowings 
  (a) to repay money (referred to in this subsection and in subsection (8.2) as “previous borrowings”) previously borrowed from any person or partnership, if 
  (i) the previous borrowings became owing after the last time at which the affiliate became a controlled foreign affiliate of the particular corporation, and 
  (ii) the previous borrowings were, at all times after they became owing, used for a purpose described in subparagraph (8)(a)(i) or (ii); or 
  (b) to pay an amount owing (referred to in this subsection and in subsection (8.2) as the “unpaid purchase price”) by the affiliate for property previously acquired from any person or partnership, if 
  (i) the property was acquired, and the unpaid purchase price became owing, by the affiliate after the last time at which it became a controlled foreign affiliate of the particular corporation, 
  (ii) the unpaid purchase price is in respect of the property, and 
  (iii) throughout the period that began when the unpaid purchase price became owing by the affiliate and ended when the unpaid purchase price was so paid, the property had been used principally to earn income described in clause (8)(a)(i)(A) or (B). 
  
  ### Deemed use
  
  (8.2) To the extent that this subsection applies in respect of new borrowings, the new borrowings are, for the purpose of subsection (8), deemed to have been used for the purpose for which the proceeds from the previous borrowings were used or were deemed by this subsection to have been used, or to acquire the property in respect of which the unpaid purchase price was payable, as the case may be. 
  
  ### Exception
  
  (9) Subsection (1) does not apply to a corporation resident in Canada for a taxation year of the corporation in respect of an amount owing to the corporation by a non-resident person if 
  (a) the corporation is not related to the non-resident person throughout the period in the year during which the amount owing is outstanding; 
  (b) the amount owing arose in respect of goods sold or services provided to the non-resident person by the corporation in the ordinary course of the business carried on by the corporation; and 
  (c) the terms and conditions in respect of the amount owing are such that persons dealing at arm’s length would have been willing to enter into them at the time that they were entered into. 
  
  ### Determination of whether related and controlled foreign affiliate status
  
  (10) For the purpose of this section, in determining whether persons are related to each other and whether a non-resident corporation is a controlled foreign affiliate of a corporation resident in Canada at any time, 
  (a) each member of a partnership is deemed to own that proportion of the number of shares of a class of the capital stock of a corporation owned by the partnership at that time that 
  (i) the fair market value of the member’s interest in the partnership at that time is of 
  (ii) the fair market value of all interests in the partnership at that time; and 
  (b) each beneficiary of a non-discretionary trust is deemed to own that proportion of the number of shares of a class of the capital stock of a corporation owned by the trust at that time that 
  (i) the fair market value of the beneficiary’s interest in the trust at that time is of 
  (ii) the fair market value of all the beneficial interests in the trust at that time. 
  
  ### Determination of whether related
  
  (11) For the purpose of this section, in determining whether persons are related to each other at any time, each settlor in respect of a trust, other than a non-discretionary trust, is deemed to own the shares of a class of the capital stock of a corporation owned by the trust at that time. 
  
  ### Determination of whether persons related
  
  (11.1) For the purposes of this section, in determining whether persons are related to each other at any time, any rights referred to in subparagraph 251(5)(b)(i) that exist at that time are deemed not to exist at that time to the extent that the exercise of those rights is prohibited at that time under a law of the country under the law of which the corporation was formed or last continued and is governed, that restricts the foreign ownership or control of the corporation. 
  
  ### Back-to-back loans
  
  (11.2) For the purposes of subsection (2) and paragraph (3)(b), where a non-resident person, or a partnership each member of which is non-resident, (in this subsection referred to as the “intermediate lender”) makes a loan to a non-resident person, or a partnership each member of which is non-resident, (in this subsection referred to as the “intended borrower”) because the intermediate lender received a loan from another non-resident person, or a partnership each member of which is non-resident, (in this subsection referred to as the “initial lender”) 
  (a) the loan made by the intermediate lender to the intended borrower is deemed to have been made by the initial lender to the intended borrower (to the extent of the lesser of the amount of the loan made by the initial lender to the intermediate lender and the amount of the loan made by the intermediate lender to the intended borrower) under the same terms and conditions and at the same time as it was made by the intermediate lender; and 
  (b) the loan made by the initial lender to the intermediate lender and the loan made by the intermediate lender to the intended borrower are deemed not to have been made to the extent of the amount of the loan deemed to have been made under paragraph (a). 
  
  ### Determination of whether persons related
  
  (11.3) For the purpose of applying paragraph (3)(b) in respect of a corporation resident in Canada described in paragraph (2)(b), in determining whether persons described in subparagraph (3)(b)(i) are related to each other at any time, any rights referred to in paragraph 251(5)(b) that otherwise exist at that time are deemed not to exist at that time where, if the rights were exercised immediately before that time, 
  (a) all of those persons would at that time be controlled foreign affiliates of the corporation resident in Canada; and 
  (b) because of subsection (8), subsection (1) would not apply to the corporation resident in Canada in respect of the amount that would, but for this subsection, have been deemed to have been owing at that time to the corporation resident in Canada by the non-resident person described in subparagraph (3)(b)(i). 
  
  ### Determination of controlled foreign affiliate status
  
  (12) For the purpose of this section, in determining whether a non-resident person is a controlled foreign affiliate of a corporation resident in Canada at any time, each settlor in respect of a trust, other than a non-discretionary trust, is deemed to own that proportion of the number of shares of a class of the capital stock of a corporation owned by the trust at that time that one is of the number of settlors in respect of the trust at that time. 
  
  ### Extended definition of controlled foreign affiliate
  
  (13) For the purpose of this section, where, at any time, two corporations resident in Canada are related (otherwise than because of a right referred to in paragraph 251(5)(b)), any corporation that is a controlled foreign affiliate of one of the corporations at that time is deemed to be a controlled foreign affiliate of the other corporation at that time. 
  
  ### Anti-avoidance rule — where rights or shares issued, acquired or disposed of to avoid tax
  
  (14) For the purpose of this section, 
  (a) where any person or partnership has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to, or to acquire, shares of the capital stock of a corporation and it can reasonably be considered that the principal purpose for the existence of the right is to avoid or reduce the amount of income that subsection (1) would otherwise require any corporation to include in computing its income for any taxation year, those shares are deemed to be owned by that person or partnership; and 
  (b) where any person or partnership acquires or disposes of shares of the capital stock of a corporation, either directly or indirectly, and it can reasonably be considered that the principal purpose for the acquisition or disposition of the shares is to avoid or reduce the amount of income that subsection (1) would otherwise require any corporation to include in computing its income for any taxation year, those shares are deemed not to have been acquired or disposed of, as the case may be, and where the shares were unissued by the corporation immediately before the acquisition, those shares are deemed not to have been issued. 
  
  ### Definitions
  
  (15) The definitions in this subsection apply in this section.  
  *controlled foreign affiliate*, at any time, of a taxpayer resident in Canada, means a corporation that would, at that time, be a controlled foreign affiliate of the taxpayer within the meaning assigned by the definition 
  *controlled foreign affiliate* in subsection 95(1) if the word “or” were added at the end of paragraph (a) of that definition and  
  (a) subparagraph (b)(ii) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with the taxpayer,”; and 
  (b) subparagraph (b)(iv) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with any relevant Canadian shareholder;”. ( société étrangère affiliée contrôlée)   
  *exempt loan or transfer* means  
  (a) a loan made by a corporation resident in Canada where the interest rate charged on the loan is not less than the interest rate that a lender and a borrower would have been willing to agree to if they were dealing at arm’s length with each other at the time the loan was made; 
  (b) a transfer of property (other than a transfer of property made for the purpose of acquiring shares of the capital stock of a foreign affiliate of a corporation or a foreign affiliate of a person resident in Canada with whom the corporation was not dealing at arm’s length) or payment of an amount owing by a corporation resident in Canada pursuant to an agreement made on terms and conditions that persons who were dealing at arm’s length at the time the agreement was entered into would have been willing to agree to; 
  (c) a dividend paid by a corporation resident in Canada on shares of a class of its capital stock; and 
  (d) a payment made by a corporation resident in Canada on a reduction of the paid-up capital in respect of shares of a class of its capital stock (not exceeding the total amount of the reduction). ( prêt ou transfert de biens exclu)   
  *non-discretionary trust*, at any time, means a trust in which all interests were vested indefeasibly at the beginning of the trust’s taxation year that includes that time. (fiducie non discrétionnaire)   
  *settlor* in respect of a trust at any time means any person or partnership that has made a loan or transfer of property, either directly or indirectly, in any manner whatever, to or for the benefit of the trust at or before that time, other than, where the person or partnership deals at arm’s length with the trust at that time,  
  (a) a loan made by the person or partnership to the trust at a reasonable rate of interest; or 
  (b) a transfer made by the person or partnership to the trust for fair market value consideration. ( auteur)  
  
  ### Deemed interest income — sections 15 and 212.3
  
  17.1 (1) Subject to subsection (2), if — at any time in a taxation year of a corporation resident in Canada (in this section referred to as the “CRIC”) or in a fiscal period of a qualifying Canadian partnership in respect of the CRIC — a non-resident corporation, or a partnership of which the non-resident corporation is a member, owes an amount to the CRIC or the qualifying Canadian partnership and the amount owing is a pertinent loan or indebtedness (as defined in subsection 15(2.11) or 212.3(11)), 
  (a) section 17 does not apply in respect of the amount owing; and 
  (b) the amount, if any, determined by the following formula is to be included in computing the income of the CRIC for the year or of the qualifying Canadian partnership for the fiscal period, as the case may be: is the amount that is the greater of 
  (i) the amount of interest that would be included in computing the income of the CRIC for the year or of the qualifying Canadian partnership for the fiscal period, as the case may be, in respect of the amount owing for the particular period in the year, or the fiscal period, during which the amount owing was a pertinent loan or indebtedness if that interest were computed at the prescribed rate for the particular period, and 
  (ii) the total of all amounts of interest payable in respect of the period in the year, or the fiscal period, during which the amount owing was a pertinent loan or indebtedness, by the CRIC, the qualifying Canadian partnership, a person resident in Canada with which the CRIC did not, at the time the amount owing arose, deal at arm’s length or a partnership of which the CRIC or the person is a member, in respect of a debt obligation — entered into as part of a series of transactions or events that includes the transaction by which the amount owing arose — to the extent that the proceeds of the debt obligation can reasonably be considered to have directly or indirectly funded, in whole or in part, the amount owing, and is an amount included in computing the income of the CRIC for the year or of the qualifying Canadian partnership for the fiscal period, as the case may be, as, on account of, in lieu of or in satisfaction of, interest in respect of the amount owing for the period in the year, or the fiscal period, during which the amount owing was a pertinent loan or indebtedness. 
  
  ### Acquisition of control
  
  (2) If at any time a parent or group of parents referred to in section 212.3 acquires control of a CRIC and the CRIC was not controlled by a non-resident person, or a group of non-resident persons not dealing with each other at arm’s length, immediately before that time, no amount is to be included under subsection (1) in computing the income of the CRIC in respect of a pertinent loan or indebtedness (as defined in subsection 212.3(11)) for the period that begins at that time and ends on the day that is 180 days after that time.  
  
  ### Tax treaties
  
  (3) A particular loan or indebtedness that would, in the absence of this subsection, be a pertinent loan or indebtedness is deemed not to be a pertinent loan or indebtedness if, because of a provision of a tax treaty, the amount included in computing the income of the CRIC for any taxation year or of the qualifying Canadian partnership for any fiscal period, as the case may be, in respect of the particular loan or indebtedness is less than it would be if no tax treaty applied. 
  
  ## Deductions 
  
  ### General limitations
  
  18 (1) In computing the income of a taxpayer from a business or property no deduction shall be made in respect of 
  
  ### General limitation
  
  (a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property; 
  
  ### Capital outlay or loss
  
  (b) an outlay, loss or replacement of capital, a payment on account of capital or an allowance in respect of depreciation, obsolescence or depletion except as expressly permitted by this Part; 
  
  ### Limitation re exempt income
  
  (c) an outlay or expense to the extent that it may reasonably be regarded as having been made or incurred for the purpose of gaining or producing exempt income or in connection with property the income from which would be exempt; 
  
  ### Annual value of property
  
  (d) the annual value of property except rent for property leased by the taxpayer for use in the taxpayer’s business; 
  
  ### Reserves, etc.
  
  (e) an amount as, or on account of, a reserve, a contingent liability or amount or a sinking fund except as expressly permitted by this Part; 
  
  ### Unpaid claims under insurance policies
  
  (e.1) an amount in respect of claims that were received by an insurer before the end of the year under insurance policies and that are unpaid at the end of the year, except as expressly permitted by this Part; 
  
  ### Payments on discounted bonds
  
  (f) an amount paid or payable as or on account of the principal amount of any obligation described in paragraph 20(1)(f) except as expressly permitted by that paragraph; 
  
  ### Payments on income bonds
  
  (g) an amount paid by a corporation as interest or otherwise to holders of its income bonds or income debentures unless the bonds or debentures have been issued or the income provisions thereof have been adopted since 1930 
  (i) to afford relief to the debtor from financial difficulties, and 
  (ii) in place of or as an amendment to bonds or debentures that at the end of 1930 provided unconditionally for a fixed rate of interest; 
  
  ### Personal and living expenses
  
  (h) personal or living expenses of the taxpayer, other than travel expenses incurred by the taxpayer while away from home in the course of carrying on the taxpayer’s business; 
  
  ### Limitation re employer’s contribution under supplementary unemployment benefit plan
  
  (i) an amount paid by an employer to a trustee under a supplementary unemployment benefit plan except as permitted by section 145; 
  
  ### Limitation re employer’s contribution under deferred profit sharing plan
  
  (j) an amount paid by an employer to a trustee under a deferred profit sharing plan except as expressly permitted by section 147; 
  
  ### Limitation re employer’s contribution under profit sharing plan
  
  (k) an amount paid by an employer to a trustee under a profit sharing plan that is not 
  (i) an employees profit sharing plan, 
  (ii) a deferred profit sharing plan, or 
  (iii) a pooled registered pension plan or registered pension plan; 
  
  ### Use of recreational facilities and club dues
  
  (l) an outlay or expense made or incurred by the taxpayer after 1971, 
  (i) for the use or maintenance of property that is a yacht, a camp, a lodge or a golf course or facility, unless the taxpayer made or incurred the outlay or expense in the ordinary course of the taxpayer’s business of providing the property for hire or reward, or 
  (ii) as membership fees or dues (whether initiation fees or otherwise) in any club the main purpose of which is to provide dining, recreational or sporting facilities for its members; 
  
  ### Safety deposit box
  
  (l.1) an amount paid or payable in respect of the use of a safety deposit box of a financial institution; 
  
  ### Limitation re employee stock option expenses
  
  (m) an amount in respect of which an election was made by or on behalf of the taxpayer under subsection 110(1.1); 
  
  ### Political contributions
  
  (n) a political contribution; 
  
  ### Employee benefit plan contributions
  
  (o) an amount paid or payable as a contribution to an employee benefit plan; 
  
  ### Salary deferral arrangement
  
  (o.1) except as expressly permitted by paragraphs 20(1)(oo) and 20(1)(pp), an outlay or expense made or incurred under a salary deferral arrangement in respect of another person, other than such an arrangement established primarily for the benefit of one or more non-resident employees in respect of services to be rendered outside Canada; 
  
  ### Retirement compensation arrangement
  
  (o.2) except as expressly permitted by paragraph 20(1)(r), contributions made under a retirement compensation arrangement; 
  
  ### Employee life and health trust
  
  (o.3) except as expressly permitted by paragraph 20(1)(s), contributions to an employee life and health trust; 
  
  ### Limitation re personal services business expenses
  
  (p) an outlay or expense to the extent that it was made or incurred by a corporation in a taxation year for the purpose of gaining or producing income from a personal services business, other than 
  (i) the salary, wages or other remuneration paid in the year to an incorporated employee of the corporation, 
  (ii) the cost to the corporation of any benefit or allowance provided to an incorporated employee in the year, 
  (iii) any amount expended by the corporation in connection with the selling of property or the negotiating of contracts by the corporation if the amount would have been deductible in computing the income of an incorporated employee for a taxation year from an office or employment if the amount had been expended by the incorporated employee under a contract of employment that required the employee to pay the amount, and 
  (iv) any amount paid by the corporation in the year as or on account of legal expenses incurred by it in collecting amounts owing to it on account of services rendered that would, if the income of the corporation were from a business other than a personal services business, be deductible in computing its income; 
  
  ### Limitation re cancellation of lease
  
  (q) an amount paid or payable by the taxpayer for the cancellation of a lease of property of the taxpayer leased by the taxpayer to another person, except to the extent permitted by paragraph 20(1)(z) or 20(1)(z.1); 
  
  ### Certain automobile expenses
  
  (r) an amount paid or payable by the taxpayer as an allowance for the use by an individual of an automobile to the extent that the amount exceeds an amount determined in accordance with prescribed rules, except where the amount so paid or payable is required to be included in computing the individual’s income; 
  
  ### Loans or lending assets
  
  (s) any loss, depreciation or reduction in a taxation year in the value or amortized cost of a loan or lending asset of a taxpayer made or acquired by the taxpayer in the ordinary course of the taxpayer’s business of insurance or the lending of money and not disposed of by the taxpayer in the year, except as expressly permitted by this Part; 
  
  ### Payments under different acts
  
  (t) any amount paid or payable 
  (i) under this Act (other than tax paid or payable under Part XII.2 or Part XII.6), 
  (ii) as interest under Part IX of the Excise Tax Act,  
  (iii) as interest under the Air Travellers Security Charge Act,  
  (iv) as interest under the Underused Housing Tax Act, or [2022, c. 10, s. 173]  
  (v) as interest under the Select Luxury Items Tax Act ; [2022, c. 10, s. 173]  
  
  ### Fees — individual saving plans
  
  (u) any amount paid or payable by the taxpayer for services in respect of a FHSA, retirement savings plan, retirement income fund or TFSA under or of which the taxpayer is the annuitant or holder; 
  
  ### Interest — authorized foreign bank
  
  (v) where the taxpayer is an authorized foreign bank, an amount in respect of interest that would otherwise be deductible in computing the taxpayer’s income from a business carried on in Canada, except as provided in section 20.2; 
  
  ### Underlying payments on qualified securities
  
  (w) except as expressly permitted, an amount that is deemed by subsection 260(5.1) to have been received by another person as an amount described in any of paragraphs 260(5.1)(a) to (c); and 
  
  ### Derivatives — lower of cost and market
  
  (x) any reduction in a taxation year in the value of a property if 
  (i) the method used by the taxpayer to value the property at the end of the year for purposes of computing the taxpayer’s profit from a business or property is the cost at which the taxpayer acquired it or its fair market value at the end of the year, whichever is lower, 
  (ii) the property is described in subsection 10(15), and 
  (iii) the property is not disposed of by the taxpayer in the year; and 
  
  ### Payment for shares
  
  (y) an amount referred to in subsection 13(36). 
  
  ### Limit on certain interest and property tax
  
  (2) Notwithstanding paragraph 20(1)(c), in computing the taxpayer’s income for a particular taxation year from a business or property, no amount shall be deductible in respect of any expense incurred by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of, 
  (a) interest on debt relating to the acquisition of land, or 
  (b) property taxes (not including income or profits taxes or taxes computed by reference to the transfer of property) paid or payable by the taxpayer in respect of land to a province or to a Canadian municipality, unless, having regard to all the circumstances (including the cost to the taxpayer of the land in relation to the taxpayer’s gross revenue, if any, from the land for the particular year or any preceding taxation year), the land can reasonably be considered to have been, in the year, 
  (c) used in the course of a business carried on in the particular year by the taxpayer, other than a business in the ordinary course of which land is held primarily for the purpose of resale or development, or 
  (d) held primarily for the purpose of gaining or producing income of the taxpayer from the land for the particular year, except to the extent of the total of 
  (e) the amount, if any, by which the taxpayer’s gross revenue, if any, from the land for the particular year exceeds the total of all amounts deducted in computing the taxpayer’s income from the land for the year, and 
  (f) in the case of a corporation whose principal business is the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm’s length, the corporation’s base level deduction for the particular year. 
  
  ### Where taxpayer member of partnership
  
  (2.1) Where a taxpayer who is a member of a partnership was obligated to pay any amount as, on account or in lieu of payment of, or in satisfaction of, interest (in this subsection referred to as an “interest amount”) on money that was borrowed by the taxpayer before April 1, 1977 and that was used to acquire land owned by the partnership before that day or on an obligation entered into by the taxpayer before April 1, 1977 to pay for land owned by the partnership before that day, and, in a taxation year of the taxpayer, either, 
  (a) the partnership has disposed of all or any portion of the land, or 
  (b) the taxpayer has disposed of all or any portion of the taxpayer’s interest in the partnership to a person other than a person with whom the taxpayer does not deal at arm’s length, in computing the taxpayer’s income for the year or any subsequent year, there may be deducted such portion of the taxpayer’s interest amount 
  (c) that was, by virtue of subsection 18(2), not deductible in computing the income of the taxpayer for any previous taxation year, 
  (d) that was not deductible in computing the income of any other taxpayer for any taxation year, 
  (e) that was not included in computing the adjusted cost base to the taxpayer of any property, and 
  (f) that was not deductible under this subsection in computing the income of the taxpayer for any previous taxation year as is reasonable having regard to the portion of the land or interest in the partnership, as the case may be, so disposed of. 
  
  ### Base level deduction
  
  (2.2) For the purposes of this section, a corporation’s base level deduction for a taxation year is the amount that would be the amount of interest, computed at the prescribed rate, for the year in respect of a loan of $1,000,000 outstanding throughout the year, unless the corporation is associated in the year with one or more other corporations in which case, except as otherwise provided in this section, its base level deduction for the year is nil. 
  
  ### Associated corporations
  
  (2.3) Notwithstanding subsection 18(2.2), if all of the corporations that are associated with each other in a taxation year have filed with the Minister in prescribed form an agreement whereby, for the purposes of this section, they allocate an amount to one or more of them for the taxation year and the amount so allocated or the total of the amounts so allocated, as the case may be, does not exceed $1,000,000, the base level deduction for the year for each of the corporations is the base level deduction that would be computed under subsection 18(2.2) in respect of the corporation if the reference in that subsection to $1,000,000 were read as a reference to the amount so allocated to it. 
  
  ### Failure to file agreement
  
  (2.4) If any of the corporations that are associated with each other in a taxation year has failed to file with the Minister an agreement as contemplated by subsection 18(2.3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year, which amount or the total of which amounts, as the case may be, shall equal $1,000,000 and in any such case, the amount so allocated to any corporation shall be deemed to be an amount allocated to the corporation pursuant to subsection 18(2.3). 
  
  ### Special rules for base level deduction
  
  (2.5) Notwithstanding any other provision of this section, 
  (a) where a corporation, in this paragraph referred to as the “first corporation”, has more than one taxation year ending in the same calendar year and is associated in two or more of those taxation years with another corporation that has a taxation year ending in that calendar year, the base level deduction of the first corporation for each taxation year in which it is associated with the other corporation ending in that calendar year is, subject to the application of paragraph 18(2.5)(b), an amount equal to its base level deduction for the first such taxation year determined without reference to paragraph 18(2.5)(b); and 
  (b) where a corporation has a taxation year that is less than 51 weeks, its base level deduction for the year is that proportion of its base level deduction for the year determined without reference to this paragraph that the number of days in the year is of 365. 
  
  ### Definitions
  
  (3) In subsection 18(2),  
  *interest on debt relating to the acquisition of land* includes  
  (a) interest paid or payable in a year in respect of borrowed money that cannot be identified with particular land but that may nonetheless reasonably be considered (having regard to all the circumstances) as interest on borrowed money used in respect of or for the acquisition of land, and 
  (b) interest paid or payable in the year by a taxpayer in respect of borrowed money that may reasonably be considered (having regard to all the circumstances) to have been used to assist, directly or indirectly, 
  (i) another person with whom the taxpayer does not deal at arm’s length, 
  (ii) a corporation of which the taxpayer is a specified shareholder, or 
  (iii) a partnership of which the taxpayer’s share of any income or loss is 10% or more, to acquire land to be used or held by that person, corporation or partnership otherwise than as described in paragraph 18(2)(c) or 18(2)(d), except where the assistance is in the form of a loan to that person, corporation or partnership and a reasonable rate of interest on the loan is charged by the taxpayer; ( intérêts sur une dette concernant l’acquisition d’un fonds de terre)   
  *land* does not, except to the extent that it is used for the provision of parking facilities for a fee or charge, include  
  (a) any property that is a building or other structure affixed to land, 
  (b) the land subjacent to any property described in paragraph (a), or 
  (c) such land immediately contiguous to the land described in paragraph (b) that is a parking area, driveway, yard, garden or similar land as is necessary for the use of any property described in paragraph (a). ( fonds de terre)  
  
  ### Costs relating to construction of building or ownership of land
  
  (3.1) Notwithstanding any other provision of this Act, in computing a taxpayer’s income for a taxation year, 
  (a) no deduction shall be made in respect of any outlay or expense made or incurred by the taxpayer (other than an amount deductible under paragraph 20(1)(a), 20(1)(aa) or 20(1)(qq) or subsection 20(29)) that can reasonably be regarded as a cost attributable to the period of the construction, renovation or alteration of a building by or on behalf of the taxpayer, a person with whom the taxpayer does not deal at arm’s length, a corporation of which the taxpayer is a specified shareholder or a partnership of which the taxpayer’s share of any income or loss is 10% or more and relating to the construction, renovation or alteration, or a cost attributable to that period and relating to the ownership during that period of land 
  (i) that is subjacent to the building, or 
  (ii) that 
  (A) is immediately contiguous to the land subjacent to the building, 
  (B) is used, or is intended to be used, for a parking area, driveway, yard, garden or any other similar use, and 
  (C) is necessary for the use or intended use of the building; and 
  (b) the amount of such an outlay or expense shall, to the extent that it would otherwise be deductible in computing the taxpayer’s income for the year, be included in computing the cost or capital cost, as the case may be, of the building to the taxpayer, to the person with whom the taxpayer does not deal at arm’s length, to the corporation of which the taxpayer is a specified shareholder or to the partnership of which the taxpayer’s share of any income or loss is 10% or more, as the case may be. 
  
  ### Included costs
  
  (3.2) For the purposes of subsection 18(3.1), costs relating to the construction, renovation or alteration of a building or to the ownership of land include 
  (a) interest paid or payable by a taxpayer in respect of borrowed money that cannot be identified with a particular building or particular land, but that can reasonably be considered (having regard to all the circumstances) as interest on borrowed money used by the taxpayer in respect of the construction, renovation or alteration of a building or the ownership of land; and 
  (b) interest paid or payable by a taxpayer in respect of borrowed money that may reasonably be considered (having regard to all the circumstances) to have been used to assist, directly or indirectly, 
  (i) another person with whom the taxpayer does not deal at arm’s length, 
  (ii) a corporation of which the taxpayer is a specified shareholder, or 
  (iii) a partnership of which the taxpayer’s share of any income or loss is 10% or more, to construct, renovate or alter a building or to purchase land, except where the assistance is in the form of a loan to that other person, corporation or partnership and a reasonable rate of interest on the loan is charged by the taxpayer. 
  
  ### Completion
  
  (3.3) For the purposes of subsection 18(3.1), the construction, renovation or alteration of a building is completed at the earlier of the day on which the construction, renovation or alteration is actually completed and the day on which all or substantially all of the building is used for the purpose for which it was constructed, renovated or altered. 
  
  ### Where s. (3.1) does not apply
  
  (3.4) Subsection 18(3.1) does not apply to prohibit a deduction in a taxation year of the specified percentage of any outlay or expense described in that subsection made or incurred before 1992 by 
  (a) a corporation whose principal business is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm’s length, or 
  (b) a partnership 
  (i) each member of which is a corporation described in paragraph (a), and 
  (ii) the principal business of which is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property held by it, to or for a person with whom each member of the partnership is dealing at arm’s length, and for the purposes of this subsection, 
  *specified percentage* means, in respect of an outlay or expense made or incurred in 1988, 80%, in 1989, 60%, in 1990, 40%, and in 1991, 20%.  
  
  ### Idem
  
  (3.5) Subsection 18(3.1) does not apply in respect of an outlay or expense in respect of a building or the land described in subparagraph 18(3.1)(a)(i) or 18(3.1)(a)(ii) in respect of the building, 
  (a) where the construction, renovation or alteration of the building was in progress on November 12, 1981, 
  (b) where the installation of the footings or other base support of the building commenced after November 12, 1981 and before 1982, 
  (c) if, in the case of a new building being constructed in Canada or an existing building being renovated or altered in Canada, arrangements, evidenced in writing, for the construction, renovation or alteration were substantially advanced before November 13, 1981 and the installation of footings or other base support for the new building or the renovation or alteration of the existing building, as the case may be, commenced before June 1, 1982, or 
  (d) if, in the case of a new building being constructed in Canada, the taxpayer was obligated to construct the building under the terms of an agreement in writing entered into before November 13, 1981 and arrangements, evidenced in writing, respecting the construction of the building were substantially advanced before June 1, 1982 and the installation of footings or other base support for the building commenced before 1983, and the construction, renovation or alteration, as the case may be, of the building proceeds after 1982 without undue delay (having regard to acts of God, labour disputes, fire, accidents or unusual delay by common carriers or suppliers of materials or equipment). 
  
  ### Undue delay
  
  (3.6) For the purposes of subsection 18(3.5), where more than one building is being constructed under any of the circumstances described in that subsection on one site or on immediately contiguous sites, no undue delay shall be regarded as occurring in the construction of any such building if construction of at least one such building proceeds after 1982 without undue delay and continuous construction of all other such buildings proceeds after 1983 without undue delay. 
  
  ### Commencement of footings
  
  (3.7) For the purposes of this section, the installation of footings or other base support for a building shall be deemed to commence on the first placement of concrete, pilings or other material that is to provide permanent support for the building. 
  
  ### Limitation on deduction of interest
  
  (4) Notwithstanding any other provision of this Act (other than subsection (8)), in computing the income for a taxation year of a corporation or a trust from a business (other than the Canadian banking business of an authorized foreign bank) or property, no deduction shall be made in respect of that proportion of any amount otherwise deductible in computing its income for the year in respect of interest paid or payable by it on outstanding debts to specified non-residents that 
  (a) the amount, if any, by which 
  (i) the average of all amounts each of which is, in respect of a calendar month that ends in the year, the greatest total amount at any time in the month of the outstanding debts to specified non-residents of the corporation or trust, exceeds 
  (ii) 1.5 times the equity amount of the corporation or trust for the year, is of 
  (b) the amount determined under subparagraph (a)(i) in respect of the corporation or trust for the year. 
  
  ### Definitions
  
  (5) Notwithstanding any other provision of this Act (other than subsection (5.1)), in this subsection and subsections (4) and (5.1) to (6.1),  
  *beneficiary* has the same meaning as in subsection 108(1); (bénéficiaire)   
  *equity amount*, of a corporation or trust for a taxation year, means  
  (a) in the case of a corporation resident in Canada, the total of 
  (i) the retained earnings of the corporation at the beginning of the year, except to the extent that those earnings include retained earnings of any other corporation, 
  (ii) the average of all amounts each of which is the corporation’s contributed surplus (other than any portion of that contributed surplus that arose at a time when the corporation was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) at the beginning of a calendar month that ends in the year, to the extent that it was contributed by a specified non-resident shareholder of the corporation, and  
  (iii) the average of all amounts each of which is the corporation’s paid-up capital at the beginning of a calendar month that ends in the year, excluding the paid-up capital in respect of shares of any class of the capital stock of the corporation owned by a person other than a specified non-resident shareholder of the corporation, 
  (b) in the case of a trust resident in Canada, the amount, if any, by which 
  (i) the total of 
  (A) the average of all amounts each of which is the total amount of all equity contributions to the trust made before a calendar month that ends in the year, to the extent that the contributions were made by a specified non-resident beneficiary of the trust, and 
  (B) the tax-paid earnings of the trust for the year, exceeds 
  (ii) the average of all amounts each of which is the total of all amounts that were paid or became payable by the trust to a beneficiary of the trust in respect of the beneficiary’s interest under the trust before a calendar month that ends in the year except to the extent that the amount is 
  (A) included in the beneficiary’s income for a taxation year because of subsection 104(13), 
  (B) an amount from which tax was deducted under Part XIII because of paragraph 212(1)(c), or 
  (C) paid or payable to a person other than a specified non-resident beneficiary of the trust, and 
  (c) in the case of a corporation or trust that is not resident in Canada, including a corporation or trust that files a return under this Part in accordance with subsection 216(1) in respect of the year, 40% of the amount, if any, by which 
  (i) the average of all amounts each of which is the cost of a property, other than an interest as a member of a partnership, owned by the corporation or trust at the beginning of a calendar month that ends in the year 
  (A) that is used by the corporation or trust in the year in, or held by it in the year in the course of, carrying on business in Canada, or 
  (B) that is an interest in real property, or a real right in immovables, in Canada, or an interest in, or for civil law a right in, timber resource properties and timber limits, in Canada, and in respect of which the corporation or trust files a return under this Part in accordance with subsection 216(1) in respect of the year, exceeds 
  (ii) the average of all amounts each of which is the total of all amounts outstanding, at the beginning of a calendar month that ends in the year, as or on account of a debt or other obligation to pay an amount that was payable by the corporation or trust that may reasonably be regarded as relating to a business carried on by it in Canada or to an interest or right described in clause (i)(B), other than a debt or obligation that is included in the outstanding debts to specified non-residents of the corporation or trust; ( montant des capitaux propres)   
  *equity contribution*, to a trust, means a transfer of property to the trust that is made  
  (a) in exchange for an interest as a beneficiary under the trust, 
  (b) in exchange for a right to acquire an interest as a beneficiary under the trust, or 
  (c) for no consideration by a person beneficially interested in the trust; ( apport de capitaux propres)   
  *outstanding debts to specified non-residents*, of a corporation or trust at any particular time in a taxation year, means  
  (a) the total of all amounts each of which is an amount outstanding at that time as or on account of a debt or other obligation to pay an amount 
  (i) that was payable by the corporation or trust to a person who was, at any time in the year, 
  (A) a specified non-resident shareholder of the corporation or a specified non-resident beneficiary of the trust, or 
  (B) a non-resident person who was not dealing at arm’s length with a specified shareholder of the corporation or a specified beneficiary of the trust, as the case may be, and 
  (ii) on which any amount in respect of interest paid or payable by the corporation or trust is or would be, but for subsection (4), deductible in computing the income of the corporation or trust for the year, but does not include 
  (b) an amount outstanding at the particular time as or on account of a debt or other obligation 
  (i) to pay an amount to 
  (A) a non-resident insurance corporation to the extent that the obligation was, for the non-resident insurance corporation’s taxation year that included the particular time, designated insurance property in respect of an insurance business carried on in Canada through a permanent establishment as defined by regulation, or 
  (B) an authorized foreign bank, if the bank uses or holds the obligation at the particular time in its Canadian banking business, or 
  (ii) that is a debt obligation described in subparagraph (ii) of the description of A in paragraph 17.1(1)(b) to the extent that the proceeds of the debt obligation can reasonably be considered to directly or indirectly fund at the particular time, in whole or in part, a pertinent loan or indebtedness (as defined in subsection 212.3(11)) owing to the corporation or another corporation resident in Canada that does not, at the particular time, deal at arm’s length with the corporation; ( dettes impayées envers des non-résidents déterminés)   
  *security interest*, in respect of a property, means an interest in, or for civil law a right in, the property that secures payment of an obligation; (garantie)   
  *specified beneficiary*, of a trust at any time, means a person who at that time, either alone or together with persons with whom that person does not deal at arm’s length, has an interest as a beneficiary under the trust with a fair market value that is not less than 25% of the fair market value of all interests as a beneficiary under the trust and for the purpose of determining whether a particular person is a specified beneficiary of a trust,  
  (a) if the particular person, or a person with whom the particular person does not deal at arm’s length, has at that time a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to, or to acquire, an interest as a beneficiary under a trust, the particular person or the person with whom the particular person does not deal at arm’s length, as the case may be, is deemed at that time to own the interest, 
  (b) if the particular person, or a person with whom the particular person does not deal at arm’s length, has at that time a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently to cause a trust to redeem, acquire or terminate any interest in it as a beneficiary (other than an interest held by the particular person or a person with whom the particular person does not deal at arm’s length), the trust is deemed at that time to have redeemed, acquired or terminated the interest, unless the right is not exercisable at that time because the exercise of the right is contingent on the death, bankruptcy or permanent disability of an individual, and 
  (c) if the amount of income or capital of the trust that the particular person, or a person with whom the particular person does not deal at arm’s length, may receive as a beneficiary of the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be; ( bénéficiaire déterminé)   
  *specified non-resident beneficiary*, of a trust at any time, means a specified beneficiary of the trust who at that time is a non-resident person; (bénéficiaire non-résident déterminé)   
  *specified non-resident shareholder* of a corporation at any time means a specified shareholder of the corporation who was at that time a non-resident person or a non-resident-owned investment corporation; (actionnaire non-résident déterminé)   
  *specified proportion* [Repealed, 2013, c. 34, s. 427]   
  *specified right*, at any time in respect of a property, means a right to, at that time, mortgage, hypothecate, assign, pledge or in any way encumber the property to secure payment of an obligation — other than the particular debt or other obligation described in paragraph (6)(a) or a debt or other obligation described in subparagraph (6)(d)(ii) — or to use, invest, sell or otherwise dispose of, or in any way alienate, the property unless it is established by the taxpayer that all of the proceeds (net of costs, if any) received, or that would be received, from exercising the right must first be applied to reduce an amount described in subparagraph (6)(d)(i) or (ii); (droit déterminé)   
  *specified shareholder* of a corporation at any time means a person who at that time, either alone or together with persons with whom that person is not dealing at arm’s length, owns  
  (a) shares of the capital stock of the corporation that give the holders thereof 25% or more of the votes that could be cast at an annual meeting of the shareholders of the corporation, or 
  (b) shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation, and for the purpose of determining whether a particular person is a specified shareholder of a corporation at any time, where the particular person or a person with whom the particular person is not dealing at arm’s length has at that time a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently 
  (c) to, or to acquire, shares in a corporation or to control the voting rights of shares in a corporation, or 
  (d) to cause a corporation to redeem, acquire or cancel any of its shares (other than shares held by the particular person or a person with whom the particular person is not dealing at arm’s length), the particular person or the person with whom the particular person is not dealing at arm’s length, as the case may be, shall be deemed at that time to own the shares referred to in paragraph (c) and the corporation referred to in paragraph (d) shall be deemed at that time to have redeemed, acquired or cancelled the shares referred to in paragraph (d), unless the right is not exercisable at that time because the exercise thereof is contingent on the death, bankruptcy or permanent disability of an individual; ( actionnaire déterminé)   
  *tax-paid earnings*, of a trust resident in Canada for a taxation year, means the total of all amounts each of which is the amount in respect of a particular taxation year of the trust that ended before the year determined by the formula  is the taxable income of the trust under this Part for the particular year, and is the total of tax payable under this Part by the trust, and all income taxes payable by the trust under the laws of a province, for the particular year. ( bénéfices libérés d’impôt)  
  
  ### Specified shareholder or specified beneficiary
  
  (5.1) For the purposes of subsections (4) to (6), if 
  (a) a particular person would, but for this subsection, be a specified shareholder of a corporation or a specified beneficiary of a trust at any time, 
  (b) there was in effect at that time an agreement or arrangement under which, on the satisfaction of a condition or the occurrence of an event that it is reasonable to expect will be satisfied or will occur, the particular person will cease to be a specified shareholder of the corporation or a specified beneficiary of the trust, and 
  (c) the purpose for which the particular person became a specified shareholder or specified beneficiary was the safeguarding of rights or interests of the particular person or a person with whom the particular person is not dealing at arm’s length in respect of any indebtedness owing at any time to the particular person or a person with whom the particular person is not dealing at arm’s length, the particular person is deemed not to be a specified shareholder of the corporation or a specified beneficiary of the trust, as the case may be, at that time. 
  
  ### Specified shareholder or specified beneficiary
  
  (5.2) For the purposes of subsections (4) to (6), a non-resident corporation is deemed to be a specified shareholder of itself and a non-resident trust is deemed to be a specified beneficiary of itself. 
  
  ### Property used in business — cost attribution
  
  (5.3) For the purposes of subparagraph (c)(i) of the definition equity amount in subsection (5),  
  (a) if a property is partly used or held by a taxpayer in a taxation year in the course of carrying on business in Canada, the cost of the property to the taxpayer is deemed for the year to be equal to the same proportion of the cost to the taxpayer of the property (determined without reference to this subsection) that the proportion of the use or holding made of the property in the course of carrying on business in Canada in the year is of the whole use or holding made of the property in the year; and 
  (b) if a corporation or trust is deemed to own a portion of a property of a partnership because of subsection (7) at any time, 
  (i) the property is deemed to have, at that time, a cost to the corporation or trust equal to the same proportion of the cost of the property to the partnership as the proportion of the debts and other obligations to pay an amount of the partnership allocated to it under subsection (7) is of the total amount of all debts and other obligations to pay an amount of the partnership, and 
  (ii) in the case of a partnership that carries on business in Canada, the corporation or trust is deemed to use or hold the property in the course of carrying on business in Canada to the extent the partnership uses or holds the property in the course of carrying on business in Canada for the fiscal period of the partnership that includes that time. 
  
  ### Rules — trust income
  
  (5.4) For the purposes of this Act, a trust resident in Canada may designate in its return of income under this Part for a taxation year that all or any portion of an amount paid or credited as interest by the trust, or by a partnership, in the year to a non-resident person is deemed to be income of the trust that has been paid to the non-resident person as a beneficiary of the trust, and not to have been paid or credited by the trust or the partnership as interest, to the extent that an amount in respect of the interest 
  (a) is included in computing the income of the trust for the year under paragraph 12(1)(l.1); or 
  (b) is not deductible in computing the income of the trust for the year because of subsection (4). 
  
  ### Back-to-back loan arrangement
  
  (6) Subsection (6.1) applies at any time in respect of a taxpayer if at that time 
  (a) the taxpayer has a particular amount outstanding as or on account of a particular debt or other obligation to pay an amount to a person (in this subsection and subsection (6.1) referred to as the “intermediary”); 
  (b) the intermediary is neither 
  (i) a person resident in Canada with whom the taxpayer does not deal at arm’s length, nor 
  (ii) a person that is, in respect of the taxpayer, described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5);  
  (c) the intermediary or a person that does not deal at arm’s length with the intermediary 
  (i) has an amount outstanding as or on account of a debt or other obligation to pay an amount to a particular non-resident person that is, in respect of the taxpayer, described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5) that meets any of the following conditions (in this subsection and subsection (6.1) referred to as the “intermediary debt”):  
  (A) recourse in respect of the debt or other obligation is limited in whole or in part, either immediately or in the future and either absolutely or contingently, to the particular debt or other obligation, or 
  (B) it can reasonably be concluded that all or a portion of the particular amount became owing, or was permitted to remain owing, because 
  (I) all or a portion of the debt or other obligation was entered into or was permitted to remain outstanding, or 
  (II) the intermediary anticipated that all or a portion of the debt or other obligation would become owing or remain outstanding, or 
  (ii) has a specified right in respect of a particular property that was granted directly or indirectly by a person that is, in respect of the taxpayer, a particular non-resident person described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5) and  
  (A) the existence of the specified right is required under the terms and conditions of the particular debt or other obligation, or 
  (B) it can reasonably be concluded that all or a portion of the particular amount became owing, or was permitted to remain owing, because 
  (I) the specified right was granted, or 
  (II) the intermediary anticipated that the specified right would be granted; and 
  (d) the total of all amounts — each of which is, in respect of the particular debt or other obligation, an amount outstanding as or on account of an intermediary debt or the fair market value of a particular property described in subparagraph (c)(ii) — is equal to at least 25% of the total of 
  (i) the particular amount, and 
  (ii) the total of all amounts each of which is an amount (other than the particular amount) that the taxpayer, or a person that does not deal at arm’s length with the taxpayer, has outstanding as or on account of a debt or other obligation to pay an amount to the intermediary under the agreement, or an agreement that is connected to the agreement, under which the particular debt or other obligation was entered into if 
  (A) the intermediary is granted a security interest in respect of a property that is the intermediary debt or the particular property, as the case may be, and the security interest secures the payment of two or more debts or other obligations that include the debt or other obligation and the particular debt or other obligation, and 
  (B) each security interest that secures the payment of a debt or other obligation referred to in clause (A) secures the payment of every debt or other obligation referred to in that clause. 
  
  ### Back-to-back loan arrangement
  
  (6.1) If this subsection applies at any time in respect of a taxpayer, 
  (a) then for the purpose of applying subsections (4) and (5), 
  (i) the portion of the particular amount, at that time, referred to in paragraph (6)(a) that is equal to the lesser of the following amounts is deemed to be an amount outstanding as or on account of a debt or other obligation to pay an amount to the particular non-resident person referred to in subparagraph (6)(c)(i) or (ii), as the case may be, and not to the intermediary: 
  (A) the amount outstanding as or on account of the intermediary debt or the fair market value of the particular property referred to in subparagraph (6)(c)(ii), as the case may be, and 
  (B) the proportion of the particular amount that the amount outstanding or the fair market value, as the case may be, is of the total of all amounts each of which is 
  (I) an amount outstanding as or on account of an intermediary debt in respect of the particular debt or other obligation, owed to the particular non-resident or any other non-resident person that is, in respect of the taxpayer, described in the definition outstanding debts to specified non-residents in subsection (5), or  
  (II) the fair market value of a particular property referred to in subparagraph (6)(c)(ii) in respect of the particular debt or other obligation, and 
  (ii) the portion of the interest paid or payable by the taxpayer, in respect of a period throughout which subparagraph (a)(i) applies, on the particular debt or other obligation referred to in paragraph (6)(a) that is equal to the amount determined by the following formula is deemed to be paid or payable by the taxpayer to the particular non-resident, and not to the intermediary, as interest for the period on the amount deemed by subparagraph (a)(i) to be outstanding to the particular non-resident: is the interest paid or payable, is the average of all amounts each of which is an amount that is deemed by subparagraph (a)(i) to be outstanding to the particular non-resident at a time during the period, and is the average of all amounts each of which is the particular amount outstanding at a time during the period; and 
  (b) for the purposes of Part XIII and subject to subsections 214(16) and (17), interest deemed under subparagraph (a)(ii) to be paid or payable to the particular non-resident in respect of a period is, to the extent that the interest is not deductible in computing the income of the taxpayer for the year because of subsection 18(4), deemed to be paid or payable by the taxpayer to the particular non-resident, and not to the intermediary, in respect of the period. 
  
  ### Partnership debts and property
  
  (7) For the purposes of this subsection, paragraph (4)(a), subsections (5) to (6.1) and paragraph 12(1)(l.1), each member of a partnership at any time is deemed at that time 
  (a) to owe the portion (in this subsection and paragraph 12(1)(l.1) referred to as the “debt amount”) of each debt or other obligation to pay an amount of the partnership and to own the portion of each property of the partnership that is equal to 
  (i) the member’s specified proportion for the last fiscal period, if any, of the partnership ending 
  (A) at or before the end of the taxation year referred to in subsection (4), and 
  (B) at a time when the member is a member of the partnership, and 
  (ii) if the member does not have a specified proportion described in subparagraph (i), the proportion that 
  (A) the fair market value of the member’s interest in the partnership at that time is of 
  (B) the fair market value of all interests in the partnership at that time; 
  (b) to owe the debt amount to the person to whom the partnership owes the debt or other obligation to pay an amount; and 
  (c) to have paid interest on the debt amount that is deductible in computing the member’s income to the extent that an amount in respect of interest paid or payable on the debt amount by the partnership is deductible in computing the partnership’s income. 
  
  ### Exception — foreign accrual property income
  
  (8) An amount in respect of interest paid or payable to a controlled foreign affiliate of a corporation resident in Canada that would otherwise not be deductible by the corporation for a taxation year because of subsection (4) may be deducted to the extent that an amount included under subsection 91(1) in computing the corporation’s income for the year or a subsequent year can reasonably be considered to be in respect of the interest. 
  
  ### Limitation respecting prepaid expenses
  
  (9) Notwithstanding any other provision of this Act, 
  (a) in computing a taxpayer’s income for a taxation year from a business or property (other than income from a business computed in accordance with the method authorized by subsection 28(1)), no deduction shall be made in respect of an outlay or expense to the extent that it can reasonably be regarded as having been made or incurred 
  (i) as consideration for services to be rendered after the end of the year, 
  (ii) as, on account of, in lieu of payment of or in satisfaction of, interest, taxes (other than taxes imposed on an insurer in respect of insurance premiums of a non-cancellable or guaranteed renewable accident and sickness insurance policy, or a life insurance policy other than a group term life insurance policy that provides coverage for a period of 12 months or less), rent or royalties in respect of a period that is after the end of the year, 
  (iii) as consideration for insurance in respect of a period after the end of the year, other than 
  (A) where the taxpayer is an insurer, consideration for reinsurance, and 
  (B) consideration for insurance on the life of an individual under a group term life insurance policy where all or part of the consideration is for insurance that is (or would be if the individual survived) in respect of a period that ends more than 13 months after the consideration is paid, or 
  (iv) subject to clause (iii)(B) and subsections 144.1(4) to (7), as consideration for a designated employee benefit (as defined in subsection 144.1(1)) to be provided after the end of the year (other than consideration payable in the year, to a corporation that is licensed to provide insurance, for insurance coverage in respect of the year);  
  (b) such portion of each outlay or expense (other than an outlay or expense of a corporation, partnership or trust as, on account of, in lieu of payment of or in satisfaction of, interest) made or incurred as would, but for paragraph 18(9)(a), be deductible in computing a taxpayer’s income for a taxation year shall be deductible in computing the taxpayer’s income for the subsequent year to which it can reasonably be considered to relate; 
  (c) for the purposes of section 37.1, such portion of each qualified expenditure (within the meaning assigned by subsection 37.1(5)) as was made by a taxpayer in a taxation year and as would, but for paragraph 18(9)(a), have been deductible in computing the taxpayer’s income for the year shall be deemed 
  (i) not to be a qualified expenditure made by the taxpayer in the year, and 
  (ii) to be a qualified expenditure made by the taxpayer in the subsequent year to which the expenditure can reasonably be considered to relate; 
  (d) for the purpose of paragraph 18(9)(a), an outlay or expense of a taxpayer is deemed not to include any payment referred to in subparagraph 37(1)(a)(ii) or 37(1)(a)(iii) that 
  (i) is made by the taxpayer to a person or partnership with which the taxpayer deals at arm’s length, and 
  (ii) is not an expenditure described in subparagraph 37(1)(a)(i); and 
  (e) for the purposes of section 37 and the definition qualified expenditure in subsection 127(9), the portion of an expenditure that is made or incurred by a taxpayer in a taxation year and that would, but for paragraph 18(9)(a), have been deductible under section 37 in computing the taxpayer’s income for the year, is deemed  
  (i) not to be made or incurred by the taxpayer in the year, and 
  (ii) to be made or incurred by the taxpayer in the subsequent taxation year to which the expenditure can reasonably be considered to relate. 
  (f)  [Repealed, 2017, c. 20, s. 3]  
  
  ### Group term life insurance
  
  (9.01) Where 
  (a) a taxpayer pays a premium after February 1994 and before 1997 under a group term life insurance policy for insurance on the life of an individual, 
  (b) the insurance is for the remainder of the individual’s lifetime, and 
  (c) no further premiums will be payable for the insurance, no amount may be deducted in computing the taxpayer’s income for a taxation year from a business or property in respect of the premium except that there may be so deducted, 
  (d) where the year is the taxation year in which the premium was paid or a subsequent taxation year and the individual is alive at the end of the year, the lesser of 
  (i) the amount determined by the formula and 
  (ii) 1/3 of the amount determined by the formula is the amount that would, if this Act were read without reference to this subsection, be deductible in respect of the premium in computing the taxpayer’s income, is the total amount deductible in respect of the premium in computing the taxpayer’s income for preceding taxation years, and is the number of days in the year, and 
  (e) where the individual died in the year, the amount determined under subparagraph 18(9.01)(d)(i). 
  
  ### Application of subsection (9) to insurers
  
  (9.02) For the purpose of subsection (9), an outlay or expense made or incurred by an insurer in a taxation year on account of the acquisition of an insurance policy at any time prior to the issuance of the policy is deemed to be an expense incurred as consideration for services rendered in the particular year that the policy is issued. 
  
  ### Penalties, bonuses and rate-reduction payments
  
  (9.1) Subject to subsection 142.4(10), where at any time a payment, other than a payment that 
  (a) can reasonably be considered to have been made in respect of the extension of the term of a debt obligation or in respect of the substitution or conversion of a debt obligation to another debt obligation or share, or 
  (b) is contingent or dependent on the use of or production from property or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation, is made to a person or partnership by a taxpayer in the course of carrying on a business or earning income from property in respect of borrowed money or on an amount payable for property acquired by the taxpayer (in this subsection referred to as a “debt obligation”) 
  (c) as consideration for a reduction in the rate of interest payable by the taxpayer on the debt obligation, or 
  (d) as a penalty or bonus payable by the taxpayer because of the repayment by the taxpayer of all or part of the principal amount of the debt obligation before its maturity, the payment shall, to the extent that it can reasonably be considered to relate to, and does not exceed the value at that time of, an amount that, but for the reduction described in paragraph 18(9.1)(c) or the repayment described in paragraph 18(9.1)(d), would have been paid or payable by the taxpayer as interest on the debt obligation for a taxation year of the taxpayer ending after that time, be deemed, 
  (e) for the purposes of this Act, to have been paid by the taxpayer and received by the person or partnership at that time as interest on the debt obligation, and 
  (f) for the purpose of computing the taxpayer’s income in respect of the business or property for the year, to have been paid or payable by the taxpayer in that year as interest pursuant to a legal obligation to pay interest, 
  (i) in the case of a reduction described in paragraph 18(9.1)(c), on the debt obligation, and 
  (ii) in the case of a repayment described in paragraph 18(9.1)(d), 
  (A) where the repayment was in respect of all or part of the principal amount of the debt obligation that was borrowed money, except to the extent that the borrowed money was used by the taxpayer to acquire property, on borrowed money used in the year for the purpose for which the borrowed money that was repaid was used, and 
  (B) where the repayment was in respect of all or part of the principal amount of the debt obligation that was either borrowed money used to acquire property or an amount payable for property acquired by the taxpayer, on the debt obligation to the extent that the property or property substituted therefor is used by the taxpayer in the year for the purpose of gaining or producing income therefrom or for the purpose of gaining or producing income from a business. 
  
  ### Interest on debt obligations
  
  (9.2) For the purposes of this Part, the amount of interest payable on borrowed money or on an amount payable for property (in this subsection and subsections 18(9.3) to 18(9.8) referred to as the “debt obligation”) by a corporation, partnership or trust (in this subsection and subsections 18(9.3) to 18(9.7) referred to as the “borrower”) in respect of a taxation year shall, notwithstanding subparagraph 18(9.1)(f)(i), be deemed to be an amount equal to the lesser of 
  (a) the amount of interest, not in excess of a reasonable amount, that would be payable on the debt obligation by the borrower in respect of the year if no amount had been paid before the end of the year in satisfaction of the obligation to pay interest on the debt obligation in respect of the year and if the amount outstanding at each particular time in the year that is after 1991 on account of the principal amount of the debt obligation were the amount, if any, by which 
  (i) the amount outstanding at the particular time on account of the principal amount of the debt obligation exceeds the total of 
  (ii) all amounts each of which is an amount paid before the particular time in satisfaction, in whole or in part, of the obligation to pay interest on the debt obligation in respect of a period or part thereof that is after 1991, after the beginning of the year, and after the time the amount was so paid (other than a period or part thereof that is in the year where no such amount was paid before the particular time in respect of a period, or part of a period, that is after the end of the year), and 
  (iii) the amount, if any, by which 
  (A) the total of all amounts of interest payable on the debt obligation (determined without reference to this subsection) by the borrower in respect of taxation years ending after 1991 and before the year (to the extent that the interest does not exceed a reasonable amount) exceeds 
  (B) the total of all amounts of interest deemed by this subsection to have been payable on the debt obligation by the borrower in respect of taxation years ending before the year, and 
  (b) the amount, if any, by which 
  (i) the total of all amounts of interest payable on the debt obligation (determined without reference to this subsection) by the borrower in respect of the year or taxation years ending after 1991 and before the year (to the extent that the interest does not exceed a reasonable amount) exceeds 
  (ii) the total of all amounts of interest deemed by this subsection to have been payable on the debt obligation by the borrower in respect of taxation years ending before the year. 
  
  ### Interest on debt obligations
  
  (9.3) Where at any time in a taxation year of a borrower a debt obligation of the borrower is settled or extinguished or the holder of the obligation acquires or reacquires property of the borrower in circumstances in which section 79 applies in respect of the debt obligation and the total of 
  (a) all amounts each of which is an amount paid at or before that time in satisfaction, in whole or in part, of the obligation to pay interest on the debt obligation in respect of a period or part of a period that is after that time, and 
  (b) all amounts of interest payable on the debt obligation (determined without reference to subsection 18(9.2)) by the borrower in respect of taxation years ending after 1991 and before that time, or in respect of periods, or parts of periods, that are in such years and before that time (to the extent that the interest does not exceed a reasonable amount), exceeds the total of 
  (c) all amounts of interest deemed by subsection 18(9.2) to have been payable on the debt obligation by the borrower in respect of taxation years ending before that time, and 
  (d) the amount of interest that would be deemed by subsection 18(9.2) to have been payable on the debt obligation by the borrower in respect of the year if the year had ended immediately before that time, (which excess is in this subsection referred to as the “excess amount”), the following rules apply: 
  (e) for the purpose of applying section 79 in respect of the borrower, the principal amount at that time of the debt obligation shall be deemed to be equal to the amount, if any, by which 
  (i) the principal amount at that time of the debt obligation exceeds 
  (ii) the excess amount, and 
  (f) the excess amount shall be deducted at that time in computing the forgiven amount in respect of the obligation (within the meaning assigned by subsection 80(1)). 
  
  ### Idem
  
  (9.4) Where an amount is paid at any time by a person or partnership in respect of a debt obligation of a borrower 
  (a) as, on account of, in lieu of payment of or in satisfaction of, interest on the debt obligation in respect of a period or part thereof that is after 1991 and after that time, or 
  (b) as consideration for a reduction in the rate of interest payable on the debt obligation (excluding, for greater certainty, a payment described in paragraph 18(9.1)(a) or 18(9.1)(b)) in respect of a period or part thereof that is after 1991 and after that time, that amount shall be deemed, for the purposes of subsection 18(9.5) and, subject to that subsection, for the purposes of clause 18(9.2)(a)(iii)(A), subparagraph 18(9.2)(b)(i), paragraph 18(9.3)(b) and subsection 18(9.6), to be an amount of interest payable on the debt obligation by the borrower in respect of that period or part thereof and shall be deemed, for the purposes of subparagraph 18(9.2)(a)(ii) and paragraph 18(9.3)(a), to be an amount paid at that time in satisfaction of the obligation to pay interest on the debt obligation in respect of that period or part thereof. 
  
  ### Idem
  
  (9.5) Where the amount of interest payable on a debt obligation (determined without reference to subsection 18(9.2)) by a borrower in respect of a particular period or part thereof that is after 1991 can reasonably be regarded as an amount payable as consideration for 
  (a) a reduction in the amount of interest that would otherwise be payable on the debt obligation in respect of a subsequent period, or 
  (b) a reduction in the amount that was or may be paid before the beginning of a subsequent period in satisfaction of the obligation to pay interest on the debt obligation in respect of that subsequent period (determined without reference to the existence of, or the amount of any interest paid or payable on, any other debt obligation), that amount shall, for the purposes of clause 18(9.2)(a)(iii)(A), subparagraph 18(9.2)(b)(i), paragraph 18(9.3)(b) and subsection 18(9.6), be deemed to be an amount of interest payable on the debt obligation by the borrower in respect of the subsequent period and not to be an amount of interest payable on the debt obligation by the borrower in respect of the particular period and shall, when paid, be deemed for the purposes of subparagraph 18(9.2)(a)(ii) and paragraph 18(9.3)(a) to be an amount paid in satisfaction of the obligation to pay interest on the debt obligation in respect of the subsequent period. 
  
  ### Idem
  
  (9.6) Where the liability in respect of a debt obligation of a person or partnership is assumed by a borrower at any time, 
  (a) the amount of interest payable on the debt obligation (determined without reference to subsection 18(9.2)) by any person or partnership in respect of a period shall, to the extent that that period is included in a taxation year of the borrower ending after 1991, be deemed, for the purposes of clause 18(9.2)(a)(iii)(A), subparagraph 18(9.2)(b)(i) and paragraph 18(9.3)(b), to be an amount of interest payable on the debt obligation by the borrower in respect of that year, and 
  (b) the application of subsections 18(9.2) and 18(9.3) to the borrower in respect of the debt obligation after that time shall be determined on the assumption that subsection 18(9.2) applied to the borrower in respect of the debt obligation before that time, and, for the purposes of this subsection, where the borrower came into existence at a particular time that is after the beginning of the particular period beginning at the beginning of the first period in respect of which interest was payable on the debt obligation by any person or partnership and ending at the particular time, the borrower shall be deemed 
  (c) to have been in existence throughout the particular period, and 
  (d) to have had, throughout the particular period, taxation years ending on the day of the year on which its first taxation year ended. 
  
  ### Idem
  
  (9.7) Where the amount paid by a borrower at any particular time, in satisfaction of the obligation to pay a particular amount of interest on a debt obligation in respect of a subsequent period or part thereof, exceeds the particular amount of that interest, discounted 
  (a) for the particular period beginning at the particular time and ending at the end of the subsequent period or part thereof, and 
  (b) at the rate or rates of interest applying under the debt obligation during the particular period (or, where the rate of interest of any part of the particular period is not fixed at the particular time, at the prescribed rate of interest in effect at the particular time), that excess shall 
  (c) for the purposes of applying subsections 18(9.2) to 18(9.6) and 18(9.8), be deemed to be neither an amount of interest payable on the debt obligation nor an amount paid in satisfaction of the obligation to pay interest on the debt obligation, and 
  (d) be deemed to be a payment described in paragraph 18(9.1)(d) in respect of the debt obligation. 
  
  ### Idem
  
  (9.8) Nothing in any of subsections 18(9.2) to 18(9.7) shall be construed as providing that 
  (a) the total of all amounts each of which is the amount of interest payable on a debt obligation by an individual (other than a trust), or deemed by subsection 18(9.2) to be payable on the debt obligation by a corporation, partnership or trust, in respect of a taxation year ending after 1991 and before any particular time, may exceed 
  (b) the total of all amounts each of which is the amount of interest payable on the debt obligation (determined without reference to subsection 18(9.2)) by a person or partnership in respect of a taxation year ending after 1991 and before that particular time. 
  
  ### Employee benefit plan
  
  (10) Paragraph 18(1)(o) does not apply in respect of a contribution to an employee benefit plan 
  (a) to the extent that the contribution 
  (i) is made in respect of services performed by an employee who is not resident in Canada and is regularly employed in a country other than Canada, and 
  (ii) cannot reasonably be regarded as having been made in respect of services performed or to be performed during a period when the employee is resident in Canada; 
  (b) the custodian of which is non-resident, to the extent that the contribution 
  (i) is in respect of an employee who is non-resident at the time the contribution is made, and 
  (ii) cannot reasonably be regarded as having been made in respect of services performed or to be performed during a period when the employee is resident in Canada; or 
  (c) the custodian of which is non-resident, to the extent that the contribution can reasonably be regarded as having been made in respect of services performed by an employee in a particular calendar month where 
  (i) the employee was resident in Canada throughout no more than 60 of the 72 calendar months ending with the particular month, and 
  (ii) the employee became a member of the plan before the end of the month following the month in which the employee became resident in Canada, and for the purpose of this paragraph, where benefits provided to an employee under a particular employee benefit plan are replaced by benefits provided under another employee benefit plan, the other plan shall be deemed, in respect of the employee, to be the same plan as the particular plan. 
  
  ### Limitation
  
  (11) Notwithstanding any other provision of this Act, in computing the income of a taxpayer for a taxation year, no amount is deductible under paragraph 20(1)(c), 20(1)(d), 20(1)(e), 20(1)(e.1) or 20(1)(f) in respect of borrowed money (or other property acquired by the taxpayer) in respect of any period after which the money (or other property) is used by the taxpayer for the purpose of 
  (a) making a payment after November 12, 1981 as consideration for an income-averaging annuity contract, unless the contract was acquired pursuant to an agreement in writing entered into before November 13, 1981; 
  (b) paying a premium (within the meaning assigned by subsection 146(1) read without reference to the portion of the definition 
  *premium* in that subsection following paragraph (b) of that definition) under a registered retirement savings plan after November 12, 1981;  
  (c) making a contribution to a deferred profit sharing plan, a pooled registered pension plan or a registered pension plan, other than 
  (i) a contribution described in subparagraph 8(1)(m)(ii) or 8(1)(m)(iii) (as they read in their application to the 1990 taxation year) that was required to be made pursuant to an obligation entered into before November 13, 1981, or 
  (ii) a contribution deductible under paragraph 20(1)(q) or 20(1)(y) in computing the taxpayer’s income; 
  (d) making a payment as consideration for an annuity the payment for which was deductible in computing the taxpayer’s income by virtue of paragraph 60(l; 
  (e) making a contribution to a retirement compensation arrangement where the contribution was deductible under paragraph 8(1)(m.2) in computing the taxpayer’s income; 
  (f) making a contribution to a net income stabilization account; 
  (g)  [Repealed, 2011, c. 24, s. 2]  
  (h) making a contribution into a registered education savings plan; 
  (i) making a contribution to a registered disability savings plan; 
  (j) making a contribution under a TFSA; or 
  (k) making a contribution to a FHSA, and, for the purposes of this subsection, to the extent that an indebtedness is incurred by a taxpayer in respect of a property and at any time that property or a property substituted therefor is used for any of the purposes referred to in this subsection, the indebtedness shall be deemed to be incurred at that time for that purpose. 
  
  ### Work space in home
  
  (12) Notwithstanding any other provision of this Act, in computing an individual’s income from a business for a taxation year, 
  (a) no amount shall be deducted in respect of an otherwise deductible amount for any part (in this subsection referred to as the “work space”) of a self-contained domestic establishment in which the individual resides, except to the extent that the work space is either 
  (i) the individual’s principal place of business, or 
  (ii) used exclusively for the purpose of earning income from business and used on a regular and continuous basis for meeting clients, customers or patients of the individual in respect of the business; 
  (b) if the conditions set out in subparagraph (a)(i) or (ii) are met, the amount for the work space that is deductible in computing the individual’s income for the year from the business shall not exceed the individual’s income for the year from the business, computed without reference to the amount and section 34.1; and 
  (c) any amount not deductible by reason only of paragraph 18(12)(b) in computing the individual’s income from the business for the immediately preceding taxation year shall be deemed to be an amount otherwise deductible that, subject to paragraphs 18(12)(a) and 18(12)(b), may be deducted for the year for the work space in respect of the business. 
  
  ### When s. (15) applies to money lenders
  
  (13) Subsection 18(15) applies, subject to subsection 142.6(7), when 
  (a) a taxpayer (in this subsection and subsection (15) referred to as the “transferor”) disposes of a particular property (other than, for the purposes of computing the exempt surplus or exempt deficit and taxable surplus or taxable deficit of a foreign affiliate of a taxpayer, in respect of the taxpayer, where the transferor is the affiliate or is a partnership of which the affiliate is a member, property that is, or would be, if the transferor were a foreign affiliate of the taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the transferor); 
  (b) the disposition is not described in any of paragraphs (c) to (g) of the definition superficial loss in section 54;  
  (c) the transferor is not an insurer; 
  (d) the ordinary business of the transferor includes the lending of money and the particular property was used or held in the ordinary course of that business; 
  (e) the particular property is a share, or a loan, bond, debenture, mortgage, hypothecary claim, note, agreement for sale or any other indebtedness; 
  (f) the particular property was, immediately before the disposition, not a capital property of the transferor; 
  (g) during the period that begins 30 days before and ends 30 days after the disposition, the transferor or a person affiliated with the transferor acquires a property (in this subsection and subsection 18(15) referred to as the “substituted property”) that is, or is identical to, the particular property; and 
  (h) at the end of the period, the transferor or a person affiliated with the transferor owns the substituted property. 
  
  ### When s. (15) applies to adventurers in trade
  
  (14) Subsection 18(15) applies where 
  (a) a person (in this subsection and subsection 18(15) referred to as the “transferor”) disposes of a particular property; 
  (b) the particular property is described in an inventory of a business that is an adventure or concern in the nature of trade; 
  (c) the disposition is not a disposition that is deemed to have occurred by subsection 10.1(6) or (7), section 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c) or subsection 138(11.3) or 138.2(4) or 149(10); 
  (d) during the period that begins 30 days before and ends 30 days after the disposition, the transferor or a person affiliated with the transferor acquires property (in this subsection and subsection 18(15) referred to as the “substituted property”) that is, or is identical to, the particular property; and 
  (e) at the end of the period, the transferor or a person affiliated with the transferor owns the substituted property. 
  
  ### Loss on certain properties
  
  (15) If this subsection applies because of subsection 18(13) or 18(14) to a disposition of a particular property, 
  (a) the transferor’s loss, if any, from the disposition is deemed to be nil, and 
  (b) the amount of the transferor’s loss, if any, from the disposition (determined without reference to this subsection) is deemed to be a loss of the transferor from a disposition of the particular property at the first time, after the disposition, 
  (i) at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns 
  (A) the substituted property, or 
  (B) a property that is identical to the substituted property and that was acquired after the day that is 31 days before the period begins, 
  (ii) at which the substituted property would, if it were owned by the transferor, be deemed by section 128.1 or subsection 149(10) to have been disposed of by the transferor, 
  (iii) that is immediately before the transferor is subject to a loss restriction event, or 
  (iv) if the transferor is a corporation, 
  (A) for the purposes of computing the transferor’s foreign accrual property income, exempt surplus or exempt deficit, and taxable surplus or taxable deficit, in respect of a taxpayer for a taxation year of the transferor where the transferor is a foreign affiliate of the taxpayer, at which the liquidation and dissolution of the transferor begins, unless the liquidation and dissolution is 
  (I) a qualifying liquidation and dissolution (within the meaning assigned by subsection 88(3.1)) of the transferor, or 
  (II) a designated liquidation and dissolution (within the meaning assigned by subsection 95(1)) of the transferor, and 
  (B) for any other purposes, at which the winding-up (other than a winding-up to which subsection 88(1) applies) of the transferor begins, and and for the purpose of paragraph 18(15)(b), where a partnership otherwise ceases to exist at any time after the disposition, the partnership is deemed not to have ceased to exist, and each person who was a member of the partnership immediately before the partnership would, but for this subsection, have ceased to exist is deemed to remain a member of the partnership, until the time that is immediately after the first time described in subparagraphs 18(15)(b)(i) to (iv). 
  
  ### Deemed identical property
  
  (16) For the purposes of subsections (13), (14) and (15), a right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property. 
  
  ### Definitions
  
  (17) The following definitions apply in this subsection and subsections (18) to (23).  
  *offsetting position*, in respect of a particular position of a person or partnership (in this definition referred to as the “holder”), means one or more positions that  
  (a) are held by 
  (i) the holder, 
  (ii) a person or partnership that does not deal at arm’s length with, or is affiliated with, the holder (in this subsection and subsections (20), (22) and (23) referred to as the “connected person”), or 
  (iii) for greater certainty, by any combination of the holder and one or more connected persons; 
  (b) have the effect, or would have the effect if each of the positions held by a connected person were held by the holder, of eliminating all or substantially all of the holder’s risk of loss and opportunity for gain or profit in respect of the particular position; and 
  (c) if held by a connected person, can reasonably be considered to have been held with the purpose of obtaining the effect described in paragraph (b). ( position compensatoire)   
  *position*, of a person or partnership, means one or more properties, obligations or liabilities of the person or partnership, if  
  (a) each property, obligation or liability is 
  (i) a share in the capital stock of a corporation, 
  (ii) an interest in a partnership, 
  (iii) an interest in a trust, 
  (iv) a commodity, 
  (v) foreign currency, 
  (vi) a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement or a similar agreement, 
  (vii) a debt owed to or owing by the person or partnership that, at any time, 
  (A) is denominated in a foreign currency, 
  (B) would be described in paragraph 7000(1)(d) of the Income Tax Regulations if that paragraph were read without reference to the words “other than one described in paragraph (a), (b) or (c)”, or  
  (C) is convertible into or exchangeable for an interest, or for civil law a right, in any property that is described in any of subparagraphs (i) to (iv), 
  (viii) an obligation to transfer or return to another person or partnership a property identical to a particular property described in any of subparagraphs (i) to (vii) that was previously transferred or lent to the person or partnership by that other person or partnership, or 
  (ix) an interest, or for civil law a right, in any property that is described in any of subparagraphs (i) to (vii); and 
  (b) it is reasonable to conclude that, if there is more than one property, obligation or liability, each of them is held in connection with each other. ( position)   
  *successor position*, in respect of a position (in this definition referred to as the “initial position”), means a particular position if  
  (a) the particular position is an offsetting position in respect of a second position; 
  (b) the second position was an offsetting position in respect of the initial position that was disposed of at a particular time; and 
  (c) the particular position was entered into during the period that begins 30 days before, and ends 30 days after, the particular time. ( position remplaçante)   
  *unrecognized loss*, in respect of a position of a person or partnership at a particular time in a taxation year, means the loss, if any, that would be deductible in computing the income of the person or partnership for the year with respect to the position if it were disposed of immediately before the particular time at its fair market value at the time of disposition. (perte non constatée)   
  *unrecognized profit*, in respect of a position of a person or partnership at a particular time in a taxation year, means the profit, if any, that would be included in computing the income of the person or partnership for the year with respect to the position if it were disposed of immediately before the particular time at its fair market value at the time of disposition. (bénéfice non constaté)  
  
  ### Application of subsection (19)
  
  (18) Subject to subsection (20), subsection (19) applies in respect of a disposition of a particular position by a person or partnership (in this subsection and subsections (19), (20) and (22) referred to as the “transferor”), if 
  (a) the disposition is not a disposition that is deemed to have occurred by section 70, subsection 104(4), section 128.1 or subsection 138(11.3) or 149(10); 
  (b) the transferor is not a financial institution (as defined in subsection 142.2(1)), a mutual fund corporation or a mutual fund trust; and  
  (c) the particular position was, immediately before the disposition, not a capital property, or an obligation or liability on account of capital, of the transferor. 
  
  ### Straddle losses
  
  (19) If this subsection applies in respect of a disposition of a particular position by a transferor, the portion of the transferor’s loss, if any, from the disposition of the particular position that is deductible in computing the transferor’s income for a particular taxation year is the amount determined by the formula is 
  (a) if the particular taxation year is the taxation year in which the disposition occurs, the amount of the loss determined without reference to this subsection (which is, for greater certainty, subject to subsection (15)), and 
  (b) in any other taxation year, nil; is 
  (a) if the disposition occurred in a preceding taxation year, the amount determined for C in respect of the disposition for the immediately preceding taxation year, and 
  (b) in any other case, nil; and is the lesser of 
  (a) the amount determined for A for the taxation year in which the disposition occurs, and 
  (b) the amount determined by the formula is the total of all amounts each of which is the amount of unrecognized profit at the end of the particular taxation year in respect of 
  (i) the particular position, 
  (ii) positions that are offsetting positions in respect of the particular position (or would be, to the extent that there is no successor position in respect of the particular position, if the particular position continued to be held by the transferor), 
  (iii) successor positions in respect of the particular position (for this purpose, a successor position in respect of a position includes a successor position that is in respect of a successor position in respect of the position), and 
  (iv) positions that are offsetting positions in respect of any successor position referred to in subparagraph (iii) (or would be, if any such successor position continued to be held by the holder), is the total of all amounts each of which is the amount of unrecognized loss at the end of the particular taxation year in respect of positions referred to in subparagraphs (i) to (iv) of the description of D, and is the total of all amounts each of which is an amount determined by the formula is the amount determined for A for the taxation year in which the disposition occurs in respect of any position that was disposed of prior to the disposition of the particular position, if 
  (i) the particular position was a successor position in respect of that position (for this purpose, a successor position in respect of a position includes a successor position that is in respect of a successor position in respect of the position), and 
  (ii) that position was 
  (A) an offsetting position in respect of the particular position, 
  (B) an offsetting position in respect of a position in respect of which the particular position was a successor position (for this purpose, a successor position in respect of a position includes a successor position that is in respect of a successor position in respect of the position), or 
  (C) the particular position, and is the total of all amounts each of which is, in respect of a position described in G, an amount determined under the first formula in this subsection for the particular taxation year or a preceding taxation year. 
  
  ### Exceptions
  
  (20) Subsection (19) does not apply in respect of a particular position of a transferor if 
  (a) it is the case that 
  (i) either the particular position, or the offsetting position in respect of the particular position, consists of 
  (A) commodities that the holder of the position manufactures, produces, grows, extracts or processes, or 
  (B) debt that the holder of the position incurs in the course of a business that consists of one or any combination of the activities described in clause (A), and 
  (ii) it can reasonably be considered that the position not described in subparagraph (i) — the particular position if the offsetting position is described in subparagraph (i) or the offsetting position if the particular position is described in that subparagraph — is held to reduce the risk, with respect to the position described in subparagraph (i), from 
  (A) in the case of a position described in clause (i)(A), price changes or fluctuations in the value of currency with respect to the goods described in clause (i)(A), or 
  (B) in the case of a position described in clause (i)(B), fluctuations in interest rates or in the value of currency with respect to the debt described in clause (i)(B); 
  (b) the transferor or a connected person (in this paragraph referred to as the “holder”) continues to hold a position — that would be an offsetting position in respect of the particular position if the particular position continued to be held by the transferor — throughout a 30-day period beginning on the date of disposition of the particular position, and at no time during the period 
  (i) is the holder’s risk of loss or opportunity for gain or profit with respect to the position reduced in any material respect by another position entered into or disposed of by the holder, or 
  (ii) would the holder’s risk of loss or opportunity for gain or profit with respect to the position be reduced in any material respect by another position entered into or disposed of by a connected person, if the other position were entered into or disposed of by the holder; or 
  (c) it can reasonably be considered that none of the main purposes of the series of transactions or events, or any of the transactions or events in the series, of which the holding of both the particular position and offsetting position are part, is to avoid, reduce or defer tax that would otherwise be payable under this Act. 
  
  ### Application
  
  (21) For the purposes of subsections (17) to (23), 
  (a) if a position of a person or partnership is not a property of the person or partnership, the person or partnership is deemed 
  (i) to hold the position at any time while it is a position of the person or partnership, and 
  (ii) to have disposed of the position when the position is settled or extinguished in respect of the person or partnership; 
  (b) a disposition of a position is deemed to include a disposition of a portion of the position; 
  (c) a position held by one or more persons or partnerships referred to in paragraph (a) of the definition offsetting position in subsection (17) is deemed to be an offsetting position in respect of a particular position of a person or partnership if  
  (i) there is a high degree of negative correlation between changes in value of the position and the particular position, and 
  (ii) it can reasonably be considered that the principal purpose of the series of transactions or events, or any of the transactions in the series, of which the holding of both the position and the particular position are part, is to avoid, reduce or defer tax that would otherwise be payable under this Act; and 
  (d) one or more positions held by one or more persons or partnerships referred to in paragraph (a) of the definition offsetting position in subsection (17) are deemed to be a successor position in respect of a particular position of a person or partnership if  
  (i) a portion of the particular position was disposed of at a particular time, 
  (ii) the position is, or the positions include, as the case may be, a position that consists of the portion of the particular position that was not disposed of (in this paragraph referred to as the “remaining portion of the particular position”), 
  (iii) where there is more than one position, the position or positions that do not consist of the remaining portion of the particular position were entered into during the period that begins 30 days before, and ends 30 days after, the particular time, 
  (iv) the position is, or the positions taken together would be, as the case may be, an offsetting position in respect of a second position (within the meaning of the definition successor position in subsection (17)),  
  (v) the second position was an offsetting position in respect of the particular position, and 
  (vi) it can reasonably be considered that the principal purpose of the series of transactions or events, or any of the transactions in the series, of which the disposition of a portion of the particular position and the holding of one or more positions are part, is to avoid, reduce or defer tax that would otherwise be payable under this Act. 
  
  ### Different taxation years
  
  (22) Subsection (23) applies if 
  (a) at any time in a particular taxation year of a transferor, a position referred to in any of subparagraphs (ii) to (iv) of the description of D in subsection (19) (in this subsection and subsection (23) referred to as the “gain position”) is held by a connected person; 
  (b) the connected person disposes of the gain position in the particular taxation year; and 
  (c) the taxation year of the connected person in which the disposition referred to in paragraph (b) occurs ends after the end of the particular taxation year. 
  
  ### Different taxation years
  
  (23) If this subsection applies, for the purposes of the definition unrecognized profit in subsection (17) and subsection (19), the portion of the profit, if any, realized from the disposition of the gain position referred to in paragraph (22)(b) that is determined by the following formula is deemed to be unrecognized profit in respect of the gain position until the end of the taxation year of the connected person in which the disposition occurs:  is the amount of the profit otherwise determined; is the number of days in the taxation year of the connected person in which the disposition referred to in paragraph (22)(b) occurs that are after the end of the particular taxation year; and is the total number of days in the taxation year of the connected person in which the disposition referred to in paragraph (22)(b) occurs. 
  
  ### Definitions
  
  18.1 (1) The definitions in this subsection apply in this section.  
  *matchable expenditure* of a taxpayer means the amount of an expenditure that is made by the taxpayer to  
  (a) acquire a right to receive production, 
  (b) fulfil a covenant or obligation arising in circumstances in which it is reasonable to conclude that a relationship exists between the covenant or obligation and a right to receive production, or 
  (c) preserve or protect a right to receive production, but does not include an amount for which a deduction is provided under section 20 in computing the taxpayer’s income. ( dépense à rattacher)   
  *right to receive production* means a right under which a taxpayer is entitled, either immediately or in the future and either absolutely or contingently, to receive an amount all or a portion of which is computed by reference to use of property, production, revenue, profit, cash flow, commodity price, cost or value of property or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares where the amount is in respect of another taxpayer’s activity, property or business but such a right does not include an income interest in a trust, a Canadian resource property or a foreign resource property. (droit aux produits)   
  *tax benefit* means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act. (avantage fiscal)   
  *tax shelter* means a property that would be a tax shelter (as defined in subsection 237.1(1)) if  
  (a) the cost of a right to receive production were the total of all amounts each of which is a matchable expenditure to which the right relates; and 
  (b) subsections 18.1(2) to 18.1(13) did not apply for the purpose of computing an amount, or in the case of a partnership a loss, represented to be deductible. ( abri fiscal)   
  *taxpayer* includes a partnership. (contribuable)  
  
  ### Limitation on the deductibility of matchable expenditure
  
  (2) In computing a taxpayer’s income from a business or property for a taxation year, no amount of a matchable expenditure may be deducted except as provided by subsection 18.1(3). 
  
  ### Deduction of matchable expenditure
  
  (3) If a taxpayer’s matchable expenditure would, but for subsection 18.1(2) and this subsection, be deductible in computing the taxpayer’s income, there may be deducted in respect of the matchable expenditure in computing the taxpayer’s income for a taxation year the amount that is determined under subsection 18.1(4) for the year in respect of the expenditure. 
  
  ### Amount of deduction
  
  (4) For the purpose of subsection 18.1(3), the amount determined under this subsection for a taxation year in respect of a taxpayer’s matchable expenditure is the amount, if any, that is the least of 
  (a) the total of 
  (i) the lesser of 
  (A) 1/5 of the matchable expenditure, and 
  (B) the amount determined by the formula is the number of months that are in the year and after the day on which the right to receive production to which the matchable expenditure relates is acquired, is the lesser of 240 and the number of months that are in the period that begins on the day on which the right to receive production to which the matchable expenditure relates is acquired and that ends on the day the right is to terminate, and is the amount of the matchable expenditure, and 
  (ii) the amount, if any, by which the amount determined under this paragraph for the preceding taxation year in respect of the matchable expenditure exceeds the amount of the matchable expenditure deductible in computing the taxpayer’s income for that preceding year, 
  (b) the total of 
  (i) all amounts each of which is included in computing the taxpayer’s income for the year (other than any portion of such amount that is the subject of a reserve claimed by the taxpayer for the year under this Act) in respect of the right to receive production to which the matchable expenditure relates, and 
  (ii) the amount by which the amount determined under this paragraph for the preceding taxation year in respect of the matchable expenditure exceeds the amount of the matchable expenditure deductible in computing the taxpayer’s income for that preceding year, and 
  (c) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount of the matchable expenditure that would, but for this section, have been deductible in computing the taxpayer’s income for the year or a preceding taxation year exceeds 
  (ii) the total of all amounts each of which is an amount of the matchable expenditure deductible under subsection 18.1(3) in computing the taxpayer’s income for a preceding taxation year. 
  
  ### Special rules
  
  (5) For the purpose of this section, 
  (a) where a taxpayer’s matchable expenditure is made before the day on which the related right to receive production is acquired by the taxpayer, the expenditure is deemed to have been made on that day; 
  (b) where a taxpayer has one or more rights to renew a particular right to receive production to which a matchable expenditure relates for one or more additional terms, after the term that includes the time at which the particular right was acquired, the particular right is deemed to terminate on the latest day on which the latest possible such term could terminate if all rights to renew the particular right were exercised; 
  (c) where a taxpayer has 2 or more rights to receive production that can reasonably be considered to be related to each other, the rights are deemed to be one right; and 
  (d) where the term of a taxpayer’s right to receive production is for an indeterminate period, the right is deemed to terminate 240 months after it is acquired. 
  
  ### Proceeds of disposition considered income
  
  (6) Where in a taxation year a taxpayer disposes of all or part of a right to receive production to which a matchable expenditure relates, the proceeds of the disposition shall be included in computing the taxpayer’s income for the year. 
  
  ### Arm’s length disposition
  
  (7) Subject to subsections 18.1(8) to 18.1(10), where in a taxation year a taxpayer disposes (otherwise than in a disposition to which subsection 87(1) or 88(1) applies) of all of the taxpayer’s right to receive production to which a matchable expenditure (other than an expenditure no portion of which would, if this section were read without reference to this subsection, be deductible under subsection 18.1(3) in computing the taxpayer’s income) relates, or the taxpayer’s right expires, the amount deductible in respect of the expenditure under subsection 18.1(3) in computing the taxpayer’s income for the year is deemed to be the amount, if any, determined under paragraph 18.1(4)(c) for the year in respect of the expenditure. 
  
  ### Non-arm’s length disposition
  
  (8) Subsection 18.1(10) applies where 
  (a) a taxpayer’s particular right to receive production to which a matchable expenditure (other than an expenditure no portion of which would, if this section were read without reference to subsections 18.1(7) and 18.1(10), be deductible under subsection 18.1(3) in computing the taxpayer’s income) relates has expired or the taxpayer has disposed of all of the right (otherwise than in a disposition to which subsection 87(1) or 88(1) applies); 
  (b) during the period that begins 30 days before and ends 30 days after the disposition or expiry, the taxpayer or a person affiliated, or who does not deal at arm’s length, with the taxpayer acquires a right to receive production (in this subsection and subsection 18.1(10) referred to as the “substituted property”) that is, or is identical to, the particular right; and 
  (c) at the end of the period, the taxpayer or a person affiliated, or who does not deal at arm’s length, with the taxpayer owns the substituted property. 
  
  ### Special case
  
  (9) Subsection 18.1(10) applies where 
  (a) a taxpayer’s particular right to receive production to which a matchable expenditure (other than an expenditure no portion of which would, if this section were read without reference to subsections 18.1(7) and 18.1(10), be deductible under subsection 18.1(3) in computing the taxpayer’s income) relates has expired or the taxpayer has disposed of all of the right (otherwise than in a disposition to which subsection 87(1) or 88(1) applies); and 
  (b) during the period that begins at the time of the disposition or expiry and ends 30 days after that time, a taxpayer that had an interest, directly or indirectly, in the right has another interest, directly or indirectly, in another right to receive production, which other interest is a tax shelter or a tax shelter investment (as defined by section 143.2). 
  
  ### Amount of deduction if non-arm’s length disposition
  
  (10) Where this subsection applies because of subsection 18.1(8) or 18.1(9) to a disposition or expiry in a taxation year or a preceding taxation year of a taxpayer’s right to receive production to which a matchable expenditure relates, 
  (a) the amount deductible under subsection 18.1(3) in respect of the expenditure in computing the taxpayer’s income for a taxation year that ends at or after the disposition or expiry of the right is the least of the amounts determined under subsection 18.1(4) for the year in respect of the expenditure; and 
  (b) the least of the amounts determined under subsection 18.1(4) in respect of the expenditure for a taxation year is deemed to be the amount, if any, determined under paragraph 18.1(4)(c) in respect of the expenditure for the year where the year includes the time that is immediately before the first time, after the disposition or expiry, 
  (i) at which the right would, if it were owned by the taxpayer, be deemed by section 128.1 or subsection 149(10) to have been disposed of by the taxpayer, 
  (ii) that is immediately before the taxpayer is subject to a loss restriction event, 
  (iii) at which winding-up of the taxpayer begins (other than a winding-up to which subsection 88(1) applies), if the taxpayer is a corporation, 
  (iv) if subsection 18.1(8) applies, at which a 30-day period begins throughout which neither the taxpayer nor a person affiliated, or who does not deal at arm’s length, with the taxpayer owns 
  (A) the substituted property, or 
  (B) a property that is identical to the substituted property and that was acquired after the day that is 31 days before the period began, or 
  (v) if subsection 18.1(9) applies, at which a 30-day period begins throughout which no taxpayer who had an interest, directly or indirectly, in the right has an interest, directly or indirectly, in another right to receive production if one or more of those direct or indirect interests in the other right is a tax shelter or tax shelter investment (as defined by section 143.2). 
  
  ### Partnerships
  
  (11) For the purpose of paragraph 18.1(10)(b), where a partnership otherwise ceases to exist at any time after a disposition or expiry referred to in subsection 18.1(10), the partnership is deemed not to have ceased to exist, and each taxpayer who was a member of the partnership immediately before the partnership would, but for this subsection, have ceased to exist is deemed to remain a member of the partnership until the time that is immediately after the first of the times described in subparagraphs 18.1(10)(b)(i) to 18.1(10)(b)(v). 
  
  ### Identical property
  
  (12) For the purposes of subsections (8) and (10), a right to acquire a particular right to receive production (other than a right, as security only, derived from a mortgage, hypothec, agreement of sale or similar obligation) is deemed to be a right to receive production that is identical to the particular right. 
  
  ### Application of section 143.2
  
  (13) For the purpose of applying section 143.2 to an amount that would, if this section were read without reference to this subsection, be a matchable expenditure any portion of the cost of which is deductible under subsection 18.1(3), the expenditure is deemed to be a tax shelter investment and that section shall be read without reference to subparagraph 143.2(6)(b)(ii). 
  
  ### Debt obligations
  
  (14) Where the rate of return on a taxpayer’s right to receive production to which a matchable expenditure (other than an expenditure no portion of which would, if this section were read without reference to this subsection, be deductible under subsection 18.1(3) in computing the taxpayer’s income) relates is reasonably certain at the time the taxpayer acquires the right, 
  (a) the right is, for the purposes of subsection 12(9) and Part LXX of the Income Tax Regulations, deemed to be a debt obligation in respect of which no interest is stipulated to be payable in respect of its principal amount and the obligation is deemed to be satisfied at the time the right terminates for an amount equal to the total of the return on the obligation and the amount that would otherwise be the matchable expenditure that is related to the right; and  
  (b) notwithstanding subsection 18.1(3), no amount may be deducted in computing the taxpayer’s income in respect of any matchable expenditure that relates to the right. 
  
  ### Non-application — risks ceded between insurers
  
  (15) Subsections (2) to (13) do not apply to a taxpayer’s matchable expenditure in respect of a right to receive production if 
  (a) the expenditure is in respect of commissions, or other expenses, related to the issuance of an insurance policy for which all or a portion of a risk has been ceded to the taxpayer; and 
  (b) the taxpayer and the person to whom the expenditure is made, or is to be made, are both insurers who are subject to the supervision of 
  (i) the Superintendent of Financial Institutions, if the taxpayer or that person, as the case may be, is an insurer who is required by law to report to the Superintendent of Financial Institutions, or 
  (ii) the Superintendent of Insurance, or other similar officer or authority, of the province under whose laws the insurer is incorporated, in any other case. 
  
  ### Non-application — no rights, tax benefits or shelters
  
  (16) Subsections (2) to (13) do not apply to a taxpayer’s matchable expenditure in respect of a right to receive production if 
  (a) no portion of the matchable expenditure can reasonably be considered to have been paid to another taxpayer, or to a person or partnership with whom the other taxpayer does not deal at arm’s length, to acquire the right from the other taxpayer; 
  (b) no portion of the matchable expenditure can reasonably be considered to relate to a tax shelter or a tax shelter investment (within the meaning assigned by subsection 143.2(1)); and 
  (c) none of the main purposes for making the matchable expenditure can reasonably be considered to have been to obtain a tax benefit for the taxpayer, a person or partnership with whom the taxpayer does not deal at arm’s length, or a person or partnership that holds, directly or indirectly, an interest in the taxpayer. 
  
  ### Revenue exception
  
  (17) Paragraph (4)(a) does not apply in determining the amount for a taxation year that may be deducted in respect of a taxpayer’s matchable expenditure in respect of a right to receive production if 
  (a) before the end of the taxation year in which the matchable expenditure is made, the total of all amounts each of which is included in computing the taxpayer’s income for the year (other than any portion of any of those amounts that is the subject of a reserve claimed by the taxpayer for the year under this Act) in respect of the right to receive production that relates to the matchable expenditure exceeds 80% of the matchable expenditure; and 
  (b) no portion of the matchable expenditure can reasonably be considered to have been paid to another taxpayer, or to a person or partnership with whom the other taxpayer does not deal at arm’s length, to acquire the right from the other taxpayer. 
  18.2  [Repealed, 2009, c. 2, s. 6]  
  
  ### Definitions
  
  18.3 (1) The following definitions apply in this section.  
  *entity* has the same meaning as in subsection 122.1(1). (entité)   
  *equity value* has the same meaning as in subsection 122.1(1). (valeur des capitaux propres)   
  *real estate investment trust* has the same meaning as in subsection 122.1(1). (fiducie de placement immobilier)   
  *security*, of an entity, means  
  (a) a liability of the entity; 
  (b) if the entity is a corporation, 
  (i) a share of the capital stock of the corporation, and 
  (ii) a right to control in any manner whatever the voting rights of a share of the capital stock of the corporation if it can reasonably be concluded that one of the reasons that a person or partnership holds the right to control is to avoid the application of subsection (3) or 12.6(3); 
  (c) if the entity is a trust, an income or a capital interest in the trust; and 
  (d) if the entity is a partnership, an interest as a member of the partnership. ( titre)   
  *stapled security*, of a particular entity at any time, means a particular security of the particular entity if at that time  
  (a) another security (referred to in this section as the “reference security”) 
  (i) is or may be required to be transferred together or concurrently with the particular security as a term or condition of the particular security, the reference security, or an agreement or arrangement to which the particular entity (or if the reference security is a security of another entity, the other entity) is a party, or 
  (ii) is listed or traded with the particular security on a stock exchange or other public market under a single trading symbol; 
  (b) the particular security or the reference security is listed or traded on a stock exchange or other public market; and 
  (c) any of the following applies: 
  (i) the reference security and the particular security are securities of the particular entity and the particular entity is a corporation, SIFT partnership or SIFT trust, 
  (ii) the reference security is a security of another entity, one of the particular entity or the other entity is a subsidiary of the other, and the particular entity or the other entity is a corporation, SIFT partnership or SIFT trust, or 
  (iii) the reference security is a security of another entity and the particular entity or the other entity is a real estate investment trust or a subsidiary of a real estate investment trust. ( titre agrafé)   
  *subsidiary*, of a particular entity at any time, means  
  (a) an entity in which the particular entity holds at that time securities that have a total fair market value greater than 10% of the equity value of the entity; and 
  (b) an entity that at that time is a subsidiary of an entity that is a subsidiary of the particular entity. ( filiale)   
  *transition period*, of an entity, means  
  (a) if one or more securities of the entity would have been stapled securities of the entity on October 31, 2006 and July 19, 2011 had the definition 
  *stapled security* in this subsection come into force on October 31, 2006, the period that begins on July 20, 2011 and ends on the earliest of  
  (i) January 1, 2016, 
  (ii) the first day after July 20, 2011 on which any of those securities is materially altered, and 
  (iii) the first day after July 20, 2011 on which any security of the entity becomes a stapled security other than by way of 
  (A) a transaction 
  (I) that is completed under the terms of an agreement in writing entered into before July 20, 2011 if no party to the agreement may be excused from completing the transaction as a result of amendments to this Act, and 
  (II) that is not the issuance of a security in satisfaction of a right to enforce payment of an amount by the entity, or 
  (B) the issuance of the security in satisfaction of a right to enforce payment of an amount that became payable by the entity on another security of the entity before July 20, 2011, if the other security was a stapled security on July 20, 2011 and the issuance was made under a term or condition of the other security in effect on July 20, 2011; 
  (b) if paragraph (a) does not apply to the entity and one or more securities of the entity would have been stapled securities of the entity on July 19, 2011 had the definition 
  *stapled security* in this subsection come into force on July 19, 2011, the period that begins on July 20, 2011 and ends on the earliest of  
  (i) July 20, 2012, 
  (ii) the first day after July 20, 2011 on which any of those securities is materially altered, and 
  (iii) the first day after July 20, 2011 on which any security of the entity becomes a stapled security other than by way of 
  (A) a transaction 
  (I) that is completed under the terms of an agreement in writing entered into before July 20, 2011 if no party to the agreement may be excused from completing the transaction as a result of amendments to this Act, and 
  (II) that is not the issuance of a security in satisfaction of a right to enforce payment of an amount by the entity, or 
  (B) the issuance of the security in satisfaction of a right to enforce payment of an amount that became payable by the entity on another security of the entity before July 20, 2011, if the other security was a stapled security on July 20, 2011 and the issuance was made under a term or condition of the other security in effect on July 20, 2011; and 
  (c) in any other case, if the entity is a subsidiary of another entity on July 20, 2011 and the other entity has a transition period, the period that begins on July 20, 2011 and ends on the earliest of 
  (i) the day on which the other entity’s transition period ends, 
  (ii) the first day after July 20, 2011 on which the entity ceases to be a subsidiary of the other entity, and 
  (iii) the first day after July 20, 2011 on which any security of the entity becomes a stapled security other than by way of 
  (A) a transaction 
  (I) that is completed under the terms of an agreement in writing entered into before July 20, 2011 if no party to the agreement may be excused from completing the transaction as a result of amendments to this Act, and 
  (II) that is not the issuance of a security in satisfaction of a right to enforce payment of an amount by the entity, or 
  (B) the issuance of the security in satisfaction of a right to enforce payment of an amount that became payable by the entity on another security of the entity before July 20, 2011, if the other security was a stapled security on July 20, 2011 and the issuance was made under a term or condition of the other security in effect on July 20, 2011. ( période de transition)  
  
  ### Property representing security
  
  (2) For the purpose of determining whether a particular security of an entity is a stapled security, if a receipt or similar property (referred to in this subsection as the “receipt”) represents all or a portion of the particular security and the receipt would be described in paragraphs (a) and (b) of the definition 
  *stapled security* in subsection (1) if it were a security of the entity, then  
  (a) the particular security is deemed to be described in those paragraphs; and 
  (b) a security that would be a reference security in respect of the receipt is deemed to be a reference security in respect of the particular security. 
  
  ### Amounts not deductible
  
  (3) Notwithstanding any other provision of this Act, in computing the income of a particular entity for a taxation year from a business or property, no deduction may be made in respect of an amount 
  (a) that is paid or payable after July 19, 2011, unless the amount is paid or payable in respect of the entity’s transition period; and 
  (b) that is 
  (i) interest paid or payable on a liability of the particular entity that is a stapled security, unless each reference security in respect of the stapled security is a liability, or 
  (ii) if a security of the particular entity, a subsidiary of the particular entity or an entity of which the particular entity is a subsidiary is a reference security in respect of a stapled security of a real estate investment trust or a subsidiary of a real estate investment trust, an amount paid or payable to 
  (A) the real estate investment trust, 
  (B) a subsidiary of the real estate investment trust, or 
  (C) any person or partnership on condition that any person or partnership pays or makes payable an amount to the real estate investment trust or a subsidiary of the real estate investment trust. 
  
  ### Limitation re advertising expense — newspapers
  
  19 (1) In computing income, no deduction shall be made in respect of an otherwise deductible outlay or expense of a taxpayer for advertising space in an issue of a newspaper for an advertisement directed primarily to a market in Canada unless 
  (a) the issue is a Canadian issue of a Canadian newspaper; or 
  (b) the issue is an issue of a newspaper that would be a Canadian issue of a Canadian newspaper except that 
  (i) its type has been wholly set in the United States or has been partly set in the United States with the remainder having been set in Canada, or 
  (ii) it has been wholly printed in the United States or has been partly printed in the United States with the remainder having been printed in Canada. 
  
  ### Where s. (1) does not apply
  
  (3) Subsection 19(1) does not apply with respect to an advertisement in a special issue or edition of a newspaper that is edited in whole or in part and printed and published outside Canada if that special issue or edition is devoted to features or news related primarily to Canada and the publishers thereof publish such an issue or edition not more frequently than twice a year. 
  
  ### Definitions
  
  (5) In this section,  
  *Canadian issue* of a newspaper means an issue, including a special issue,  
  (a) the type of which, other than the type for advertisements or features, is set in Canada, 
  (b) all of which, exclusive of any comics supplement, is printed in Canada, 
  (c) that is edited in Canada by individuals resident in Canada, and 
  (d) that is published in Canada; ( édition canadienne)   
  *Canadian newspaper* means a newspaper the exclusive right to produce and publish issues of which is held by one or more of the following:  
  (a) a Canadian citizen, 
  (b) a partnership 
  (i) in which interests representing in value at least 3/4 of the total value of the partnership property are beneficially owned by, and 
  (ii) at least 3/4 of each income or loss of which from any source is included in the determination of the income of, corporations described in paragraph (e) or Canadian citizens or any combination thereof, 
  (c) an association or society of which at least 3/4 of the members are Canadian citizens, 
  (d) Her Majesty in right of Canada or a province, or a municipality in Canada, or 
  (e) a corporation 
  (i) that is incorporated under the laws of Canada or a province, 
  (ii) of which the chairperson or other presiding officer and at least 3/4 of the directors or other similar officers are Canadian citizens, and 
  (iii) that, if it is a corporation having share capital, is 
  (A) a public corporation a class or classes of shares of the capital stock of which are listed on a designated stock exchange in Canada, other than a corporation controlled by citizens or subjects of a country other than Canada, or 
  (B) a corporation of which at least 3/4 of the shares having full voting rights under all circumstances, and shares having a fair market value in total of at least 3/4 of the fair market value of all of the issued shares of the corporation, are beneficially owned by Canadian citizens or by public corporations a class or classes of shares of the capital stock of which are listed on a designated stock exchange in Canada, other than a public corporation controlled by citizens or subjects of a country other than Canada, and, for the purposes of clause (B), where shares of a class of the capital stock of a corporation are owned, or deemed by this definition to be owned, at any time by another corporation (in this definition referred to as the “holding corporation”), other than a public corporation a class or classes of shares of the capital stock of which are listed on a designated stock exchange in Canada, each shareholder of the holding corporation shall be deemed to own at that time that proportion of the number of such shares of that class that 
  (C) the fair market value of the shares of the capital stock of the holding corporation owned at that time by the shareholder is of 
  (D) the fair market value of all the issued shares of the capital stock of the holding corporation outstanding at that time, and where at any time shares of a class of the capital stock of a corporation are owned, or are deemed by this definition to be owned, by a partnership, each member of the partnership shall be deemed to own at that time the least proportion of the number of such shares of that class that 
  (E) the member’s share of the income or loss of the partnership from any source for its fiscal period that includes that time is of 
  (F) the income or loss of the partnership from that source for its fiscal period that includes that time, and for this purpose, where the income and loss of a partnership from any source for a fiscal period are nil, the partnership shall be deemed to have had income from that source for that period in the amount of $1,000,000; ( journal canadien)   
  *substantially the same* [Repealed, 2001, c. 17, s. 11(2)]   
  *United States* means  
  (a) the United States of America, but does not include Puerto Rico, the Virgin Islands, Guam or any other United States possession or territory, and 
  (b) any areas beyond the territorial sea of the United States within which, in accordance with international law and its domestic laws, the United States may exercise rights with respect to the seabed and subsoil and the natural resources of those areas. ( États-Unis)  
  
  ### Interpretation
  
  (5.1) In this section, each of the following is deemed to be a Canadian citizen: 
  (a) a trust or corporation described in paragraph 149(1)(o) or (o.1) formed in connection with a pension plan that exists for the benefit of individuals a majority of whom are Canadian citizens; 
  (b) a trust described in paragraph 149(1)(r) or (x), the annuitant in respect of which is a Canadian citizen; 
  (c) a mutual fund trust, within the meaning assigned by subsection 132(6), other than a mutual fund trust the majority of the units of which are held by citizens or subjects of a country other than Canada; 
  (d) a trust, each beneficiary of which is a person, partnership, association or society described in any of paragraphs (a) to (e) of the definition 
  *Canadian newspaper* in subsection (5); and  
  (e) a person, association or society described in paragraph (c) or (d) of the definition 
  *Canadian newspaper* in subsection (5).  
  
  ### Trust property
  
  (6) Where the right that is held by any person, partnership, association or society described in the definition 
  *Canadian newspaper* in subsection (5) to produce and publish issues of a newspaper is held as property of a trust or estate, the newspaper is not a Canadian newspaper unless each beneficiary under the trust or estate is a person, partnership, association or society described in that definition.  
  
  ### Grace period
  
  (7) A Canadian newspaper that would, but for this subsection, cease to be a Canadian newspaper, is deemed to continue to be a Canadian newspaper until the end of the 12th month that follows the month in which it would, but for this subsection, have ceased to be a Canadian newspaper. 
  
  ### Non-Canadian newspaper
  
  (8) Where at any time one or more persons or partnerships that are not described in any of paragraphs (a) to (e) of the definition 
  *Canadian newspaper* in subsection (5) have any direct or indirect influence that, if exercised, would result in control in fact of a person or partnership that holds a right to produce or publish issues of a newspaper, the newspaper is deemed not to be a Canadian newspaper at that time.  
  
  ### Definitions
  
  19.01 (1) The definitions in this subsection apply in this section.  
  *advertisement directed at the Canadian market* has the same meaning as the expression 
  *directed at the Canadian market* in section 2 of the Foreign Publishers Advertising Services Act and includes a reference to that expression made by or under that Act. (annonce destinée au marché canadien)   
  *original editorial content* in respect of an issue of a periodical means non-advertising content  
  (a) the author of which is a Canadian citizen or a permanent resident of Canada within the meaning assigned by the Immigration Act and, for this purpose, “author” includes a writer, a journalist, an illustrator and a photographer; or  
  (b) that is created for the Canadian market and has not been published in any other edition of that issue of the periodical published outside Canada. ( contenu rédactionnel original)   
  *periodical* has the meaning assigned by section 2 of the Foreign Publishers Advertising Services Act. (périodique)  
  
  ### Limitation re advertising expenses — periodicals
  
  (2) Subject to subsections (3) and (4), in computing income, no deduction shall be made by a taxpayer in respect of an otherwise deductible outlay or expense for advertising space in an issue of a periodical for an advertisement directed at the Canadian market. 
  
  ### 100% deduction
  
  (3) A taxpayer may deduct in computing income an outlay or expense of the taxpayer for advertising space in an issue of a periodical for an advertisement directed at the Canadian market if 
  (a) the original editorial content in the issue is 80% or more of the total non-advertising content in the issue; and 
  (b) the outlay or expense would, but for subsection (2), be deductible in computing the taxpayer’s income. 
  
  ### 50% deduction
  
  (4) A taxpayer may deduct in computing income 50% of an outlay or expense of the taxpayer for advertising space in an issue of a periodical for an advertisement directed at the Canadian market if 
  (a) the original editorial content in the issue is less than 80% of the total non-advertising content in the issue; and 
  (b) the outlay or expense would, but for subsection (2), be deductible in computing the taxpayer’s income. 
  
  ### Application
  
  (5) For the purposes of subsections (3) and (4), 
  (a) the percentage that original editorial content is of total non-advertising content is the percentage that the total space occupied by original editorial content in the issue is of the total space occupied by non-advertising content in the issue; and 
  (b) the Minister may obtain the advice of the Department of Canadian Heritage for the purpose of 
  (i) determining the result obtained under paragraph (a), and 
  (ii) interpreting any expression defined in this section that is defined in the Foreign Publishers Advertising Services Act.  
  
  ### Editions of issues
  
  (6) For the purposes of this section, 
  (a) where an issue of a periodical is published in several versions, each version is an edition of that issue; and 
  (b) where an issue of a periodical is published in only one version, that version is an edition of that issue. 
  
  ### Limitation re advertising expense on broadcasting undertaking
  
  19.1 (1) Subject to subsection 19.1(2), in computing income, no deduction shall be made in respect of an otherwise deductible outlay or expense of a taxpayer made or incurred after September 21, 1976 for an advertisement directed primarily to a market in Canada and broadcast by a foreign broadcasting undertaking. 
  
  ### Exception
  
  (2) In computing income, a deduction may be made in respect of an outlay or expense made or incurred before September 22, 1977 for an advertisement directed primarily to a market in Canada and broadcast by a foreign broadcasting undertaking pursuant to 
  (a) a written agreement entered into on or before January 23, 1975; or 
  (b) a written agreement entered into after January 23, 1975 and before September 22, 1976 if the agreement is for a term of one year or less and by its express terms is not capable of being extended or renewed. 
  
  ### Definitions
  
  (4) In this section,  
  *foreign broadcasting undertaking* means a network operation or a broadcasting transmitting undertaking located outside Canada or on a ship or aircraft not registered in Canada; (entreprise étrangère de radiodiffusion)   
  *network* includes any operation involving two or more broadcasting undertakings whereby control over all or any part of the programs or program schedules of any of the broadcasting undertakings involved in the operation is delegated to a network operator. (réseau)  
  
  ### Deductions permitted in computing income from business or property
  
  20 (1) Notwithstanding paragraphs 18(1)(a), 18(1)(b) and 18(1)(h), in computing a taxpayer’s income for a taxation year from a business or property, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto 
  
  ### Capital cost of property
  
  (a) such part of the capital cost to the taxpayer of property, or such amount in respect of the capital cost to the taxpayer of property, if any, as is allowed by regulation; 
  
  ### Incorporation expenses
  
  (b) the lesser of 
  (i) the portion of the amount (that is not otherwise deductible in computing the income of the taxpayer) that is an expense incurred in the year for the incorporation of a corporation, and 
  (ii) $3,000 less the total of all amounts each of which is an amount deducted by another taxpayer in respect of the incorporation of the corporation; 
  
  ### Interest
  
  (c) an amount paid in the year or payable in respect of the year (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income), pursuant to a legal obligation to pay interest on 
  (i) borrowed money used for the purpose of earning income from a business or property (other than borrowed money used to acquire property the income from which would be exempt or to acquire a life insurance policy), 
  (ii) an amount payable for property acquired for the purpose of gaining or producing income from the property or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy), 
  (iii) an amount paid to the taxpayer under 
  (A) an appropriation Act and on terms and conditions approved by the Treasury Board for the purpose of advancing or sustaining the technological capability of Canadian manufacturing or other industry, or 
  (B) the Northern Mineral Exploration Assistance Regulations made under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, or  
  (iv) borrowed money used to acquire an interest in an annuity contract in respect of which section 12.2 applies (or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest) except that, where annuity payments have begun under the contract in a preceding taxation year, the amount of interest paid or payable in the year shall not be deducted to the extent that it exceeds the amount included under section 12.2 in computing the taxpayer’s income for the year in respect of the taxpayer’s interest in the contract, or a reasonable amount in respect thereof, whichever is the lesser; 
  
  ### Compound interest
  
  (d) an amount paid in the year pursuant to a legal obligation to pay interest on an amount that would be deductible under paragraph 20(1)(c) if it were paid in the year or payable in respect of the year; 
  
  ### Expenses re financing
  
  (e) such part of an amount (other than an excluded amount) that is not otherwise deductible in computing the income of the taxpayer and that is an expense incurred in the year or a preceding taxation year 
  (i) in the course of an issuance or sale of units of the taxpayer where the taxpayer is a unit trust, of interests in a partnership or syndicate by the partnership or syndicate, as the case may be, or of shares of the capital stock of the taxpayer, 
  (ii) in the course of a borrowing of money used by the taxpayer for the purpose of earning income from a business or property (other than money used by the taxpayer for the purpose of acquiring property the income from which would be exempt), 
  (ii.1) in the course of incurring indebtedness that is an amount payable for property acquired for the purpose of gaining or producing income therefrom or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy), or 
  (ii.2) in the course of a rescheduling or restructuring of a debt obligation of the taxpayer or an assumption of a debt obligation by the taxpayer, where the debt obligation is 
  (A) in respect of a borrowing described in subparagraph 20(1)(e)(ii), or 
  (B) in respect of an amount payable described in subparagraph 20(1)(e)(ii.1), and in the case of a rescheduling or restructuring, the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation, (including a commission, fee, or other amount paid or payable for or on account of services rendered by a person as a salesperson, agent or dealer in securities in the course of the issuance, sale or borrowing) that is the lesser of 
  (iii) that proportion of 20% of the expense that the number of days in the year is of 365 and 
  (iv) the amount, if any, by which the expense exceeds the total of all amounts deductible by the taxpayer in respect of the expense in computing the taxpayer’s income for a preceding taxation year, and for the purposes of this paragraph, 
  (iv.1)  
  *excluded amount* means  
  (A) an amount paid or payable as or on account of the principal amount of a debt obligation or interest in respect of a debt obligation, 
  (B) an amount that is contingent or dependent on the use of, or production from, property, or 
  (C) an amount that is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation, 
  (v) where in a taxation year all debt obligations in respect of a borrowing described in subparagraph 20(1)(e)(ii) or in respect of indebtedness described in subparagraph 20(1)(e)(ii.1) are settled or extinguished (otherwise than in a transaction made as part of a series of borrowings or other transactions and repayments), by the taxpayer for consideration that does not include any unit, interest, share or debt obligation of the taxpayer or any person with whom the taxpayer does not deal at arm’s length or any partnership or trust of which the taxpayer or any person with whom the taxpayer does not deal at arm’s length is a member or beneficiary, this paragraph shall be read without reference to the words “the lesser of” and to subparagraph 20(1)(e)(iii), and 
  (vi) where a partnership has ceased to exist, 
  (A) no amount may be deducted by the partnership under this paragraph in computing its income for its last fiscal period, and 
  (B) there may be deducted for a taxation year ending after the time that is immediately before the end of the partnership’s last fiscal period (referred to in this clause as the “particular time”) by any person or partnership that was a member of the partnership at the particular time, that proportion of the amount that would, but for this subparagraph, have been deductible under this paragraph by the partnership in the fiscal period ending in the year had it continued to exist and had the partnership interest not been redeemed, acquired or cancelled, that the fair market value of the member’s interest in the partnership at the particular time is of the fair market value of all the interests in the partnership at the particular time; 
  
  ### Annual fees, etc.
  
  (e.1) an amount payable by the taxpayer (other than a payment that is contingent or dependent on the use of, or production from, property or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation) as a standby charge, guarantee fee, registrar fee, transfer agent fee, filing fee, service fee or any similar fee, that can reasonably be considered to relate solely to the year and that is incurred by the taxpayer 
  (i) for the purpose of borrowing money to be used by the taxpayer for the purpose of earning income from a business or property (other than borrowed money used by the taxpayer for the purpose of acquiring property the income from which would be exempt income), 
  (ii) in the course of incurring indebtedness that is an amount payable for property acquired for the purpose of gaining or producing income therefrom or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy), or 
  (iii) for the purpose of rescheduling or restructuring a debt obligation of the taxpayer or an assumption of a debt obligation by the taxpayer, where the debt obligation is 
  (A) in respect of a borrowing described in subparagraph 20(1)(e.1)(i), or 
  (B) in respect of an amount payable described in subparagraph 20(1)(e.1)(ii), and in the case of a rescheduling or restructuring, the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation. 
  
  ### Premiums on life insurance — collateral
  
  (e.2) the least of the following amounts in respect of a life insurance policy (other than an annuity contract or LIA policy): 
  (i) the premiums payable by the taxpayer under the policy in respect of the year, if 
  (A) an interest in the policy is assigned to a restricted financial institution in the course of a borrowing from the institution, 
  (B) the interest payable in respect of the borrowing is or would, but for subsections 18(2) and 18(3.1) and sections 21 and 28, be deductible in computing the taxpayer’s income for the year, and 
  (C) the assignment referred to in clause 20(1)(e.2)(i)(A) is required by the institution as collateral for the borrowing 
  (ii) the net cost of pure insurance in respect of the year (other than in respect of a period after 2013 during which the policy is a 10/8 policy), as determined in accordance with the regulations, in respect of the interest in the policy referred to in clause (i)(A), and 
  (iii) the portion, of the lesser of the amounts determined under subparagraphs (i) and (ii) in respect of the policy, that can reasonably be considered to relate to the amount owing from time to time during the year by the taxpayer to the institution under the borrowing; 
  
  ### Discount on certain obligations
  
  (f) an amount paid in the year in satisfaction of the principal amount of any bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by the taxpayer after June 18, 1971 on which interest was stipulated to be payable, to the extent that the amount so paid does not exceed, 
  (i) in any case where the obligation was issued for an amount not less than 97% of its principal amount, and the yield from the obligation, expressed in terms of an annual rate on the amount for which the obligation was issued (which annual rate shall, if the terms of the obligation or any agreement relating thereto conferred on its holder a right to demand payment of the principal amount of the obligation or the amount outstanding as or on account of its principal amount, as the case may be, before the maturity of the obligation, be calculated on the basis of the yield that produces the highest annual rate obtainable either on the maturity of the obligation or conditional on the exercise of any such right) does not exceed 4/3 of the interest stipulated to be payable on the obligation, expressed in terms of an annual rate on 
  (A) the principal amount of the obligation, if no amount is payable on account of the principal amount before the maturity of the obligation, or 
  (B) the amount outstanding from time to time as or on account of the principal amount of the obligation, in any other case, the amount by which the lesser of the principal amount of the obligation and all amounts paid in the year or in any preceding year in satisfaction of its principal amount exceeds the amount for which the obligation was issued, and 
  (ii) in any other case, 1/2 of the lesser of the amount so paid and the amount by which the lesser of the principal amount of the obligation and all amounts paid in the year or in any preceding taxation year in satisfaction of its principal amount exceeds the amount for which the obligation was issued; 
  
  ### Share transfer and other fees
  
  (g) where the taxpayer is a corporation, 
  (i) an amount payable in the year as a fee for services rendered by a person as a registrar of or agent for the transfer of shares of the capital stock of the taxpayer or as an agent for the remittance to shareholders of the taxpayer of dividends declared by it, 
  (ii) an amount payable in the year as a fee to a stock exchange for the listing of shares of the capital stock of the taxpayer, and 
  (iii) an expense incurred in the year in the course of printing and issuing a financial report to shareholders of the taxpayer or to any other person entitled by law to receive the report; 
  
  ### Repayment of loan by shareholder
  
  (j) such part of any loan or indebtedness repaid by the taxpayer in the year as was by virtue of subsection 15(2) included in computing the taxpayer’s income for a preceding taxation year (except to the extent that the amount of the loan or indebtedness was deductible from the taxpayer’s income for the purpose of computing the taxpayer’s taxable income for that preceding taxation year), if it is established by subsequent events or otherwise that the repayment was not made as part of a series of loans or other transactions and repayments; 
  
  ### Doubtful or impaired debts
  
  (l) a reserve determined as the total of 
  (i) a reasonable amount in respect of doubtful debts (other than a debt to which subparagraph 20(1)(l)(ii) applies) that have been included in computing the taxpayer’s income for the year or a preceding taxation year, and 
  (ii) where the taxpayer is a financial institution (as defined in subsection 142.2(1)) in the year or a taxpayer whose ordinary business includes the lending of money, an amount in respect of properties (other than mark-to-market properties, as defined in that subsection) that are 
  (A) impaired loans or lending assets that are specified debt obligations (as defined in that subsection) of the taxpayer, or 
  (B) impaired loans or lending assets that were made or acquired by the taxpayer in the ordinary course of the taxpayer’s business of insurance or the lending of money equal to the total of 
  (C) the percentage (not exceeding 100%) that the taxpayer claims of the prescribed reserve amount for the taxpayer for the year, and 
  (D) in respect of loans, lending assets or specified debt obligations that are impaired and for which an amount is not deductible for the year because of clause 20(1)(l)(ii)(C) (each of which in this clause is referred to as a “loan”), the taxpayer’s specified percentage for the year of the lesser of 
  (I) the total of all amounts each of which is a reasonable amount as a reserve (other than any portion of which is in respect of a sectoral reserve) for a loan in respect of the amortized cost of the loan to the taxpayer at the end of the year, and 
  (II) the amount determined by the formula is the amount that is the taxpayer’s reserve or allowance for impairment (other than any portion of the amount that is in respect of a sectoral reserve) for all loans that is determined for the year in accordance with generally accepted accounting principles, and is the total of all amounts each of which is the specified reserve adjustment for a loan (other than an income bond or an income debenture) for the year or a preceding taxation year; 
  
  ### Reserve for guarantees, etc.
  
  (l.1) a reserve in respect of credit risks under guarantees, indemnities, letters of credit or other credit facilities, bankers’ acceptances, interest rate or currency swaps, foreign exchange or other future or option contracts, interest rate protection agreements, risk participations and other similar instruments or commitments issued, made or assumed by a taxpayer who was an insurer or whose ordinary business included the lending of money in favour of persons with whom the taxpayer deals at arm’s length in the ordinary course of the taxpayer’s business of insurance or the lending of money, equal to the lesser of 
  (i) a reasonable amount as a reserve for credit risk losses of the taxpayer expected to arise after the end of the year under or in respect of those instruments or commitments, and 
  (ii) 90% of the reserve for credit risk losses of the taxpayer expected to arise after the end of the year under or in respect of those instruments or commitments determined for the year in accordance with generally accepted accounting principles, or such lesser amount as the taxpayer may claim; 
  
  ### Reserve in respect of certain goods and services
  
  (m) subject to subsection 20(6), where amounts described in paragraph 12(1)(a) have been included in computing the taxpayer’s income from a business for the year or a previous year, a reasonable amount as a reserve in respect of 
  (i) goods that it is reasonably anticipated will have to be delivered after the end of the year, 
  (ii) services that it is reasonably anticipated will have to be rendered after the end of the year, 
  (iii) periods for which rent or other amounts for the possession or use of land or of chattels or movables have been paid in advance, or 
  (iv) repayments under arrangements or understandings of the class described in subparagraph 12(1)(a)(ii) that it is reasonably anticipated will have to be made after the end of the year on the return or resale to the taxpayer of articles other than bottles; 
  
  ### Manufacturer’s warranty reserve
  
  (m.1) where an amount described in paragraph 12(1)(a) has been included in computing the taxpayer’s income from a business for the year or a preceding taxation year, a reasonable amount as a reserve in respect of goods or services that it is reasonably anticipated will have to be delivered or rendered after the end of the year pursuant to an agreement for an extended warranty 
  (i) entered into by the taxpayer with a person with whom the taxpayer was dealing at arm’s length, and 
  (ii) under which the only obligation of the taxpayer is to provide those goods or services with respect to property manufactured by the taxpayer or by a corporation related to the taxpayer, not exceeding that portion of the amount paid or payable by the taxpayer to an insurer that carries on an insurance business in Canada to insure the taxpayer’s liability under the agreement in respect of an outlay or expense made or incurred after December 11, 1979 and in respect of the period after the end of the year; 
  
  ### Repayment of amount previously included in income
  
  (m.2) a repayment in the year by the taxpayer of an amount required by paragraph 12(1)(a) to be included in computing the taxpayer’s income from a business for the year or a preceding taxation year; 
  (m.3) the unamortized amount at the end of the year in respect of the amount that was received in excess of the principal amount of a bond (in this paragraph referred to as the “premium”) received by the issuer in the year, or a previous year, for issuing the bond (in this paragraph referred to as the “new bond”) if 
  (i) the terms of the new bond are identical to the terms of bonds previously issued by the taxpayer (in this paragraph referred to as the “old bonds”), except for the date of issuance and total principal amount of the bonds, 
  (ii) the old bonds were part of an issuance (in this paragraph referred to as the “original issuance”) of bonds by the taxpayer, 
  (iii) the interest rate on the old bonds was reasonable at the time of the original issuance, 
  (iv) the new bond is issued on the re-opening of the original issuance, 
  (v) the amount of the premium at the time of issuance of the new bond is reasonable, and 
  (vi) the amount of the premium has been included in the taxpayer’s income for the year or a previous taxation year; 
  
  ### Reserve for unpaid amounts
  
  (n) if an amount included in computing the taxpayer’s income from the business for the year or for a preceding taxation year in respect of property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real or immovable property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, a reasonable amount as a reserve in respect of any part of the amount that can reasonably be regarded as a portion of the profit from the sale; 
  
  ### Reserve for quadrennial survey
  
  (o) such amount as may be prescribed as a reserve for expenses to be incurred by the taxpayer by reason of quadrennial or other special surveys required under the Canada Shipping Act, or the regulations under that Act, or under the rules of any society or association for the classification and registry of shipping approved by the Minister of Transport for the purposes of the Canada Shipping Act ;  
  
  ### Bad debts
  
  (p) the total of 
  (i) all debts owing to the taxpayer that are established by the taxpayer to have become bad debts in the year and that have been included in computing the taxpayer’s income for the year or a preceding taxation year, and 
  (ii) all amounts each of which is that part of the amortized cost to the taxpayer at the end of the year of a loan or lending asset (other than a mark-to-market property, as defined in subsection 142.2(1)) that is established in the year by the taxpayer to have become uncollectible and that, 
  (A) where the taxpayer is an insurer or a taxpayer whose ordinary business includes the lending of money, was made or acquired in the ordinary course of the taxpayer’s business of insurance or the lending of money, or 
  (B) where the taxpayer is a financial institution (as defined in subsection 142.2(1)) in the year, is a specified debt obligation (as defined in that subsection) of the taxpayer; 
  
  ### Employer’s contributions to RPP or PRPP
  
  (q) such amount in respect of employer contributions to registered pension plans or pooled registered pension plans as is permitted under subsection 147.2(1) or 147.5(10); 
  
  ### Employer’s contributions under retirement compensation arrangement
  
  (r) amounts paid by the taxpayer in the year as contributions under a retirement compensation arrangement in respect of services rendered by an employee or former employee of the taxpayer, other than where it is established, by subsequent events or otherwise, that the amounts were paid as part of a series of payments and refunds of contributions under the arrangement; 
  
  ### Employer’s contributions under employee life and health trust
  
  (s) such amount in respect of employer contributions paid to a trustee under an employee life and health trust as is permitted by subsections 144.1(4) to (7); 
  
  ### Patronage dividends
  
  (u) such amounts in respect of payments made by the taxpayer pursuant to allocations in proportion to patronage as are permitted by section 135; 
  
  ### Mining taxes
  
  (v) such amount as is allowed by regulation in respect of taxes on income from mining operations; 
  (v.1)  [Repealed, 2003, c. 28, s. 3]  
  
  ### Employer’s contributions under profit sharing plan
  
  (w) an amount paid by the taxpayer to a trustee in trust for employees of the taxpayer or of a corporation with whom the taxpayer does not deal at arm’s length, under an employees profit sharing plan as permitted by section 144; 
  
  ### Employer’s contributions under registered supplementary unemployment benefit plan
  
  (x) an amount paid by the taxpayer to a trustee under a registered supplementary unemployment benefit plan as permitted by section 145; 
  
  ### Employer’s contributions under deferred profit sharing plan
  
  (y) an amount paid by the taxpayer to a trustee under a deferred profit sharing plan as permitted by subsection 147(8); 
  
  ### Cancellation of lease
  
  (z) the proportion of an amount not otherwise deductible that was paid or that became payable by the taxpayer before the end of the year to a person for the cancellation of a lease of property of the taxpayer leased by the taxpayer to that person that 
  (i) the number of days that remained in the term of the lease (including all renewal periods of the lease), not exceeding 40 years, immediately before its cancellation and that were in the year is of 
  (ii) the number of days that remained in the term of the lease (including all renewal periods of the lease), not exceeding 40 years, immediately before its cancellation, in any case where the property was owned at the end of the year by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length and no part of the amount was deductible by the taxpayer under paragraph 20(1)(z.1) in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Idem
  
  (z.1) an amount not otherwise deductible that was paid or that became payable by the taxpayer before the end of the year to a person for the cancellation of a lease of property of the taxpayer leased by the taxpayer to that person, in any case where 
  (i) the property was not owned at the end of the year by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length, and 
  (ii) no part of the amount was deductible by the taxpayer under this paragraph in computing the taxpayer’s income for any preceding taxation year, to the extent of the amount thereof (or in the case of capital property, 1/2 of the amount thereof) that was not deductible by the taxpayer under paragraph 20(1)(z) in computing the taxpayer’s income for any preceding taxation year; 
  
  ### Landscaping of grounds
  
  (aa) an amount paid by the taxpayer in the year for the landscaping of grounds around a building or other structure of the taxpayer that is used by the taxpayer primarily for the purpose of gaining or producing income therefrom or from a business; 
  
  ### Fees paid to investment counsel
  
  (bb) an amount, other than a commission, that 
  (i) is paid by the taxpayer in the year to a person or partnership the principal business of which 
  (A) is advising others as to the advisability of purchasing or selling specific shares or securities, or 
  (B) includes the provision of services in respect of the administration or management of shares or securities, and 
  (ii) is paid for 
  (A) advice as to the advisability of purchasing or selling a specific share or security of the taxpayer, or 
  (B) services in respect of the administration or management of shares or securities of the taxpayer; 
  
  ### Expenses of representation
  
  (cc) an amount paid by the taxpayer in the year as or on account of expenses incurred by the taxpayer in making any representation relating to a business carried on by the taxpayer, 
  (i) to the government of a country, province or state or to a municipal or public body performing a function of government in Canada, or 
  (ii) to an agency of a government or of a municipal or public body referred to in subparagraph 20(1)(cc)(i) that had authority to make rules, regulations or by-laws relating to the business carried on by the taxpayer, including any representation for the purpose of obtaining a licence, permit, franchise or trademark relating to the business carried on by the taxpayer; 
  
  ### Investigation of site
  
  (dd) an amount paid by the taxpayer in the year for investigating the suitability of a site for a building or other structure planned by the taxpayer for use in connection with a business carried on by the taxpayer; 
  
  ### Utilities service connection
  
  (ee) an amount paid by the taxpayer in the year to a person (other than a person with whom the taxpayer was not dealing at arm’s length) for the purpose of making a service connection to the taxpayer’s place of business for the supply, by means of wires, pipes or conduits, of electricity, gas, telephone service, water or sewers supplied by that person, to the extent that the amount so paid was not paid 
  (i) to acquire property of the taxpayer, or 
  (ii) as consideration for the goods or services for the supply of which the service connection was undertaken or made; 
  
  ### Payments by farmers
  
  (ff) an amount paid by the taxpayer in the year as a levy under the Western Grain Stabilization Act, as a premium in respect of the gross revenue insurance program established under the Farm Income Protection Act or as an administration fee in respect of a net income stabilization account;  
  (gg)  [Repealed, 1994, c. 7, Sch. VIII, s. 157]  
  
  ### Repayments of inducements, etc.
  
  (hh) an amount repaid by the taxpayer in the year pursuant to a legal obligation to repay all or part of a particular amount 
  (i) included under paragraph 12(1)(x) in computing the taxpayer’s income for the year or a preceding taxation year, or 
  (ii) that is, by reason of subparagraph 12(1)(x)(vi) or subsection 12(2.2), not included under paragraph 12(1)(x) in computing the taxpayer’s income for the year or a preceding taxation year, where the particular amount relates to an outlay or expense (other than an outlay or expense that is in respect of the cost of property of the taxpayer or that is or would be, if amounts deductible by the taxpayer were not limited by reason of paragraph 66(4)(b), subsection 66.1(2), subparagraph 66.2(2)(a)(ii), the words “30% of” in clause 66.21(4)(a)(ii)(B), clause 66.21(4)(a)(ii)(C) or (D) or subparagraph 66.4(2)(a)(ii), deductible under section 66, 66.1, 66.2, 66.21 or 66.4) that would, if the particular amount had not been received, have been deductible in computing the taxpayer’s income for the year or a preceding taxation year; 
  
  ### Repayment of obligation
  
  (hh.1) 3/4 of any amount repaid by the taxpayer in the year (on or after the time the taxpayer ceases to carry on a business) under a legal obligation to repay all or part of an amount the taxpayer received or was entitled to receive that was assistance from a government, municipality or other public authority (whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance) in respect of, or for the acquisition of, property the cost of which was an eligible capital expenditure of the taxpayer in respect of the business if the amount of the eligible capital expenditure of the taxpayer in respect of the business was reduced by paragraph 14(10)(c) because of the amount of the assistance the taxpayer received or was entitled to receive; 
  
  ### Inventory adjustment
  
  (ii) the amount required by paragraph 12(1)(r) to be included in computing the taxpayer’s income for the immediately preceding taxation year; 
  (jj)  [Repealed, 2013, c. 34, s. 180]  
  
  ### Exploration and development grants
  
  (kk) the amount of any assistance or benefit received by the taxpayer in the year as a deduction from or reimbursement of an expense that is a tax (other than the goods and services tax) or royalty to the extent that 
  (i) the tax or royalty is, by reason of the receipt of the amount by the taxpayer, not deductible in computing the taxpayer’s income for a taxation year, and 
  (ii) the deduction or reimbursement was included by the taxpayer in the amount determined for J in the definition cumulative Canadian exploration expense in subsection 66.1(6), for M in the definition cumulative Canadian development expense in subsection 66.2(5) or for I in the definition cumulative Canadian oil and gas property expense in subsection 66.4(5);  
  
  ### Repayment of interest
  
  (ll) such part of any amount payable by the taxpayer because of a provision of this Act, or of an Act of a province that imposes a tax similar to the tax imposed under this Act, as was paid in the year and as can reasonably be considered to be a repayment of interest that was included in computing the taxpayer’s income for the year or a preceding taxation year; 
  
  ### Cost of substances injected in reservoir
  
  (mm) the portion claimed by the taxpayer of an amount that is an outlay or expense made or incurred by the taxpayer before the end of the year that is a cost to the taxpayer of any substance injected before that time into a natural reservoir to assist in the recovery of petroleum, natural gas or related hydrocarbons to the extent that that portion was not 
  (i) otherwise deducted in computing the taxpayer’s income for the year, or 
  (ii) deducted in computing the taxpayer’s income for any preceding taxation year, except that where the year is less than 51 weeks, the amount that may be claimed under this paragraph by the taxpayer for the year shall not exceed the greater of 
  (iii) that proportion of the maximum amount that may otherwise be claimed under this paragraph by the taxpayer for the year that the number of days in the year is of 365, and 
  (iv) the amount of such outlay or expense that was made or incurred by the taxpayer in the year and not otherwise deducted in computing the taxpayer’s income for the year; 
  
  ### Part XII.6 tax
  
  (nn) the tax, if any, under Part XII.6 paid in the year or payable in respect of the year by the taxpayer (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income); 
  (nn.1)  [Repealed, 2017, c. 20, s. 4]  
  
  ### Salary deferral arrangement
  
  (oo) any deferred amount under a salary deferral arrangement in respect of another person to the extent that it was 
  (i) included under paragraph 6(1)(a) as a benefit in computing the income of the other person for the taxation year of the other person that ends in the taxpayer’s taxation year, and 
  (ii) in respect of services rendered to the taxpayer; 
  
  ### Idem
  
  (pp) any amount under a salary deferral arrangement in respect of another person (other than an arrangement established primarily for the benefit of one or more non-resident employees in respect of services to be rendered outside Canada) to the extent that it was 
  (i) included under paragraph 6(1)(i) in computing the income of the other person for the taxation year of the other person that ends in the taxpayer’s taxation year, and 
  (ii) in respect of services rendered to the taxpayer; 
  
  ### Disability-related modifications to buildings
  
  (qq) an amount paid by the taxpayer in the year for prescribed renovations or alterations to a building used by the taxpayer primarily for the purpose of gaining or producing income from the building or from a business that are made to enable individuals who have a mobility impairment to gain access to the building or to be mobile within it; 
  
  ### Disability-related equipment
  
  (rr) an amount paid by the taxpayer in the year for any prescribed disability-specific device or equipment; 
  
  ### Qualifying environmental trusts
  
  (ss) a contribution made in the year by the taxpayer to a qualifying environmental trust under which the taxpayer is a beneficiary; 
  
  ### Acquisition of interests in qualifying environmental trusts
  
  (tt) the consideration paid by the taxpayer in the year for the acquisition from another person or partnership of all or part of the taxpayer’s interest as a beneficiary under a qualifying environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust; 
  
  ### Debt forgiveness
  
  (uu) any amount deducted in computing the taxpayer’s income for the year because of paragraph 80(15)(a) or subsection 80.01(10); 
  
  ### Countervailing or anti-dumping duty
  
  (vv) an amount paid in the year by the taxpayer as or on account of an existing or proposed countervailing or anti-dumping duty in respect of property (other than depreciable property); 
  
  ### Split income
  
  (ww) where the taxpayer is a specified individual in relation to the year, the individual’s split income for the year; and 
  
  ### Derivative forward agreement
  
  (xx) in respect of a derivative forward agreement of a taxpayer, the amount determined by the formula is the lesser of 
  (i) the total of all amounts each of which is 
  (A) if the taxpayer acquires a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the cost to the taxpayer of the property exceeds the fair market value of the property at the time it is acquired by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in subparagraphs (b)(i) to (iii) of the definition derivative forward agreement in subsection 248(1), or  
  (B) if the taxpayer disposes of a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the fair market value of the property at the time the agreement is entered into by the taxpayer exceeds the proceeds of disposition (within the meaning assigned by Subdivision C) of the property that is attributable to an underlying interest other than an underlying interest referred to in clauses (c)(i)(A) to (C) of the definition derivative forward agreement in subsection 248(1), and  
  (ii) the amount that is, 
  (A) if final settlement of the agreement occurs in the year and it cannot reasonably be considered that one of the main reasons for entering into the agreement is to obtain a deduction under this paragraph, the amount determined under subparagraph (i), or 
  (B) in any other case, the total of all amounts included under paragraph 12(1)(z.7) in computing the taxpayer’s income in respect of the agreement for the year or a preceding taxation year, and is the total of all amounts deducted under this paragraph in respect of the agreement for a preceding taxation year. 
  
  ### Application of s. 13(21)
  
  (1.1) The definitions in subsection 13(21) apply to any regulations made under paragraph 20(1)(a). 
  
  ### Application of s. 12.2(11)
  
  (1.2) The definitions in subsection 12.2(11) apply to paragraph 20(1)(c). 
  
  ### Borrowed money
  
  (2) For the purposes of paragraph 20(1)(c), where a person has borrowed money in consideration of a promise by the person to pay a larger amount and to pay interest on the larger amount, 
  (a) the larger amount shall be deemed to be the amount borrowed; and 
  (b) where the amount actually borrowed has been used in whole or in part for the purpose of earning income from a business or property, the proportion of the larger amount that the amount actually so used is of the amount actually borrowed shall be deemed to be the amount so used. 
  
  ### Limitation of expression “interest” — 10/8 policy
  
  (2.01) For the purposes of paragraphs (1)(c) and (d), interest does not include an amount if 
  (a) the amount 
  (i) is paid, after March 20, 2013 in respect of a period after 2013, in respect of a life insurance policy that is, at the time of the payment, a 10/8 policy, and 
  (ii) is described in paragraph (a) of the definition 10/8 policy in subsection 248(1); or  
  (b) the amount 
  (i) is payable, in respect of a life insurance policy, after March 20, 2013 in respect of a period after 2013 during which the policy is a 10/8 policy, and 
  (ii) is described in paragraph (a) of the definition 10/8 policy in subsection 248(1).  
  
  ### Limitation of expression “interest”
  
  (2.1) For the purposes of paragraphs 20(1)(c) and 20(1)(d), “interest” does not include an amount that is paid after the taxpayer’s 1977 taxation year or payable in respect of a period after the taxpayer’s 1977 taxation year, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, in respect of interest on a policy loan made by an insurer except to the extent that the amount of that interest is verified by the insurer in prescribed form and within the prescribed time to be 
  (a) interest paid in the year on that loan; and 
  (b) interest (other than interest that would, but for paragraph 20(2.2)(b), be interest on money borrowed before 1978 to acquire a life insurance policy or on an amount payable for property acquired before 1978 that is an interest in a life insurance policy) that is not added to the adjusted cost basis (within the meaning given that expression in subsection 148(9)) to the taxpayer of the taxpayer’s interest in the policy. 
  
  ### Limitation of expression “life insurance policy”
  
  (2.2) For the purposes of paragraphs 20(1)(c) and 20(1)(d), a “life insurance policy” does not include a policy 
  (a) that is or is issued pursuant to a pooled registered pension plan, a registered pension plan, a registered retirement savings plan, an income-averaging annuity contract or a deferred profit sharing plan; 
  (b) that was an annuity contract issued before 1978 that provided for annuity payments to commence not later than the day on which the policyholder attains 75 years of age; or 
  (c) that is an annuity contract all of the insurer’s reserves for which vary in amount depending on the fair market value of a specified group of properties. 
  
  ### Sectoral reserve
  
  (2.3) For the purpose of clause 20(1)(l)(ii)(D), a sectoral reserve is a reserve or an allowance for impairment for a loan that is determined on a sector-by-sector basis (including a geographic sector, an industrial sector or a sector of any other nature) and not on a property-by-property basis. 
  
  ### Specified Percentage
  
  (2.4) For the purpose of clause 20(1)(l)(ii)(D), a taxpayer’s specified percentage for a taxation year is 
  (a) where the taxpayer has a prescribed reserve amount for the year, the percentage that is the percentage of the prescribed reserve amount of the taxpayer for the year claimed by the taxpayer under clause 20(1)(l)(ii)(C) for the year, and 
  (b) in any other case, 100%. 
  
  ### Borrowed money
  
  (3) For greater certainty, if a taxpayer uses borrowed money to repay money previously borrowed, or to pay an amount payable for property described in subparagraph (1)(c)(ii) previously acquired (which previously borrowed money or amount payable in respect of previously acquired property is, in this subsection, referred to as the “previous indebtedness”), subject to subsection 20.1(6), for the purposes of paragraphs (1)(c), (e) and (e.1), subsections 20.1(1) and (2), section 21 and subparagraph 95(2)(a)(ii), and for the purpose of paragraph 20(1)(k) of the Income Tax Act, Chapter 148 of the Revised Statutes of Canada, 1952, the borrowed money is deemed to be used for the purpose for which the previous indebtedness was used or incurred, or was deemed by this subsection to have been used or incurred.  
  
  ### Bad debts — dispositions of depreciable property
  
  (4) If an amount that is owing to a taxpayer as or on account of the proceeds of disposition of depreciable property (other than a timber resource property, a passenger vehicle to which paragraph 13(7)(g) applies or a zero-emission passenger vehicle to which paragraph 13(7)(i) applies) of the taxpayer of a prescribed class is established by the taxpayer to have become a bad debt in a taxation year, there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the amount so owing to the taxpayer, and 
  (b) the amount, if any, by which the capital cost to the taxpayer of that property exceeds the total of the amounts, if any, realized by the taxpayer on account of the proceeds of disposition. 
  
  ### Idem
  
  (4.1) Where an amount that is owing to a taxpayer as or on account of the proceeds of disposition of a timber resource property of the taxpayer is established by the taxpayer to have become a bad debt in a taxation year, the amount so owing to the taxpayer may be deducted in computing the taxpayer’s income for the year. 
  
  ### Bad debts — zero-emission passenger vehicles
  
  (4.11) If an amount that is owing to a taxpayer as or on account of the proceeds of disposition of a zero-emission passenger vehicle of the taxpayer to which paragraph 13(7)(i) applies is established by the taxpayer to have become a bad debt in a taxation year, there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the amount that would be determined by the formula in subparagraph 13(7)(i)(ii) in respect of the disposition if the amount determined for A in the formula were the amount owing to the taxpayer, and 
  (b) the amount determined by the formula is the capital cost to the taxpayer of the vehicle, and is the amount that would be determined by the formula in subparagraph 13(7)(i)(ii) in respect of the disposition if the amount determined for A in the formula were the total amount, if any, realized by the taxpayer on account of the proceeds of disposition. 
  
  ### Former eligible capital property
  
  (4.2) If an amount is deductible under subsection (4) in respect of the disposition of a depreciable property and subsection 13(39) applied to the disposition of the depreciable property, the amount deductible under subsection (4) is equal to 3/4 of the amount that would be deductible without reference to this subsection. 
  (4.3)  [Repealed, 2016, c. 12, s. 7]  
  
  ### Sale of agreement for sale, mortgage or hypothecary claim included in proceeds of disposition
  
  (5) Where depreciable property, other than a timber resource property, of a taxpayer has, in a taxation year, been disposed of to a person with whom the taxpayer was dealing at arm’s length, and the proceeds of disposition include an agreement for the sale of, or a mortgage or hypothecary claim on, land that the taxpayer has, in a subsequent taxation year, sold to a person with whom the taxpayer was dealing at arm’s length, there may be deducted in computing the income of the taxpayer for the subsequent year an amount equal to the lesser of 
  (a) the amount, if any, by which the principal amount of the agreement for sale, mortgage or hypothecary claim outstanding at the time of the sale exceeds the consideration paid by the purchaser to the taxpayer for the agreement for sale, mortgage or hypothecary claim, and 
  (b) the amount determined under paragraph 20(5)(a) less the amount, if any, by which the proceeds of disposition of the depreciable property exceed the capital cost to the taxpayer of that property. 
  
  ### Sale of agreement for sale, mortgage or hypothecary claim included in proceeds of disposition
  
  (5.1) Where a timber resource property of a taxpayer has, in a taxation year, been disposed of to a person with whom the taxpayer was dealing at arm’s length, and the proceeds of disposition include an agreement for sale of, or a mortgage or hypothecary claim on, land that the taxpayer has, in a subsequent taxation year, sold to a person with whom the taxpayer was dealing at arm’s length, there may be deducted in computing the income of the taxpayer for the subsequent year the amount, if any, by which the principal amount of the agreement for sale, mortgage or hypothecary claim outstanding at the time of the sale exceeds the consideration paid by the purchaser to the taxpayer for the agreement for sale, mortgage or hypothecary claim. 
  
  ### Special reserves
  
  (6) Where an amount is deductible in computing income for a taxation year under paragraph 20(1)(m) as a reserve in respect of 
  (a) articles of food or drink that it is reasonably anticipated will have to be delivered after the end of the year, or 
  (b) transportation that it is reasonably anticipated will have to be provided after the end of the year, there shall be substituted for the amount determined under that paragraph an amount not exceeding the total of amounts included in computing the taxpayer’s income from the business for the year that were received or receivable (depending on the method regularly followed by the taxpayer in computing the taxpayer’s profit) in the year in respect of 
  (c) articles of food or drink not delivered before the end of the year, or 
  (d) transportation not provided before the end of the year, as the case may be. 
  
  ### Where para. (1)(m) does not apply
  
  (7) Paragraph 20(1)(m) does not apply to allow a deduction 
  (a) as a reserve in respect of guarantees, indemnities or warranties; 
  (b) in computing the income of a taxpayer for a taxation year from a business in any case where the taxpayer’s income for the year from that business is computed in accordance with the method authorized by subsection 28(1); 
  (c) as a reserve in respect of insurance, except that in computing an insurer’s income for a taxation year from an insurance business, other than a life insurance business, carried on by it, there may be deducted as a policy reserve any amount that the insurer claims not exceeding the amount prescribed in respect of the insurer for the year; or 
  (d) as a reserve in respect of a reclamation obligation. 
  
  ### No deduction in respect of property in certain circumstances
  
  (8) Paragraph 20(1)(n) does not apply to allow a deduction in computing the income of a taxpayer for a taxation year from a business in respect of a property sold in the course of the business if 
  (a) the taxpayer, at the end of the year or at any time in the immediately following taxation year, 
  (i) was exempt from tax under any provision of this Part, or 
  (ii) was not resident in Canada and did not carry on the business in Canada; 
  (b) the sale occurred more than 36 months before the end of the year; 
  (c) the purchaser of the property sold was a corporation that, immediately after the sale, 
  (i) was controlled, directly or indirectly, in any manner whatever, by the taxpayer, 
  (ii) was controlled, directly or indirectly, in any manner whatever, by a person or group of persons that controlled the taxpayer, directly or indirectly, in any manner whatever, or 
  (iii) controlled the taxpayer, directly or indirectly, in any manner whatever; or 
  (d) the purchaser of the property sold was a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner. 
  
  ### Application of para. (1)(cc)
  
  (9) In lieu of making any deduction of an amount permitted by paragraph 20(1)(cc) in computing a taxpayer’s income for a taxation year from a business, the taxpayer may, if the taxpayer so elects in prescribed manner, make a deduction of 1/10 of that amount in computing the taxpayer’s income for that taxation year and a like deduction in computing the taxpayer’s income for each of the 9 immediately following taxation years. 
  
  ### Convention expenses
  
  (10) Notwithstanding paragraph 18(1)(b), there may be deducted in computing a taxpayer’s income for a taxation year from a business an amount paid by the taxpayer in the year as or on account of expenses incurred by the taxpayer in attending, in connection with the business, not more than two conventions held during the year by a business or professional organization at a location that may reasonably be regarded as consistent with the territorial scope of that organization. 
  
  ### Foreign taxes on income from property exceeding 15%
  
  (11) In computing the income of an individual from a property other than real or immovable property for a taxation year after 1975 that is income from a source outside Canada, there may be deducted the amount, if any, by which, 
  (a) such part of any income or profits tax paid by the taxpayer to the government of a country other than Canada for the year as may reasonably be regarded as having been paid in respect of an amount that has been included in computing the taxpayer’s income for the year from the property, exceeds 
  (b) 15% of the amount referred to in paragraph 20(11)(a). 
  
  ### Foreign non-business-income tax
  
  (12) In computing the income of a taxpayer who is resident in Canada at any time in a taxation year from a business or property for the year, there may be deducted any amount that the taxpayer claims that does not exceed the non-business-income tax paid by the taxpayer for the year to the government of a country other than Canada (within the meaning assigned by subsection 126(7) read without reference to paragraphs (c) and (e) of the definition non-business-income tax in that subsection) in respect of that income, other than any of those taxes paid that can, in whole or in part, reasonably be regarded as having been paid by a corporation in respect of income from a share of the capital stock of a foreign affiliate of the corporation.  
  
  ### Foreign tax where no economic profit
  
  (12.1) In computing a taxpayer’s income for a taxation year from a business, there may be deducted the amount that the taxpayer claims not exceeding the lesser of 
  (a) the amount of foreign tax (within the meaning assigned by subsection 126(4.1)) that 
  (i) is in respect of a property used in the business for a period of ownership by the taxpayer or in respect of a related transaction (as defined in subsection 126(7)), 
  (ii) is paid by the taxpayer for the year, 
  (iii) is, because of subsection 126(4.1), not included in computing the taxpayer’s business-income tax or non-business-income tax, and 
  (iv) where the taxpayer is a corporation, is not an amount that can reasonably be regarded as having been paid in respect of income from a share of the capital stock of a foreign affiliate of the taxpayer, and 
  (b) the portion of the taxpayer’s income for the year from the business that is attributable to the property for the period or to a related transaction (as defined in subsection 126(7)). 
  
  ### Deductions under Subdivision I
  
  (13) In computing the income for a taxation year of a taxpayer resident in Canada, there may be deducted such amounts as are provided by Subdivision I. 
  
  ### Accrued bond interest
  
  (14) Where, by virtue of an assignment or other transfer of a debt obligation, other than an income bond or an income debenture, the transferee has become entitled to an amount of interest that accrued on the debt obligation for a period commencing before the time of transfer and ending at that time that is not payable until after that time, that amount 
  (a) shall be included as interest in computing the transferor’s income for the transferor’s taxation year in which the transfer occurred, except to the extent that it was otherwise included in computing the transferor’s income for the year or a preceding taxation year; and 
  (b) may be deducted in computing the transferee’s income for a taxation year to the extent that the amount was included as interest in computing the transferee’s income for the year. 
  
  ### Interest on debt obligation
  
  (14.1) Where a person who has issued a debt obligation, other than an income bond or an income debenture, is obligated to pay an amount that is stipulated to be interest on that debt obligation in respect of a period before its issue (in this subsection referred to as the “unearned interest amount”) and it is reasonable to consider that the person to whom the debt obligation was issued paid to the issuer consideration for the debt obligation that included an amount in respect of the unearned interest amount, 
  (a) for the purposes of subsection 20(14) and section 12, the issue of the debt obligation shall be deemed to be an assignment of the debt obligation from the issuer, as transferor, to the person to whom the obligation was issued, as transferee, and an amount equal to the unearned interest amount shall be deemed to be interest that accrued on the obligation for a period commencing before the issue and ending at the time of issue; and 
  (b) notwithstanding paragraph 20(14.1)(a) or any other provision of this Act, no amount that can reasonably be considered to be an amount in respect of the unearned interest amount shall be deducted or included in computing the income of the issuer. 
  
  ### Sales of linked notes
  
  (14.2) For the purposes of subsection (14), the amount determined by the following formula is deemed to be interest that accrued on an assigned or otherwise transferred debt obligation — that is, at any time, described in paragraph 7000(1)(d) of the Income Tax Regulations — to which the transferee has become entitled to for a period commencing before the time of the transfer and ending at that particular time that is not payable until after that particular time:  is the price for which the debt obligation was assigned or otherwise transferred at the particular time; and is the amount by which the price (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) for which the debt obligation was issued exceeds the portion, if any, of the principal amount of the debt obligation (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) that was repaid by the issuer on or before the particular time. 
  (15)  [Repealed, 2003, c. 28, s. 3]  
  
  ### Terminal loss
  
  (16) Notwithstanding paragraphs 18(1)(a), 18(1)(b) and 18(1)(h), where at the end of a taxation year, 
  (a) the total of all amounts used to determine A to D.1 in the definition undepreciated capital cost in subsection 13(21) in respect of a taxpayer’s depreciable property of a particular class exceeds the total of all amounts used to determine E to K in that definition in respect of that property, and  
  (b) the taxpayer no longer owns any property of that class, in computing the taxpayer’s income for the year 
  (c) there shall be deducted the amount of the excess determined under paragraph 20(16)(a), and 
  (d) no amount shall be deducted for the year under paragraph 20(1)(a) in respect of property of that class. 
  
  ### Non-application of subsection (16)
  
  (16.1) Subsection (16) does not apply 
  (a) in respect of a passenger vehicle of a taxpayer that has a cost to the taxpayer in excess of $20,000 or any other amount that is prescribed; 
  (b) in respect of a taxation year in respect of a property that was a former property deemed by paragraph 13(4.3)(a) or (b) to be owned by the taxpayer, if 
  (i) within 24 months after the taxpayer last owned the former property, the taxpayer or a person not dealing at arm’s length with the taxpayer acquires a similar property in respect of the same fixed place to which the former property applied, and 
  (ii) at the end of the taxation year, the taxpayer or the person owns the similar property or another similar property in respect of the same fixed place to which the former property applied; and 
  (c) in respect of a taxation year in respect of property included in Class 14.1 of Schedule II to the Income Tax Regulations unless the taxpayer has ceased to carry on the business to which the class relates.  
  
  ### Reference to “taxation year” and “year” of individual
  
  (16.2) Where a taxpayer is an individual and the taxpayer’s income for a taxation year includes income from a business the fiscal period of which does not coincide with the calendar year, if depreciable property acquired for the purpose of gaining or producing income from the business has been disposed of, each reference in subsections 20(16) and 20(16.1) to a “taxation year” and “year” shall, for greater certainty, be read as a reference to a “fiscal period”. 
  
  ### Disposition after ceasing business
  
  (16.3) Where a taxpayer, after ceasing to carry on a business, has disposed of depreciable property of the taxpayer of a prescribed class that was acquired by the taxpayer for the purpose of gaining or producing income from the business and that was not subsequently used by the taxpayer for some other purpose, in applying subsection 20(16) or 20(16.1), each reference in that subsection to a “taxation year” and “year” shall, notwithstanding anything in subsection 20(16.2), not be read as a reference to a “fiscal period”. 
  (17) and (18)  [Repealed, 2013, c. 34, s. 180]  
  
  ### Annuity contract
  
  (19) Where a taxpayer has in a particular taxation year received a payment under an annuity contract in respect of which an amount was by virtue of subsection 12(3) included in computing the taxpayer’s income for a taxation year commencing before 1983, there may be deducted in computing the taxpayer’s income for the particular year such amount, if any, as is allowed by regulation. 
  
  ### Life insurance policy
  
  (20) Where in a taxation year a taxpayer disposes of an interest in a life insurance policy that is not an annuity contract (otherwise than as a consequence of a death) or of an interest in an annuity contract (other than a prescribed annuity contract), there may be deducted in computing the taxpayer’s income for the year an amount equal to the lesser of 
  (a) the total of all amounts in respect of the interest in the policy that were included under section 12.2 of this Act or paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year or a preceding taxation year, and  
  (b) the amount, if any, by which the adjusted cost basis (within the meaning assigned by section 148) to the taxpayer of that interest immediately before the disposition exceeds the proceeds of the disposition (within the meaning assigned by section 148) of the interest that the policyholder, a beneficiary or an assignee became entitled to receive. 
  
  ### Debt obligation
  
  (21) If a taxpayer has in a particular taxation year disposed of a property that is an interest in, or for civil law a right in, a debt obligation for consideration equal to its fair market value at the time of disposition, there may be deducted in computing the taxpayer’s income for the particular year the amount, if any, by which 
  (a) the total of all amounts each of which is an amount that was included in computing the taxpayer’s income for the particular year or a preceding taxation year as interest in respect of that property exceeds the total of all amounts each of which is 
  (b) the portion of an amount that was received or became receivable by the taxpayer in the particular year or a preceding taxation year that can reasonably be considered to be in respect of an amount described in paragraph 20(21)(a) and that was not repaid by the taxpayer to the issuer of the debt obligation because of an adjustment in respect of interest received before the time of disposition by the taxpayer, or 
  (c) an amount in respect of that property that was deductible by the taxpayer by virtue of paragraph 20(14)(b) in computing the taxpayer’s income for the particular year or a preceding taxation year. 
  
  ### Deduction for negative reserves
  
  (22) In computing an insurer’s income for a taxation year, there may be deducted the amount included under paragraph 12(1)(e.1) in computing the insurer’s income for the preceding taxation year. 
  
  ### Amounts paid for undertaking future obligations
  
  (24) Where an amount is included under paragraph 12(1)(a) in computing a taxpayer’s income for a taxation year in respect of an undertaking to which that paragraph applies and the taxpayer paid a reasonable amount in a particular taxation year to another person as consideration for the assumption by that other person of the taxpayer’s obligations in respect of the undertaking, if the taxpayer and the other person jointly so elect, 
  (a) the payment may be deducted in computing the taxpayer’s income for the particular year and no amount is deductible under paragraph 20(1)(m) or 20(1)(m.1) in computing the taxpayer’s income for that or any subsequent taxation year in respect of the undertaking; and 
  (b) where the amount was received by the other person in the course of business, it shall be deemed to be an amount described in paragraph 12(1)(a). 
  
  ### Manner of election
  
  (25) An election under subsection 20(24) shall be made by notifying the Minister in writing on or before the earlier of the days on or before which either the payer or the recipient is required to file a return of income pursuant to section 150 for the taxation year in which the payment to which the election relates was made. 
  (26)  [Repealed, 2013, c. 34, s. 180]  
  
  ### Loans, etc., acquired in ordinary course of business
  
  (27) For the purposes of computing a deduction under paragraph 20(1)(l), 20(1)(l.1) or 20(1)(p) from the income for a taxation year of a taxpayer who was an insurer or whose ordinary business included the lending of money, a loan or lending asset or an instrument or commitment described in paragraph 20(1)(l.1) acquired from a person with whom the taxpayer did not deal at arm’s length for an amount equal to its fair market value shall be deemed to have been acquired by the taxpayer in the ordinary course of the taxpayer’s business of insurance or the lending of money where 
  (a) the person from whom the loan or lending asset or instrument or commitment was acquired carried on the business of insurance or the lending of money; and 
  (b) the loan or lending asset was made or acquired or the instrument or commitment was issued, made or assumed by the person in the ordinary course of the person’s business of insurance or the lending of money. 
  
  ### Application of ss. 13(21) and 138(12)
  
  (27.1) The definitions in subsections 13(21) and 138(12) apply to this section. 
  
  ### Deduction before available for use
  
  (28) In computing a taxpayer’s income from a business or property for a taxation year ending before the time a building or a part thereof acquired after 1989 by the taxpayer becomes available for use by the taxpayer, there may be deducted an amount not exceeding the amount by which the lesser of 
  (a) the amount that would be deductible under paragraph 20(1)(a) for the year in respect of the building if subsection 13(26) did not apply, and 
  (b) the taxpayer’s income for the year from renting the building, computed without reference to this subsection and before deducting any amount in respect of the building under paragraph 20(1)(a) exceeds 
  (c) the amount deductible under paragraph 20(1)(a) for the year in respect of the building, computed without reference to this subsection, and any amount so deducted shall be deemed to be an amount deducted by the taxpayer under paragraph 20(1)(a) in computing the taxpayer’s income for the year. 
  
  ### Idem
  
  (29) Where, because of subsection 18(3.1), a deduction would, but for this subsection, not be allowed to a taxpayer in respect of an outlay or expense in respect of a building, or part thereof, and the outlay or expense would, but for that subsection and without reference to this subsection, be deductible in computing the taxpayer’s income for a taxation year, there may be deducted in respect of such outlays and expenses in computing the taxpayer’s income for the year an amount equal to the lesser of 
  (a) the total of all such outlays or expenses, and 
  (b) the taxpayer’s income for the year from renting the building or the part thereof computed without reference to subsection 20(28) and this subsection. 
  
  ### Specified reserve adjustment
  
  (30) For the purpose of the description of N in subclause 20(1)(l)(ii)(D)(II), the specified reserve adjustment for a loan of a taxpayer for a taxation year is the amount determined by the formula is the carrying amount of the impaired loan that is used or would be used in determining the interest income on the loan for the year in accordance with generally accepted accounting principles; is the effective interest rate on the loan for the year determined in accordance with generally accepted accounting principles; and is the number of days in the year on which the loan is impaired. 
  
  ### PHSP premiums
  
  20.01 (1) Notwithstanding paragraphs 18(1)(a) and (h) and subject to subsection (2), there may be deducted in computing an individual’s income for a taxation year from a business carried on by the individual and in which the individual is actively engaged on a regular and continuous basis, directly or as a member of a partnership, an amount payable by the individual or partnership in respect of the year as a premium, contribution or other consideration under a private health services plan in respect of the individual, the individual’s spouse or common-law partner or any person who is a member of the individual’s household if 
  (a) in the year or in the preceding taxation year 
  (i) the total of all amounts each of which is the individual’s income from such a business for a fiscal period that ends in the year exceeds 50% of the individual’s income for the year, or 
  (ii) the individual’s income for the year does not exceed the total of $10,000 and the total referred to in subparagraph (i) in respect of the individual for the year, on the assumption that the individual’s income from each business is computed without reference to this subsection and the individual’s income is computed without reference to this subsection and Subdivision E; and 
  (b) the amount is payable under a contract between the individual or partnership and 
  (i) a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an insurance business or the business of offering to the public its services as trustee, 
  (ii) a person or partnership engaged in the business of offering to the public its services as an administrator of private health services plans, or 
  (iii) a person the taxable income of which is exempt under section 149 and that is a business or professional organization of which the individual is a member or a trade union of which the individual or a majority of the individual’s employees are members. 
  
  ### Limit
  
  (2) For the purpose of calculating the amount deductible under subsection (1) in computing an individual’s income for a taxation year from a particular business, 
  (a) no amount may be deducted to the extent that 
  (i) it is deducted under this section in computing another individual’s income for any taxation year, or 
  (ii) it is included in calculating a deduction under section 118.2 in computing an individual’s tax payable under this Part for any taxation year; 
  (b) where an amount payable under a private health services plan relates to a period in the year throughout which 
  (i) each of one or more persons 
  (A) is employed on a full-time basis (other than on a temporary or seasonal basis) in the particular business or in another business carried on by 
  (I) the individual (otherwise than as a member of a partnership), 
  (II) a partnership of which the individual is a majority-interest partner, or 
  (III) a corporation affiliated with the individual, and 
  (B) has accumulated not less than three months of service in that employment since the person last became so employed, and 
  (ii) the total number of persons employed in a business described in clause (i)(A), with whom the individual deals at arm’s length and to whom coverage is extended under the plan, is not less than 50% of the total number of persons each of whom is a person 
  (A) who carries on the particular business or is employed in a business described in clause (i)(A), and 
  (B) to whom coverage is extended under the plan, the amount so deductible in relation to the period shall not exceed the individual’s cost of equivalent coverage under the plan in respect of each employed person who deals at arm’s length with the individual and who is described in subparagraph (i) in relation to the period; 
  (c) subject to paragraph (d), where an amount payable under a private health services plan relates to a particular period in the year, other than a period described in paragraph (b), the amount so deductible in relation to the particular period shall not exceed the amount determined by the formula is the number of days in the year that are included in the particular period, is the product obtained when $1,500 is multiplied by the number of persons each of whom is covered under the plan, and 
  (i) is the individual or the individual’s spouse or common-law partner, or 
  (ii) is a member of the individual’s household and has attained the age of 18 years before the beginning of the particular period, and is the product obtained when $750 is multiplied by the number of members of the individual’s household who, but for the fact that they have not attained the age of 18 years before the particular period began, would be included in computing the product under the description of B; and 
  (d) where an amount payable under a private health services plan relates to a particular period in the year (other than a period described in paragraph (b)) and one or more persons with whom the individual deals at arm’s length are described in subparagraph (b)(i) in relation to the particular period, the amount so deductible in relation to the particular period shall not exceed the lesser of the amount determined under the formula set out in paragraph (c) and the individual’s cost of equivalent coverage in respect of any such person in relation to the particular period. 
  
  ### Equivalent coverage
  
  (3) For the purpose of subsection (2), an amount payable in respect of an individual under a private health services plan in relation to a period does not exceed the individual’s cost of equivalent coverage under the plan in respect of another person in relation to the period to the extent that, in relation to the period, the amount does not exceed the product obtained when 
  (a) the amount that would be the individual’s cost of coverage under the plan if the benefits and coverage in respect of the individual, the individual’s spouse or common-law partner and the members of the individual’s household were identical to the benefits and coverage made available in respect of the other person, the other person’s spouse or common-law partner and the members of the other person’s household is multiplied by 
  (b) the percentage of the cost of coverage under the plan in respect of the other person that is payable by the individual or a partnership of which the individual is a member. 
  
  ### Borrowed money used to earn income from property
  
  20.1 (1) Where 
  (a) at any time after 1993 borrowed money ceases to be used by a taxpayer for the purpose of earning income from a capital property (other than real or immovable property or depreciable property), and 
  (b) the amount of the borrowed money that was so used by the taxpayer immediately before that time exceeds the total of 
  (i) where the taxpayer disposed of the property at that time for an amount of consideration that is not less than the fair market value of the property at that time, the amount of the borrowed money used to acquire the consideration, 
  (ii) where the taxpayer disposed of the property at that time and subparagraph 20.1(1)(b)(i) does not apply, the amount of the borrowed money that, if the taxpayer had received as consideration an amount of money equal to the amount by which the fair market value of the property at that time exceeds the amount included in the total by reason of subparagraph 20.1(1)(b)(iii), would be considered to be used to acquire the consideration, 
  (iii) where the taxpayer disposed of the property at that time for consideration that includes a reduction in the amount of the borrowed money, the amount of the reduction, and 
  (iv) where the taxpayer did not dispose of the property at that time, the amount of the borrowed money that, if the taxpayer had disposed of the property at that time and received as consideration an amount of money equal to the fair market value of the property at that time, would be considered to be used to acquire the consideration, an amount of the borrowed money equal to the excess shall, to the extent that the amount is outstanding after that time, be deemed to be used by the taxpayer for the purpose of earning income from the property. 
  
  ### Borrowed money used to earn income from business
  
  (2) Where at any particular time after 1993 a taxpayer ceases to carry on a business and, as a consequence, borrowed money ceases to be used by the taxpayer for the purpose of earning income from the business, the following rules apply: 
  (a) where, at any time (in this paragraph referred to as the “time of disposition”) at or after the particular time, the taxpayer disposes of property that was last used by the taxpayer in the business, an amount of the borrowed money equal to the lesser of 
  (i) the fair market value of the property at the time of disposition, and 
  (ii) the amount of the borrowed money outstanding at the time of disposition that is not deemed by this paragraph to have been used before the time of disposition to acquire any other property shall be deemed to have been used by the taxpayer immediately before the time of disposition to acquire the property; 
  (b) subject to paragraph 20.1(2)(a), the borrowed money shall, after the particular time, be deemed not to have been used to acquire property that was used by the taxpayer in the business; 
  (c) the portion of the borrowed money outstanding at any time after the particular time that is not deemed by paragraph 20.1(2)(a) to have been used before that subsequent time to acquire property shall be deemed to be used by the taxpayer at that subsequent time for the purpose of earning income from the business; and 
  (d) the business shall be deemed to have fiscal periods after the particular time that coincide with the taxation years of the taxpayer, except that the first such fiscal period shall be deemed to begin at the end of the business’s last fiscal period that began before the particular time. 
  
  ### Deemed dispositions
  
  (3) For the purpose of paragraph 20.1(2)(a), 
  (a) where a property was used by a taxpayer in a business that the taxpayer has ceased to carry on, the taxpayer shall be deemed to dispose of the property at the time at which the taxpayer begins to use the property in another business or for any other purpose; 
  (b) where a taxpayer, who has at any time ceased to carry on a business, regularly used a property in part in the business and in part for some other purpose, 
  (i) the taxpayer shall be deemed to have disposed of the property at that time, and 
  (ii) the fair market value of the property at that time shall be deemed to equal the proportion of the fair market value of the property at that time that the use regularly made of the property in the business was of the whole use regularly made of the property; and 
  (c) where the taxpayer is a trust, subsections 104(4) to 104(5.2) do not apply. 
  
  ### Amount payable for property
  
  (4) Where an amount is payable by a taxpayer for property, the amount shall be deemed, for the purposes of this section and, where subsection 20.1(2) applies with respect to the amount, for the purposes of this Act, to be payable in respect of borrowed money used by the taxpayer to acquire the property. 
  
  ### Interest in partnership
  
  (5) For the purposes of this section, where borrowed money that has been used to acquire an interest in a partnership is, as a consequence, considered to be used at any time for the purpose of earning income from a business or property of the partnership, the borrowed money shall be deemed to be used at that time for the purpose of earning income from property that is the interest in the partnership and not to be used for the purpose of earning income from the business or property of the partnership. 
  
  ### Refinancings
  
  (6) Where at any time a taxpayer uses borrowed money to repay money previously borrowed that was deemed by paragraph 20.1(2)(c) immediately before that time to be used for the purpose of earning income from a business, 
  (a) paragraphs 20.1(2)(a) to 20.1(2)(c) apply with respect to the borrowed money; and 
  (b) subsection 20(3) does not apply with respect to the borrowed money. 
  
  ### Interest — authorized foreign bank — interpretation
  
  20.2 (1) The following definitions apply in this section.  
  *branch advance* of an authorized foreign bank means an amount allocated or provided by, or on behalf of, the bank to, or for the benefit of, its Canadian banking business under terms that were documented, before the amount was so allocated or provided, to the same extent as, and in a form similar to the form in which, the bank would ordinarily document a loan by it to a person with whom it deals at arm’s length. (avance de succursale)   
  *branch financial statements* of an authorized foreign bank for a taxation year means the unconsolidated statements of assets and liabilities and of income and expenses for the year, in respect of its Canadian banking business,  
  (a) that form part of the bank’s annual report for the year filed with the Superintendent of Financial Institutions as required under section 601 of the Bank Act, and accepted by the Superintendent, and  
  (b) if no filing is so required for the taxation year, that are prepared in a manner consistent with the statements in the annual report or reports so filed and accepted for the period or periods in which the taxation year falls, except if the Minister demonstrates that the statements are not prepared in accordance with generally-accepted accounting principles in Canada as modified by any specifications applicable to the bank made by the Superintendent of Financial Institutions under subsection 308(4) of the Bank Act (in this definition referred to as “modified GAAP”), in which case it means the statements subject to such modifications as are required to make them comply with modified GAAP. (états financiers de succursale)   
  *calculation period* of an authorized foreign bank for a taxation year means any one of a series of regular periods into which the year is divided in a designation by the bank in its return of income for the year or, in the absence of such a designation, by the Minister,  
  (a) none of which is longer than 31 days; 
  (b) the first of which commences at the beginning of the year and the last of which ends at the end of the year; and 
  (c) that are, unless the Minister otherwise agrees in writing, consistent with the calculation periods designated for the bank’s preceding taxation year. ( période de calcul)  
  
  ### Formula elements
  
  (2) The following descriptions apply for the purposes of the formulae in subsection (3) for any calculation period in a taxation year of an authorized foreign bank: is the amount of the bank’s assets at the end of the period; is the amount of the bank’s branch advances at the end of the period; is the total of all amounts each of which is a reasonable amount on account of notional interest for the period, in respect of a branch advance, that would be deductible in computing the bank’s income for the year if it were interest payable by, and the advance were indebtedness of, the bank to another person and if this Act were read without reference to paragraph 18(1)(v) and this section; is the total of all amounts each of which is an amount on account of interest for the period in respect of a liability of the bank to another person or partnership that would be deductible in computing the bank’s income for the year if this Act were read without reference to paragraph 18(1)(v) and this section; and is the amount of the bank’s liabilities to other persons and partnerships at the end of the period. 
  
  ### Interest deduction
  
  (3) In computing the income of an authorized foreign bank from its Canadian banking business for a taxation year, there may be deducted on account of interest for each calculation period of the bank for the year, 
  (a) where the total amount at the end of the period of its liabilities to other persons and partnerships and branch advances is 95% or more of the amount of its assets at that time, an amount not exceeding 
  (i) if the amount of liabilities to other persons and partnerships at that time is less than 95% of the amount of its assets at that time, the amount determined by the formula and 
  (ii) if the amount of those liabilities at that time is greater than or equal to 95% of the amount of its assets at that time, the amount determined by the formula and 
  (b) in any other case, the total of 
  (i) the amount determined by the formula and 
  (ii) the product of 
  (A) the amount claimed by the bank, in its return of income for the year, not exceeding the amount determined by the formula and 
  (B) the average, based on daily observations, of the Bank of Canada bank rate for the period. 
  
  ### Branch amounts
  
  (4) Only amounts that are in respect of an authorized foreign bank’s Canadian banking business, and that are recorded in the books of account of the business in a manner consistent with the manner in which they are required to be treated for the purposes of the branch financial statements, shall be used to determine 
  (a) the amounts in subsection (2); and 
  (b) the amounts in subsection (3) of an authorized foreign bank’s assets, liabilities to other persons and partnerships, and branch advances. 
  
  ### Notional interest
  
  (5) For the purposes of the description of IBA in subsection (2), a reasonable amount on account of notional interest for a calculation period in respect of a branch advance is the amount that would be payable on account of interest for the period by a notional borrower, having regard to the duration of the advance, the currency in which repayment is required and all other terms, as adjusted by paragraph (c), of the advance, if 
  (a) the borrower were a person that dealt at arm’s length with the bank, that carried on the bank’s Canadian banking business and that had the same credit-worthiness and borrowing capacity as the bank; 
  (b) the advance were a loan by the bank to the borrower; and 
  (c) any of the terms of the advance (excluding the rate of interest, but including the structure of the interest calculation, such as whether the rate is fixed or floating and the choice of any reference rate referred to) that are not terms that would be made between the bank as lender and the borrower, having regard to all the circumstances, including the nature of the Canadian banking business, the use of the advanced funds in the business and normal risk management practices for banks, were instead terms that would be agreed to by the bank and the borrower. 
  
  ### Weak currency debt — interpretation
  
  20.3 (1) The definitions in this subsection apply in this section.  
  *exchange date* in respect of a debt of a taxpayer that is at any time a weak currency debt means, if the debt is incurred or assumed by the taxpayer  
  (a) in respect of borrowed money that is denominated in the final currency, the day that the debt is incurred or assumed by the taxpayer; and 
  (b) in respect of borrowed money that is not denominated in the final currency, or in respect of the acquisition of property, the day on which the taxpayer uses the borrowed money or the acquired property, directly or indirectly, to acquire funds that are, or to settle an obligation that is, denominated in the final currency. ( date de l’échange)   
  *hedge* in respect of a debt of a taxpayer that is at any time a weak currency debt means any agreement made by the taxpayer  
  (a) that can reasonably be regarded as having been made by the taxpayer primarily to reduce the taxpayer’s risk, with respect to payments of principal or interest in respect of the debt, of fluctuations in the value of the weak currency; and 
  (b) that is identified by the taxpayer as a hedge in respect of the debt in a designation in prescribed form filed with the Minister on or before the 30th day after the day the taxpayer enters into the agreement. ( opération de couverture)   
  *weak currency debt* of a taxpayer at a particular time means a particular debt in a foreign currency (in this section referred to as the “weak currency”), incurred or assumed by the taxpayer at a time (in this section referred to as the “commitment time”) after February 27, 2000, in respect of a borrowing of money or an acquisition of property, where  
  (a) any of the following applies, namely, 
  (i) the borrowed money is denominated in a currency (in this section referred to as the “final currency”) other than the weak currency, is used for the purpose of earning income from a business or property and is not used to acquire funds in a currency other than the final currency, 
  (ii) the borrowed money or the acquired property is used, directly or indirectly, to acquire funds that are denominated in a currency (in this section referred to as the “final currency”) other than the weak currency, that are used for the purpose of earning income from a business or property and that are not used to acquire funds in a currency other than the final currency, 
  (iii) the borrowed money or the acquired property is used, directly or indirectly, to settle an obligation that is denominated in a currency (in this section referred to as the “final currency”) other than the weak currency, that is incurred or assumed for the purpose of earning income from a business or property and that is not incurred or assumed to acquire funds in a currency other than the final currency, or 
  (iv) the borrowed money or the acquired property is used, directly or indirectly, to settle another debt of the taxpayer that is at any time a weak currency debt in respect of which the final currency (which is deemed to be the final currency in respect of the particular debt) is a currency other than the currency of the particular debt; 
  (b) the amount of the particular debt (together with any other debt that would, but for this paragraph, be at any time a weak currency debt, and that can reasonably be regarded as having been incurred or assumed by the taxpayer as part of a series of transactions that includes the incurring or assumption of the particular debt) exceeds $500,000; and 
  (c) either of the following applies, namely, 
  (i) if the rate at which interest is payable at the particular time in the weak currency in respect of the particular debt is determined under a formula based on the value from time to time of a reference rate (other than a reference rate the value of which is established or materially influenced by the taxpayer), the interest rate at the commitment time, as determined under the formula as though interest were then payable, exceeds by more than two percentage points the rate at which interest would have been payable at the commitment time in the final currency if 
  (A) the taxpayer had, at the commitment time, instead incurred or assumed an equivalent amount of debt in the final currency on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating) with those modifications that the difference in currency requires, and 
  (B) interest on the equivalent amount of debt referred to in clause (A) was payable at the commitment time, or 
  (ii) in any other case, the rate at which interest is payable at the particular time in the weak currency in respect of the particular debt exceeds by more than two percentage points the rate at which interest would have been payable at the particular time in the final currency if at the commitment time the taxpayer had instead incurred or assumed an equivalent amount of debt in the final currency on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating), with those modifications that the difference in currency requires. ( dette en devise faible)  
  
  ### Interest and gain
  
  (2) Notwithstanding any other provision of this Act, the following rules apply in respect of a particular debt of a taxpayer (other than a corporation described in one or more of paragraphs (a), (b), (c) and (e) of the definition 
  *specified financial institution* in subsection 248(1)) that is at any time a weak currency debt:  
  (a) no deduction on account of interest that accrues on the debt for any period that begins after the day that is the later of June 30, 2000 and the exchange date during which it is a weak currency debt shall exceed the amount of interest that would, if at the commitment time the taxpayer had instead incurred or assumed an equivalent amount of debt, the principal and interest in respect of which were denominated in the final currency, on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating) have accrued on the equivalent debt during that period, with those modifications that the difference in currency requires; 
  (b) the amount, if any, of the taxpayer’s gain or loss (in this section referred to as a “foreign exchange gain or loss”) for a taxation year on the settlement or extinguishment of the debt that arises because of the fluctuation in the value of any currency shall be included or deducted, as the case may be, in computing the taxpayer’s income for the year from the business or the property to which the debt relates; and 
  (c) the amount of any interest on the debt that was, because of this subsection, not deductible is deemed, for the purpose of computing the taxpayer’s foreign exchange gain or loss on the settlement or extinguishment of the debt, to be an amount paid by the taxpayer to settle or extinguish the debt. 
  
  ### Hedges
  
  (3) In applying subsection (2) in circumstances where a taxpayer has entered into a hedge in respect of a debt of the taxpayer that is at any time a weak currency debt, the amount paid or payable in the weak currency for a taxation year on account of interest on the debt, or paid in the weak currency in the year on account of the debt’s principal, shall be decreased by the amount of any foreign exchange gain, or increased by the amount of any foreign exchange loss, on the hedge in respect of the amount so paid or payable. 
  
  ### Repayment of principal
  
  (4) If the amount (expressed in the weak currency) outstanding on account of principal in respect of a debt of the taxpayer that is at any time a weak currency debt is reduced before maturity (whether by repayment or otherwise), the amount (expressed in the weak currency) of the reduction is deemed, except for the purposes of determining the rate of interest that would have been charged on an equivalent loan in the final currency and applying paragraph (b) of the definition 
  *weak currency debt* in subsection (1), to have been a separate debt from the commitment time.  
  
  ### Definitions
  
  20.4 (1) The definitions in section 12.5 apply for the purposes of this section. 
  
  ### Transition year income deduction
  
  (2) There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year the absolute value of the negative amount, if any, of the insurer’s reserve transition amount in respect of that insurance business. 
  
  ### Transition year income inclusion reversal
  
  (3) If an amount has been included under subsection 12.5(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be deducted in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula is the amount included under subsection 12.5(2) in computing the insurer’s income for the transition year from that insurance business; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Ceasing to carry on business
  
  (4) If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the “discontinued business”), and none of subsections 12.5(4) to (6) apply, there shall be deducted in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula is any amount included under subsection 12.5(2) in computing the insurer’s income from the discontinued business for its transition year; and is the total of all amounts each of which is an amount deducted under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time. 
  
  ### Cost of borrowed money
  
  21 (1) Where in a taxation year a taxpayer has acquired depreciable property, if the taxpayer elects under this subsection in the taxpayer’s return of income under this Part for the year, 
  (a) in computing the taxpayer’s income for the year and for such of the 3 immediately preceding taxation years as the taxpayer had, paragraphs 20(1)(c), 20(1)(d), 20(1)(e) and 20(1)(e.1) do not apply to the amount or to the part of the amount specified in the taxpayer’s election that, but for an election under this subsection in respect thereof, would be deductible in computing the taxpayer’s income (other than exempt income) for any such year in respect of borrowed money used to acquire the depreciable property or the amount payable for the depreciable property; and 
  (b) the amount or the part of the amount, as the case may be, described in paragraph 21(1)(a) shall be added to the capital cost to the taxpayer of the depreciable property so acquired by the taxpayer. 
  
  ### Borrowed money used for exploration or development
  
  (2) Where in a taxation year a taxpayer has used borrowed money for the purpose of exploration, development or the acquisition of property and the expenses incurred by the taxpayer in respect of those activities are Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses, Canadian oil and gas property expenses, foreign resource expenses in respect of a country, or foreign exploration and development expenses, as the case may be, if the taxpayer so elects under this subsection in the taxpayer’s return of income for the year, 
  (a) in computing the taxpayer’s income for the year and for such of the three immediately preceding taxation years as the taxpayer had, paragraphs 20(1)(c), (d), (e) and (e.1) do not apply to the amount or to the part of the amount specified in the taxpayer’s election that, but for that election, would be deductible in computing the taxpayer’s income (other than exempt income or income that is exempt from tax under this Part) for any such year in respect of the borrowed money used for the exploration, development or acquisition of property, as the case may be; and 
  (b) the amount or the part of the amount, as the case may be, described in paragraph (a) is deemed to be Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses, Canadian oil and gas property expenses, foreign resource expenses in respect of a country, or foreign exploration and development expenses, as the case may be, incurred by the taxpayer in the year. 
  
  ### Borrowing for depreciable property
  
  (3) In computing the income of a taxpayer for a particular taxation year, where the taxpayer 
  (a) in any preceding taxation year 
  (i) made an election under subsection 21(1) in respect of borrowed money used to acquire depreciable property or an amount payable for depreciable property acquired by the taxpayer, or 
  (ii) was, by virtue of subsection 18(3.1), required to include an amount in respect of the construction of a depreciable property in computing the capital cost to the taxpayer of the depreciable property, and 
  (b) in each taxation year, if any, after that preceding taxation year and before the particular year, made an election under this subsection covering the total amount that, but for an election under this subsection in respect thereof, would have been deductible in computing the taxpayer’s income (other than exempt income) for each such year in respect of the borrowed money used to acquire the depreciable property or the amount payable for the depreciable property acquired by the taxpayer, if an election under this subsection is made in the taxpayer’s return of income under this Part for the particular year, paragraphs 20(1)(c), 20(1)(d), 20(1)(e) and 20(1)(e.1) do not apply to the amount or to the part of the amount specified in the election that, but for an election under this subsection in respect thereof, would be deductible in computing the taxpayer’s income (other than exempt income) for the particular year in respect of the borrowed money used to acquire the depreciable property or the amount payable for the depreciable property acquired by the taxpayer, and the amount or part of the amount, as the case may be, shall be added to the capital cost to the taxpayer of the depreciable property. 
  
  ### Borrowing for exploration, etc.
  
  (4) In computing the income of a taxpayer for a particular taxation year, where the taxpayer 
  (a) in any preceding taxation year made an election under subsection 21(2) in respect of borrowed money used for the purpose of exploration, development or acquisition of property, 
  (b) in each taxation year, if any, after that preceding taxation year and before the particular year, made an election under this subsection covering the total amount that, but for that election, would have been deductible in computing the taxpayer’s income (other than exempt income or income that is exempt from tax under this Part) for each such year in respect of the borrowed money used for the exploration, development or acquisition of property, as the case may be, and 
  (c) so elects in the taxpayer’s return of income for the particular year, the following rules apply: 
  (d) paragraphs 20(1)(c), (d), (e) and (e.1) do not apply to the amount or to the part of the amount specified in the election that, but for the election, would be deductible in computing the taxpayer’s income (other than exempt income or income that is exempt from tax under this Part) for the particular year in respect of the borrowed money used for the exploration, development or acquisition of property, and 
  (e) the amount or part of the amount, as the case may be, is deemed to be Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses, Canadian oil and gas property expenses, foreign resource expenses in respect of a country, or foreign exploration and development expenses, as the case may be, incurred by the taxpayer in the particular year. 
  
  ### Reassessments
  
  (5) Notwithstanding any other provision of this Act, where a taxpayer has made an election in accordance with the provisions of subsection 21(1) or 21(2), such reassessments of tax, interest or penalties shall be made as are necessary to give effect thereto. 
  
  ## Ceasing to carry on business 
  
  ### Sale of accounts receivable
  
  22 (1) Where a person who has been carrying on a business has, in a taxation year, sold all or substantially all the property used in carrying on the business, including the debts that have been or will be included in computing the person’s income for that year or a previous year and that are still outstanding, and including the debts arising from loans made in the ordinary course of the person’s business if part of the person’s ordinary business was the lending of money and that are still outstanding, to a purchaser who proposes to continue the business which the vendor has been carrying on, if the vendor and the purchaser have executed jointly an election in prescribed form to have this section apply, the following rules are applicable: 
  (a) there may be deducted in computing the vendor’s income for the taxation year an amount equal to the difference between the face value of the debts so sold (other than debts in respect of which the vendor has made deductions under paragraph 20(1)(p)), and the consideration paid by the purchaser to the vendor for the debts so sold; 
  (b) an amount equal to the difference described in paragraph 22(1)(a) shall be included in computing the purchaser’s income for the taxation year; 
  (c) the debts so sold shall be deemed, for the purposes of paragraphs 20(1)(l) and 20(1)(p), to have been included in computing the purchaser’s income for the taxation year or a previous year but no deduction may be made by the purchaser under paragraph 20(1)(p) in respect of a debt in respect of which the vendor has previously made a deduction; and 
  (d) each amount deducted by the vendor in computing income for a previous year under paragraph 20(1)(p) in respect of any of the debts so sold shall be deemed, for the purpose of paragraph 12(1)(i), to have been so deducted by the purchaser. 
  
  ### Statement by vendor and purchaser
  
  (2) An election executed for the purposes of subsection 22(1) shall contain a statement by the vendor and the purchaser jointly as to the consideration paid for the debts sold by the vendor to the purchaser and that statement shall, subject to subsection 69(1), as against the Minister, be binding on the vendor and the purchaser in so far as it may be relevant in respect of any matter arising under this Act. 
  
  ### Sale of inventory
  
  23 (1) Where, on or after disposing of or ceasing to carry on a business or a part of a business, a taxpayer has sold all or any part of the property that was included in the inventory of the business, the property so sold shall, for the purposes of this Part, be deemed to have been sold by the taxpayer in the course of carrying on the business. 
  
  ### Reference to property in inventory
  
  (3) A reference in this section to property that was included in the inventory of a business shall be deemed to include a reference to property that would have been so included if the income from the business had not been computed in accordance with the method authorized by subsection 28(1) or paragraph 34(a). 
  24 (1)  [Repealed, 2016, c. 12, s. 8]  
  
  ### Business carried on by spouse or common-law partner or controlled corporation
  
  (2) If, at any time, an individual ceases to carry on a business and the individual’s spouse or common-law partner, or a corporation controlled directly or indirectly in any manner whatever by the individual, carries on the business and acquires all of the property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of the business owned by the individual immediately before that time and that had value at that time, the following rules apply:  
  (a) the individual is deemed to have, immediately before that time, disposed of the property and received proceeds of disposition equal to the lesser of the capital cost and the cost amount to the individual of the property immediately before the disposition; 
  (b) the spouse, common-law partner or corporation, as the case may be, is deemed to have acquired the property at a cost equal to those proceeds; and 
  (c) if the amount that was the capital cost to the individual of the property exceeds the amount determined under paragraph 70(5)(b) to be the cost to the person that acquired the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (i) the capital cost to the person of the property is deemed to be the amount that was the capital cost to the individual of the property, and 
  (ii) the excess is deemed to have been allowed to the person in respect of the property under regulations made for the purposes of paragraph 20(1)(a) in computing income for taxation years that ended before the person acquired the property. 
  (3)  [Repealed, 2016, c. 12, s. 8]  
  24.1  [Repealed, 1996, c. 21, s. 6(1)]  
  
  ### Fiscal period of business disposed of by individual
  
  25 (1) Where an individual was the proprietor of a business and disposed of it during a fiscal period of the business, the fiscal period may, if the individual so elects and subsection 249.1(4) does not apply in respect of the business, be deemed to have ended at the time it would have ended if the individual had not disposed of the business during the fiscal period. 
  
  ### Election
  
  (2) An election under subsection 25(1) is not valid unless the individual, at the time when the fiscal period of the business would, if the election were valid, be deemed to have ended, is resident in Canada. 
  
  ### Dispositions in extended fiscal period
  
  (3) If subsection (1) applies in respect of a fiscal period of a business of an individual, for the purpose of computing the individual’s income for the fiscal period, section 13 is to be read without reference to its subsection (8). 
  
  ## Special Cases 
  
  ### Banks — inclusions in income
  
  26 (1) There shall be included in computing the income of a bank for its first taxation year that commences after June 17, 1987 and ends after 1987 the total of 
  (a) the total of the specific provisions of the bank, as determined, or as would be determined if such a determination were required, under the Minister’s rules, as at the end of its immediately preceding taxation year, 
  (b) the total of the general provisions of the bank, as determined, or as would be determined if such a determination were required, under the Minister’s rules, as at the end of its immediately preceding taxation year, 
  (c) the amount, if any, by which 
  (i) the amount of the special provision for losses on trans-border claims of the bank, as determined, or as would be determined if such a determination were required, under the Minister’s rules, that was deductible by the bank under subsection 26(2) in computing its income for its immediately preceding taxation year exceeds 
  (ii) that part of the amount determined under subparagraph 26(1)(c)(i) that was a realized loss of the bank for that immediately preceding taxation year, and 
  (d) the amount, if any, of the tax allowable appropriations account of the bank, as determined, or as would be determined if such a determination were required, under the Minister’s rules, at the end of its immediately preceding taxation year. 
  
  ### Banks — deductions from income
  
  (2) In computing the income for a taxation year of a bank, there may be deducted an amount not exceeding the total of 
  (a) that part of the total of the amounts of the five-year average loan loss experiences of the bank, as determined, or as would be determined if such a determination were required, under the Minister’s rules, for all taxation years before its first taxation year that commences after June 17, 1987 and ends after 1987 that is specified by the bank for the year and was not deducted by the bank in computing its income for any preceding taxation year, 
  (b) that part of the total of the amounts transferred by the bank to its tax allowable appropriations account, as permitted under the Minister’s rules, for all taxation years before its first taxation year that commences after June 17, 1987 and ends after 1987 that is specified by the bank for the year and was not deducted by the bank in computing its income for any preceding taxation year, 
  (c) that part of the amount, if any, by which 
  (i) the amount of the special provision for losses on trans-border claims, as determined, or as would be determined if such a determination were required, under the Minister’s rules, that was deductible by the bank under this subsection in computing its income for its last taxation year before its first taxation year that commences after June 17, 1987 and ends after 1987 exceeds 
  (ii) that part of the amount determined under subparagraph 26(2)(c)(i) that was a realized loss of the bank for that last taxation year that is specified by the bank for the year and was not deducted by the bank in computing its income for any preceding taxation year, 
  (d) where the tax allowable appropriations account of the bank at the end of its last taxation year before its first taxation year that commences after June 17, 1987 and ends after 1987, as determined, or as would be determined if such a determination were required, under the Minister’s rules, is a negative amount, that part of such amount expressed as a positive number that is specified by the bank for the year and was not deducted by the bank in computing its income for any preceding taxation year, and 
  (e) that part of the total of the amounts calculated in respect of the bank for the purposes of the Minister’s rules, or that would be calculated for the purposes of those rules if such a calculation were required, under Procedure 8 of the Procedures for the Determination of the Provision for Loan Losses as set out in Appendix 1 of those rules, for all taxation years before its first taxation year that commences after June 17, 1987 and ends after 1987 that is specified by the bank for the year and was not deducted by the bank in computing its income for any preceding taxation year. 
  
  ### Write-offs and recoveries
  
  (3) In computing the income of a bank, the following rules apply: 
  (a) any amount that was recorded by the bank as a realized loss or a write-off of an asset that was included by the bank in the calculation of an amount deductible under the Minister’s rules, or would have been included in the calculation of such an amount if such a calculation had been required, for any taxation year before its first taxation year that commences after June 17, 1987 and ends after 1987, shall, for the purposes of paragraph 12(1)(i) and section 12.4, be deemed to have been deducted by the bank under paragraph 20(1)(p) in computing its income for the year for which it was so recorded; and 
  (b) any amount that was recorded by the bank as a recovery of a realized loss or a write-off of an asset that was included by the bank in the calculation of an amount deductible under the Minister’s rules, or would have been included in the calculation of such an amount if such a calculation had been required, for any taxation year before its first taxation year that commences after June 17, 1987 and ends after 1987 shall, for the purposes of section 12.4, be deemed to have been included by the bank under paragraph 12(1)(i) in computing its income for the year for which it was so recorded. 
  
  ### Definition of 
  *Minister’s rules* 
  
  (4) For the purposes of this section, 
  *Minister’s rules* means the Rules for the Determination of the Appropriations for Contingencies of a Bank issued under the authority of the Minister of Finance pursuant to section 308 of the Bank Act for the purposes of subsections (1) and (2) of this section.  
  
  ### Application of Part I to Crown corporation
  
  27 (1) This Part applies to a federal Crown corporation as if 
  (a) any income or loss from a business carried on by the corporation as agent of Her Majesty, or from a property of Her Majesty administered by the corporation, were an income or loss of the corporation from the business or the property, as the case may be; and 
  (b) any property, obligation or debt of any kind whatever held, administered, entered into or incurred by the corporation as agent of Her Majesty were a property, obligation or debt, as the case may be, of the corporation. 
  
  ### Presumption
  
  (2) Notwithstanding any other provision of this Act, a prescribed federal Crown corporation and any corporation controlled by such a corporation are each deemed not to be a private corporation and paragraphs 149(1)(d) to (d.4) do not apply to those corporations. 
  
  ### Transfers of land for disposition
  
  (3) Where land of Her Majesty has been transferred to a prescribed federal Crown corporation for purposes of disposition, the acquisition of the property by the corporation and any disposition thereof shall be deemed not to have been in the course of the business carried on by the corporation. 
  
  ### Emissions allowances
  
  27.1 (1) Notwithstanding section 10, for the purpose of computing a taxpayer’s income from a business, an emissions allowance shall be valued at the cost at which the taxpayer acquired it. 
  
  ### Determination of cost of emissions allowances
  
  (2) If at any particular time a taxpayer that owns one emissions allowance, or two or more identical emissions allowances (for the purposes of this subsection two or more emissions allowances will be considered identical if they could be used to settle the same emissions obligations), acquires one or more other emissions allowances (in this subsection referred to as 
  *newly acquired emissions allowances*), each of which is identical to each of the previously-acquired emissions allowances, for the purposes of computing, at any subsequent time, the cost of the taxpayer of each of the identical emissions allowances,  
  (a) the taxpayer is deemed to have disposed of each of the previously-acquired emissions allowances immediately before the particular time for proceeds equal to its cost to the taxpayer immediately before the particular time; and 
  (b) the taxpayer is deemed to have acquired each of the identical emissions allowances at the particular time at a cost equal to the amount determined by the formula is the total cost to the taxpayer immediately before the particular time of the previously-acquired emissions allowances, is the total cost to the taxpayer (determined without reference to this section) of the newly-acquired emissions allowances, and is the number of the identical emissions allowances owned by the taxpayer immediately after the particular time. 
  
  ### Expense restriction
  
  (3) Notwithstanding any other provision of this Act, in computing a taxpayer’s income from a business for a taxation year, the total amount deductible in respect of a particular emissions obligation for a taxation year shall not exceed the amount determined by the formula is the total cost of emissions allowances either 
  (a) used by the taxpayer to settle the particular emissions obligation in the year, or 
  (b) held by the taxpayer at the end of the taxation year that can be used to satisfy the particular emissions obligation in respect of the year; is the amount determined by the formula is the number of emissions allowances required to satisfy the particular emissions obligation in respect of the taxation year, is the number of emissions allowances used by the taxpayer to settle the particular emissions obligation in the year, and is the number of emissions allowances held by the taxpayer at the end of the taxation year that can be used to satisfy the particular emissions obligation in respect of the year; and is the fair market value of an emissions allowance at the end of the taxation year that could be used to satisfy the particular emissions obligation in respect of the year. 
  
  ### Income inclusion in following year
  
  (4) There shall be included in computing the income of a taxpayer for a taxation year as income from a business the amount deducted in respect of an emissions obligation referred to in subsection (3) for the immediately preceding taxation year to the extent that the emissions obligation was not settled in the immediately preceding taxation year. 
  
  ### Proceeds of disposition
  
  (5) If a taxpayer surrenders an emissions allowance to settle an emissions obligation, the taxpayer’s proceeds from the disposition of the emissions allowance are deemed to be equal to the taxpayer’s cost of the emissions allowance. 
  
  ### Loss restriction event
  
  (6) Notwithstanding subsection (1), each emissions allowance held at the end of the taxpayer’s taxation year that ends immediately before the time at which the taxpayer is subject to a loss restriction event is to be valued at the cost at which the taxpayer acquired the property, or its fair market value at the end of the year, whichever is lower, and after that time the cost at which the taxpayer acquired the property is, subject to a subsequent application of this subsection and subsection (2), deemed to be that lower amount. 
  
  ### Farming or fishing business
  
  28 (1) For the purpose of computing the income of a taxpayer for a taxation year from a farming or fishing business, the income from the business for that year may, if the taxpayer so elects, be computed in accordance with a method (in this section referred to as the “cash method”) whereby the income therefrom for that year shall be deemed to be an amount equal to the total of 
  (a) all amounts that 
  (i) were received in the year, or are deemed by this Act to have been received in the year, in the course of carrying on the business, and 
  (ii) were in payment of or on account of an amount that would, if the income from the business were not computed in accordance with the cash method, be included in computing income from the business for that or any other year, 
  (b) with respect to a farming business, such amount, if any, as is specified by the taxpayer in respect of the business in the taxpayer’s return of income under this Part for the year, not exceeding the amount, if any, by which 
  (i) the fair market value at the end of the year of inventory owned by the taxpayer in connection with the business at that time exceeds 
  (ii) the amount determined under paragraph 28(1)(c) for the year, 
  (c) with respect to a farming business, the amount, if any, that is the lesser of 
  (i) the taxpayer’s loss from the business for the year computed without reference to this paragraph and to paragraph 28(1)(b), and 
  (ii) the value of inventory purchased by the taxpayer that was owned by the taxpayer in connection with the business at the end of the year, and 
  (d) the total of all amounts each of which is an amount included in computing the taxpayer’s income for the year from the business because of subsection 13(1), 80(13) or 80.3(3) or (5), minus the total of 
  (e) all amounts, other than amounts described in section 30, that 
  (i) were paid in the year, or are deemed by this Act to have been paid in the year, in the course of carrying on the business, 
  (ii) in the case of amounts paid, or deemed by this Act to have been paid, for inventory, were in payment of or on account of an amount that would be deductible in computing the income from the business for the year or any other taxation year if that income were not computed in accordance with the cash method, and 
  (iii) in any other case, were in payment of or on account of an amount that would be deductible in computing the income from the business for a preceding taxation year, the year or the following taxation year if that income were not computed in accordance with the cash method, 
  (e.1) all amounts, other than amounts described in section 30, that 
  (i) would be deductible in computing the income from the business for the year if that income were not computed in accordance with the cash method, 
  (ii) are not deductible in computing the income from the business for any other taxation year, and 
  (iii) were paid in a preceding taxation year in the course of carrying on the business, 
  (f) the total of all amounts each of which is the amount, if any, included under paragraph 28(1)(b) or 28(1)(c) in computing the taxpayer’s income from the business for the immediately preceding taxation year, and 
  (g) the total of all amounts each of which is an amount deducted for the year under paragraph 20(1)(a) or (uu), subsection 20(16), section 30 or subsection 80.3(2) or (4) in respect of the business, except that paragraphs 28(1)(b) and 28(1)(c) do not apply in computing the income of the taxpayer for the taxation year in which the taxpayer dies. 
  
  ### Acquisition of inventory
  
  (1.1) Where at any time, and in circumstances where paragraph 69(1)(a) or 69(1)(c) applies, a taxpayer acquires inventory that is owned by the taxpayer in connection with a farming business the income from which is computed in accordance with the cash method, for the purposes of this section an amount equal to the cost to the taxpayer of the inventory shall be deemed 
  (a) to have been paid by the taxpayer at that time and in the course of carrying on that business, and 
  (b) to be the only amount so paid for the inventory by the taxpayer, and the taxpayer shall be deemed to have purchased the inventory at the time it was so acquired. 
  
  ### Valuation of inventory
  
  (1.2) For the purpose of paragraph 28(1)(c) and notwithstanding section 10, inventory of a taxpayer shall be valued at any time at the lesser of the total amount paid by the taxpayer at or before that time to acquire it (in this section referred to as its “cash cost”) and its fair market value, except that an animal (in this section referred to as a “specified animal”) that is a horse or, where the taxpayer has so elected in respect thereof for the taxation year that includes that time or for any preceding taxation year, is a bovine animal registered under the Animal Pedigree Act, shall be valued  
  (a) at any time in the taxation year in which it is acquired, at such amount as is designated by the taxpayer not exceeding its cash cost to the taxpayer and not less than 70% of its cash cost to the taxpayer; and 
  (b) at any time in a subsequent taxation year, at such amount as is designated by the taxpayer not exceeding its cash cost to the taxpayer and not less than 70% of the total of 
  (i) its value determined under this subsection at the end of the preceding taxation year, and 
  (ii) the total amount paid on account of the purchase price of the animal during the year. 
  
  ### Short fiscal period
  
  (1.3) For each taxation year that is less than 51 weeks, the reference in subsection 28(1.2) to “70” shall be read as a reference to the number determined by the formula is the number of days in the taxation year. 
  
  ### Where joint farming or fishing business
  
  (2) Subsection 28(1) does not apply for the purpose of computing the income of a taxpayer for a taxation year from a farming or fishing business carried on by the taxpayer jointly with one or more other persons, unless each of the other persons by whom the business is jointly carried on has elected to have his or her income from the business for that year computed in accordance with the cash method. 
  
  ### Concurrence of Minister
  
  (3) Where a taxpayer has filed a return of income under this Part for a taxation year wherein the taxpayer’s income for that year from a farming or fishing business has been computed in accordance with the cash method, income from the business for each subsequent taxation year shall, subject to the other provisions of this Part, be computed in accordance with that method unless the taxpayer, with the concurrence of the Minister and on such terms and conditions as are specified by the Minister, adopts some other method. 
  
  ### Non-resident
  
  (4) Notwithstanding subsections 28(1) and 28(5), where at the end of a taxation year a taxpayer who carried on a business the income from which was computed in accordance with the cash method is non-resident and does not carry on that business in Canada, an amount equal to the total of all amounts each of which is the fair market value of an amount outstanding during the year as or on account of a debt owing to the taxpayer that arose in the course of carrying on the business and that would have been included in computing the taxpayer’s income for the year if the amount had been received by the taxpayer in the year, shall (to the extent that the amount was not otherwise included in computing the taxpayer’s income for the year or a preceding taxation year) be included in computing the taxpayer’s income from the business 
  (a) for the year, if the taxpayer was non-resident throughout the year; and 
  (b) for the part of the year throughout which the taxpayer was resident in Canada, if the taxpayer was resident in Canada at any time in the year. 
  (4.1)  [Repealed, 2001, c. 17, s. 18]  
  
  ### Accounts receivable
  
  (5) There shall be included in computing the income of a taxpayer for a taxation year such part of an amount received by the taxpayer in the year, on or after disposing of or ceasing to carry on a business or a part of a business, for, on account or in lieu of payment of, or in satisfaction of debts owing to the taxpayer that arose in the course of carrying on the business as would have been included in computing the income of the taxpayer for the year had the amount so received been received by the taxpayer in the course of carrying on the business. 
  
  ### Disposition of animal of basic herd class
  
  29 (1) Where a taxpayer has a basic herd of a class of animals and disposes of an animal of that class in the course of carrying on a farming business in a taxation year, if the taxpayer so elects in the taxpayer’s return of income under this Part for the year the following rules apply: 
  (a) there shall be deducted in computing the taxpayer’s basic herd of that class at the end of the year such number as is designated by the taxpayer in the taxpayer’s election, not exceeding the least of 
  (i) the number of animals of that class so disposed of by the taxpayer in that year, 
  (ii) 1/10 of the taxpayer’s basic herd of that class on December 31, 1971, and 
  (iii) the taxpayer’s basic herd of that class of animal at the end of the immediately preceding taxation year; and 
  (b) there shall be deducted in computing the taxpayer’s income from the farming business for the taxation year the product obtained when 
  (i) the number determined under paragraph 29(1)(a) in respect of the taxpayer’s basic herd of that class for the year is multiplied by 
  (ii) the quotient obtained when the fair market value on December 31, 1971 of the taxpayer’s animals of that class on that day is divided by the number of the taxpayer’s animals of that class on that day. 
  
  ### Reduction in basic herd
  
  (2) Where a taxpayer carries on a farming business in a taxation year and the taxpayer’s basic herd of any class at the end of the immediately preceding year, minus the deduction, if any, required by paragraph 29(1)(a) to be made in computing the taxpayer’s basic herd of that class at the end of the year, exceeds the number of animals of that class owned by the taxpayer at the end of the year, 
  (a) there shall be deducted in computing the taxpayer’s basic herd of that class at the end of the year the number of animals comprising the excess; and 
  (b) there shall be deducted in computing the taxpayer’s income from the farming business for the taxation year the product obtained when 
  (i) the number of animals comprising the excess is multiplied by 
  (ii) the quotient obtained when the fair market value on December 31, 1971 of the taxpayer’s animals of that class on that day is divided by the number of the taxpayer’s animals of that class on that day. 
  
  ### Interpretation
  
  (3) For the purposes of this section, 
  (a) a taxpayer’s 
  *basic herd* of any class of animals at a particular time means such number of the animals of that class that the taxpayer had on hand at the end of his 1971 taxation year as were, for the purpose of assessing the taxpayer’s tax under this Part for that year, accepted by the Minister, as a consequence of an application made by the taxpayer, to be capital properties and not to be stock-in-trade, minus the numbers, if any, required by virtue of this section to be deducted in computing the taxpayer’s basic herd of that class at the end of taxation years of the taxpayer ending before the particular time;  
  (b)  
  *class of animals* means animals of a particular species, namely, cattle, horses, sheep or swine, that are  
  (i) purebred animals of that species for which a certificate of registration has been issued by a person recognized by breeders in Canada of purebred animals of that species to be the registrar of the breed to which such animals belong, or issued by the Canadian Livestock Records Corporation, or 
  (ii) animals of that species other than purebred animals described in subparagraph 29(3)(b)(i), each of which descriptions in subparagraphs 29(3)(b)(i) and 29(3)(b)(ii) shall be deemed to be of separate classes, except that where the number of the taxpayer’s animals described in subparagraph 29(3)(b)(i) or 29(3)(b)(ii), as the case may be, of a particular species is not greater than 10% of the total number of the taxpayer’s animals of that species that would otherwise be of two separate classes by virtue of this paragraph, the taxpayer’s animals described in subparagraphs 29(3)(b)(i) and 29(3)(b)(ii) of that species shall be deemed to be of a single class; and 
  (c) in determining the number of animals of any class on hand at any time, an animal shall not be included if it was acquired for a feeder operation, and an animal shall be included only if its actual age is not less than, 
  (i) in the case of cattle, 2 years, 
  (ii) in the case of horses, 3 years, and 
  (iii) in the case of sheep or swine, one year, except that 2 animals of a class under the age specified in subparagraph 29(3)(c)(i), 29(3)(c)(ii) or 29(3)(c)(iii), as the case may be, shall be counted as one animal of the age so specified. 
  
  ### Improving land for farming
  
  30 Notwithstanding paragraphs 18(1)(a) and 18(1)(b), there may be deducted in computing a taxpayer’s income for a taxation year from a farming business any amount paid by the taxpayer before the end of the year for clearing land, levelling land or installing a land drainage system for the purposes of the business, to the extent that the amount has not been deducted in a preceding taxation year. 
  
  ### Restricted farm loss
  
  31 (1) If a taxpayer’s chief source of income for a taxation year is neither farming nor a combination of farming and some other source of income that is a subordinate source of income for the taxpayer, then for the purposes of sections 3 and 111 the taxpayer’s loss, if any, for the year from all farming businesses carried on by the taxpayer is deemed to be the total of 
  (a) the lesser of 
  (i) the amount by which the total of the taxpayer’s losses for the year, determined without reference to this section and before making any deduction under section 37, from all farming businesses carried on by the taxpayer exceeds the total of the taxpayer’s incomes for the year, so determined from all such businesses, and 
  (ii) $2,500 plus the lesser of 
  (A) 1/2 of the amount by which the amount determined under subparagraph 31(1)(a)(i) exceeds $2,500, and 
  (B) $15,000, and 
  (b) the amount, if any, by which 
  (i) the amount that would be determined under subparagraph (a)(i) if it were read without reference to “and before making any deduction under section 37”, exceeds 
  (ii) the amount determined under subparagraph 31(1)(a)(i). 
  
  ### Restricted farm loss
  
  (1.1) For the purposes of this Act, a taxpayer’s “restricted farm loss” for a taxation year is the amount, if any, by which 
  (a) the amount determined under subparagraph 31(1)(a)(i) in respect of the taxpayer for the year exceeds 
  (b) the total of the amount determined under subparagraph 31(1)(a)(ii) in respect of the taxpayer for the year and all amounts each of which is an amount by which the taxpayer’s restricted farm loss for the year is required to be reduced because of section 80. 
  
  ### Farming and manufacturing or processing
  
  (2) Subsection (1) does not apply to a taxpayer for a taxation year if the taxpayer’s chief source of income for the year is a combination of farming and manufacturing or processing in Canada of goods for sale and all or substantially all output from all farming businesses carried on by the taxpayer is used in the manufacturing or processing. 
  
  ### Insurance agents and brokers
  
  32 (1) In computing a taxpayer’s income for a taxation year from the taxpayer’s business as an insurance agent or broker, no amount may be deducted under paragraph 20(1)(m) for the year in respect of unearned commissions from the business, but in computing the taxpayer’s income for the year from the business there may be deducted, as a reserve in respect of such commissions, an amount equal to the lesser of 
  (a) the total of all amounts each of which is that proportion of an amount that has been included in computing the taxpayer’s income for the year or a preceding taxation year as a commission in respect of an insurance contract (other than a life insurance contract) that 
  (i) the number of days in the period provided for in the insurance contract that are after the end of the taxation year is of 
  (ii) the number of days in that period, and 
  (b) the total of all amounts each of which is the amount that would, but for this subsection, be deductible under paragraph 20(1)(m) for the year in respect of a commission referred to in paragraph 32(1)(a). 
  
  ### Reserve to be included
  
  (2) There shall be included as income of a taxpayer for a taxation year from a business as an insurance agent or broker, the amount deducted under subsection 32(1) in computing the taxpayer’s income therefrom for the immediately preceding year. 
  
  ### Additional reserve
  
  (3) In computing a taxpayer’s income for a taxation year ending after 1990 from a business carried on by the taxpayer throughout the year as an insurance agent or broker, there may be deducted as an additional reserve an amount not exceeding 
  (a) where the year ends in 1991, 90%, 
  (b) where the year ends in 1992, 80%, 
  (c) where the year ends in 1993, 70%, 
  (d) where the year ends in 1994, 60%, 
  (e) where the year ends in 1995, 50%, 
  (f) where the year ends in 1996, 40%, 
  (g) where the year ends in 1997, 30%, 
  (h) where the year ends in 1998, 20%, 
  (i) where the year ends in 1999, 10%, and 
  (j) where the year ends after 1999, 0% of the amount, if any, by which 
  (k) the reserve that was deducted by the taxpayer under subsection 32(1) for the taxpayer’s last taxation year ending before 1991 exceeds 
  (l) the amount deductible by the taxpayer under subsection 32(1) for the taxpayer’s first taxation year ending after 1990, and any amount so deducted by the taxpayer for a taxation year shall be deemed for the purposes of subsection 32(2) to have been deducted for that year under subsection 32(1). 
  
  ### Employee benefit plan deductions
  
  32.1 (1) Where a taxpayer has made contributions to an employee benefit plan in respect of the taxpayer’s employees or former employees, the taxpayer may deduct in computing the taxpayer’s income for a taxation year 
  (a) such portion of an amount allocated to the taxpayer for the year under subsection 32.1(2) by the custodian of the plan as does not exceed the amount, if any, by which 
  (i) the total of all amounts each of which is a contribution by the taxpayer to the plan for the year or a preceding year exceeds the total of all amounts each of which is 
  (ii) an amount in respect of the plan deducted by the taxpayer in computing the taxpayer’s income for a preceding year, or 
  (iii) an amount received by the taxpayer in the year or a preceding year that was a return of amounts contributed by the taxpayer to the plan; and 
  (b) where at the end of the year all of the obligations of the plan to the taxpayer’s employees and former employees have been satisfied and no property of the plan will thereafter be paid to or otherwise be available for the benefit of the taxpayer, the amount, if any, by which 
  (i) the total of all amounts each of which is a contribution by the taxpayer to the plan for the year or a preceding year exceeds the total of all amounts each of which is 
  (ii) an amount in respect of the plan deducted by the taxpayer in computing the taxpayer’s income for a preceding year, or, by virtue of paragraph 32.1(1)(a), for the year, or 
  (iii) an amount received by the taxpayer in the year or a preceding year that was a return of amounts contributed by the taxpayer to the plan. 
  
  ### Allocation
  
  (2) Every custodian of an employee benefit plan shall each year allocate to persons who have made contributions to the plan in respect of their employees or former employees the amount, if any, by which the total of 
  (a) all payments made in the year out of or under the plan to or for the benefit of their employees or former employees (other than the portion thereof that, by virtue of subparagraph 6(1)(g)(ii), is not required to be included in computing the income of a taxpayer), and 
  (b) all payments made in the year out of or under the plan to the heirs or the legal representatives of their employees or former employees exceeds the income of the plan for the year. 
  
  ### Income of employee benefit plan
  
  (3) For the purposes of subsection 32.1(2), the income of an employee benefit plan for a year 
  (a) in the case of a plan that is a trust, is the amount that would be its income for the year if section 104 were read without reference to subsections 104(4) to 104(24); and 
  (b) in any other case, is the total of all amounts each of which is the amount, if any, by which a payment under the plan by the custodian thereof in the year exceeds 
  (i) in the case of an annuity, that part of the payment determined in prescribed manner to have been a return of capital, and 
  (ii) in any other case, that part of the payment that could, but for paragraph 6(1)(g), reasonably be regarded as being a payment of a capital nature. 
  33.1  [Repealed, 2013, c. 33, s. 4]  
  34  [Repealed, 2017, c. 33, s. 7]  
  
  ### Additional Business Income
  
  34.1 (1) Where 
  (a) an individual (other than a graduated rate estate) carries on a business in a taxation year, 
  (b) a fiscal period of the business begins in the year and ends after the end of the year (in this subsection referred to as the “particular period”), and 
  (c) the individual has elected under subsection 249.1(4) in respect of the business and the election has not been revoked, there shall be included in computing the individual’s income for the year from the business, the amount determined by the formula is the total of the individual’s income from the business for the fiscal periods of the business that end in the year, is the lesser of 
  (i) the total of all amounts each of which is an amount included in the value of A in respect of the business and that is deemed to be a taxable capital gain for the purpose of section 110.6, and 
  (ii) the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for the year, is the number of days on which the individual carries on the business that are both in the year and in the particular period, and is the number of days on which the individual carries on the business that are in fiscal periods of the business that end in the year. 
  
  ### Additional income election
  
  (2) Where 
  (a) an individual (other than a graduated rate estate) begins carrying on a business in a taxation year and not earlier than the beginning of the first fiscal period of the business that begins in the year and ends after the end of the year (in this subsection referred to as the “particular period”), and 
  (b) the individual has elected under subsection 249.1(4) in respect of the business and the election has not been revoked, there shall be included in computing the individual’s income for the year from the business the lesser of 
  (c) the amount designated in the individual’s return of income for the year, and 
  (d) the amount determined by the formula is the individual’s income from the business for the particular period, is the lesser of 
  (i) the total of all amounts each of which is an amount included in the value of A in respect of the business and that is deemed to be a taxable capital gain for the purpose of section 110.6, and 
  (ii) the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for the taxation year that includes the end of the particular period, is the number of days on which the individual carries on the business that are both in the year and in the particular period, and is the number of days on which the individual carries on the business that are in the particular period. 
  
  ### Deduction
  
  (3) There shall be deducted in computing an individual’s income for a taxation year from a business the amount, if any, included under subsection 34.1(1) or 34.1(2) in computing the individual’s income for the preceding taxation year from the business. 
  (4) to (7)  [Repealed, 2013, c. 40, s. 15]  
  
  ### No additional income inclusion
  
  (8) Subsections 34.1(1) and 34.1(2) do not apply in computing an individual’s income for a taxation year from a business where 
  (a) the individual dies or otherwise ceases to carry on the business in the year; or 
  (b) the individual becomes a bankrupt in the calendar year in which the taxation year ends. 
  
  ### Death of partner or proprietor
  
  (9) Where 
  (a) an individual carries on a business in a taxation year, 
  (b) the individual dies in the year and after the end of a fiscal period of the business that ends in the year, 
  (c) another fiscal period of the business ends because of the individual’s death (in this subsection referred to as the “short period”), and 
  (d) the individual’s legal representative 
  (i) elects that this subsection apply in computing the individual’s income for the year, or 
  (ii) files a separate return of income under subsection 150(4) in respect of the individual’s business, notwithstanding subsection 34.1(8), there shall be included in computing the individual’s income for the year from the business, the amount determined by the formula is the total of the individual’s income from the business for fiscal periods (other than the short period) of the business that end in the year, is the lesser of 
  (i) the total of all amounts, each of which is an amount included in the value of A in respect of the business that is deemed to be a taxable capital gain for the purpose of section 110.6, and 
  (ii) the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for the year, is the number of days in the short period, and is the total number of days in fiscal periods of the business (other than the short period) that end in the year. 
  
  ### Definitions
  
  34.2 (1) The definitions in this subsection apply in this section.  
  *adjusted stub period accrual* of a corporation in respect of a partnership — in which the corporation has a significant interest at the end of the last fiscal period of the partnership that ends in the corporation’s taxation year in circumstances where another fiscal period (in this definition referred to as the “particular period”) of the partnership begins in the year and ends after the year — means  
  (a) if paragraph (b) does not apply, the amount determined by the formula is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for a fiscal period of the partnership that ends in the year (other than any amount for which a deduction is available under section 112 or 113), is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for a fiscal period of the partnership that ends in the year, is the number of days that are in both the year and the particular period, is the number of days in fiscal periods of the partnership that end in the year, is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and is an amount designated by the corporation in its return of income for the year (other than an amount included in the description of E) and filed with the Minister on or before its filing-due date for the year; and 
  (b) if a fiscal period of the partnership ends in the corporation’s taxation year and the year is the first taxation year in which the fiscal period of the partnership is aligned with the fiscal period of one or more other partnerships under a multi-tier alignment (in this paragraph referred to as the “eligible fiscal period”), 
  (i) where a fiscal period of the partnership ends in the year and before the eligible fiscal period, the amount determined by the formula is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the first fiscal period of the partnership that ends in the year (other than any amount for which a deduction is available under section 112 or 113), is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the first fiscal period of the partnership that ends in the year, is the number of days that are in both the year and the particular period, is the number of days in the first fiscal period of the partnership that ends in the year, is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and is an amount designated by the corporation in its return of income for the year (other than an amount included in the description of E) and filed with the Minister on or before its filing-due date for the year, and 
  (ii) where the eligible fiscal period of the partnership is the first fiscal period of the partnership that ends in the corporation’s taxation year, the amount determined by the formula is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the eligible fiscal period (other than any amount for which a deduction is available under section 112 or 113), is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the eligible fiscal period, is the corporation’s eligible alignment income for the eligible fiscal period, is the number of days that are in both the year and the particular period, is the number of days that are in the eligible fiscal period that ends in the year, is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and is an amount designated by the corporation in its return of income for the year (other than an amount included in the description of F) and filed with the Minister on or before its filing-due date for the year. ( montant comptabilisé ajusté pour la période tampon)   
  *eligible alignment income*, of a corporation, means  
  (a) if a partnership is subject to a single-tier alignment, the first aligned fiscal period of the partnership ends in the first taxation year of the corporation ending after March 22, 2011 (in this paragraph referred to as the “eligible fiscal period”) and the corporation is a member of the partnership at the end of the eligible fiscal period, 
  (i) where the eligible fiscal period is preceded by another fiscal period of the partnership that ends in the corporation’s first taxation year that ends after March 22, 2011 and the corporation is a member of the partnership at the end of that preceding fiscal period, the amount determined by the formula is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the eligible fiscal period (other than any amount for which a deduction is available under section 112 or 113), is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the eligible fiscal period, and is, where an outlay or expense of the partnership is deemed by subsection 66(18) to be made or incurred by the corporation at the end of the eligible fiscal period, the total of all amounts each of which is an amount that would be deductible by the corporation for the taxation year under any of sections 66.1, 66.2, 66.21 and 66.4 determined as if each such outlay or expense were the only amount relevant in determining the amount deductible, or 
  (ii) where the eligible fiscal period is the first fiscal period of the partnership that ends in the corporation’s first taxation year ending after March 22, 2011, nil; and 
  (b) if a partnership is subject to a multi-tier alignment, the first aligned fiscal period of the partnership ends in the taxation year of the corporation (in this paragraph referred to as the “eligible fiscal period”) and the corporation is a member of the partnership at the end of the eligible fiscal period, the amount determined by the formula is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the eligible fiscal period, other than any amount 
  (i) for which a deduction is available under section 112 or 113, or 
  (ii) that would be included in computing the income of the corporation for the year if there were no multi-tier alignment, is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of a partnership for the eligible fiscal period, and is, where an outlay or expense of the partnership is deemed by subsection 66(18) to be made or incurred by the corporation at the end of the eligible fiscal period, the total of all amounts each of which is an amount that would be deductible by the corporation for the taxation year under any of sections 66.1, 66.2, 66.21 and 66.4 determined as if each such outlay or expense were the only amount relevant in determining the amount deductible. ( revenu d’alignement admissible)   
  *multi-tier alignment*, in respect of a partnership, means the alignment under subsection 249.1(9) or (11) of the fiscal period of the partnership and the fiscal period of one or more other partnerships.  (alignement pour paliers multiples)   
  *qualified resource expense*, of a corporation for a taxation year in respect of a fiscal period of a partnership that begins in the year and ends after the year, means an expense incurred by the partnership in the portion of the fiscal period that is in the year and that is described in any of the following definitions:  
  (a)  
  *Canadian exploration expense* in subsection 66.1(6);  
  (b)  
  *Canadian development expense* in subsection 66.2(5);  
  (c)  
  *foreign resource expense* in subsection 66.21(1); and  
  (d)  
  *Canadian oil and gas property expense* in subsection 66.4(5). (dépense admissible relative à des ressources)   
  *qualifying transitional income*, of a corporation that is a member of a partnership on March 22, 2011, means the amount that is the total of the following amounts, computed in accordance with subsection (15),  
  (a) the corporation’s eligible alignment income in respect of the partnership, and 
  (b) the corporation’s adjusted stub period accrual in respect of the partnership for 
  (i) if there is a multi-tier alignment in respect of the partnership, the corporation’s taxation year during which ends the fiscal period of the partnership that is aligned with the fiscal period of one or more other partnerships under the multi-tier alignment, or 
  (ii) in any other case, the corporation’s first taxation year that ends after March 22, 2011. ( revenu admissible à l’allègement)   
  *significant interest*, of a corporation in a partnership at any time, means a membership interest of the corporation in the partnership if the corporation, or the corporation together with one or more persons or partnerships related to or affiliated with the corporation, is entitled at that time to more than 10% of  
  (a) the income or loss of the partnership; or 
  (b) the assets (net of liabilities) of the partnership if it were to cease to exist. ( participation importante)   
  *single-tier alignment*, in respect of a partnership, means the ending of a fiscal period of the partnership under subsection 249.1(8). (alignement pour palier unique)   
  *specified percentage*, of a corporation for a particular taxation year in respect of a partnership, means  
  (a) if the first taxation year for which the corporation has qualifying transitional income ends in 2011 and the particular year ends in 
  (i) 2011, 100%, 
  (ii) 2012, 85%, 
  (iii) 2013, 65%, 
  (iv) 2014, 45%, 
  (v) 2015, 25%, and 
  (vi) 2016, 0%; 
  (b) if the first taxation year for which the corporation has qualifying transitional income ends in 2012 and the particular year ends in 
  (i) 2012, 100%, 
  (ii) 2013, 85%, 
  (iii) 2014, 65%, 
  (iv) 2015, 45%, 
  (v) 2016, 25%, and 
  (vi) 2017, 0%; and 
  (c) if the first taxation year for which the corporation has qualifying transitional income ends in 2013 and the particular year ends in 
  (i) 2013, 85%, 
  (ii) 2014, 65%, 
  (iii) 2015, 45%, 
  (iv) 2016, 25%, and 
  (v) 2017, 0%. ( pourcentage déterminé)  
  
  ### Income inclusion — adjusted stub period accrual
  
  (2) Subject to subsections (5) and (9), a corporation (other than a professional corporation) shall include in computing its income for a taxation year its adjusted stub period accrual in respect of a partnership if 
  (a) the corporation has a significant interest in the partnership at the end of the last fiscal period of the partnership that ends in the year; 
  (b) another fiscal period of the partnership begins in the year and ends after the year; and 
  (c) at the end of the year, the corporation is entitled to a share of an income, loss, taxable capital gain or allowable capital loss of the partnership for the fiscal period referred to in paragraph (b). 
  
  ### Income inclusion — new partner designation
  
  (3) Subject to subsection (5), if a corporation (other than a professional corporation) becomes a member of a partnership during a fiscal period of the partnership (in this subsection referred to as the “particular period”) that begins in the corporation’s taxation year and ends after the taxation year but on or before the filing-due date for the taxation year and the corporation has a significant interest in the partnership at the end of the particular period, the corporation may include in computing its income for the taxation year the lesser of 
  (a) the amount, if any, designated by the corporation in its return of income for the taxation year, and 
  (b) the amount determined by the formula is the corporation’s income from the partnership for the particular period (other than any amount for which a deduction is available under section 112 or 113), is the number of days that are both in the corporation’s taxation year and the particular period, and is the number of days in the particular period. 
  
  ### Treatment in following year
  
  (4) If an amount was included in computing the income of a corporation in respect of a partnership for the immediately preceding taxation year under subsection (2) or (3), 
  (a) the portion of the amount that, because of subparagraph (5)(a)(i) or (ii), was income for that preceding year is deductible in computing the income of the corporation for the current taxation year; and 
  (b) the portion of the amount that, because of subparagraph (5)(a)(i) or (ii), was taxable capital gains for that preceding year is deemed to be an allowable capital loss of the corporation for the current taxation year from the disposition of property. 
  
  ### Character of amounts
  
  (5) For the purposes of this Act, the following rules apply: 
  (a) in computing the income of a corporation for a taxation year, 
  (i) an adjusted stub period accrual included under subsection (2) in respect of a partnership for the year is deemed to be income, and taxable capital gains from the disposition of property, having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for all fiscal periods of the partnership ending in the year, 
  (ii) an amount included under subsection (3) in respect of a partnership for the year is deemed to be income, and taxable capital gains from the disposition of property, having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for the particular period referred to in that subsection, 
  (iii) an amount, a portion of which is deductible or is an allowable capital loss under subsection (4) in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the income and taxable capital gains included in the corporation’s income for the immediately preceding taxation year under subsection (2) or (3) in respect of the partnership, 
  (iv) an amount claimed as a reserve under subsection (11) in respect of a partnership for the year is deemed to have the same character and to be in the same proportions as the qualifying transitional income in respect of the partnership for the year, and 
  (v) an amount, a portion of which is included in income under paragraph (12)(a), or is deemed to be a taxable capital gain under paragraph (12)(b), in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the amount claimed as a reserve under subsection (11) in respect of the partnership for the immediately preceding taxation year; 
  (b) a corporation’s capital dividend account, as defined in subsection 89(1), is to be determined without reference to this section; and 
  (c) the reference in subparagraph 53(2)(c)(i.4) to an amount deducted under subsection (11) by a taxpayer includes an amount deemed to be an allowable capital loss under subparagraph (11)(b)(ii). 
  
  ### Designation — qualified resource expense
  
  (6) A corporation may designate an amount for a taxation year in respect of a qualified resource expense under the definition 
  *adjusted stub period accrual* in subsection (1) subject to the following rules:  
  (a) the corporation cannot designate an amount for the year in respect of a qualified resource expense in respect of a partnership except to the extent the corporation obtains from the partnership, before the corporation’s filing-due date for the year, information in writing identifying the corporation’s qualified resource expenses described 
  (i) in paragraph (h) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year,  
  (ii) in paragraph (f) of the definition 
  *Canadian development expense* in subsection 66.2(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year,  
  (iii) in paragraph (e) of the definition 
  *foreign resource expense* in subsection 66.21(1), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year, and  
  (iv) in paragraph (b) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year; and  
  (b) the amount designated for the year by the corporation is not to exceed the maximum amount that would be deductible by the corporation under any of sections 66.1, 66.2, 66.21 and 66.4 in computing its income for the year if 
  (i) the amounts referred to in paragraph (a) in respect of the partnership were the only amounts relevant in determining the maximum amount, and 
  (ii) the fiscal period of the partnership that begins in the year and ends after the year had ended at the end of the year and each qualified resource expense were deemed under subsection 66(18) to be incurred by the corporation at the end of the year. 
  
  ### No additional income — bankrupt
  
  (7) Subsections (2) and (3) do not apply in computing a corporation’s income for a taxation year in respect of a partnership if the corporation becomes a bankrupt in the year. 
  
  ### Foreign affiliates
  
  (8) This section does not apply for the purposes of computing, for a taxation year of a foreign affiliate of a corporation resident in Canada, 
  (a) the foreign accrual property income of the affiliate in respect of the corporation; and 
  (b) except to the extent that the context otherwise requires, the exempt surplus or exempt deficit, the hybrid surplus or hybrid deficit, and the taxable surplus or taxable deficit (as those terms are defined in subsection 5907(1) of the Income Tax Regulations) of the affiliate in respect of the corporation.  
  
  ### Special case — multi-tier alignment
  
  (9) If a corporation is a member of a partnership subject to a multi-tier alignment, subsection (2) does not apply to the corporation in respect of the partnership for taxation years preceding the taxation year that includes the end of the first aligned fiscal period of the partnership under the multi-tier alignment. 
  
  ### Designations
  
  (10) Once a corporation makes a designation in calculating its adjusted stub period accrual in respect of a partnership for a taxation year under any of the description of E or F of paragraph (a), the description of E or F of subparagraph (b)(i) and the description of F or G of subparagraph (b)(ii) of the definition 
  *adjusted stub period accrual* in subsection (1), the designation cannot be amended or revoked.  
  
  ### Transitional reserve
  
  (11) If a corporation has qualifying transitional income in respect of a partnership for a particular taxation year, 
  (a) the corporation may, in computing its income for the particular year, claim an amount, as a reserve, not exceeding the least of 
  (i) the specified percentage for the particular year of the corporation’s qualifying transitional income in respect of the partnership, 
  (ii) if, for the immediately preceding taxation year, an amount was claimed under this subsection in computing the corporation’s income in respect of the partnership, the amount that is the total of 
  (A) the amount included under subsection (12) in computing the corporation’s income for the particular year in respect of the partnership, and 
  (B) the amount by which the corporation’s qualifying transitional income in respect of the partnership is increased in the particular year because of the application of subsections (16) and (17), and 
  (iii) the amount determined by the formula is the corporation’s income for the particular year computed before deducting or claiming any amount under this subsection in respect of the partnership or under section 61.3 and 61.4, and is the total of all amounts each of which is an amount deductible by the corporation for the year under section 112 or 113 in respect of a dividend received by the corporation after December 20, 2012; and 
  (b) the portion of the amount claimed under paragraph (a) for the particular year that, because of subparagraph (5)(a)(iv), has 
  (i) a character other than capital is deductible in computing the income of the corporation for the particular year, and 
  (ii) the character of capital is deemed to be an allowable capital loss of the corporation for the particular year from the disposition of property. 
  
  ### Inclusion of prior year reserve
  
  (12) Subject to subsection (5), if a reserve was claimed by a corporation under subsection (11) in respect of a partnership for the immediately preceding taxation year, 
  (a) the portion of the reserve that was deducted under subparagraph (11)(b)(i) for that preceding year is to be included in computing the income of the corporation for the current taxation year; and 
  (b) the portion of the reserve that was deemed by subparagraph (11)(b)(ii) to be an allowable capital loss of the corporation for that preceding year is deemed to be a taxable capital gain of the corporation for the current taxation year from the disposition of property. 
  
  ### No reserve
  
  (13) No claim shall be made under subsection (11) in computing a corporation’s income for a taxation year in respect of a partnership 
  (a) unless, 
  (i) in the case of a corporation that is a member of a partnership in respect of which there is a multi-tier alignment, the corporation has been a member of the partnership continuously since before March 22, 2011 to the end of the year, 
  (ii) in the case of a corporation that is a member of a partnership in respect of which there is no multi-tier alignment, the corporation is a member of the partnership 
  (A) at the end of the partnership’s fiscal period that begins before March 22, 2011 and ends in the year of the corporation that includes March 22, 2011, 
  (B) at the end of the partnership’s fiscal period commencing immediately after the fiscal period referred to in clause (A) and continues to be a member until after the end of the year of the corporation that includes March 22, 2011, and 
  (C) continuously since before March 22, 2011 until the end of the year; 
  (b) if at the end of the year or at any time in the following taxation year, 
  (i) the corporation’s income is exempt from tax under this Part, or 
  (ii) the corporation is non-resident and the partnership does not carry on business through a permanent establishment (as defined for the purpose of subsection 16.1(1)) in Canada; or 
  (c) if the year ends immediately before another taxation year 
  (i) at the beginning of which the partnership no longer principally carries on the activities to which the reserve relates, 
  (ii) in which the corporation becomes a bankrupt, or 
  (iii) in which the corporation is dissolved or wound up (other than in circumstances to which subsection 88(1) applies). 
  
  ### Deemed partner
  
  (14) A corporation that cannot claim an amount under subsection (11) for a taxation year in respect of a partnership solely because it has disposed of its interest in the partnership is deemed for the purposes of paragraph (13)(a) to be a member of a partnership continuously until the end of the taxation year if 
  (a) the corporation disposed of its interest to another corporation related to, or affiliated with, the corporation at the time of the disposition; and 
  (b) a corporation related to, or affiliated with, the corporation has the partnership interest referred to in paragraph (a) at the end of the taxation year. 
  
  ### Computing qualifying transitional income — special rules
  
  (15) For the purposes of determining a corporation’s qualifying transitional income, the income or loss, as the case may be, of a partnership for a fiscal period shall be computed as if 
  (a) the partnership had deducted for the period the maximum amount deductible in respect of any expense, reserve, allowance or other amount; 
  (b) this Act were read without reference to paragraph 28(1)(b); and 
  (c) the partnership had made an election under paragraph 34(a). 
  
  ### Qualifying transition income adjustment  — conditions for application
  
  (16) Subsection (17) applies for a particular taxation year of a corporation and for each subsequent taxation year for which the corporation may claim an amount under subsection (11) in respect of a partnership if the particular year is the first taxation year 
  (a) that is after the taxation year in which the corporation has, or would have if the partnership had income, an adjusted stub period accrual that is included in the corporation’s qualifying transitional income in respect of the partnership by reason of paragraph (b) of the definition 
  *qualifying transitional income* in subsection (1); and  
  (b) in which ends the fiscal period of the partnership that began in the taxation year referred to in paragraph (a). 
  
  ### Adjustment of qualifying transitional income
  
  (17) If this subsection applies in respect of a partnership for a taxation year of a corporation, the adjusted stub period accrual included in the corporation’s qualifying transitional income in respect of the partnership for the year is computed as if 
  (a) the descriptions in paragraph (a) and subparagraph (b)(i) of the definition 
  *adjusted stub period accrual* in subsection (1) read as follows:  is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the particular period (other than any amount for which a deduction is available under section 112 or 113), is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the particular period, is the number of days that are in both the year and the particular period, is the number of days in the particular period, is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and is nil; and 
  (b) the descriptions in subparagraph (b)(ii) of the definition 
  *adjusted stub period accrual* in subsection (1) read as follows:  is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the particular period (other than any amount for which a deduction is available under section 112 or 113), the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the particular period, is nil, is the number of days that are in both the year and the particular period, is the number of days in the particular period, is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and is nil. 
  
  ### Anti-avoidance
  
  (18) If it is reasonable to conclude that one of the main reasons a corporation is a member of a partnership in a taxation year is to avoid the application of subsection (13), the corporation is deemed not to be a member of the partnership for the purposes of that subsection. 
  
  ### Definitions
  
  34.3 (1) The definitions in this subsection and in subsection 34.2(1) apply in this section.  
  *actual stub period accrual*, of a corporation in respect of a qualifying partnership for a taxation year, means the positive or negative amount determined by the formula  is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the qualifying partnership for the last fiscal period of the partnership that began in the base year (other than any amount for which a deduction was available under section 112 or 113); is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss of the qualifying partnership for the last fiscal period of the partnership that began in the base year (to the extent that the total of all allowable capital losses included under this description in respect of all qualifying partnerships for the taxation year does not exceed the corporation’s share of all taxable capital gains of all qualifying partnerships for the taxation year); is the number of days that are in both the base year and the fiscal period; is the number of days in the fiscal period; and is the amount of the qualified resource expense in respect of the qualifying partnership that was designated by the corporation for the base year under subsection 34.2(6) in its return of income for the base year filed with the Minister on or before its filing-due date for the base year. ( montant comptabilisé réel pour la période tampon)   
  *base year*, of a corporation in respect of a qualifying partnership for a taxation year, means the preceding taxation year of the corporation in which began a fiscal period of the partnership that ends in the corporation’s taxation year. (année de base)   
  *income shortfall adjustment*, of a corporation in respect of a qualifying partnership for a taxation year, means the positive or negative amount determined by the formula  is the amount that is the lesser of 
  (a) the actual stub period accrual in respect of the qualifying partnership, and 
  (b) the amount that would be the corporation’s adjusted stub period accrual for the base year in respect of the qualifying partnership if the value of F in paragraph (a) of the definition 
  *adjusted stub period accrual* in subsection 34.2(1) were nil;  is the amount included under subsection 34.2(2) in computing the corporation’s income for the base year in respect of the qualifying partnership; is the number of days in the period that 
  (a) begins on the day after the day on which the base year ends, and 
  (b) ends on the day on which the taxation year ends; and is the average daily rate of interest determined by reference to the rate of interest prescribed under paragraph 4301(a) of the Income Tax Regulations for the period referred to in the description of C. (rajustement pour revenu insuffisant)   
  *qualifying partnership*, in respect of a corporation for a particular taxation year, means a partnership  
  (a) a fiscal period of which began in a preceding taxation year and ends in the particular taxation year; and 
  (b) in respect of which the corporation was required to calculate an adjusted stub period accrual for the preceding taxation year. ( société de personnes admissible)  
  
  ### Application of subsection (3)
  
  (2) Subsection (3) applies to a corporation for a taxation year if 
  (a) the corporation has designated an amount for the purpose of the description of F in paragraph (a) of the definition 
  *adjusted stub period accrual* in subsection 34.2(1) in calculating its adjusted stub period accrual for the base year in respect of a qualifying partnership for the taxation year; and  
  (b) where the corporation has qualifying transitional income, the taxation year is after the first taxation year of the corporation to which subsection 34.2(17) applies. 
  
  ### Income shortfall adjustment — inclusion
  
  (3) If this subsection applies to a corporation for a taxation year, the corporation shall include in computing its income for the taxation year the amount determined by the formula is the amount that is the total of all amounts each of which is the corporation’s income shortfall adjustment in respect of a qualifying partnership for the year; and is the amount that is the lesser of A and the total of all amounts each of which is 25% of the positive amount, if any, that would be the income shortfall adjustment in respect of a qualifying partnership for the year if the value of the description of B in the definition 
  *income shortfall adjustment* in subsection (1) were nil.  
  
  ### Prospectors and grubstakers
  
  35 (1) Where a share of the capital stock of a corporation 
  (a) is received in a taxation year by an individual as consideration for the disposition by the individual to the corporation of a mining property or an interest, or for civil law a right, therein acquired by the individual as a result of the individual’s efforts as a prospector, either alone or with others, or 
  (b) is received in a taxation year 
  (i) by a person who has, either under an arrangement with a prospector made before the prospecting, exploration or development work or as an employer of a prospector, advanced money for, or paid part or all of, the expenses of prospecting or exploring for minerals or of developing a property for minerals, and 
  (ii) as consideration for the disposition by the person referred to in subparagraph (i) to the corporation of a mining property or an interest, or for civil law a right, therein acquired under the arrangement under which that person made the advance or paid the expenses, or if the prospector’s employee, acquired by the person through the employee’s efforts, the following rules apply: 
  (c) notwithstanding any other provision of this Act, no amount in respect of the receipt of the share shall be included 
  (i) in computing the income for the year of the individual or person, as the case may be, except as provided in paragraph 35(1)(d), or 
  (ii) in computing at any time the amount to be determined for F in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) in respect of the individual or person, as the case may be,  
  (d) in the case of an individual or partnership (other than a partnership each member of which is a taxable Canadian corporation), an amount in respect of the receipt of the share equal to the lesser of its fair market value at the time of acquisition and its fair market value at the time of disposition or exchange of the share shall be included in computing the income of the individual or partnership, as the case may be, for the year in which the share is disposed of or exchanged, 
  (e) notwithstanding Subdivision C, in computing the cost to the individual, person or partnership, as the case may be, of the share, no amount shall be included in respect of the disposition of the mining property or the interest, or for civil law the right, therein, as the case may be, 
  (f) notwithstanding sections 66 and 66.2, in computing the cost to the corporation of the mining property or the interest, or for civil law the right, therein, as the case may be, no amount shall be included in respect of the share, and 
  (g) for the purpose of paragraph 35(1)(d), an individual or partnership shall be deemed to have disposed of or exchanged shares that are identical properties in the order in which they were acquired. 
  
  ### Definitions
  
  (2) In this section,  
  *mining property* means  
  (a) a right, licence or privilege to prospect, explore, drill or mine for minerals in a mineral resource in Canada, or 
  (b) real property or an immovable in Canada (other than depreciable property) the principal value of which depends on its mineral resource content; ( bien minier)   
  *prospector* means an individual who prospects or explores for minerals or develops a property for minerals on behalf of the individual, on behalf of the individual and others or as an employee. (prospecteur)  
  36  [Repealed, 2013, c. 40, s. 17]  
  
  ### Scientific research and experimental development
  
  37 (1) Where a taxpayer carried on a business in Canada in a taxation year, there may be deducted in computing the taxpayer’s income from the business for the year such amount as the taxpayer claims not exceeding the amount, if any, by which the total of 
  (a) the total of all amounts each of which is an expenditure of a current nature made by the taxpayer in the year or in a preceding taxation year ending after 1973 
  (i) on scientific research and experimental development related to a business of the taxpayer, carried on in Canada and directly undertaken by the taxpayer, 
  (i.01) on scientific research and experimental development related to a business of the taxpayer, carried on in Canada and directly undertaken on behalf of the taxpayer, 
  (i.1) by payments to a corporation resident in Canada to be used for scientific research and experimental development carried on in Canada that is related to a business of the taxpayer, but only where the taxpayer is entitled to exploit the results of that scientific research and experimental development, 
  (ii) by payments to 
  (A) an approved association that undertakes scientific research and experimental development, 
  (B) an approved university, college, research institute or other similar institution, 
  (C) a corporation resident in Canada and exempt from tax under paragraph 149(1)(j), or 
  (D)  [Repealed, 1996, c. 21, s. 9(4)]  
  (E) an approved organization that makes payments to an association, institution or corporation described in any of clauses A to (C) to be used for scientific research and experimental development carried on in Canada that is related to a business of the taxpayer, but only where the taxpayer is entitled to exploit the results of that scientific research and experimental development, or 
  (iii) where the taxpayer is a corporation, by payments to a corporation resident in Canada and exempt from tax because of paragraph 149(1)(j), for scientific research and experimental development that is basic research or applied research carried on in Canada 
  (A) the primary purpose of which is the use of results therefrom by the taxpayer in conjunction with other scientific research and experimental development activities undertaken or to be undertaken by or on behalf of the taxpayer that relate to a business of the taxpayer, and 
  (B) that has the technological potential for application to other businesses of a type unrelated to that carried on by the taxpayer, and 
  (b)  [Repealed, 2012, c. 31, s. 9]  
  (c) the total of all amounts each of which is an expenditure made by the taxpayer in the year or in a preceding taxation year ending after 1973 by way of repayment of amounts described in paragraph 37(1)(d), 
  (c.1) all amounts included by virtue of paragraph 12(1)(v), in computing the taxpayer’s income for any previous taxation year, 
  (c.2) all amounts added because of subsection 127(27), (29) or (34) to the taxpayer’s tax otherwise payable under this Part for any preceding taxation year, and 
  (c.3) in the case of a partnership, all amounts each of which is an excess referred to in subsection 127(30) in respect of the partnership for any preceding fiscal period, exceeds the total of 
  (d) the total of all amounts each of which is the amount of any government assistance or non-government assistance (as defined in subsection 127(9)) in respect of an expenditure described in paragraph (a) or (b), as paragraph (a) or (b), as the case may be, read in its application in respect of the expenditure, that at the taxpayer’s filing-due date for the year the taxpayer has received, is entitled to receive or can reasonably be expected to receive, 
  (d.1) the total of all amounts each of which is the super-allowance benefit amount (within the meaning assigned by subsection 127(9)) for the year or for a preceding taxation year in respect of the taxpayer in respect of a province, 
  (e) that part of the total of all amounts each of which is an amount deducted under subsection 127(5) in computing the tax payable under this Part by the taxpayer for a preceding taxation year where the amount can reasonably be attributed to 
  (i) a prescribed proxy amount for a preceding taxation year, 
  (ii) an expenditure of a current nature incurred in a preceding taxation year that was a qualified expenditure incurred in that preceding year in respect of scientific research and experimental development for the purposes of section 127, or 
  (iii) an amount included because of paragraph 127(13)(e) in the taxpayer’s SR&ED qualified expenditure pool at the end of a preceding taxation year within the meaning assigned by subsection 127(9), 
  (f) the total of all amounts each of which is an amount deducted under this subsection in computing the taxpayer’s income for a preceding taxation year, except amounts described in subsection 37(6), 
  (f.1) the total of all amounts each of which is the lesser of 
  (i) the amount deducted under section 61.3 in computing the taxpayer’s income for a preceding taxation year, and 
  (ii) the amount, if any, by which the amount that was deductible under this subsection in computing the taxpayer’s income for that preceding year exceeds the amount claimed under this subsection in computing the taxpayer’s income for that preceding year, 
  (g) the total of all amounts each of which is an amount equal to twice the amount claimed under subparagraph 194(2)(a)(ii) by the taxpayer for the year or any preceding taxation year, and 
  (h) if the taxpayer was subject to a loss restriction event before the end of the year, the amount determined for the year under subsection (6.1) with respect to the taxpayer. 
  
  ### Business of related corporations
  
  (1.1) Notwithstanding paragraph 37(8)(c), for the purposes of subsection 37(1), where a taxpayer is a corporation, scientific research and experimental development, related to a business carried on by another corporation to which the taxpayer is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)) and in which that other corporation is actively engaged, at the time at which an expenditure or payment in respect of the scientific research and experimental development is made by the taxpayer, shall be considered to be related to a business of the taxpayer at that time. 
  
  ### Deemed time of capital expenditure
  
  (1.2) For the purposes of paragraph 37(1)(b), an expenditure made by a taxpayer in respect of property shall be deemed not to have been made before the property is considered to have become available for use by the taxpayer. 
  
  ### SR&ED in the exclusive economic zone
  
  (1.3) For the purposes of this section and section 127 of this Act and Part XXIX of the Income Tax Regulations, an expenditure is deemed to have been made by a taxpayer in Canada if the expenditure is  
  (a) made by the taxpayer in the course of a business carried on by the taxpayer in Canada; and 
  (b) made for the prosecution of scientific research and experimental development in the exclusive economic zone of Canada, within the meaning of the Oceans Act, or in the airspace above that zone or the seabed or subsoil below that zone.  
  
  ### Salary or wages for SR&ED outside Canada
  
  (1.4) For the purposes of this section, section 127 and Part XXIX of the Income Tax Regulations, the amount of a taxpayer’s expenditure for a taxation year determined under subsection (1.5) is deemed to be made in the taxation year in respect of scientific research and experimental development carried on in Canada by the taxpayer.  
  
  ### Salary or wages outside Canada — limit determined
  
  (1.5) The amount of a taxpayer’s expenditure for a taxation year determined under this subsection is the lesser of 
  (a) the amount that is the total of all expenditures each of which is an expenditure made by the taxpayer, in the taxation year and after February 25, 2008, in respect of an expense incurred in the taxation year for salary or wages paid to the taxpayer’s employee who was resident in Canada at the time the expense was incurred in respect of scientific research and experimental development, 
  (i) that was carried on outside Canada, 
  (ii) that was directly undertaken by the taxpayer, 
  (iii) that related to a business of the taxpayer, and 
  (iv) that was solely in support of scientific research and experimental development carried on in Canada by the taxpayer, and 
  (b) the amount that is 10 per cent of the total of all expenditures, made by the taxpayer in the year, each of which would, if this Act were read without reference to subsection (1.4), be an expenditure made in respect of an expense incurred in the year for salary or wages paid to an employee in respect of scientific research and experimental development that was carried on in Canada, that was directly undertaken by the taxpayer and that related to a business of the taxpayer. 
  
  ### Research outside Canada
  
  (2) In computing the income of a taxpayer for a taxation year from a business of the taxpayer, there may be deducted expenditures of a current nature made by the taxpayer in the year 
  (a) on scientific research and experimental development carried on outside Canada, directly undertaken by or on behalf of the taxpayer, and related to the business (except to the extent that subsection (1.4) deems the expenditures to have been made in Canada); or 
  (b) by payments to an approved association, university, college, research institute or other similar institution to be used for scientific research and experimental development carried on outside Canada related to the business provided that the taxpayer is entitled to exploit the results of that scientific research and experimental development. 
  
  ### Minister may obtain advice
  
  (3) The Minister may obtain the advice of the Department of Industry, the National Research Council of Canada, the Defence Research Board or any other agency or department of the Government of Canada carrying on activities in the field of scientific research as to whether any particular activity constitutes scientific research and experimental development. 
  
  ### Where no deduction allowed under section
  
  (4) No deduction may be made under this section in respect of an expenditure made to acquire rights in, or arising out of, scientific research and experimental development. 
  
  ### Where no deduction allowed under ss. 110.1 and 118.1
  
  (5) Where, in respect of an expenditure on scientific research and experimental development made by a taxpayer in a taxation year, an amount is otherwise deductible under this section and under section 110.1 or 118.1, no deduction may be made in respect of the expenditure under section 110.1 or 118.1 in computing the taxable income of, or the tax payable by, the taxpayer for any taxation year. 
  
  ### Expenditures of a capital nature
  
  (6) For the purposes of section 13, an amount claimed under subsection (1) that may reasonably be considered to be in respect of a property described in paragraph (1)(b), as that paragraph read in its application in respect of the property, is deemed to be an amount allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a), and for that purpose the property is deemed to be of a separate prescribed class. 
  
  ### Loss restriction event
  
  (6.1) If a taxpayer was, at any time (in this subsection referred to as “that time”) before the end of a taxation year of the taxpayer, last subject to a loss restriction event, the amount determined for the purposes of paragraph (1)(h) for the year with respect to the taxpayer in respect of a business is the amount, if any, by which 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is 
  (A) an expenditure described in paragraph (1)(a) or (c) that was made by the taxpayer before that time, 
  (B) the lesser of the amounts determined immediately before that time in respect of the taxpayer under subparagraphs (1)(b)(i) and (ii), as those paragraphs read on March 29, 2012, in respect of expenditures made, and property acquired, by the taxpayer before 2014, or 
  (C) an amount determined in respect of the taxpayer under paragraph (1)(c.1) for its taxation year that ended immediately before that time exceeds the total of all amounts each of which is 
  (ii) the total of all amounts determined in respect of the taxpayer under paragraphs (1)(d) to (g) for its taxation year that ended immediately before that time, or 
  (iii) the amount deducted under subsection (1) in computing the taxpayer’s income for its taxation year that ended immediately before that time exceeds 
  (b) the total of 
  (i) if the business to which the amounts described in any of clauses (a)(i)(A) to (C) can reasonably be considered to have been related was carried on by the taxpayer for profit or with a reasonable expectation of profit throughout the year, the total of 
  (A) the taxpayer’s income for the year from the business before making any deduction under subsection (1), and 
  (B) if properties were sold, leased, rented or developed, or services were rendered, in the course of carrying on the business before that time, the taxpayer’s income for the year, before making any deduction under subsection (1), from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services, and 
  (ii) the total of all amounts each of which is an amount determined in respect of a preceding taxation year of the taxpayer that ended after that time equal to the lesser of 
  (A) the amount determined under subparagraph (i) with respect to the taxpayer in respect of the business for that preceding year, and 
  (B) the amount in respect of the business deducted under subsection (1) in computing the taxpayer’s income for that preceding year. 
  
  ### Definitions
  
  (7) In this section,  
  *approved* means approved by the Minister after the Minister has, if the Minister considers it necessary, obtained the advice of the Department of Industry or the National Research Council of Canada. (agréé)   
  *scientific research and experimental development* [Repealed, 1996, c. 21, s. 9(8)]  
  
  ### Interpretation
  
  (8) In this section, 
  (a) references to expenditures on or in respect of scientific research and experimental development 
  (i) where the references occur in subsection 37(2), include only 
  (A) expenditures each of which was an expenditure incurred for and all or substantially all of which was attributable to the prosecution of scientific research and experimental development, and 
  (B) expenditures of a current nature that were directly attributable, as determined by regulation, to the prosecution of scientific research and experimental development, and 
  (ii) where the references occur other than in subsection 37(2), include only 
  (A) expenditures incurred by a taxpayer in a taxation year (other than a taxation year for which the taxpayer has elected under clause (B)), each of which is 
  (I) an expenditure of a current nature all or substantially all of which was attributable to the prosecution, or to the provision of premises, facilities or equipment for the prosecution, of scientific research and experimental development in Canada, or 
  (II) an expenditure of a current nature directly attributable, as determined by regulation, to the prosecution, or to the provision of premises, facilities or equipment for the prosecution, of scientific research and experimental development in Canada, and 
  (III)  [Repealed, 2012, c. 31, s. 9]  
  (B) where a taxpayer has elected in prescribed form and in accordance with subsection 37(10) for a taxation year, expenditures incurred by the taxpayer in the year each of which is 
  (I)  [Repealed, 2012, c. 31, s. 9]  
  (II) an expenditure of a current nature for the prosecution of scientific research and experimental development in Canada directly undertaken on behalf of the taxpayer, 
  (III)  [Repealed, 2012, c. 31, s. 9]  
  (IV) that portion of an expenditure made in respect of an expense incurred in the year for salary or wages of an employee who is directly engaged in scientific research and experimental development in Canada that can reasonably be considered to relate to such work having regard to the time spent by the employee thereon, and, for this purpose, where that portion is all or substantially all of the expenditure, that portion shall be deemed to be the amount of the expenditure, or 
  (V) the cost of materials consumed or transformed in the prosecution of scientific research and experimental development in Canada, or 
  (VI)  [Repealed, 2012, c. 31, s. 9]  
  (b) for greater certainty, references to scientific research and experimental development related to a business include any scientific research and experimental development that may lead to or facilitate an extension of that business; 
  (c) except in the case of a taxpayer who derives all or substantially all of the taxpayer’s revenue from the prosecution of scientific research and experimental development (including the sale of rights arising out of scientific research and experimental development carried on by the taxpayer), the prosecution of scientific research and experimental development shall not be considered to be a business of the taxpayer to which scientific research and experimental development is related; and 
  (d) references to expenditures of a current nature include any expenditure made by a taxpayer other than an expenditure made by the taxpayer for 
  (i) the acquisition from a person or partnership of a property that is a capital property of the taxpayer, or 
  (ii) the use of, or the right to use, property that would be capital property of the taxpayer if it were owned by the taxpayer. 
  
  ### Salary or wages
  
  (9) An expenditure of a taxpayer 
  (a) does not include, for the purposes of clauses (8)(a)(ii)(A) and (B), remuneration based on profits or a bonus, where the remuneration or bonus, as the case may be, is in respect of a specified employee of the taxpayer, and 
  (b) includes, for the purpose of paragraph (1.5)(a), an amount paid in respect of an expense incurred for salary or wages paid to an employee only if the taxpayer reasonably believes that the salary or wages is not subject to an income or profits tax imposed, because of the employee’s presence or activity in a country other than Canada, by a government of that other country. 
  
  ### Limitation re specified employees
  
  (9.1) For the purposes of clauses (8)(a)(ii)(A) and (B), expenditures incurred by a taxpayer in a taxation year do not include expenses incurred in the year in respect of salary or wages of a specified employee of the taxpayer to the extent that those expenses exceed the amount determined by the formula is 5 times the Year’s Maximum Pensionable Earnings (as determined under section 18 of the Canada Pension Plan) for the calendar year in which the taxation year ends; and  is the number of days in the taxation year on which the employee is a specified employee of the taxpayer. 
  
  ### Associated corporations
  
  (9.2) Where 
  (a) in a taxation year of a corporation that ends in a calendar year, the corporation employs an individual who is a specified employee of the corporation, 
  (b) the corporation is associated with another corporation (in this subsection and subsection 37(9.3) referred to as the “associated corporation”) in a taxation year of the associated corporation that ends in the calendar year, and 
  (c) the individual is a specified employee of the associated corporation in the taxation year of the associated corporation that ends in the calendar year, for the purposes of clauses (8)(a)(ii)(A) and (B), the expenditures incurred by the corporation in its taxation year or years that end in the calendar year and by each associated corporation in its taxation year or years that end in the calendar year do not include expenses incurred in those taxation years in respect of salary or wages of the specified employee unless the corporation and all of the associated corporations have filed with the Minister an agreement referred to in subsection 37(9.3) in respect of those years. 
  
  ### Agreement among associated corporations
  
  (9.3) Where all of the members of a group of associated corporations of which an individual is a specified employee file, in respect of their taxation years that end in a particular calendar year, an agreement with the Minister in which they allocate an amount in respect of the individual to one or more of them for those years and the amount so allocated or the total of the amounts so allocated, as the case may be, does not exceed the amount determined by the formula is 5 times the Year’s Maximum Pensionable Earnings (as determined under section 18 of the Canada Pension Plan) for the particular calendar year, and  is the lesser of 365 and the number of days in those taxation years on which the individual was a specified employee of one or more of the corporations, the maximum amount that may be claimed in respect of salary or wages of the individual for the purposes of clauses (8)(a)(ii)(A) and (B) by each of the corporations for each of those years is the amount so allocated to it for each of those years. 
  
  ### Filing
  
  (9.4) An agreement referred to in subsection 37(9.3) is deemed not to have been filed by a taxpayer unless 
  (a) it is in prescribed form; and 
  (b) where the taxpayer is a corporation, it is accompanied by 
  (i) where its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and 
  (ii) where its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made. 
  
  ### Deemed corporation
  
  (9.5) For the purposes of subsections 37(9.2) and 37(9.3) and this subsection, each 
  (a) individual related to a particular corporation, 
  (b) partnership of which a majority-interest partner is 
  (i) an individual related to a particular corporation, or 
  (ii) a corporation associated with a particular corporation, and 
  (c) limited partnership of which a member whose liability as a member is not limited is 
  (i) an individual related to a particular corporation, or 
  (ii) a corporation associated with a particular corporation, is deemed to be a corporation associated with the particularcorporation. 
  
  ### Time for election
  
  (10) Any election made under clause (8)(a)(ii)(B) for a taxation year by a taxpayer shall be filed by the taxpayer on the day on which the taxpayer first files a prescribed form referred to in subsection 37(11) for the year. 
  
  ### Filing requirement
  
  (11) A prescribed form must be filed by a taxpayer with the Minister in respect of any expenditure, that would be incurred by the taxpayer in a taxation year that begins after 1995 if this Act were read without reference to subsection 78(4), that is claimed by the taxpayer for the year as a deduction under this section, on or before the day that is 12 months after the taxpayer’s filing-due date for the taxation year, containing 
  (a) prescribed information in respect of the expenditure; and 
  (b)  claim preparer information, as defined in subsection 162(5.3).  
  
  ### Failure to file
  
  (11.1) Subject to subsection (12), if the prescribed information in respect of an expenditure referred to in paragraph (11)(a) is not contained in the form referred to in subsection (11), no amount in respect of the expenditure may be deducted under subsection (1). 
  
  ### Misclassified expenditures
  
  (12) If a taxpayer has not filed a prescribed form in respect of an expenditure in accordance with subsection 37(11), for the purposes of this Act, the expenditure is deemed not to be an expenditure on or in respect of scientific research and experimental development. 
  
  ### Non-arm’s length contract — linked work
  
  (13) For the purposes of this section and sections 127 and 127.1, where 
  (a) work is performed by a taxpayer for a person or partnership at a time when the person or partnership does not deal at arm’s length with the taxpayer, and 
  (b) the work would be scientific research and experimental development if it were performed by the person or partnership, the work is deemed to be scientific research and experimental development. 
  
  ### Look-through rule
  
  (14) For the purposes of subparagraphs (1)(a)(i.01) to (iii), the amount of a particular expenditure made by a taxpayer shall be reduced by the amount of any related expenditure of the person or partnership to whom the particular expenditure is made that is not an expenditure of a current nature of the person or partnership. 
  
  ### Reporting of certain payments
  
  (15) If an expenditure is required to be reduced because of subsection (14), the person or the partnership referred to in that subsection is required to inform the taxpayer in writing of the amount of the reduction without delay if requested by the taxpayer and in any other case no later than 90 days after the end of the calendar year in which the expenditure was made. 
  37.1  [Repealed, 1998, c. 19, s. 87(1)]  
  37.2  [Repealed, 1998, c. 19, s. 87(1)]  
  37.3  [Repealed, 1998, c. 19, s. 87(1)]  
  
  # SUBDIVISION C 
  
  ## Taxable Capital Gains and Allowable Capital Losses 
  
  ### Taxable capital gain and allowable capital loss
  
  38 For the purposes of this Act, 
  (a) subject to paragraphs (a.1) to (a.3), a taxpayer’s taxable capital gain for a taxation year from the disposition of any property is ½ of the taxpayer’s capital gain for the year from the disposition of the property; 
  (a.1) a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to zero if 
  (i) the disposition is the making of a gift to a qualified donee of a share, debt obligation or right listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation, a unit of a mutual fund trust, an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)) or a prescribed debt obligation, 
  (ii) the disposition is deemed by section 70 to have occurred and the property is 
  (A) a security described in subparagraph (i), and 
  (B) the subject of a gift to which subsection 118.1(5.1) applies and that is made by the taxpayer’s estate to a qualified donee, or 
  (iii) the disposition is the exchange, for a security described in subparagraph (i), of a share of the capital stock of a corporation, which share included, at the time it was issued and at the time of the disposition, a condition allowing the holder to exchange it for the security, and the taxpayer 
  (A) receives no consideration on the exchange other than the security, and 
  (B) makes a gift of the security to a qualified donee not more than 30 days after the exchange; 
  (a.2) a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to zero if 
  (i) the disposition is the making of a gift to a qualified donee (other than a private foundation) of a property described, in respect of the taxpayer, in paragraph 110.1(1)(d) or in the definition 
  *total ecological gifts* in subsection 118.1(1), or  
  (ii) the disposition is deemed by section 70 to have occurred and the property is 
  (A) described in subparagraph (i), and 
  (B) the subject of a gift to which subsection 118.1(5.1) applies and that is made by the taxpayer’s estate to a qualified donee (other than a private foundation); 
  (a.3) a taxpayer’s taxable capital gain for a taxation year, from the disposition of an interest in a partnership (other than a prescribed interest in a partnership) that would be an exchange described in subparagraph (a.1)(iii) if the interest were a share in the capital stock of a corporation, is equal to the lesser of 
  (i) that taxable capital gain determined without reference to this paragraph, and 
  (ii) ½ of the amount, if any, by which 
  (A) the total of 
  (I) the cost to the taxpayer of the partnership interest, and 
  (II) each amount required by subparagraph 53(1)(e)(iv) or (x) to be added in determining the taxpayer’s adjusted cost base of the partnership interest, exceeds 
  (B) the adjusted cost base to the taxpayer of the partnership interest (determined without reference to subparagraphs 53(2)(c)(iv) and (v)); 
  (b) a taxpayer’s allowable capital loss for a taxation year from the disposition of any property is 1/2 of the taxpayer’s capital loss for the year from the disposition of that property; and 
  (c) a taxpayer’s allowable business investment loss for a taxation year from the disposition of any property is 1/2 of the taxpayer’s business investment loss for the year from the disposition of that property. 
  
  ### Tax-deferred transaction — flow-through shares
  
  38.1 If a taxpayer acquires a property (in this section referred to as the “acquired property”) that is included in a flow-through share class of property in the course of a transaction or series of transactions to which any of section 51, subsections 73(1), 85(1) and (2) and 85.1(1), sections 86 and 87 and subsections 88(1) and 98(3) apply 
  (a) if the transfer of the acquired property is part of a gifting arrangement (within the meaning assigned by section 237.1) or of a transaction or series of transactions to which subsection 98(3) applies, or the transferor is a person with whom the taxpayer was, at the time of the acquisition, not dealing at arm’s length, there shall be added, at the time of the transfer, to the taxpayer’s exemption threshold in respect of the flow-through share class of property, and deducted from the transferor’s exemption threshold in respect of the flow-through share class of property, the amount determined by the formula is the amount by which the transferor’s exemption threshold in respect of the flow-through share class of property immediately before that time exceeds the capital gain, if any, of the transferor as a result of the transfer, and is the proportion that the fair market value of the acquired property immediately before the transfer is of the fair market value of all property of the transferor immediately before the transfer that is included in the flow-through share class of property; and 
  (b) if the transferor receives particular shares of the capital stock of the taxpayer as consideration for the acquired property and those particular shares are listed on a designated stock exchange or are shares of a mutual fund corporation, then for the purposes of this section and subsection 40(12) 
  (i) the particular shares are deemed to be flow-through shares of the transferor, and 
  (ii) there shall be added to the transferor’s exemption threshold in respect of the flow-through share class of property that includes the particular shares the amount that is determined under paragraph (a) or that would be so determined if paragraph (a) applied to the taxpayer. 
  
  ### Allocation of gain re certain gifts
  
  38.2 If a taxpayer is entitled to an amount of an advantage in respect of a gift of property described in paragraph 38(a.1) or (a.2), 
  (a) those paragraphs apply only to that proportion of the taxpayer’s capital gain in respect of the gift that the eligible amount of the gift is of the taxpayer’s proceeds of disposition in respect of the gift; and 
  (b) paragraph 38(a) applies to the extent that the taxpayer’s capital gain in respect of the gift exceeds the amount of the capital gain to which paragraph 38(a.1) or (a.2) applies. 
  
  ### Meaning of capital gain and capital loss
  
  39 (1) For the purposes of this Act, 
  (a) a taxpayer’s capital gain for a taxation year from the disposition of any property is the taxpayer’s gain for the year determined under this Subdivision (to the extent of the amount thereof that would not, if section 3 were read without reference to the expression “other than a taxable capital gain from the disposition of a property” in paragraph 3(a) and without reference to paragraph 3(b), be included in computing the taxpayer’s income for the year or any other taxation year) from the disposition of any property of the taxpayer other than 
  (i)  [Repealed, 2016, c. 12, s. 13]  
  (i.1) an object that the Canadian Cultural Property Export Review Board has determined meets the criterion set out in paragraph 29(3)(b) of the Cultural Property Export and Import Act if  
  (A) the disposition is to an institution or a public authority in Canada that was, at the time of the disposition, designated under subsection 32(2) of that Act either generally or for a specified purpose related to that object, or 
  (B) the disposition is deemed by section 70 to have occurred and the object is the subject of a gift to which subsection 118.1(5.1) applies and that is made by the taxpayer’s estate to an institution that would be described in clause (A) if the disposition were made at the time the estate makes the gift, 
  (ii) a Canadian resource property, 
  (ii.1) a foreign resource property, 
  (ii.2) a property if the disposition is a disposition to which subsection 142.4(4) or (5) or 142.5(1) applies, 
  (iii) an insurance policy, including a life insurance policy, except for that part of a life insurance policy in respect of which a policyholder is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust, 
  (iv) a timber resource property; or 
  (v) an interest of a beneficiary under a qualifying environmental trust; 
  (b) a taxpayer’s capital loss for a taxation year from the disposition of any property is the taxpayer’s loss for the year determined under this Subdivision (to the extent of the amount thereof that would not, if section 3 were read in the manner described in paragraph (a) of this subsection and without reference to the expression “or the taxpayer’s allowable business investment loss for the year” in paragraph 3(d), be deductible in computing the taxpayer’s income for the year or any other taxation year) from the disposition of any property of the taxpayer other than 
  (i) depreciable property, or 
  (ii) property described in any of subparagraphs 39(1)(a)(ii) to (iii) and (v); and 
  (c) a taxpayer’s business investment loss for a taxation year from the disposition of any property is the amount, if any, by which the taxpayer’s capital loss for the year from a disposition after 1977 
  (i) to which subsection 50(1) applies, or 
  (ii) to a person with whom the taxpayer was dealing at arm’s length of any property that is 
  (iii) a share of the capital stock of a small business corporation, or 
  (iv) a debt owing to the taxpayer by a Canadian-controlled private corporation (other than, where the taxpayer is a corporation, a debt owing to it by a corporation with which it does not deal at arm’s length) that is 
  (A) a small business corporation, 
  (B) a bankrupt that was a small business corporation at the time it last became a bankrupt, or 
  (C) a corporation referred to in section 6 of the Winding-up Act that was insolvent (within the meaning of that Act) and was a small business corporation at the time a winding-up order under that Act was made in respect of the corporation, exceeds the total of 
  (v) in the case of a share referred to in subparagraph 39(1)(c)(iii), the amount, if any, of the increase after 1977 by virtue of the application of subsection 85(4) in the adjusted cost base to the taxpayer of the share or of any share (in this subparagraph referred to as a “replaced share”) for which the share or a replaced share was substituted or exchanged, 
  (vi) in the case of a share referred to in subparagraph 39(1)(c)(iii) that was issued before 1972 or a share (in this subparagraph and subparagraph 39(1)(c)(vii) referred to as a “substituted share”) that was substituted or exchanged for such a share or for a substituted share, the total of all amounts each of which is an amount received after 1971 and before or on the disposition of the share or an amount receivable at the time of such a disposition by 
  (A) the taxpayer, 
  (B) where the taxpayer is an individual, the taxpayer’s spouse or common-law partner, or 
  (C) a trust of which the taxpayer or the taxpayer’s spouse or common-law partner was a beneficiary as a taxable dividend on the share or on any other share in respect of which it is a substituted share, except that this subparagraph shall not apply in respect of a share or substituted share that was acquired after 1971 from a person with whom the taxpayer was dealing at arm’s length, 
  (vii) in the case of a share to which subparagraph (vi) applies and where the taxpayer is a trust for which a day is to be, or has been, determined under paragraph 104(4)(a), or (a.4) by reference to a death or later death, as the case may be, the total of all amounts each of which is an amount received after 1971 or receivable at the time of the disposition, as a taxable dividend on the share or on any other share in respect of which it is a substituted share, by an individual whose death is that death or later death, as the case may be, or a spouse or common-law partner of the individual, and 
  (viii) the amount determined in respect of the taxpayer under subsection 39(9) or 39(10), as the case may be. 
  
  ### Foreign currency dispositions by an individual
  
  (1.1) If, because of any fluctuation after 1971 in the value of one or more currencies other than Canadian currency relative to Canadian currency, an individual (other than a trust) has made one or more particular gains or sustained one or more particular losses in a taxation year from dispositions of currency other than Canadian currency and the particular gains or losses would, in the absence of this subsection, be capital gains or losses described under subsection (1) 
  (a) subsection (1) does not apply to any of the particular gains or losses; 
  (b) the amount determined by the following formula is deemed to be a capital gain of the individual for the year from the disposition of currency other than Canadian currency: is the total of all the particular gains made by the individual in the year, is the total of all the particular losses sustained by the individual in the year, and is $200; and 
  (c) the amount determined by the following formula is deemed to be a capital loss of the individual for the year from the disposition of currency other than Canadian currency: is the total of all the particular losses sustained by the individual in the year, is the total of all the particular gains made by the individual in the year, and is $200. 
  
  ### Foreign exchange capital gains and losses
  
  (2) If, because of any fluctuation after 1971 in the value of a currency other than Canadian currency relative to Canadian currency, a taxpayer has made a gain or sustained a loss in a taxation year (other than a gain or loss that would, in the absence of this subsection, be a capital gain or capital loss to which subsection (1) or (1.1) applies, or a gain or loss in respect of a transaction or event in respect of shares of the capital stock of the taxpayer) 
  (a) the amount of the gain (to the extent of the amount of that gain that would not, if section 3 were read in the manner described in paragraph (1)(a), be included in computing the taxpayer’s income for the year or any other taxation year), if any, is deemed to be a capital gain of the taxpayer for the year from the disposition of currency other than Canadian currency; and 
  (b) the amount of the loss (to the extent of the amount of that loss that would not, if section 3 were read in the manner described in paragraph (1)(a), be deductible in computing the taxpayer’s income for the year or any other taxation year), if any, is deemed to be a capital loss of the taxpayer for the year from the disposition of currency other than Canadian currency. 
  
  ### Deemed gain — parked obligation
  
  (2.01) For the purposes of subsection (2), if a debt obligation owing by a taxpayer (referred to in this subsection and subsections (2.02) and (2.03) as the 
  *debtor*) is denominated in a foreign currency and the debt obligation has become a parked obligation at a particular time, the debtor is deemed at that time to have made the gain, if any, that the debtor otherwise would have made if it had paid an amount at the particular time in satisfaction of the debt obligation equal to  
  (a) if the debt obligation has become a parked obligation at the particular time as a result of its acquisition by the holder of the debt obligation, the amount paid by the holder to acquire the debt obligation; and 
  (b) in any other case, the fair market value of the debt obligation at the particular time. 
  
  ### Parked obligation
  
  (2.02) For the purposes of subsection (2.01), a debt obligation owing by a debtor is a parked obligation at a particular time if 
  (a) both 
  (i) at that time, the holder of the debt obligation does not deal at arm’s length with the debtor or, if the debtor is a corporation, has a significant interest in the debtor, and 
  (ii) at any previous time, a person who held the debt obligation dealt at arm’s length with the debtor and, where the debtor is a corporation, did not have a significant interest in the debtor; and 
  (b) it can reasonably be considered that one of the main purposes of the transaction or event or series of transactions or events that resulted in the debt obligation meeting the condition in subparagraph (a)(i) is to avoid the application of subsection (2). 
  
  ### Interpretation
  
  (2.03) For the purposes of subsections (2.01) and (2.02), 
  (a) paragraph 80(2)(j) applies for the purpose of determining whether two persons are related to each other or whether any person is controlled by any other person; and 
  (b) paragraph 80.01(2)(b) applies for the purpose of determining whether a person has a significant interest in a corporation. 
  
  ### Upstream loan — transitional set-off
  
  (2.1) If at any time a corporation resident in Canada or a partnership of which such a corporation is a member (such corporation or partnership referred to in this subsection and subsections (2.2) and (2.3) as the “borrowing party”) has received a loan from, or become indebted to, a creditor that is a foreign affiliate (referred to in this subsection and subsections (2.2) and (2.3) as a “creditor affiliate”) of a qualifying entity, or that is a partnership (referred to in this subsection and subsection (2.3) as a “creditor partnership”) of which such an affiliate is a member, and the loan or indebtedness is at a later time repaid, in whole or in part, then the amount of the borrowing party’s capital gain or capital loss determined, in the absence of this subsection, under subsection (2) in respect of the repayment, is to be reduced 
  (a) in the case of a capital gain 
  (i) if the creditor is a creditor affiliate, by an amount, not exceeding that capital gain, that is equal to twice the amount that would — in the absence of subparagraph 40(2)(g)(ii) and paragraph 95(2)(g.04) and on the assumption that the creditor affiliate’s capital loss in respect of the repayment of the loan or indebtedness were a capital gain of the creditor affiliate, the creditor affiliate had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the creditor affiliate that includes the later time, or 
  (ii) if the creditor is a creditor partnership, by an amount, not exceeding that capital gain, that is equal to twice the amount that is the total of each amount, determined in respect of a particular member of the creditor partnership that is a foreign affiliate of a qualifying entity, that would — in the absence of subparagraph 40(2)(g)(ii) and paragraph 95(2)(g.04) and on the assumption that the creditor partnership’s capital loss in respect of the repayment of the loan or indebtedness were a capital gain of the creditor partnership, the particular member had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the particular member that includes the last day of the creditor partnership’s fiscal period that includes that later time; and 
  (b) in the case of a capital loss 
  (i) if the creditor is a creditor affiliate, by an amount, not exceeding that capital loss, that is equal to twice the amount, in respect of the creditor affiliate’s capital gain in respect of the repayment of the loan or indebtedness, that would — in the absence of paragraph 95(2)(g.04) and on the assumption that the creditor affiliate had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the creditor affiliate that includes the later time, or 
  (ii) if the creditor is a creditor partnership, by an amount, not exceeding that capital loss, that is equal to twice the amount, in respect of the creditor partnership’s capital gain in respect of the repayment of the loan or indebtedness, that is the total of each amount, determined in respect of a particular member of the creditor partnership that is a foreign affiliate of a qualifying entity, that would — in the absence of paragraph 95(2)(g.04) and on the assumption that the particular member had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the particular member that includes the last day of the creditor partnership’s fiscal period that includes the later time. 
  
  ### Definition of qualifying entity 
  
  (2.2) For purposes of subsections (2.1) and (2.3), 
  *qualifying entity* means  
  (a) in the case of a borrowing party that is a corporation, 
  (i) the borrowing party, 
  (ii) a corporation resident in Canada of which 
  (A) the borrowing party is a subsidiary wholly-owned corporation, or 
  (B) a corporation described in this paragraph is a subsidiary wholly-owned corporation, 
  (iii) a corporation resident in Canada 
  (A) each share of the capital stock of which is owned by 
  (I) the borrowing party, or 
  (II) a corporation that is described in this subparagraph or subparagraph (ii), or 
  (B) all or substantially all of the capital stock of which is owned by one or more corporations resident in Canada that are borrowing parties in respect of the creditor affiliate because of subsection 90(7), or 
  (iv) a partnership each member of which is 
  (A) a corporation described in any of subparagraphs (i) to (iii), or 
  (B) another partnership described in this subparagraph; and 
  (b) in the case of a borrowing party that is a partnership, 
  (i) the borrowing party, 
  (ii) if each member — determined as if each member of a partnership that is a member of another partnership is a member of that other partnership — of the borrowing party is either a particular corporation resident in Canada (in this paragraph referred to as the “parent”) or a corporation resident in Canada that is a subsidiary wholly-owned corporation, as defined in subsection 87(1.4), of the parent,  
  (A) the parent, or 
  (B) a corporation resident in Canada that is a subsidiary wholly-owned corporation, as defined in subsection 87(1.4), of the parent, or  
  (iii) a partnership each member of which is any of 
  (A) the borrowing party, 
  (B) a corporation described in subparagraph (ii), and 
  (C) another partnership described in this subparagraph. 
  
  ### Upstream loan — transitional set-off election
  
  (2.3) Subsection (2.1) and paragraph 95(2)(g.04) do not apply in respect of a repayment, in whole or in part, of a loan or indebtedness if an election has been filed with the Minister before 2019 jointly by 
  (a) the borrowing party; 
  (b) if the creditor is a creditor affiliate, each qualifying entity of which the creditor affiliate is a foreign affiliate; and 
  (c) if the creditor is a creditor partnership, each qualifying entity of which a member of the creditor partnership is a foreign affiliate. 
  
  ### Gain in respect of purchase of bonds, etc., by issuer
  
  (3) Where a taxpayer has issued any bond, debenture or similar obligation and has at any subsequent time in a taxation year and after 1971 purchased the obligation in the open market, in the manner in which any such obligation would normally be purchased in the open market by any member of the public, 
  (a) the amount, if any, by which the amount for which the obligation was issued by the taxpayer exceeds the purchase price paid or agreed to be paid by the taxpayer for the obligation shall be deemed to be a capital gain of the taxpayer for the taxation year from the disposition of a capital property, and 
  (b) the amount, if any, by which the purchase price paid or agreed to be paid by the taxpayer for the obligation exceeds the greater of the principal amount of the obligation and the amount for which it was issued by the taxpayer shall be deemed to be a capital loss of the taxpayer for the taxation year from the disposition of a capital property, to the extent that the amount determined under paragraph 39(3)(a) or 39(3)(b) would not, if section 3 were read in the manner described in paragraph 39(1)(a) and this Act were read without reference to subsections 80(12) and 80(13), be included or be deductible, as the case may be, in computing the taxpayer’s income for the year or any other taxation year. 
  
  ### Election concerning disposition of Canadian securities
  
  (4) Except as provided in subsection 39(5), where a Canadian security has been disposed of by a taxpayer in a taxation year and the taxpayer so elects in prescribed form in the taxpayer’s return of income under this Part for that year, 
  (a) every Canadian security owned by the taxpayer in that year or any subsequent taxation year shall be deemed to have been a capital property owned by the taxpayer in those years; and 
  (b) every disposition by the taxpayer of any such Canadian security shall be deemed to be a disposition by the taxpayer of a capital property. 
  
  ### Members of partnerships
  
  (4.1) For the purpose of determining the income of a taxpayer who is a member of a partnership, subsections 39(4) and 39(5) apply as if 
  (a) every Canadian security owned by the partnership were owned by the taxpayer; and 
  (b) every Canadian security disposed of by the partnership in a fiscal period of the partnership were disposed of by the taxpayer at the end of that fiscal period. 
  
  ### Exception
  
  (5) An election under subsection 39(4) does not apply to a disposition of a Canadian security by a taxpayer (other than a mutual fund corporation or a mutual fund trust) who at the time of the disposition is 
  (a) a trader or dealer in securities, 
  (b) a financial institution (as defined in subsection 142.2(1)), 
  (c) to (e)  [Repealed, 1995, c. 21, s. 49]  
  (f) a corporation whose principal business is the lending of money or the purchasing of debt obligations or a combination thereof, or 
  (g) a non-resident, or any combination thereof. 
  
  ### Definition of 
  *Canadian security* 
  
  (6) For the purposes of this section, 
  *Canadian security* means a security (other than a prescribed security) that is a share of the capital stock of a corporation resident in Canada, a unit of a mutual fund trust or a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by a person resident in Canada.  
  
  ### Unused share-purchase tax credit
  
  (7) The amount of any unused share-purchase tax credit of a taxpayer for a particular taxation year, to the extent that it was not deducted from the taxpayer’s tax otherwise payable under this Part for the immediately preceding taxation year, shall be deemed to be a capital loss of the taxpayer from a disposition of property for the year immediately following the particular taxation year. 
  
  ### Unused scientific research and experimental development tax credit
  
  (8) The amount of any unused scientific research and experimental development tax credit of a taxpayer for a particular taxation year, to the extent that it was not deducted from the taxpayer’s tax otherwise payable under this Part for the immediately preceding taxation year, shall be deemed to be a capital loss of the taxpayer from a disposition of property for the year immediately following the particular taxation year, except that where the taxpayer is an individual the capital loss shall be deemed to be 147% of that amount. 
  
  ### Deduction from business investment loss
  
  (9) In computing the business investment loss of a taxpayer who is an individual (other than a trust) for a taxation year from the disposition of a particular property, there shall be deducted an amount equal to the lesser of 
  (a) the amount that would be the taxpayer’s business investment loss for the year from the disposition of that particular property if paragraph 39(1)(c) were read without reference to subparagraph 39(1)(c)(viii), and 
  (b) the amount, if any, by which the total of 
  (i) the total of all amounts each of which is twice the amount deducted by the taxpayer under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that 
  (A) ended before 1988, or 
  (B) begins after October 17, 2000, 
  (i.1) the total of all amounts each of which is 
  (A) 3/2 of the amount deducted under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that 
  (I) ended after 1987 and before 1990, or 
  (II) began after February 27, 2000 and ended before October 18, 2000, or 
  (B) the amount determined by multiplying the reciprocal of the fraction in paragraph 38(a) that applies to the taxpayer for each of the taxpayer’s taxation years that includes February 28, 2000 or October 18, 2000 by the amount deducted under section 110.6 in computing the taxpayer’s taxable income for that year, and 
  (i.2) the total of all amounts each of which is 4/3 of the amount deducted under section 110.6 in computing the taxpayer’s taxable income for a preceding taxation year that ended after 1989 and before February 28, 2000 exceeds 
  (ii) the total of all amounts each of which is an amount deducted by the taxpayer under paragraph 39(1)(c) by virtue of subparagraph 39(1)(c)(viii) in computing the taxpayer’s business investment loss 
  (A) from the disposition of property in taxation years preceding the year, or 
  (B) from the disposition of property other than the particular property in the year, except that, where a particular amount was included under subparagraph 14(1)(a)(v) in the taxpayer’s income for a taxation year that ended after 1987 and before 1990, the reference in subparagraph 39(9)(b)(i.1) to “3/2” shall, in respect of that portion of any amount deducted under section 110.6 in respect of the particular amount, be read as “4/3”. 
  
  ### Idem, of a trust
  
  (10) In computing the business investment loss of a trust for a taxation year from the disposition of a particular property, there shall be deducted an amount equal to the lesser of 
  (a) the amount that would be the trust’s business investment loss for the year from the disposition of that particular property if paragraph 39(1)(c) were read without reference to subparagraph 39(1)(c)(viii), and 
  (b) the amount, if any, by which the total of 
  (i) the total of all amounts each of which is twice the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that 
  (A) ended before 1988, or 
  (B) begins after October 17, 2000, 
  (i.1) the total of all amounts each of which is 
  (A) 3/2 of the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that 
  (I) ended after 1987 and before 1990, or 
  (II) began after February 27, 2000 and ended before October 18, 2000, or 
  (B) the amount determined by multiplying the reciprocal of the fraction in paragraph 38(a) that applies to the trust for each of the trust’s taxation years that includes February 28, 2000 or October 18, 2000 by the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for that year, and 
  (i.2) the total of all amounts each of which is 4/3 of the amount designated by the trust under subsection 104(21.2) in respect of a beneficiary in its return of income for a preceding taxation year that ended after 1989 and before February 28, 2000 exceeds 
  (ii) the total of all amounts each of which is an amount deducted by the trust under paragraph 39(1)(c) by virtue of subparagraph 39(1)(c)(viii) in computing its business investment loss 
  (A) from the disposition of property in taxation years preceding the year, or 
  (B) from the disposition of property other than the particular property in the year, except that, where a particular amount was included under subparagraph 14(1)(a)(v) in the trust’s income for a taxation year that ended after 1987 and before 1990, the reference in subparagraph 39(10)(b)(i.1) to “3/2” shall, in respect of that portion of any amount deducted under section 110.6 in respect of the particular amount, be read as “4/3”. 
  
  ### Recovery of bad debt
  
  (11) Where an amount is received in a taxation year on account of a debt (in this subsection referred to as the “recovered amount”) in respect of which a deduction for bad debts had been made under subsection 20(4.2) in computing a taxpayer’s income for a preceding taxation year, the amount, if any, by which 1/2 of the recovered amount exceeds the amount determined under paragraph 12(1)(i.1) in respect of the recovered amount is deemed to be a taxable capital gain of the taxpayer from a disposition of capital property in the year. 
  
  ### Guarantees
  
  (12) For the purpose of paragraph 39(1)(c), where 
  (a) an amount was paid by a taxpayer in respect of a debt of a corporation under an arrangement under which the taxpayer guaranteed the debt, 
  (b) the amount was paid to a person with whom the taxpayer was dealing at arm’s length, and 
  (c) the corporation was a small business corporation 
  (i) at the time the debt was incurred, and 
  (ii) at any time in the 12 months before the time an amount first became payable by the taxpayer under the arrangement in respect of a debt of the corporation, that part of the amount that is owing to the taxpayer by the corporation shall be deemed to be a debt owing to the taxpayer by a small business corporation. 
  
  ### Repayment of assistance
  
  (13) The total of all amounts paid by a taxpayer in a taxation year each of which is 
  (a) such part of any assistance described in subparagraph 53(2)(k)(i) in respect of, or for the acquisition of, a capital property (other than depreciable property) by the taxpayer that was repaid by the taxpayer in the year where the repayment is made after the disposition of the property by the taxpayer and under an obligation to repay all or any part of that assistance, or 
  (b) an amount repaid by the taxpayer in the year in respect of a capital property (other than depreciable property) acquired by the taxpayer that is repaid after the disposition thereof by the taxpayer and that would have been an amount described in subparagraph 53(2)(s)(ii) had the repayment been made before the disposition of the property, shall be deemed to be a capital loss of the taxpayer for the year from the disposition of property by the taxpayer in the year and, for the purpose of section 110.6, that property shall be deemed to have been disposed of by the taxpayer in the year. 
  
  ### Definitions
  
  39.1 (1) In this section,  
  *exempt capital gains balance* of an individual for a taxation year that ends before 2005 in respect of a flow-through entity means the amount determined by the formula  is 
  (a) if the entity is a trust referred to in any of paragraphs (f) to (j) of the definition 
  *flow-through entity* in this subsection, the amount determined under paragraph 110.6(19)(c) in respect of the individual’s interest or interests therein, and  
  (b) in any other case, the lesser of 
  (i) 4/3 of the total of the taxable capital gains that resulted from elections made under subsection 110.6(19) in respect of the individual’s interests in or shares of the capital stock of the entity, and 
  (ii) the amount that would be determined under subparagraph (i) if 
  (A) the amount designated in the election in respect of each interest or share were equal to the amount determined by the formula is the fair market value of the interest or share at the end of February 22, 1994, and is the amount, if any, by which the amount designated in the election that was made in respect of the interest or share exceeds 11/10 of its fair market value at the end of February 22, 1994, and 
  (B) this Act were read without reference to subsection 110.6(20), is the total of all amounts each of which is the amount by which the individual’s capital gain for a preceding taxation year, determined without reference to subsection 39.1(2), from the disposition of an interest in or a share of the capital stock of the entity was reduced under that subsection, is 
  (a) if the entity is a trust described in any of paragraphs (d) and (h) to (j) of the definition 
  *flow-through entity* in this subsection, the total of  
  (i) 3/2 of the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section), for a preceding taxation year that began after February 27, 2000 and ended before October 18, 2000 that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3), 
  (ii) 4/3 of the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section), for a preceding taxation year that ended before February 28, 2000 and that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3), 
  (iii) the amount claimed by the individual under subparagraph 104(21.4)(a)(ii) or (21.7)(b)(ii) for a preceding taxation year, and 
  (iv) twice the total of all amounts each of which is the amount by which the individual’s taxable capital gain (determined without reference to this section) for a preceding taxation year that began after October 17, 2000 and that resulted from a designation made under subsection 104(21) by the trust, was reduced under subsection (3), 
  (b) if the entity is a partnership, the total of 
  (i) 3/2 of the total of 
  (A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that began after February 27, 2000 and ended before October 18, 2000, was reduced under subsection (4), and 
  (B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that began after February 27, 2000 and ended before October 18, 2000, was reduced under subsection (5), 
  (ii) 4/3 of the total of 
  (A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that ended before February 28, 2000 and in a preceding taxation year was reduced under subsection (4), and 
  (B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that ended before February 28, 2000 and in a preceding taxation year, was reduced under subsection (5), 
  (iii) the product obtained when the reciprocal of the fraction in paragraph 38(a) that applies to the partnership for its fiscal period that includes February 28, 2000 or October 17, 2000 is multiplied by the total of 
  (A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that includes February 28, 2000 or October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (4), and 
  (B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that includes February 28, 2000 or October 17, 2000 and ended in a preceding taxation year was reduced under subsection (5), and 
  (iv) twice the total of 
  (A) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s taxable capital gains (determined without reference to this section), for its fiscal period that began after October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (4), and 
  (B) the total of all amounts each of which is the amount by which the individual’s share of the partnership’s income from a business (determined without reference to this section), for its fiscal period that began after October 17, 2000 and ended in a preceding taxation year, was reduced under subsection (5), and 
  (c) in any other case, the total of all amounts each of which is the amount by which the total of the individual’s capital gains otherwise determined under subsection 130.1(4) or 131(1), subsections 138.1(3) and 138.1(4) or subsection 144(4), as the case may be, for a preceding taxation year in respect of the entity was reduced under subsection 39.1(6); and is 
  (a) if the entity is a trust described in any of paragraphs (g) to (j) of the definition 
  *flow-through entity* in this subsection, the total of all amounts each of which is an amount included before the year in the cost to the individual of a property under subsection 107(2.2) or paragraph 144(7.1)(c) because of the individual’s exempt capital gains balance in respect of the entity, and  
  (b) in any other case, nil; ( solde des gains en capital exonérés)   
  *flow-through entity* means  
  (a) an investment corporation, 
  (b) a mortgage investment corporation, 
  (c) a mutual fund corporation, 
  (d) a mutual fund trust, 
  (e) a partnership, 
  (f) a related segregated fund trust for the purpose of section 138.1, 
  (g) a trust governed by an employees profit sharing plan, 
  (h) a trust maintained primarily for the benefit of employees of a corporation or two or more corporations that do not deal at arm’s length with each other, where one of the main purposes of the trust is to hold interests in, or for civil law rights in, shares of the capital stock of the corporation or corporations, as the case may be, or any corporation not dealing at arm’s length therewith, 
  (i) a trust established exclusively for the benefit of one or more persons each of whom was, at the time the trust was created, either a person from whom the trust received property or a creditor of that person, where one of the main purposes of the trust is to secure the payments required to be made by or on behalf of that person to such creditor, and 
  (j) a trust all or substantially all of the properties of which consist of shares of the capital stock of a corporation, where the trust was established pursuant to an agreement between 2 or more shareholders of the corporation and one of the main purposes of the trust is to provide for the exercise of voting rights in respect of those shares pursuant to that agreement. ( entité intermédiaire)  
  
  ### Reduction of capital gain
  
  (2) Where at any time after February 22, 1994 an individual disposes of an interest in or a share of the capital stock of a flow-through entity, the individual’s capital gain, if any, otherwise determined for a taxation year from the disposition shall be reduced by such amount as the individual claims, not exceeding the amount determined by the formula is the exempt capital gains balance of the individual for the year in respect of the entity, is 
  (a) if the entity made a designation under subsection 104(21) in respect of the individual for the year, twice the amount, if any, claimed under subsection 39.1(3) by the individual for the year in respect of the entity, 
  (b) if the entity is a partnership, twice the amount, if any, claimed under subsection (4) by the individual for the year in respect of the entity, and 
  (c) in any other case, the amount, if any, claimed under subsection 39.1(6) by the individual for the year in respect of the entity, and is the total of all reductions under this subsection in the individual’s capital gains otherwise determined for the year from the disposition of other interests in or shares of the capital stock of the entity. 
  
  ### Reduction of taxable capital gain
  
  (3) The taxable capital gain otherwise determined under subsection 104(21) of an individual for a taxation year as a result of a designation made under that subsection by a flow-through entity shall be reduced by such amount as the individual claims, not exceeding 1/2 of the individual’s exempt capital gains balance for the year in respect of the entity. 
  
  ### Reduction in share of partnership’s taxable capital gains
  
  (4) An individual’s share otherwise determined for a taxation year of a taxable capital gain of a partnership from the disposition of a property (other than property acquired by the partnership after February 22, 1994 in a transfer to which subsection 97(2) applied) for its fiscal period that ends after February 22, 1994 and in the year shall be reduced by such amount as the individual claims, not exceeding the amount determined by the formula is 1/2 of the individual’s exempt capital gains balance for the year in respect of the partnership, and is the total of amounts claimed by the individual under this subsection in respect of other taxable capital gains of the partnership for that fiscal period. 
  (5)  [Repealed, 2016, c. 12, s. 14]  
  
  ### Reduction of capital gains
  
  (6) The total capital gains otherwise determined under subsection 130.1(4) or 131(1), subsections 138.1(3) and 138.1(4) or subsection 144(4), as the case may be, of an individual for a taxation year as a result of one or more elections, allocations or designations made after February 22, 1994 by a flow-through entity shall be reduced by such amount as the individual claims, not exceeding the individual’s exempt capital gains balance for the year in respect of the entity. 
  
  ### Nil exempt capital gains balance
  
  (7) Notwithstanding subsection 39.1(1), where at any time an individual ceases to be a member or shareholder of, or a beneficiary under, a flow-through entity, the exempt capital gains balance of the individual in respect of the entity for each taxation year that begins after that time is deemed to be nil. 
  
  ### General rules
  
  40 (1) Except as otherwise expressly provided in this Part 
  (a) a taxpayer’s gain for a taxation year from the disposition of any property is the amount, if any, by which 
  (i) if the property was disposed of in the year, the amount, if any, by which the taxpayer’s proceeds of disposition exceed the total of the adjusted cost base to the taxpayer of the property immediately before the disposition and any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, or 
  (ii) if the property was disposed of before the year, the amount, if any, claimed by the taxpayer under subparagraph 40(1)(a)(iii) in computing the taxpayer’s gain for the immediately preceding year from the disposition of the property, exceeds 
  (iii) subject to subsection 40(1.1), such amount as the taxpayer may claim 
  (A) in the case of an individual (other than a trust) in prescribed form filed with the taxpayer’s return of income under this Part for the year, and 
  (B) in any other case, in the taxpayer’s return of income under this Part for the year, as a deduction, not exceeding the lesser of 
  (C) a reasonable amount as a reserve in respect of such of the proceeds of disposition of the property that are payable to the taxpayer after the end of the year as can reasonably be regarded as a portion of the amount determined under subparagraph 40(1)(a)(i) in respect of the property, and 
  (D) an amount equal to the product obtained when 1/5 of the amount determined under subparagraph 40(1)(a)(i) in respect of the property is multiplied by the amount, if any, by which 4 exceeds the number of preceding taxation years of the taxpayer ending after the disposition of the property; and 
  (b) a taxpayer’s loss for a taxation year from the disposition of any property is, 
  (i) if the property was disposed of in the year, the amount, if any, by which the total of the adjusted cost base to the taxpayer of the property immediately before the disposition and any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, exceeds the taxpayer’s proceeds of disposition of the property, and 
  (ii) in any other case, nil. 
  
  ### Gift of non-qualifying security
  
  (1.01) A taxpayer’s gain for a particular taxation year from a disposition of a non-qualifying security of the taxpayer (as defined in subsection 118.1(18)) that is the making of a gift (other than an excepted gift, within the meaning assigned by subsection 118.1(19)) to a qualified donee (as defined in subsection 149.1(1)) is the amount, if any, by which 
  (a) where the disposition occurred in the particular year, the amount, if any, by which the taxpayer’s proceeds of disposition exceed the total of the adjusted cost base to the taxpayer of the security immediately before the disposition and any outlays and expenses to the extent they were made or incurred by the taxpayer for the purpose of making the disposition, and 
  (b) where the disposition occurred in the 60-month period that ends at the beginning of the particular year, the amount, if any, deducted under paragraph 40(1.01)(c) in computing the taxpayer’s gain for the preceding taxation year from the disposition of the security exceeds 
  (c) the amount that the taxpayer claims in prescribed form filed with the taxpayer’s return of income for the particular year, not exceeding the eligible amount of the gift, where the taxpayer is not deemed by subsection 118.1(13) to have made a gift of property before the end of the particular year as a consequence of a disposition of the security by the donee or as a consequence of the security ceasing to be a non-qualifying security of the taxpayer before the end of the particular year. 
  
  ### Reserve — property disposed of to a child
  
  (1.1) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a property, that subparagraph shall be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if, 
  (a) the property was disposed of by the taxpayer to the taxpayer’s child, 
  (b) that child was resident in Canada immediately before the disposition, and 
  (c) the property was immediately before the disposition, 
  (i) any land in Canada or depreciable property in Canada of a prescribed class that was used by the taxpayer, the spouse or common-law partner of the taxpayer, a child or a parent of the taxpayer in a farming or fishing business carried on in Canada, 
  (ii) a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer (such a share or an interest having the meaning assigned by subsection 70(10)), or 
  (iii) a qualified small business corporation share of the taxpayer (within the meaning assigned by subsection 110.6(1)). 
  (iv)  [Repealed, 2014, c. 39, s. 11]  
  
  ### Limitations
  
  (2) Notwithstanding subsection 40(1), 
  (a) subparagraph 40(1)(a)(iii) does not apply to permit a taxpayer to claim any amount under that subparagraph in computing a gain for a taxation year if 
  (i) the taxpayer, at the end of the year or at any time in the immediately following year, was not resident in Canada or was exempt from tax under any provision of this Part, 
  (ii) the purchaser of the property sold is a corporation that, immediately after the sale, 
  (A) was controlled, directly or indirectly, in any manner whatever, by the taxpayer, 
  (B) was controlled, directly or indirectly, in any manner whatever, by a person or group of persons by whom the taxpayer was controlled, directly or indirectly, in any manner whatever, or 
  (C) controlled the taxpayer, directly or indirectly, in any manner whatever, where the taxpayer is a corporation, or 
  (iii) the purchaser of the property sold is a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner; 
  (b) where the taxpayer is an individual, the taxpayer’s gain for a taxation year from the disposition of a property that was the taxpayer’s principal residence at any time after the date (in this section referred to as the “acquisition date”) that is the later of December 31, 1971 and the day on which the taxpayer last acquired or reacquired it, as the case may be, is the amount determined by the formula is the amount that would, if this Act were read without reference to this paragraph and subsections 110.6(19) and 110.6(21), be the taxpayer’s gain therefrom for the year, is 
  (i) if the taxpayer was resident in Canada during the year that includes the acquisition date, one plus the number of taxation years that end after the acquisition date for which the property is the taxpayer’s principal residence and during which the taxpayer was resident in Canada, or 
  (ii) if it is not the case that the taxpayer was resident in Canada during the year that includes the acquisition date, the number of taxation years that end after the acquisition date for which the property was the taxpayer’s principal residence and during which the taxpayer was resident in Canada, is the number of taxation years that end after the acquisition date during which the taxpayer owned the property whether jointly with another person or otherwise, and is 
  (i) if the acquisition date is before February 23, 1994 and the taxpayer or the taxpayer’s spouse or common-law partner elected under subsection 110.6(19) in respect of the property or an interest, or for civil law a right, therein that was owned, immediately before the disposition, by the taxpayer, 4/3 of the lesser of 
  (A) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election by the taxpayer or spouse or common-law partner under subsection 110.6(19) in respect of the property or the interest or right if 
  (I) this Act were read without reference to subsection 110.6(20), and 
  (II) the amount designated in the election were equal to the amount, if any, by which the fair market value of the property or the interest or right at the end of February 22, 1994 exceeds the amount determined by the formula is the amount designated in the election that was made in respect of the property or the interest or right, and is the fair market value of the property or the interest or right at the end of February 22, 1994, and 
  (B) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election that was made under subsection 110.6(19) in respect of the property or the interest or right if the property were the principal residence of neither the taxpayer nor the spouse or common-law partner for each particular taxation year unless the property was designated, in a return of income for the taxation year that includes February 22, 1994 or for a preceding taxation year, to be the principal residence of either of them for the particular taxation year, and 
  (ii) in any other case, zero; 
  (c) where the taxpayer is an individual, the taxpayer’s gain for a taxation year from the disposition of land used in a farming business carried on by the taxpayer that includes property that was at any time the taxpayer’s principal residence is 
  (i) the taxpayer’s gain for the year, otherwise determined, from the disposition of the portion of the land that does not include the property that was the taxpayer’s principal residence, plus the taxpayer’s gain for the year, if any, determined under paragraph 40(2)(b) from the disposition of the property that was the taxpayer’s principal residence, or 
  (ii) if the taxpayer so elects in prescribed manner in respect of the land, the taxpayer’s gain for the year from the disposition of the land including the property that was the taxpayer’s principal residence, determined without regard to paragraph 40(2)(b) or subparagraph (i) of this paragraph, less the total of 
  (A) $1,000, and 
  (B) $1,000 for each taxation year ending after the acquisition date for which the property was the taxpayer’s principal residence and during which the taxpayer was resident in Canada; 
  (d) where the taxpayer is a corporation, its loss for a taxation year from the disposition of a bond or debenture is its loss therefrom for the year otherwise determined, less the total of such amounts received by it as, on account or in lieu of payment of, or in satisfaction of interest thereon as were, by virtue of paragraph 81(1)(m), not included in computing its income; 
  (e)  [Repealed, 1998, c. 19, s. 89]  
  (e.1) a particular taxpayer’s loss, if any, from the disposition at any time to a particular person or partnership of an obligation — other than, for the purposes of computing the exempt surplus or exempt deficit and taxable surplus or taxable deficit of the particular taxpayer in respect of another taxpayer, where the particular taxpayer or, if the particular taxpayer is a partnership, a member of the particular taxpayer is a foreign affiliate of the other taxpayer, an obligation that is, or would be, if the particular taxpayer were a foreign affiliate of the other taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the particular taxpayer — that was, immediately after that time, payable by another person or partnership to the particular person or partnership is nil if the particular taxpayer, the particular person or partnership and the other person or partnership are related to each other at that time or would be related to each other at that time if paragraph 80(2)(j) applied for the purpose of this paragraph; 
  (e.2) subject to paragraph (e.3), a taxpayer’s loss on the settlement or extinguishment of a particular commercial obligation (in this paragraph having the meaning assigned by subsection 80(1)) issued by a person or partnership and payable to the taxpayer is deemed to be the amount determined by the following formula if any part of the consideration given by the person or partnership for the settlement or extinguishment of the particular obligation consists of one or more other commercial obligations issued by the person or partnership to the taxpayer: is the amount, if any, that would be the taxpayer’s loss from the disposition of the particular obligation if this Act were read without reference to this paragraph, is the total fair market value of all the consideration given by the person or partnership for the settlement or extinguishment of the particular obligation, and is the total fair market value of the other obligations; 
  (e.3) paragraph (e.2) does not apply, for the purposes of computing the exempt surplus or exempt deficit and taxable surplus or taxable deficit of the taxpayer in respect of another taxpayer, where the taxpayer or, if the taxpayer is a partnership, a member of the taxpayer is a foreign affiliate of the other taxpayer, to the particular commercial obligation if the particular commercial obligation is, or would be, if the taxpayer were a foreign affiliate of the other taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the taxpayer; 
  (f) a taxpayer’s gain or loss from the disposition of 
  (i) a chance to win a prize or bet, or 
  (ii) a right to receive an amount as a prize or as winnings on a bet, in connection with a lottery scheme or a pool system of betting referred to in section 205 of the Criminal Code is nil;  
  (g) a taxpayer’s loss, if any, from the disposition of a property (other than, for the purposes of computing the exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, and taxable surplus or taxable deficit of the taxpayer in respect of another taxpayer, where the taxpayer or, if the taxpayer is a partnership, a member of the taxpayer is a foreign affiliate of the other taxpayer, a property that is, or would be, if the taxpayer were a foreign affiliate of the other taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the taxpayer), to the extent that it is 
  (i) a superficial loss, 
  (ii) a loss from the disposition of a debt or other right to receive an amount, unless the debt or right, as the case may be, was acquired by the taxpayer for the purpose of gaining or producing income from a business or property (other than exempt income) or as consideration for the disposition of capital property to a person with whom the taxpayer was dealing at arm’s length, 
  (iii) a loss from the disposition of any personal-use property of the taxpayer (other than listed personal property or a debt referred to in subsection 50(2)), or 
  (iv) a loss from the disposition of property to 
  (A) a trust governed by a deferred profit sharing plan, an employees profit sharing plan, a FHSA, a registered disability savings plan, a registered retirement income fund or a TFSA, under which the taxpayer is a beneficiary or immediately after the disposition becomes a beneficiary, or 
  (B) a trust governed by a registered retirement savings plan under which the taxpayer or the taxpayer’s spouse or common-law partner is an annuitant or becomes, within 60 days after the end of the taxation year, an annuitant, is nil; 
  (h) where the taxpayer is a corporation, its loss otherwise determined from the disposition at any time in a taxation year of shares of the capital stock of a corporation (in this paragraph referred to as the “controlled corporation”) that was controlled, directly or indirectly in any manner whatever, by it at any time in the year, is its loss therefrom otherwise determined less the amount, if any, by which 
  (i) all amounts added under paragraph 53(1)(f.1) to the cost to a corporation, other than the controlled corporation, of property disposed of to that corporation by the controlled corporation that were added to the cost of the property during the period while the controlled corporation was controlled by the taxpayer and that can reasonably be attributed to losses on the property that accrued during the period while the controlled corporation was controlled by the taxpayer, exceeds 
  (ii) all amounts by which losses have been reduced by virtue of this paragraph in respect of dispositions before that time of shares of the capital stock of the controlled corporation; and 
  (i) where at a particular time a taxpayer has disposed of a share of the capital stock of a corporation that was at any time a prescribed venture capital corporation or a prescribed labour-sponsored venture capital corporation or a share of the capital stock of a taxable Canadian corporation that was held in a prescribed stock savings plan or of a property substituted for such a share, the taxpayer’s loss from the disposition thereof shall be deemed to be the amount, if any, by which 
  (i) the loss otherwise determined exceeds 
  (ii) the amount, if any, by which 
  (A) the amount of prescribed assistance that the taxpayer (or a person with whom the taxpayer was not dealing at arm’s length) received or is entitled to receive in respect of the share exceeds 
  (B) the total of all amounts determined under subparagraph 40(2)(i)(i) in respect of any disposition of the share or of the property substituted for the share before the particular time by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length. 
  
  ### Deemed gain where amounts to be deducted from adjusted cost base exceed cost plus amounts to be added to adjusted cost base
  
  (3) Where 
  (a) the total of all amounts required by subsection 53(2) (except paragraph 53(2)(c)) to be deducted in computing the adjusted cost base to a taxpayer of any property at any time in a taxation year exceeds 
  (b) the total of 
  (i) the cost to the taxpayer of the property determined for the purpose of computing the adjusted cost base to the taxpayer of that property at that time, and 
  (ii) all amounts required by subsection 53(1) to be added to the cost to the taxpayer of the property in computing the adjusted cost base to the taxpayer of that property at that time, the following rules apply: 
  (c) subject to paragraph 93(1)(b), the amount of the excess is deemed to be a gain of the taxpayer for the year from a disposition at that time of the property, 
  (d) for the purposes of section 93 and subsections 116(6) and (6.1), the property is deemed to have been disposed of by the taxpayer at that time, and 
  (e) for the purposes of subsection 2(3) and sections 110.6 and 150, the property is deemed to have been disposed of by the taxpayer in the year. 
  
  ### Deemed gain for certain partners
  
  (3.1) Where, at the end of a fiscal period of a partnership, a member of the partnership is a limited partner of the partnership, or is a member of the partnership who was a specified member of the partnership at all times since becoming a member, except where the member’s partnership interest was held by the member on February 22, 1994 and is an excluded interest at the end of the fiscal period, 
  (a) the amount determined under subsection 40(3.11) is deemed to be a gain from the disposition, at the end of the fiscal period, of the member’s interest in the partnership; and 
  (b) for the purposes of subsection 2(3), section 110.6, subsections 116(6) and (6.1) and section 150, the interest is deemed to have been disposed of by the member at that time. 
  
  ### Amount of gain
  
  (3.11) For the purpose of subsection 40(3.1), the amount determined at any time under this subsection in respect of a member’s interest in a partnership is the amount determined by the formula is the total of 
  (a) all amounts required by subsection 53(2) to be deducted in computing the adjusted cost base to the member of the interest in the partnership at that time, and 
  (b) if the member is a member of a professional partnership, and that time is the end of the fiscal period of the partnership, the amount referred to in subparagraph 53(2)(c)(i) in respect of the taxpayer for that fiscal period; and is the total of 
  (a) the cost to the member of the interest determined for the purpose of computing the adjusted cost base to the member of the interest at that time, 
  (b) all amounts required by subsection 53(1) to be added to the cost to the member of the interest in computing the adjusted cost base to the member of the interest at that time, and 
  (c) if the member is a member of a professional partnership, and that time is the end of the fiscal period of the partnership, the amount referred to in subparagraph 53(1)(e)(i) in respect of the taxpayer for that fiscal period. 
  
  ### Meaning of 
  *professional partnership* 
  
  (3.111) In this section, 
  *professional partnership* means a partnership through which one or more persons carry on the practice of a profession that is governed or regulated under a law of Canada or a province.  
  
  ### Deemed loss for certain partners
  
  (3.12) If a corporation, an individual (other than a trust) or a graduated rate estate (each of which is referred to in this subsection as the “taxpayer”) is a member of a partnership at the end of a fiscal period of the partnership, the taxpayer is deemed to have a loss from the disposition at that time of the member’s interest in the partnership equal to the amount that the taxpayer elects in the taxpayer’s return of income under this Part for the taxation year that includes that time, not exceeding the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which was an amount deemed by subsection 40(3.1) to be a gain of the taxpayer from a disposition of the interest before that time exceeds 
  (ii) the total of all amounts each of which was an amount deemed by this subsection to be a loss of the taxpayer from a disposition of the interest before that time, and 
  (b) the adjusted cost base to the taxpayer of the interest at that time. 
  
  ### Artificial transactions
  
  (3.13) For the purpose of applying section 53 at any time to a member of a partnership who would be a member described in subsection (3.1) of the partnership if the fiscal period of the partnership that includes that time ended at that time, where at any time after February 21, 1994 the member of the partnership makes a contribution of capital to the partnership and 
  (a) the partnership or a person or partnership with whom the partnership does not deal at arm’s length 
  (i) makes a loan to the member or to a person with whom the member does not deal at arm’s length, or 
  (ii) pays an amount as, on account of, in lieu of payment of or in satisfaction of, a distribution of the member’s share of the partnership profits or partnership capital, or 
  (b) the member or a person with whom the member does not deal at arm’s length becomes indebted to the partnership or a person or partnership with whom the partnership does not deal at arm’s length, and it is established, by subsequent events or otherwise, that the loan, payment or indebtedness, as the case may be, was made or arose as part of a series of contributions and such loans, payments or other transactions, the contribution of capital shall be deemed not to have been made. 
  
  ### Specified member of a partnership
  
  (3.131) Where it can reasonably be considered that one of the main reasons that a member of a partnership was not a specified member of the partnership at all times since becoming a member of the partnership is to avoid the application of subsection 40(3.1) to the member’s interest in the partnership, the member is deemed for the purpose of that subsection to have been a specified member of the partnership at all times since becoming a member of the partnership. 
  
  ### Limited partner
  
  (3.14) For the purpose of subsection 40(3.1), a member of a partnership at a particular time is a limited partner of the partnership at that time if, at that time or within 3 years after that time, 
  (a) by operation of any law governing the partnership arrangement, the liability of the member as a member of the partnership is limited (except by operation of a provision of a statute of Canada or a province that limits the member’s liability only for debts, obligations and liabilities of the partnership, or any member of the partnership, arising from negligent acts or omissions, from misconduct or from fault of another member of the partnership or an employee, an agent or a representative of the partnership in the course of the partnership business while the partnership is a limited liability partnership); 
  (b) the member or a person not dealing at arm’s length with the member is entitled, either immediately or in the future and either absolutely or contingently, to receive an amount or to obtain a benefit that would be described in paragraph 96(2.2)(d) if that paragraph were read without reference to subparagraphs 40(3.14)(b)(ii) and 40(3.14)(b)(vi); 
  (c) one of the reasons for the existence of the member who owns the interest 
  (i) can reasonably be considered to be to limit the liability of any person with respect to that interest, and 
  (ii) cannot reasonably be considered to be to permit any person who has an interest in the member to carry on the person’s business (other than an investment business) in the most effective manner; or 
  (d) there is an agreement or other arrangement for the disposition of an interest in the partnership and one of the main reasons for the agreement or arrangement can reasonably be considered to be to attempt to avoid the application of this subsection to the member. 
  
  ### Excluded interest
  
  (3.15) For the purpose of subsection 40(3.1), an excluded interest in a partnership at any time means an interest in a partnership that actively carries on a business that was carried on by it throughout the period beginning February 22, 1994 and ending at that time, or that earns income from a property that was owned by it throughout that period, unless in that period there was a substantial contribution of capital to the partnership or a substantial increase in the indebtedness of the partnership. 
  
  ### Amounts considered not to be substantial
  
  (3.16) For the purpose of subsection 40(3.15), an amount will be considered not to be substantial where 
  (a) the amount 
  (i) was raised pursuant to the terms of a written agreement entered into by a partnership before February 22, 1994 to issue an interest in the partnership and was expended on expenditures contemplated by the agreement before 1995 (or before March 2, 1995 in the case of amounts expended to acquire a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii) the principal photography of which or, in the case of such a production that is a television series, one episode of the series, commences before 1995 and the production is completed before March 2, 1995, or an interest in one or more partnerships all or substantially all of the property of which is such a film production), 
  (ii) was raised pursuant to the terms of a written agreement (other than an agreement referred to in subparagraph 40(3.16)(a)(i)) entered into by a partnership before February 22, 1994 and was expended on expenditures contemplated by the agreement before 1995 (or before March 2, 1995 in the case of amounts expended to acquire a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii) the principal photography of which or, in the case of such a production that is a television series, one episode of the series, commences before 1995 and the production is completed before March 2, 1995, or an interest in one or more partnerships all or substantially all of the property of which is such a film production), 
  (iii) was used by the partnership before 1995 (or before March 2, 1995 in the case of amounts expended to acquire a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii) the principal photography of which or, in the case of such a production that is a television series, one episode of the series, commences before 1995 and the production is completed before March 2, 1995, or an interest in one or more partnerships all or substantially all of the property of which is such a film production) to make an expenditure required to be made pursuant to the terms of a written agreement entered into by the partnership before February 22, 1994, or 
  (iv) was used to repay a loan, debt or contribution of capital that had been received or incurred in respect of any such expenditure; 
  (b) the amount was raised before 1995 pursuant to the terms of a prospectus, preliminary prospectus, offering memorandum or registration statement filed before February 22, 1994 with a public authority in Canada pursuant to and in accordance with the securities legislation of Canada or of a province and, where required by law, accepted for filing by the public authority, and expended before 1995 (or before March 2, 1995 in the case of amounts expended to acquire a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii), or an interest in one or more partnerships all or substantially all of the property of which is such a film production) on expenditures contemplated by the document that was filed before February 22, 1994; 
  (c) the amount was raised before 1995 pursuant to the terms of an offering memorandum distributed as part of an offering of securities where 
  (i) the memorandum contained a complete or substantially complete description of the securities contemplated in the offering as well as the terms and conditions of the offering, 
  (ii) the memorandum was distributed before February 22, 1994, 
  (iii) solicitations in respect of the sale of the securities contemplated by the memorandum were made before February 22, 1994, 
  (iv) the sale of the securities was substantially in accordance with the memorandum, and 
  (v) the funds are expended in accordance with the memorandum before 1995 (except that the funds may be expended before March 2, 1995 in the case of a partnership all or substantially all of the property of which is a film production prescribed for the purpose of subparagraph 96(2.2)(d)(ii) the principal photography of which or, in the case of such a production that is a television series, one episode of the series, commences before 1995 and the production is completed before March 2, 1995, or an interest in one or more partnerships all or substantially all of the property of which is such a film production); or 
  (d) the amount was used for an activity that was carried on by the partnership on February 22, 1994 but not for a significant expansion of the activity nor for the acquisition or production of a film production. 
  
  ### Whether carrying on business before February 22, 1994
  
  (3.17) For the purpose of subsection 40(3.15), a partnership in respect of which paragraph 40(3.16)(a), 40(3.16)(b) or 40(3.16)(c) applies shall be considered to have actively carried on the business, or earned income from the property, contemplated in the document referred to in that paragraph throughout the period beginning February 22, 1994 and ending on the earlier of the closing date, if any, stipulated in the document and January 1, 1995. 
  
  ### Deemed partner
  
  (3.18) For the purpose of subsection 40(3.1), a member of a partnership who acquired an interest in the partnership after February 22, 1994 shall be deemed to have held the interest on February 22, 1994 where the member acquired the interest 
  (a) in circumstances in which 
  (i) paragraph 70(6)(d.1) applied, 
  (ii) where the member is an individual, the member’s spouse or common-law partner held the partnership interest on February 22, 1994, 
  (iii) where the member is a trust, the taxpayer by whose will the trust was created held the partnership interest on February 22, 1994, and 
  (iv) the partnership interest was, immediately before the death of the spouse or common-law partner or the taxpayer, as the case may be, an excluded interest; 
  (b) in circumstances in which 
  (i) paragraph 70(9.2)(c) applied, 
  (ii) the member’s parent held the partnership interest on February 22, 1994, and 
  (iii) the partnership interest was, immediately before the parent’s death, an excluded interest; 
  (c) in circumstances in which 
  (i) paragraph 70(9.3)(e) applied, 
  (ii) the trust referred to in subsection 70(9.3) or the taxpayer by whose will the trust was created held the partnership interest on February 22, 1994, and 
  (iii) the partnership interest was, immediately before the death of the spouse or common-law partner referred to in subsection 70(9.3), an excluded interest; or 
  (d) before 1995 pursuant to a document referred to in subparagraph 40(3.16)(a)(i) or paragraph 40(3.16)(b) or 40(3.16)(c). 
  
  ### Non-application of subsection (3)
  
  (3.19) Subsection 40(3) does not apply in any case where subsection 40(3.1) applies. 
  
  ### Non-application of subsection (3.1)
  
  (3.2) Subsection 40(3.1) does not apply in any case where paragraph 98(1)(c) or 98.1(1)(c) applies. 
  
  ### Deemed capital gain under section 180.01
  
  (3.21) If, in respect of a taxation year, a taxpayer has made an election under subsection 180.01(1), the amount deemed to be a capital gain under paragraph 180.01(2)(b) is deemed to be a gain from the disposition of property for the taxation year. 
  
  ### When subsection (3.4) applies
  
  (3.3) Subsection 40(3.4) applies when 
  (a) a corporation, trust or partnership (in this subsection and subsection (3.4) referred to as the “transferor”) disposes of a particular capital property — other than depreciable property of a prescribed class and other than, for the purposes of computing the exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, and taxable surplus or taxable deficit of a foreign affiliate of a taxpayer, in respect of the taxpayer, where the transferor is the affiliate or is a partnership of which the affiliate is a member, property that is, or would be, if the transferor were a foreign affiliate of the taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the transferor — otherwise than in a disposition described in any of paragraphs (c) to (g) of the definition 
  *superficial loss* in section 54;  
  (b) during the period that begins 30 days before and ends 30 days after the disposition, the transferor or a person affiliated with the transferor acquires a property (in this subsection and subsection 40(3.4) referred to as the “substituted property”) that is, or is identical to, the particular property; and 
  (c) at the end of the period, the transferor or a person affiliated with the transferor owns the substituted property. 
  
  ### Loss on certain properties
  
  (3.4) If this subsection applies because of subsection 40(3.3) to a disposition of a particular property, 
  (a) the transferor’s loss, if any, from the disposition is deemed to be nil, and 
  (b) the amount of the transferor’s loss, if any, from the disposition (determined without reference to paragraph 40(2)(g) and this subsection) is deemed to be a loss of the transferor from a disposition of the particular property at the time that is immediately before the first time, after the disposition, 
  (i) at which a 30-day period begins throughout which neither the transferor nor a person affiliated with the transferor owns 
  (A) the substituted property, or 
  (B) a property that is identical to the substituted property and that was acquired after the day that is 31 days before the period begins, 
  (ii) at which the property would, if it were owned by the transferor, be deemed by section 128.1 or subsection 149(10) to have been disposed of by the transferor, 
  (iii) that is immediately before the transferor is subject to a loss restriction event, 
  (iv) at which the transferor or a person affiliated with the transferor is deemed by section 50 to have disposed of the property, where the substituted property is a debt or a share of the capital stock of a corporation, or 
  (v) if the transferor is a corporation, 
  (A) for the purposes of computing the transferor’s foreign accrual property income, exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, and taxable surplus or taxable deficit, in respect of a taxpayer for a taxation year of the transferor where the transferor is a foreign affiliate of the taxpayer, at which the liquidation and dissolution of the transferor begins, unless the liquidation and dissolution is 
  (I) a qualifying liquidation and dissolution (within the meaning assigned by subsection 88(3.1)) of the transferor, or 
  (II) a designated liquidation and dissolution (within the meaning assigned by subsection 95(1)) of the transferor, and 
  (B) for any other purposes, at which the winding-up (other than a winding-up to which subsection 88(1) applies) of the transferor begins, and for the purpose of paragraph 40(3.4)(b), where a partnership otherwise ceases to exist at any time after the disposition, the partnership is deemed not to have ceased to exist, and each person who was a member of the partnership immediately before the partnership would, but for this subsection, have ceased to exist is deemed to remain a member of the partnership, until the time that is immediately after the first time described in subparagraphs 40(3.4)(b)(i) to 40(3.4)(b)(v). 
  
  ### Deemed identical property
  
  (3.5) For the purposes of subsections 40(3.3) and 40(3.4), 
  (a) right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property; 
  (b) a share of the capital stock of a corporation that is acquired in exchange for another share in a transaction is deemed to be a property that is identical to the other share if 
  (i) section 51, 86 or 87 applies to the transaction, or 
  (ii) the following conditions are met, namely, 
  (A) section 85.1 applies to the transaction, 
  (B) subsection (3.4) applied to a prior disposition of the other share, and 
  (C) none of the times described in any of subparagraphs (3.4)(b)(i) to (v) has occurred in respect of the prior disposition; 
  (b.1) a share of the capital stock of a SIFT wind-up corporation in respect of a SIFT wind-up entity is, if the share was acquired before 2013, deemed to be a property that is identical to equity in the SIFT wind-up entity; 
  (c) if subsections (3.3) and (3.4) apply to the disposition by a transferor of a share of the capital stock of a particular corporation and after the disposition 
  (i) the particular corporation is merged or combined with one or more other corporations, otherwise than in a transaction in respect of which paragraph (b) applies to the share, then the corporation formed on the merger or combination is deemed to own the share while the corporation so formed is affiliated with the transferor, 
  (ii) the particular corporation is wound up in a winding-up to which subsection 88(1) applies, then the parent (within the meaning assigned by subsection 88(1)) is deemed to own the share while the parent is affiliated with the transferor, or 
  (iii) the particular corporation is liquidated and dissolved, the liquidation and dissolution is a qualifying liquidation and dissolution (within the meaning assigned by subsection 88(3.1)) of the corporation or a designated liquidation and dissolution (within the meaning assigned by subsection 95(1)) of the corporation, and the transferor is a foreign affiliate of a taxpayer, then for the purposes of computing the transferor’s foreign accrual property income, exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, and taxable surplus or taxable deficit, in respect of the taxpayer for a taxation year of the transferor, the taxpayer referred to in subsection 88(3.1) or the particular shareholder referred to in the definition 
  *designated liquidation and dissolution* in subsection 95(1), as the case may be, is deemed to own the share while the taxpayer or particular shareholder is affiliated with the transferor; and  
  (d) where subsections 40(3.3) and 40(3.4) apply to the disposition by a transferor of a share of the capital stock of a corporation, and after the disposition the share is redeemed, acquired or cancelled by the corporation, otherwise than in a transaction in respect of which paragraph 40(3.5)(b) or 40(3.5)(c) applies to the share, the transferor is deemed to own the share while the corporation is affiliated with the transferor. 
  
  ### Loss on shares
  
  (3.6) If at any time a taxpayer disposes, to a corporation that is affiliated with the taxpayer immediately after the disposition, of a share of a class of the capital stock of the corporation (other than a share that is a distress preferred share (within the meaning assigned by subsection 80(1)) and other than, for the purposes of computing the exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, and taxable surplus or taxable deficit of the taxpayer in respect of another taxpayer, where the taxpayer or, if the taxpayer is a partnership, a member of the taxpayer is a foreign affiliate of the other taxpayer, a property that is, or would be, if the taxpayer were a foreign affiliate of the other taxpayer, excluded property (within the meaning assigned by subsection 95(1)) of the taxpayer), 
  (a) the taxpayer’s loss, if any, from the disposition is deemed to be nil; and 
  (b) in computing the adjusted cost base to the taxpayer after that time of a share of a class of the capital stock of the corporation owned by the taxpayer immediately after the disposition, there shall be added the proportion of the amount of the taxpayer’s loss from the disposition (determined without reference to paragraph 40(2)(g) and this subsection) that 
  (i) the fair market value, immediately after the disposition, of the share is of 
  (ii) the fair market value, immediately after the disposition, of all shares of the capital stock of the corporation owned by the taxpayer. 
  
  ### Exception — estate loss carried back
  
  (3.61) If, in the course of administering the estate of a deceased taxpayer, the taxpayer’s legal representative elects in accordance with subsection 164(6) to treat all or any portion of the estate’s capital loss (determined without reference to subsections (3.4) and (3.6)) from the disposition of a share of the capital stock of a corporation as a capital loss of the deceased taxpayer from the disposition of the share, subsections (3.4) and (3.6) apply to the estate in respect of the loss only to the extent that the amount of the loss exceeds the portion of the loss to which the election applies. 
  
  ### Losses of non-resident
  
  (3.7) If an individual disposes of a property at any time after having ceased to be resident in Canada, for the purposes of applying subsections 100(4), 107(1) and 112(3) to (3.32) and (7) in computing the individual’s loss from the disposition, 
  (a) the individual is deemed to be a corporation in respect of dividends received by the individual, or deemed under Part XIII to have been paid to the individual, at a particular time that is after the time at which the individual last acquired the property and at which the individual was non-resident; and 
  (b) an amount on account of 
  (i) each taxable dividend received by the individual at a particular time described in paragraph (a), and 
  (ii) each amount deemed under Part XIII to have been paid to the individual at a particular time described in paragraph (a), as a dividend from a corporation resident in Canada, to the extent that the amount can reasonably be considered to relate to the property, is deemed to be a taxable dividend that was received by the individual and that was deductible under section 112 in computing the individual’s taxable income or taxable income earned in Canada for the taxation year that includes that particular time. 
  
  ### Disposal of principal residence to spouse or trust for spouse
  
  (4) Where a taxpayer has, after 1971, disposed of property to an individual in circumstances to which subsection 70(6) or 73(1) applied, for the purposes of computing the individual’s gain from the disposition of the property under paragraph 40(2)(b) or 40(2)(c), as the case may be, 
  (a) the individual shall be deemed to have owned the property throughout the period during which the taxpayer owned it; 
  (b) the property shall be deemed to have been the individual’s principal residence 
  (i) in any case where subsection 70(6) is applicable, for any taxation year for which it would, if the taxpayer had designated it in prescribed manner to have been the taxpayer’s principal residence for that year, have been the taxpayer’s principal residence, and 
  (ii) in any case where subsection 73(1) is applicable, for any taxation year for which it was the taxpayer’s principal residence; and 
  (c) where the individual is a trust, the trust shall be deemed to have been resident in Canada during each taxation year during which the taxpayer was resident in Canada. 
  (5)  [Repealed, 1994, Sch. VIII, c. 7, s. 12]  
  
  ### Principal residence — property owned at end of 1981
  
  (6) Subject to subsection (6.1), if a property was owned by a taxpayer, whether jointly with another person or otherwise, at the end of 1981 and continuously from the beginning of 1982 until disposed of by the taxpayer, the amount of the gain determined under paragraph (2)(b) in respect of the disposition shall not exceed the amount, if any, by which the total of 
  (a) the taxpayer’s gain calculated in accordance with paragraph 40(2)(b) on the assumption that the taxpayer had disposed of the property on Dec ember 31, 1981 for proceeds of disposition equal to its fair market value on that date, and 
  (b) the taxpayer’s gain calculated in accordance with paragraph 40(2)(b) on the assumption that that paragraph applies and that 
  (i) the taxpayer acquired the property on January 1, 1982 at a cost equal to its proceeds of disposition as determined under paragraph 40(6)(a), and 
  (ii) the description of B in paragraph 40(2)(b) is read without reference to “one plus” exceeds 
  (c) the amount, if any, by which the fair market value of the property on December 31, 1981 exceeds the proceeds of disposition of the property determined without reference to this subsection. 
  
  ### Principal residence — property owned at end of 2016
  
  (6.1) If a trust owns property at the end of 2016, the trust is not in its first taxation year that begins after 2016 a trust described in subparagraph (c.1)(iii.1) of the definition principal residence in section 54, the trust disposes of the property after 2016, the disposition is the trust’s first disposition of the property after 2016 and the trust owns the property, whether jointly with another person or otherwise, continuously from the beginning of 2017 until the disposition,  
  (a) subsection (6) does not apply to the disposition; and 
  (b) the trust’s gain determined under paragraph (2)(b) in respect of the disposition is the amount, if any, determined by the formula is the trust’s gain calculated in accordance with paragraph (2)(b) on the assumption that 
  (i) the trust disposed of the property on December 31, 2016 for proceeds of disposition equal to its fair market value on that date, and 
  (ii) paragraph (a) did not apply in respect of the disposition described in subparagraph (i), is the trust’s gain in respect of the disposition calculated in accordance with paragraph (2)(b) on the assumption that 
  (i) the description of B in that paragraph is read without reference to “one plus”, and 
  (ii) the trust acquired the property on January 1, 2017 at a cost equal to its fair market value on December 31, 2016, and is the amount, if any, by which the fair market value of the property on December 31, 2016 exceeds the proceeds of disposition of the property determined without reference to this subsection. 
  
  ### Property in satisfaction of interest in trust
  
  (7) Where property has been acquired by a taxpayer in satisfaction of all or any part of the taxpayer’s capital interest in a trust, in circumstances to which subsection 107(2) applies and subsection 107(4) does not apply, for the purposes of paragraph 40(2)(b) and the definition 
  *principal residence* in section 54 the taxpayer shall be deemed to have owned the property continuously since the trust last acquired it.  
  
  ### Effect of election under subsection 110.6(19)
  
  (7.1) Where an election was made under subsection 110.6(19) in respect of a property of a taxpayer that was the taxpayer’s principal residence for the 1994 taxation year or that, in the taxpayer’s return of income for the taxation year in which the taxpayer disposes of the property or grants an option to acquire the property, is designated as the taxpayer’s principal residence, in determining, for the purposes of paragraph 40(2)(b) and subsections 40(4) to 40(7), the day on which the property was last acquired or reacquired by the taxpayer and the period throughout which the property was owned by the taxpayer this Act shall be read without reference to subsection 110.6(19). 
  
  ### Application of s. 70(10)
  
  (8) The definitions in subsection 70(10) apply to this section. 
  
  ### Additions to taxable Canadian property
  
  (9) If a non-resident person disposes of a taxable Canadian property 
  (a) that the person last acquired before April 27, 1995, 
  (b) that would not be a taxable Canadian property immediately before the disposition if section 115 were read as it applied to dispositions that occurred on April 26, 1995, and 
  (c) that would be a taxable Canadian property immediately before the disposition if section 115 were read as it applied to dispositions that occurred on January 1, 1996, the person’s gain or loss from the disposition is deemed to be the amount determined by the formula is the amount of the gain or loss determined without reference to this subsection; is the number of calendar months in the period that begins with May 1995 and ends with the calendar month that includes the time of the disposition; and is the number of calendar months in the period that begins with the calendar month in which the person last acquired the property and ends with the calendar month that includes the time of the disposition. 
  
  ### Application of subsection (11)
  
  (10) Subsection (11) applies in computing at any particular time a taxpayer’s gain or loss (in this subsection and subsection (11) referred to as the “new gain” or “new loss”, as the case may be), in respect of any part (which in this subsection and subsection (11) is referred to as the “relevant part” and which may for greater certainty be the whole) of a foreign currency debt of the taxpayer, arising from a fluctuation in the value of the currency of the foreign currency debt (other than, for greater certainty, a gain or a capital loss that arises because of the application of subsection 111(12)), if at any time before the particular time the taxpayer realized a capital loss or gain in respect of the foreign currency debt because of subsection 111(12). 
  
  ### Gain or loss on foreign currency debt
  
  (11) If this subsection applies, the new gain is the positive amount, or the new loss is the negative amount, as the case may be, determined by the formula is 
  (a) if the taxpayer would, but for any application of subsection 111(12), recognize a new gain, the amount of the new gain, determined without reference to this subsection, or 
  (b) if the taxpayer would, but for any application of subsection 111(12), recognize a new loss, the amount of the new loss, determined without reference to this subsection, multiplied by (–1); is the total of all amounts each of which is that portion of the amount of a capital loss realized by the taxpayer at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to 
  (a) the relevant part of the foreign currency debt at the particular time, or 
  (b) the forgiven amount, if any, (as defined in subsection 80(1)) in respect of the foreign currency debt at the particular time; and is the total of all amounts each of which is that portion of the amount of a gain realized by the taxpayer at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to 
  (a) the relevant part of the foreign currency debt at the particular time, or 
  (b) the forgiven amount, if any, (as defined in subsection 80(1)) in respect of the foreign currency debt at the particular time. 
  
  ### Donated flow-through shares
  
  (12) If at any time a taxpayer disposes of one or more capital properties that are included in a flow-through share class of property and subparagraph 38(a.1)(i) or (iii) applies to the disposition (in this subsection referred to as the “actual disposition”), then the taxpayer is deemed to have a capital gain from a disposition at that time of another capital property equal to the lesser of 
  (a) the taxpayer’s exemption threshold at that time in respect of the flow-through share class of property, and 
  (b) the total of all amounts each of which is a capital gain from the actual disposition (for greater certainty, calculated without reference to this subsection). 
  
  ### Class 14.1 — transitional rules
  
  (13) Subsection (14) applies in respect of a disposition by a taxpayer of a property that is included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of a business of the taxpayer if  
  (a) the property was an eligible capital property of the taxpayer immediately before January 1, 2017; 
  (b) the amount determined for Q in the definition 
  *cumulative eligible capital* in subsection 14(5) in respect of the business immediately before January 1, 2017 is greater than nil;  
  (c) the amount determined for B in that definition in respect of the business immediately before January 1, 2017 is nil; and 
  (d) no amount is included in the taxpayer’s income for a taxation year because of paragraph 13(38)(d). 
  
  ### Class 14.1 — transitional rules
  
  (14) If this subsection applies in respect of a disposition at any time by a taxpayer of a property, the taxpayer’s capital gain from the disposition is to be reduced by such amount as the taxpayer claims, not exceeding the amount by which 
  (a) 2/3 of the amount determined for Q in the definition 
  *cumulative eligible capital* in subsection 14(5) in respect of the business immediately before 2017  exceeds 
  (b) the total of all amounts each of which is an amount claimed under this subsection in respect of another disposition at or before that time. 
  
  ### Class 14.1 — transitional rules
  
  (15) Subsection (16) applies in respect of a disposition by an individual of a property that is included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of a business of the individual if  
  (a) the property was an eligible capital property of the individual immediately before January 1, 2017; and 
  (b) the individual’s exempt gains balance in respect of the business is greater than nil for the taxation year that includes January 1, 2017. 
  
  ### Class 14.1 — transitional rules
  
  (16) If this subsection applies in respect of a disposition at any time by an individual of a property, the individual’s capital gain from the disposition is to be reduced by such amount as the individual claims, not exceeding the amount by which 
  (a) twice the amount of the individual’s exempt gains balance in respect of the business for the taxation year that includes January 1, 2017 exceeds 
  (b) the total of 
  (i) if paragraph 13(38)(d) applies in respect of the business for the individual’s taxation year that includes January 1, 2017, the amount determined for D in paragraph 14(1)(b) for the purposes of paragraph 13(38)(d), and 
  (ii) the total of all amounts each of which is an amount claimed under this subsection in respect of another disposition at or before that time. 
  
  ### Taxable net gain from disposition of listed personal property
  
  41 (1) For the purposes of this Part, a taxpayer’s taxable net gain for a taxation year from dispositions of listed personal property is 1/2 of the amount determined under subsection 41(2) to be the taxpayer’s net gain for the year from dispositions of such property. 
  
  ### Determination of net gain
  
  (2) A taxpayer’s net gain for a taxation year from dispositions of listed personal property is an amount determined as follows: 
  (a) determine the amount, if any, by which the total of the taxpayer’s gains for the year from the disposition of listed personal property, other than property described in subparagraph 39(1)(a)(i.1), exceeds the total of the taxpayer’s losses for the year from dispositions of listed personal property, and 
  (b) deduct from the amount determined under paragraph 41(2)(a) such portion as the taxpayer may claim of the taxpayer’s listed-personal-property losses for the 7 taxation years immediately preceding and the 3 taxation years immediately following the taxation year, except that for the purposes of this paragraph 
  (i) an amount in respect of a listed-personal-property loss is deductible for a taxation year only to the extent that it exceeds the total of amounts deducted under this paragraph in respect of that loss for preceding taxation years, 
  (ii) no amount is deductible in respect of the listed-personal-property loss of any year until the deductible listed-personal-property losses for previous years have been deducted, and 
  (iii) no amount is deductible in respect of listed-personal-property losses from the amount determined under paragraph 41(2)(a) for a taxation year except to the extent of the amount so determined for the year, and the remainder determined under paragraph 41(2)(b) is the taxpayer’s net gain for the year from dispositions of listed personal property. 
  
  ### Definition of 
  *listed-personal-property loss* 
  
  (3) In this section, 
  *listed-personal-property loss* of a taxpayer for a taxation year means the amount, if any, by which the total of the taxpayer’s losses for the year from dispositions of listed personal property exceeds the total of the taxpayer’s gains for the year from dispositions of listed personal property, other than property described in subparagraph 39(1)(a)(i.1).  
  
  ### Dispositions subject to warranty
  
  42 (1) For the purposes of this Subdivision, 
  (a) an amount received or receivable by a person or partnership (referred to in this subsection as the “vendor”), as the case may be, as consideration for a warranty, covenant or other conditional or contingent obligation given or incurred by the vendor in respect of a property (referred to in this section as the “subject property”) disposed of by the vendor, 
  (i) if it is received or receivable on or before the specified date, is deemed to be received as consideration for the disposition by the vendor of the subject property (and not to be an amount received or receivable by the vendor as consideration for the obligation) and is to be included in computing the vendor’s proceeds of disposition of the subject property for the taxation year or fiscal period in which the disposition occurred, and 
  (ii) in any other case, is deemed to be a capital gain of the vendor from the disposition of a property by the vendor that occurs at the earlier of the time when the amount is received or becomes receivable; and 
  (b) an outlay or expense paid or payable by the vendor under a warranty, covenant or other conditional or contingent obligation given or incurred by the vendor in respect of the subject property disposed of by the vendor, 
  (i) if it is paid or payable on or before the specified date, is deemed to reduce the consideration for the disposition by the vendor of the subject property (and not to be an outlay or expense paid or payable by the vendor under the obligation) and is to be deducted in computing the vendor’s proceeds of disposition of the subject property for the taxation year or fiscal period in which the disposition occurred, and 
  (ii) in any other case, is deemed to be a capital loss of the vendor from the disposition of a property by the vendor that occurs at the earlier of the time when the outlay or expense is paid or becomes payable. 
  
  ### Meaning of 
  *specified date* 
  
  (2) In subsection (1), 
  *specified date* means,  
  (a) if the vendor is a partnership, the last day of the vendor’s fiscal period in which the vendor disposed of the subject property; and 
  (b) in any other case, the vendor’s filing-due date for the vendor’s taxation year in which the vendor disposed of the subject property. 
  
  ### General rule for part dispositions
  
  43 (1) For the purpose of computing a taxpayer’s gain or loss for a taxation year from the disposition of part of a property, the adjusted cost base to the taxpayer, immediately before the disposition, of that part is the portion of the adjusted cost base to the taxpayer at that time of the whole property that can reasonably be regarded as attributable to that part. 
  
  ### Ecological gifts
  
  (2) For the purposes of subsection (1) and section 53, if at any time a taxpayer disposes of a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a real or personal servitude, in circumstances where subsection 110.1(5) or 118.1(12) applies, 
  (a) the portion of the adjusted cost base to the taxpayer of the land immediately before the disposition that can reasonably be regarded as attributable to the covenant, easement or servitude, as the case may be, is deemed to be equal to the amount determined by the formula is the adjusted cost base to the taxpayer of the land immediately before the disposition, is the amount determined under subsection 110.1(5) or 118.1(12) in respect of the disposition, and is the fair market value of the land immediately before the disposition; and 
  (b) for greater certainty, the cost to the taxpayer of the land shall be reduced at the time of the disposition by the amount determined under paragraph (a). 
  
  ### Payments out of trust income, etc.
  
  (3) Notwithstanding subsection (1), where part of a capital interest of a taxpayer in a trust would, but for paragraph (h) or (i) of the definition 
  *disposition* in subsection 248(1), be disposed of solely because of the satisfaction of a right to enforce payment of an amount by the trust, no part of the adjusted cost base to the taxpayer of the taxpayer’s capital interest in the trust shall be allocated to that part of the capital interest.  
  
  ### Life estates in real property
  
  43.1 (1) Notwithstanding any other provision of this Act, if at any time a taxpayer disposes of a remainder interest in real property (except as a result of a transaction to which subsection 73(3) would otherwise apply or by way of a gift to a qualified donee) to a person or partnership and retains a life estate or an estate pur autre vie (in this section referred to as the “life estate”) in the property, the taxpayer is deemed  
  (a) to have disposed at that time of the life estate in the property for proceeds of disposition equal to its fair market value at that time; and 
  (b) to have reacquired the life estate immediately after that time at a cost equal to the proceeds of disposition referred to in paragraph 43.1(1)(a). 
  
  ### Idem
  
  (2) Where, as a result of an individual’s death, a life estate to which subsection 43.1(1) applied is terminated, 
  (a) the holder of the life estate immediately before the death shall be deemed to have disposed of the life estate immediately before the death for proceeds of disposition equal to the adjusted cost base to that person of the life estate immediately before the death; and 
  (b) where a person who is the holder of the remainder interest in the real property immediately before the death was not dealing at arm’s length with the holder of the life estate, there shall, after the death, be added in computing the adjusted cost base to that person of the real property an amount equal to the lesser of 
  (i) the adjusted cost base of the life estate in the property immediately before the death, and 
  (ii) the amount, if any, by which the fair market value of the real property immediately after the death exceeds the adjusted cost base to that person of the remainder interest immediately before the death. 
  
  ### Exchanges of property
  
  44 (1) Where at any time in a taxation year (in this subsection referred to as the “initial year”) an amount has become receivable by a taxpayer as proceeds of disposition of a capital property that is not a share of the capital stock of a corporation (which capital property is in this section referred to as the taxpayer’s “former property”) that is either 
  (a) property the proceeds of disposition of which are described in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in subsection 13(21) or paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in section 54, or  
  (b) a property that was, immediately before the disposition, a former business property of the taxpayer, and the taxpayer has 
  (c) if the former property is described in paragraph (a), before the later of the end of the second taxation year following the initial year and 24 months after the end of the initial year, and 
  (d) in any other case, before the later of the end of the first taxation year following the initial year and 12 months after the end of the initial year, acquired a capital property that is a replacement property for the taxpayer’s former property and the replacement property has not been disposed of by the taxpayer before the time the taxpayer disposed of the taxpayer’s former property, notwithstanding subsection 40(1), if the taxpayer so elects under this subsection in the taxpayer’s return of income for the year in which the taxpayer acquired the replacement property, 
  (e) the gain for a particular taxation year from the disposition of the taxpayer’s former property shall be deemed to be the amount, if any, by which 
  (i) where the particular year is the initial year, the lesser of 
  (A) the amount, if any, by which the proceeds of disposition of the former property exceed 
  (I) in the case of depreciable property, the lesser of the proceeds of disposition of the former property computed without reference to subsection 44(6) and the total of its adjusted cost base to the taxpayer immediately before the disposition and any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, and 
  (II) in any other case, the total of its adjusted cost base to the taxpayer immediately before the disposition and any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, and 
  (B) the amount, if any, by which the proceeds of disposition of the former property exceed the total of the cost to the taxpayer, or in the case of depreciable property, the capital cost to the taxpayer, determined without reference to paragraph (f), of the taxpayer’s replacement property and any outlays and expenses to the extent that they were made or incurred by the taxpayer for the purpose of making the disposition, or 
  (ii) where the particular year is subsequent to the initial year, the amount, if any, claimed by the taxpayer under subparagraph 44(1)(e)(iii) in computing the taxpayer’s gain for the immediately preceding year from the disposition of the former property, exceeds 
  (iii) subject to subsection 44(1.1), such amount as the taxpayer claims, 
  (A) in the case of an individual (other than a trust), in prescribed form filed with the taxpayer’s return of income under this Part for the particular year, and 
  (B) in any other case, in the taxpayer’s return of income under this Part for the particular year, as a deduction, not exceeding the lesser of 
  (C) a reasonable amount as a reserve in respect of such of the proceeds of disposition of the former property that are payable to the taxpayer after the end of the particular year as can reasonably be regarded as a portion of the amount determined under subparagraph 44(1)(e)(i) in respect of the property, and 
  (D) an amount equal to the product obtained when 1/5 of the amount determined under subparagraph 44(1)(e)(i) in respect of the property is multiplied by the amount, if any, by which 4 exceeds the number of preceding taxation years of the taxpayer ending after the disposition of the property, and 
  (f) the cost to the taxpayer or, in the case of depreciable property, the capital cost to the taxpayer, of the taxpayer’s replacement property at any time after the time the taxpayer disposed of the taxpayer’s former property, shall be deemed to be 
  (i) the cost to the taxpayer or, in the case of depreciable property, the capital cost to the taxpayer of the taxpayer’s replacement property otherwise determined, minus 
  (ii) the amount, if any, by which the amount determined under clause 44(1)(e)(i)(A) exceeds the amount determined under clause 44(1)(e)(i)(B). 
  
  ### Reserve — property disposed of to a child
  
  (1.1) In computing the amount that a taxpayer may claim under subparagraph (1)(e)(iii) in computing the taxpayer’s gain from the disposition of a former property of the taxpayer, that subparagraph shall be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively if that former property is real or immovable property in respect of the disposition of which, because of subsection 73(3), the rules in subsection 73(3.1) applied to the taxpayer and a child of the taxpayer. 
  
  ### Time of disposition and of receipt of proceeds
  
  (2) For the purposes of this Act, the time at which a taxpayer has disposed of a property for which there are proceeds of disposition as described in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in subsection 13(21) or paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in section 54, and the time at which an amount, in respect of those proceeds of disposition has become receivable by the taxpayer shall be deemed to be the earliest of  
  (a) the day the taxpayer has agreed to an amount as full compensation to the taxpayer for the property lost, destroyed, taken or sold, 
  (b) where a claim, suit, appeal or other proceeding has been taken before one or more tribunals or courts of competent jurisdiction, the day on which the taxpayer’s compensation for the property is finally determined by those tribunals or courts, 
  (c) where a claim, suit, appeal or other proceeding referred to in paragraph 44(2)(b) has not been taken before a tribunal or court of competent jurisdiction within two years of the loss, destruction or taking of the property, the day that is two years following the day of the loss, destruction or taking, 
  (d) the time at which the taxpayer is deemed by section 70 or paragraph 128.1(4)(b) to have disposed of the property, and 
  (e) where the taxpayer is a corporation other than a subsidiary corporation referred to in subsection 88(1), the time immediately before the winding-up of the corporation, and the taxpayer shall be deemed to have owned the property continuously until the time so determined. 
  
  ### Where s. 70(3) does not apply
  
  (3) Subsection 70(3) does not apply to compensation referred to in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in subsection 13(21) or paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in section 54 that has been transferred or distributed to beneficiaries or other persons beneficially interested in an estate or trust.  
  
  ### Deemed election
  
  (4) Where a former property of a taxpayer was a depreciable property of the taxpayer 
  (a) if the taxpayer has elected in respect of that property under subsection 44(1), the taxpayer shall be deemed to have elected in respect thereof under subsection 13(4); and 
  (b) if the taxpayer has elected in respect of that property under subsection 13(4), the taxpayer shall be deemed to have elected in respect thereof under subsection 44(1). 
  
  ### Replacement property
  
  (5) For the purposes of this section, a particular capital property of a taxpayer is a replacement property for a former property of the taxpayer, if 
  (a) it is reasonable to conclude that the property was acquired by the taxpayer to replace the former property; 
  (a.1) it was acquired by the taxpayer and used by the taxpayer or a person related to the taxpayer for a use that is the same as or similar to the use to which the taxpayer or a person related to the taxpayer put the former property; 
  (b) where the former property was used by the taxpayer or a person related to the taxpayer for the purpose of gaining or producing income from a business, the particular capital property was acquired for the purpose of gaining or producing income from that or a similar business or for use by a person related to the taxpayer for such a purpose; 
  (c) where the former property was a taxable Canadian property of the taxpayer, the particular capital property is a taxable Canadian property of the taxpayer; and 
  (d) where the former property was a taxable Canadian property (other than treaty-protected property) of the taxpayer, the particular capital property is a taxable Canadian property (other than treaty-protected property) of the taxpayer. 
  
  ### Deemed proceeds of disposition
  
  (6) If a taxpayer has disposed of property that was a former business property and was in part a building and in part the land (or an interest, or for civil law a right, therein) subjacent to, or immediately contiguous to and necessary for the use of, the building, for the purposes of this Subdivision, the amount if any, by which 
  (a) the proceeds of disposition of one such part determined without regard to this subsection exceed 
  (b) the adjusted cost base to the taxpayer of that part shall, to the extent that the taxpayer so elects in the taxpayer’s return of income under this Part for the year in which the taxpayer acquired a replacement property for the former business property, be deemed not to be proceeds of disposition of that part and to be proceeds of disposition of the other part. 
  
  ### Where subpara. (1)(e)(iii) does not apply
  
  (7) Subparagraph 44(1)(e)(iii) does not apply to permit a taxpayer to claim any amount under that subparagraph in computing a gain for a taxation year where 
  (a) the taxpayer, at the end of the year or at any time in the immediately following year, was not resident in Canada or was exempt from tax under any provision of this Part; 
  (b) the person to whom the former property of the taxpayer was disposed of was a corporation that, immediately after the disposition, 
  (i) was controlled, directly or indirectly in any manner whatever, by the taxpayer, 
  (ii) was controlled, directly or indirectly in any manner whatever, by a person or group of persons by whom the taxpayer was controlled, directly or indirectly in any manner whatever, or 
  (iii) controlled the taxpayer, directly or indirectly in any manner whatever, where the taxpayer is a corporation; or 
  (c) the former property of the taxpayer was disposed of to a partnership in which the taxpayer was, immediately after the disposition, a majority-interest partner. 
  
  ### Application of s. 70(10)
  
  (8) The definitions in subsection 70(10) apply to this section. 
  
  ### Definitions
  
  44.1 (1) The definitions in this subsection apply in this section.  
  *ACB reduction* of an individual in respect of a replacement share of the individual in respect of a qualifying disposition of the individual means the amount determined by the formula  is the permitted deferral of the individual in respect of the qualifying disposition; is the cost to the individual of the replacement share; and is the cost to the individual of all the replacement shares of the individual in respect of the qualifying disposition. ( réduction du prix de base rajusté)   
  *active business corporation* at any time means, subject to subsection (10), a corporation that is, at that time, a taxable Canadian corporation all or substantially all of the fair market value of the assets of which at that time is attributable to assets of the corporation that are  
  (a) assets used principally in an active business carried on by the corporation or by an active business corporation that is related to the corporation; 
  (b) shares issued by or debt owing by other active business corporations that are related to the corporation; or 
  (c) a combination of assets described in paragraphs (a) and (b). ( société exploitant activement une entreprise)   
  *carrying value* of the assets of a corporation at any time means the amount at which the assets of the corporation would be valued for the purpose of the corporation’s balance sheet as of that time if that balance sheet were prepared in accordance with generally accepted accounting principles used in Canada at that time, except that an asset of a corporation that is a share or debt issued by a related corporation is deemed to have a carrying value of nil. (valeur comptable)   
  *common share* means a share prescribed for the purpose of paragraph 110(1)(d). (action ordinaire)   
  *eligible pooling arrangement* in respect of an individual means an agreement in writing made between the individual and another person or partnership (which other person or partnership is referred to in this definition and subsection (3) as the “investment manager”) where the agreement provides for  
  (a) the transfer of funds or other property by the individual to the investment manager for the purpose of making investments on behalf of the individual; 
  (b) the purchase of eligible small business corporation shares with those funds, or the proceeds of a disposition of the other property, within 60 days after receipt of those funds or the other property by the investment manager; and 
  (c) the provision of a statement of account to the individual by the investment manager at the end of each month that ends after the transfer disclosing the details of the investment portfolio held by the investment manager on behalf of the individual at the end of that month and the details of the transactions made by the investment manager on behalf of the individual during the month. ( arrangement admissible de mis en commun)   
  *eligible small business corporation* at any time means, subject to subsection (10), a corporation that, at that time, is a Canadian-controlled private corporation all or substantially all of the fair market value of the assets of which at that time is attributable to assets of the corporation that are  
  (a) assets used principally in an active business carried on primarily in Canada by the corporation or by an eligible small business corporation that is related to the corporation; 
  (b) shares issued by or debt owing by other eligible small business corporations that are related to the corporation; or 
  (c) a combination of assets described in paragraphs (a) and (b). ( société admissible exploitant une petite entreprise)   
  *eligible small business corporation share* of an individual means a common share issued by a corporation to the individual if  
  (a) at the time the share was issued, the corporation was an eligible small business corporation; and 
  (b) immediately before and after the share was issued, the total carrying value of the assets of the corporation and corporations related to it did not exceed $50,000,000. ( action déterminée de petite entreprise)   
  *permitted deferral* of an individual in respect of a qualifying disposition of the individual means the amount determined by the formula  is the lesser of the individual’s proceeds of disposition from the qualifying disposition and the total of all amounts each of which is the cost to the individual of a replacement share in respect of the qualifying disposition; is the individual’s proceeds of disposition from the qualifying disposition; and is the individual’s capital gain from the qualifying disposition. ( montant de report autorisé)   
  *qualifying cost* [Repealed, 2003, c. 15, s. 70(1)]   
  *qualifying disposition* of an individual (other than a trust) means, subject to subsection (9), a disposition of shares of the capital stock of a corporation where each such share disposed of was  
  (a) an eligible small business corporation share of the individual; 
  (b) throughout the period during which the individual owned the share, a common share of an active business corporation; and 
  (c) throughout the 185-day period that ended immediately before the disposition of the share, owned by the individual. ( disposition admissible)   
  *qualifying portion of a capital gain* [Repealed, 2003, c. 15, s. 70(1)]   
  *qualifying portion of the proceeds of disposition* [Repealed, 2003, c. 15, s. 70(1)]   
  *replacement share* of an individual in respect of a qualifying disposition of the individual in a taxation year means an eligible small business corporation share of the individual that is  
  (a) acquired by the individual in the year or within 120 days after the end of the year; and 
  (b) designated by the individual in the individual’s return of income for the year to be a replacement share in respect of the qualifying disposition. ( action remplacement)  
  
  ### Capital gain deferral
  
  (2) Where an individual has made a qualifying disposition in a taxation year, 
  (a) the individual’s capital gain for the year from the qualifying disposition is deemed to be the amount by which the individual’s capital gain for the year from the qualifying disposition, determined without reference to this section, exceeds the individual’s permitted deferral in respect of the qualifying disposition; 
  (b) in computing the adjusted cost base to the individual of a replacement share of the individual in respect of the qualifying disposition at any time after its acquisition, there shall be deducted the amount of the ACB reduction of the individual in respect of the replacement share; and 
  (c) where the qualifying disposition was a disposition of a share that was taxable Canadian property of the individual, the replacement share of the individual in respect of the qualifying disposition is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the individual. 
  
  ### Special rule — re eligible pooling arrangements
  
  (3) Except for the purpose of the definition 
  *eligible pooling arrangement* in subsection (1), any transaction entered into by an investment manager under an eligible pooling arrangement on behalf of an individual is deemed to be a transaction of the individual and not a transaction of the investment manager.  
  
  ### Special rule — re acquisitions on death
  
  (4) For the purpose of this section, a share of the capital stock of a corporation, acquired by an individual as a consequence of the death of a person who is the individual’s spouse, common-law partner or parent, is deemed to be a share that was acquired by the individual at the time it was acquired by that person and owned by the individual throughout the period that it was owned by that person, if 
  (a) where the person was the spouse or common-law partner of the individual, the share was an eligible small business share of the person and subsection 70(6) applied to the individual in respect of the share; or 
  (b) where the person was the individual’s parent, the share was an eligible small business share of the parent and subsection 70(9.2) applied to the individual in respect of the share. 
  
  ### Special rule — re breakdown of relationships
  
  (5) For the purpose of this section, a share of the capital stock of a corporation, acquired by an individual from a person who was the individual’s former spouse or common-law partner as a consequence of the settlement of rights arising out of their marriage or common-law partnership, is deemed to be a share that was acquired by the individual at the time it was acquired by that person and owned by the individual throughout the period that it was owned by that person if the share was an eligible small business share of the person and subsection 73(1) applied to the individual in respect of the share. 
  
  ### Special rule — re eligible small business corporation share exchanges
  
  (6) For the purpose of this section, where an individual receives shares of the capital stock of a particular corporation that are eligible small business corporation shares of the individual (in this subsection referred to as the “new shares”) as the sole consideration for the disposition by the individual of shares issued by the particular corporation or by another corporation that were eligible small business corporation shares of the individual (in this subsection referred to as the “exchanged shares”), the new shares are deemed to have been owned by the individual throughout the period that the exchanged shares were owned by the individual if 
  (a) section 51, paragraph 85(1)(h), subsection 85.1(1), section 86 or subsection 87(4) applied to the individual in respect of the new shares; and 
  (b) the individual’s total proceeds of disposition of the exchanged shares was equal to the total of all amounts each of which was the individual’s adjusted cost base of an exchanged share immediately before the disposition. 
  
  ### Special rule — re active business corporation share exchanges
  
  (7) For the purpose of this section, where an individual receives common shares of the capital stock of a particular corporation (in this subsection referred to as the “new shares”) as the sole consideration for the disposition by the individual of common shares of the particular corporation or of another corporation (in this subsection referred to as the “exchanged shares”), the new shares are deemed to be eligible small business corporation shares of the individual and shares of the capital stock of an active business corporation that were owned by the individual throughout the period that the exchanged shares were owned by the individual, if 
  (a) section 51, paragraph 85(1)(h), subsection 85.1(1), section 86 or subsection 87(4) applied to the individual in respect of the new shares; 
  (b) the total of the individual’s proceeds of disposition in respect of the disposition of the exchanged shares was equal to the total of the individual’s adjusted cost bases immediately before the disposition of such shares; and 
  (c) the disposition of the exchanged shares was a qualifying disposition of the individual. 
  
  ### Special rule — re carrying on an active business
  
  (8) For the purpose of the definitions in subsection (1), a property held at any particular time by a corporation that would, if this Act were read without reference to this subsection, be considered to carry on an active business at that time, is deemed to be used or held by the corporation in the course of carrying on that active business if the property (or other property for which the property is substituted property) was acquired by the corporation, at any time in the 36-month period ending at the particular time, because the corporation 
  (a) issued a debt or a share of a class of its capital stock in order to acquire money for the purpose of acquiring property to be used in or held in the course of, or making expenditures for the purpose of, earning income from an active business carried on by it; 
  (b) disposed of property used or held by it in the course of carrying on an active business in order to acquire money for the purpose of acquiring property to be used in or held in the course of, or making expenditures for the purpose of, earning income from an active business carried on by it; or 
  (c) accumulated income derived from an active business carried on by it in order to acquire property to be used in or held in the course of, or to make expenditures for the purpose of, earning income from an active business carried on by it. 
  
  ### Special rule — re qualifying disposition
  
  (9) A disposition of a common share of an active business corporation (in this subsection referred to as the “subject share”) by an individual that, but for this subsection, would be a qualifying disposition of the individual is deemed not to be a qualifying disposition of the individual unless the active business of the corporation referred to in paragraph (a) of the definition 
  *active business corporation* in subsection (1) was carried on primarily in Canada  
  (a) at all times in the period that began at the time the individual last acquired the subject share and ended at the time of disposition, if that period is less than 730 days; or 
  (b) in any other case, for at least 730 days in the period referred to in paragraph (a). 
  
  ### Special rule — re exceptions
  
  (10) For the purpose of this section, an eligible small business corporation and an active business corporation at any time do not include a corporation that is, at that time, 
  (a) a professional corporation; 
  (b) a specified financial institution; 
  (c) a corporation the principal business of which is the leasing, rental, development or sale, or any combination of those activities, of real or immovable property owned by it; or 
  (d) a corporation more than 50% of the fair market value of the property of which (net of debts incurred to acquire the property) is attributable to real or immovable property. 
  
  ### Determination rule
  
  (11) In determining whether a share owned by an individual is an eligible small business corporation share of the individual, this Act shall be read without reference to section 48.1. 
  
  ### Anti-avoidance rule
  
  (12) The permitted deferral of an individual in respect of a qualifying disposition of shares issued by a corporation (in this subsection referred to as “new shares”) is deemed to be nil where 
  (a) the new shares (or shares for which the new shares are substituted property) were issued to the individual or a person related to the individual as part of a series of transactions or events in which 
  (i) shares of the capital stock of a corporation (in this subsection referred to as the “old shares”) were disposed of by the individual or a person related to the individual, or 
  (ii) the paid-up capital of old shares or the adjusted cost base to the individual or to a person related to the individual of the old shares was reduced; 
  (b) the new shares (or shares for which the new shares are substituted property) were 
  (i) issued by the corporation that issued the old shares, 
  (ii) issued by a corporation that, at or immediately after the time of issue of the new shares, was a corporation that was not dealing at arm’s length with 
  (A) the corporation that issued the old shares, or 
  (B) the individual, or 
  (iii) issued, by a corporation that acquired the old shares (or by another corporation related to that corporation), as part of the transaction or event or series of transactions or events that included that acquisition of the old shares; and 
  (c) it is reasonable to conclude that one of the main reasons for the series of transactions or events or a transaction in the series was to permit the individual, persons related to the individual, or the individual and persons related to the individual to become eligible to deduct under subsection (2) permitted deferrals in respect of qualifying dispositions of new shares (or shares substituted for the new shares) the total of which would exceed the total that those persons would have been eligible to deduct under subsection (2) in respect of permitted deferrals in respect of qualifying dispositions of old shares. 
  
  ### Order of disposition of shares
  
  (13) For the purpose of this section, an individual is deemed to dispose of shares that are identical properties in the order in which the individual acquired them. 
  
  ### Property with more than one use
  
  45 (1) For the purposes of this Subdivision the following rules apply: 
  (a) where a taxpayer, 
  (i) having acquired property for some other purpose, has commenced at a later time to use it for the purpose of gaining or producing income, or 
  (ii) having acquired property for the purpose of gaining or producing income, has commenced at a later time to use it for some other purpose, the taxpayer shall be deemed to have 
  (iii) disposed of it at that later time for proceeds equal to its fair market value at that later time, and 
  (iv) immediately thereafter reacquired it at a cost equal to that fair market value; 
  (b) where property has, since it was acquired by a taxpayer, been regularly used in part for the purpose of gaining or producing income and in part for some other purpose, the taxpayer shall be deemed to have acquired, for that other purpose, the proportion of the property that the use regularly made of the property for that other purpose is of the whole use regularly made of the property at a cost to the taxpayer equal to the same proportion of the cost to the taxpayer of the whole property, and, if the property has, in such a case, been disposed of, the proceeds of disposition of the proportion of the property deemed to have been acquired for that other purpose shall be deemed to be the same proportion of the proceeds of disposition of the whole property; 
  (c) where, at any time after a taxpayer has acquired property, there has been a change in the relation between the use regularly made by the taxpayer of the property for gaining or producing income and the use regularly made of the property for other purposes, 
  (i) if the use regularly made of the property for those other purposes has increased, the taxpayer shall be deemed to have 
  (A) disposed of the property at that time for proceeds equal to the proportion of the fair market value of the property at that time that the amount of the increase in the use regularly made by the taxpayer of the property for those other purposes is of the whole use regularly made of the property, and 
  (B) immediately thereafter reacquired the property so disposed of at a cost equal to the proceeds referred to in clause 45(1)(c)(i)(A), and 
  (ii) if the use regularly made of the property for those other purposes has decreased, the taxpayer shall be deemed to have 
  (A) disposed of the property at that time for proceeds equal to the proportion of the fair market value of the property at that time that the amount of the decrease in use regularly made by the taxpayer of the property for those other purposes is of the whole use regularly made of the property, and 
  (B) immediately thereafter reacquired the property so disposed of at a cost equal to the proceeds referred to in clause 45(1)(c)(ii)(A); and 
  (d) in applying this subsection in respect of a non-resident taxpayer, a reference to “gaining or producing income” shall be read as a reference to “gaining or producing income from a source in Canada”. 
  
  ### Election where change of use
  
  (2) For the purposes of this Subdivision and section 13, if a taxpayer elects in respect of any property of the taxpayer in the taxpayer’s return of income for a taxation year under this Part, 
  (a) if subparagraph (1)(a)(i) or paragraph 13(7)(b) would otherwise apply to the property for the taxation year, the taxpayer is deemed not to have begun to use the property for the purpose of gaining or producing income; 
  (b) if subparagraph (1)(c)(ii) or 13(7)(d)(i) would otherwise apply to the property for the taxation year, the taxpayer is deemed not to have increased the use regularly made of the property for the purpose of gaining or producing income relative to the use regularly made of the property for other purposes; and 
  (c) if the taxpayer rescinds the election in respect of the property in the taxpayer’s return of income under this Part for a subsequent taxation year, 
  (i) if paragraph (a) applied to the taxpayer in the taxation year, the taxpayer is deemed to have begun to use the property for the purpose of gaining or producing income on the first day of the subsequent taxation year, and 
  (ii) if paragraph (b) applied to the taxpayer in the taxation year, the taxpayer is deemed to have increased the use regularly made of the property for the purpose of gaining or producing income on the first day of the subsequent taxation year by the amount that would have been the increase in the taxation year if the election had not been made. 
  
  ### Election concerning principal residence
  
  (3) If at any time a property that was acquired by a taxpayer for the purpose of gaining or producing income, or that was acquired in part for that purpose, ceases in whole or in part to be used for that purpose and becomes, or becomes part of, the principal residence of the taxpayer, paragraphs (1)(a) and (c) shall not apply to deem the taxpayer to have disposed of the property at that time and to have reacquired it immediately thereafter if the taxpayer so elects by notifying the Minister in writing on or before the earlier of 
  (a) the day that is 90 days after a demand by the Minister for an election under this subsection is sent to the taxpayer, and 
  (b) the taxpayer’s filing-due date for the taxation year in which the property is actually disposed of by the taxpayer. 
  
  ### Where election cannot be made
  
  (4) Notwithstanding subsection 45(3), an election described in that subsection shall be deemed not to have been made in respect of a change in use of property if any deduction in respect of the property has been allowed for any taxation year ending after 1984 and on or before the change in use under regulations made under paragraph 20(1)(a) to the taxpayer, the taxpayer’s spouse or common-law partner or a trust under which the taxpayer or the taxpayer’s spouse or common-law partner is a beneficiary. 
  
  ### Personal-use property
  
  46 (1) Where a taxpayer has disposed of a personal-use property (other than an excluded property disposed of in circumstances to which subsection 110.1(1), or the definition 
  *total charitable gifts*, 
  *total cultural gifts* or 
  *total ecological gifts* in subsection 118.1(1), applies) of the taxpayer, for the purposes of this Subdivision  
  (a) the adjusted cost base to the taxpayer of the property immediately before the disposition shall be deemed to be the greater of $1,000 and the amount otherwise determined to be its adjusted cost base to the taxpayer at that time; and 
  (b) the taxpayer’s proceeds of disposition of the property shall be deemed to be the greater of $1,000 and the taxpayer’s proceeds of disposition of the property otherwise determined. 
  
  ### Where part only of property disposed of
  
  (2) Where a taxpayer has disposed of part of a personal-use property (other than a part of an excluded property disposed of in circumstances to which subsection 110.1(1), or the definition 
  *total charitable gifts*, 
  *total cultural gifts* or 
  *total ecological gifts* in subsection 118.1(1), applies) owned by the taxpayer and has retained another part of the property, for the purposes of this Subdivision  
  (a) the adjusted cost base to the taxpayer, immediately before the disposition, of the part so disposed of shall be deemed to be the greater of 
  (i) the adjusted cost base to the taxpayer at that time of that part otherwise determined, and 
  (ii) that proportion of $1,000 that the amount determined under subparagraph 46(2)(a)(i) is of the adjusted cost base to the taxpayer at that time of the whole property; and 
  (b) the proceeds of disposition of the part so disposed of shall be deemed to be the greater of 
  (i) the proceeds of disposition of that part otherwise determined, and 
  (ii) the amount determined under subparagraph 46(2)(a)(ii). 
  
  ### Properties ordinarily disposed of as a set
  
  (3) For the purposes of this Subdivision, where a number of personal-use personal-use properties of a taxpayer that would, if the properties were disposed of, ordinarily be disposed of in one disposition as a set, 
  (a) have been disposed of by more than one disposition so that all of the properties have been acquired by one person or by a group of persons not dealing with each other at arm’s length, and 
  (b) had, immediately before the first disposition referred to in paragraph 46(3)(a), a total fair market value greater than $1,000, the properties shall be deemed to be a single personal-use property and each such disposition shall be deemed to be a disposition of a part of that property. 
  
  ### Decrease in value of personal-use property of corporation, etc.
  
  (4) Where it may reasonably be regarded that, by reason of a decrease in the fair market value of any personal-use property of a corporation, partnership or trust, 
  (a) a taxpayer’s gain, if any, from the disposition of a share of the capital stock of a corporation, an interest in a trust or an interest in a partnership has become a loss, or is less than it would have been if the decrease had not occurred, or 
  (b) a taxpayer’s loss, if any, from the disposition of a share or interest described in paragraph 46(4)(a) is greater than it would have been if the decrease had not occurred, the amount of the gain or loss, as the case may be, shall be deemed to be the amount that it would have been but for the decrease. 
  
  ### Excluded property
  
  (5) For the purpose of this section, 
  *excluded property* of a taxpayer means property acquired by the taxpayer, or by a person with whom the taxpayer does not deal at arm’s length, in circumstances in which it is reasonable to conclude that the acquisition of the property relates to an arrangement, plan or scheme that is promoted by another person or partnership and under which it is reasonable to conclude that the property will be the subject of a gift to which subsection 110.1(1), or the definition 
  *total charitable gifts*, 
  *total cultural gifts* or 
  *total ecological gifts* in subsection 118.1(1), applies.  
  
  ### Identical properties
  
  47 (1) Where at any particular time after 1971 a taxpayer who owns one property that was or two or more identical properties each of which was, as the case may be, acquired by the taxpayer after 1971, acquires one or more other properties (in this subsection referred to as “newly-acquired properties”) each of which is identical to each such previously-acquired property, for the purposes of computing, at any subsequent time, the adjusted cost base of the taxpayer of each such identical property, 
  (a) the taxpayer shall be deemed to have disposed of each such previously-acquired property immediately before the particular time for proceeds equal to its adjusted cost base to the taxpayer immediately before the particular time; 
  (b) the taxpayer shall be deemed to have acquired the identical property at the particular time at a cost equal to the quotient obtained when 
  (i) the total of the adjusted cost bases to the taxpayer immediately before the particular time of the previously-acquired properties, and the cost to the taxpayer (determined without reference to this section) of the newly-acquired properties is divided by 
  (ii) the number of the identical properties owned by the taxpayer immediately after the particular time; 
  (c) there shall be deducted, after the particular time, in computing the adjusted cost base to the taxpayer of each such identical property, the amount determined by the formula is the total of all amounts deducted under paragraph 53(2)(g.1) in computing immediately before the particular time the adjusted cost base to the taxpayer of the previously-acquired properties, and is the number of such identical properties owned by the taxpayer immediately after the particular time or, where subsection 47(2) applies, the quotient determined under that subsection in respect of the acquisition; and 
  (d) there shall be added, after the particular time, in computing the adjusted cost base to the taxpayer of each such identical property the amount determined under paragraph 47(1)(c) in respect of the identical property. 
  
  ### Where identical properties are bonds, etc.
  
  (2) For the purposes of subsection 47(1), where a group of identical properties referred to in that subsection is a group of identical bonds, debentures, bills, notes or similar obligations issued by a debtor, subparagraph 47(1)(b)(ii) shall be read as follows: 
  “(ii) the quotient obtained when the total of the principal amounts of all such identical properties owned by the taxpayer immediately after the particular time is divided by the principal amount of the identical property.” 
  
  ### Securities acquired by employee
  
  (3) For the purpose of subsection (1), a security (within the meaning assigned by subsection 7(7)) acquired by a taxpayer after February 27, 2000 is deemed not to be identical to any other security acquired by the taxpayer if 
  (a) the security is acquired in circumstances to which any of subsections 7(1.1), (1.5) or (8) or 147(10.1) applies; or 
  (b) the security is a security to which subsection 7(1.31) applies. 
  
  ## Indexed Security Investment Plans 
  
  ###  Application of s. 47.1 of R.S.C., 1952, c. 148 
  
  47.1 (26.1) Words and expressions used in subsections 47.1(27) and 47.1(28) have the meanings assigned to them by subsections 47.1(1) to (26) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as the latter subsections read on July 1, 1986 and in so far as they are not inconsistent with subsections 47.1(27) and 47.1(28).  
  
  ### Capital losses in 1986
  
  (27) Notwithstanding any other provision of this Act, where paragraph 47.1(10)(f) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as that paragraph read on January 1, 1986, applied in respect of the termination before 1986 of an indexed security investment plan under which a taxpayer was a participant, any amount that would have been deemed under that paragraph to be a capital loss of the taxpayer from the Plan for the 1986 or a subsequent taxation year shall be deemed to be a capital loss of the taxpayer for the 1986 taxation year from the disposition of property in 1986.  
  
  ### Transition for 1986
  
  (28) Where a taxpayer was a participant under a Plan on January 1, 1986, the following rules apply: 
  (a) each indexed security owned under the Plan by the taxpayer on that date shall be deemed to have been disposed of under the Plan on that date for proceeds of disposition determined by the formula is the indexing base of the Plan on that date determined as if subparagraph 47.1(3)(a)(i) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, were read as “the fair market value of all indexed securities owned by the taxpayer under the Plan at the end of the preceding taxation year”,  is the fair market value of the security on that date, and is the fair market value of all indexed securities owned under the Plan by the taxpayer on that date; 
  (b) each indexed security deemed under paragraph 47.1(28)(a) to have been disposed of under the Plan shall be deemed to have been reacquired outside the Plan by the taxpayer immediately after that date at a cost equal to the amount deemed under paragraph 47.1(28)(a) to be the proceeds of the disposition of that security; 
  (c) each put or call option referred to in clause 47.1(4)(a)(iv)(B) or (C) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as that clause read on January 1, 1986, outstanding under the Plan on that date shall be deemed to have been closed out under the Plan on that date at a cost equal to the amount that the taxpayer would have had to pay on that date if the taxpayer had actually closed out the option on a prescribed stock exchange in Canada on that date;  
  (d) each put or call option deemed under paragraph 47.1(28)(c) to have been closed out shall be deemed to be written outside the Plan immediately after that date for proceeds equal to the amount deemed under paragraph 47.1(28)(c) to be the cost at which the option was closed out; and 
  (e) for greater certainty, the taxpayer’s indexed gain or loss, as the case may be, for the 1986 taxation year from the Plan and unindexed gain or loss, as the case may be, for that year from the Plan shall be nil. 
  48  [Repealed, 1994, c. 21, s. 19(1)]  
  
  ### Gain when small business corporation becomes public
  
  48.1 (1) Where 
  (a) at any time in a taxation year an individual owns capital property that is a share of a class of the capital stock of a corporation that, 
  (i) at that time, is a small business corporation, and 
  (ii) immediately after that time, ceases to be a small business corporation because a class of its or another corporation’s shares is listed on a designated stock exchange, and 
  (b) the individual elects in prescribed form to have this section apply, the individual is deemed, except for the purposes of sections 7 and 35, paragraph 110(1)(d.1) and subsections 120.4(4) and (5), 
  (c) to have disposed of the share at that time for proceeds of disposition equal to the greater of 
  (i) the adjusted cost base to the individual of the share at that time, and 
  (ii) the lesser of the fair market value of the share at that time and such amount as is designated in the prescribed form by the individual in respect of the share, and 
  (d) to have reacquired the share immediately after that time at a cost equal to those proceeds of disposition. 
  
  ### Time for election
  
  (2) An election made under subsection 48.1(1) by an individual for a taxation year shall be made on or before the individual’s filing-due date for the year. 
  
  ### Late filed election
  
  (3) Where the election referred to in subsection 48.1(2) was not made on or before the day referred to therein, the election shall be deemed for the purposes of subsections 48.1(1) and 48.1(2) to have been made on that day if, on or before the day that is 2 years after that day, 
  (a) the election is made in prescribed form; and 
  (b) an estimate of the penalty in respect of that election is paid by the individual when the election is made. 
  
  ### Penalty for late filed election
  
  (4) For the purposes of this section, the penalty in respect of an election referred to in paragraph 48.1(3)(a) is an amount equal to the lesser of 
  (a) 1/4 of 1% of the amount, if any, by which 
  (i) the proceeds of disposition determined under subsection 48.1(1) exceed 
  (ii) the amount referred to in subparagraph 48.1(1)(c)(i) for each month or part of a month during the period commencing on the day referred to in subsection 48.1(2) and ending on the day the election is made, and 
  (b) an amount equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in paragraph 48.1(4)(a). 
  
  ### Unpaid balance of penalty
  
  (5) The Minister shall, with all due dispatch, examine each election referred to in paragraph 48.1(3)(a), assess the penalty payable and send a notice of assessment to the individual, who shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Granting of options
  
  49 (1) Subject to subsections 49(3) and 49(3.1), for the purposes of this Subdivision, the granting of an option, other than 
  (a) an option to acquire or to dispose of a principal residence, 
  (b) an option granted by a corporation to acquire shares of its capital stock or bonds or debentures to be issued by it, or 
  (c) an option granted by a trust to acquire units of the trust to be issued by the trust, is a disposition of a property the adjusted cost base of which to the grantor immediately before the grant is nil. 
  
  ### Expired option — shares
  
  (2) If at any time an option described in paragraph (1)(b) expires, the corporation that granted the option is deemed to have disposed of capital property at that time for proceeds equal to the proceeds received by it for the granting of the option, and the adjusted cost base to the corporation of that capital property immediately before that time is deemed to be nil, unless 
  (a) the option is held, at that time, by a person who deals at arm’s length with the corporation and the option was granted by the corporation to a person who was dealing at arm’s length with the corporation at the time that the option was granted, or 
  (b) the option is an option to acquire shares of the capital stock of the corporation in consideration for the incurring, pursuant to an agreement described in paragraph (e) of the definition 
  *Canadian exploration and development expenses* in subsection 66(15), paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), of any expense described in whichever of those paragraphs is applicable.  
  
  ### Expired option — trust units
  
  (2.1) If, at a particular time, an option referred to in paragraph (1)(c) expires, and the option is held at that time by a person who does not deal at arm’s length with the trust or was granted to a person who did not deal at arm’s length with the trust at the time that the option was granted, 
  (a) the trust is deemed to have disposed of capital property at the particular time for proceeds equal to the proceeds received by it for the granting of the option; and 
  (b) the adjusted cost base to the trust of that capital property immediately before the particular time is deemed to be nil. 
  
  ### Where option to acquire exercised
  
  (3) Where an option to acquire property is exercised so that property is disposed of by a taxpayer (in this subsection referred to as the “vendor”) or so that property is acquired by another taxpayer (in this subsection referred to as the “purchaser”), for the purpose of computing the income of each such taxpayer the granting and the exercise of the option shall be deemed not to be dispositions of property and there shall be included 
  (a) in computing the vendor’s proceeds of disposition of the property, the consideration received by the vendor for the option; and 
  (b) in computing the cost to the purchaser of the property, 
  (i) where paragraph 53(1)(j) applied to the acquisition of the property by the purchaser because a person who did not deal at arm’s length with the purchaser was deemed because of the acquisition to have received a benefit under section 7, the adjusted cost base to that person of the option immediately before that person last disposed of the option, and 
  (ii) in any other case, the adjusted cost base to the purchaser of the option. 
  
  ### Option to acquire specified property exercised
  
  (3.01) Where at any time a taxpayer exercises an option to acquire a specified property, 
  (a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the specified property the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the option; and 
  (b) the amount determined under paragraph 49(3.01)(a) in respect of that acquisition shall be added after that time in computing the adjusted cost base to the taxpayer of the specified property. 
  
  ### Where option to dispose exercised
  
  (3.1) Where an option to dispose of property is exercised so that property is disposed of by a taxpayer (in this subsection referred to as the “vendor”) or so that property is acquired by another taxpayer (in this subsection referred to as the “purchaser”), for the purpose of computing the income of each such taxpayer the granting and the exercise of the option shall be deemed not to be dispositions of property and there shall be deducted 
  (a) in computing the vendor’s proceeds of disposition of the property, the adjusted cost base to the vendor of the option; and 
  (b) in computing the cost to the purchaser of the property, the consideration received by the purchaser for the option. 
  
  ### Option granted before February 23, 1994
  
  (3.2) Where an individual (other than a trust) who disposes of property pursuant to the exercise of an option that was granted by the individual before February 23, 1994 so elects in the individual’s return of income for the taxation year in which the disposition occurs, subsection 49(3) does not apply in respect of the disposition in computing the income of the individual. 
  
  ### Reassessment where option exercised in subsequent year
  
  (4) Where 
  (a) an option granted by a taxpayer in a taxation year (in this subsection referred to as the “initial year”) is exercised in a subsequent taxation year (in this subsection referred to as the “subsequent year”), 
  (b) the taxpayer has filed a return of the taxpayer’s income for the initial year as required by section 150, and 
  (c) on or before the day on or before which the taxpayer was required by section 150 to file a return of the taxpayer’s income for the subsequent year, the taxpayer has filed an amended return for the initial year excluding from the taxpayer’s income the proceeds received by the taxpayer for the granting of the option, such reassessment of the taxpayer’s tax, interest or penalties for the year shall be made as is necessary to give effect to the exclusion. 
  
  ### Idem
  
  (5) Where a taxpayer has granted an option (in this subsection referred to as the “original option”) to which subsection 49(1), 49(2) or 49(2.1) applies, and grants one or more extensions or renewals of that original option, 
  (a) for the purposes of subsections 49(1), 49(2) and 49(2.1), the granting of each extension or renewal shall be deemed to be the granting of an option at the time the extension or renewal is granted; 
  (b) for the purposes of subsections (2) to (4) and subparagraph (b)(iv) of the definition 
  *disposition* in subsection 248(1), the original option and each extension or renewal of it is deemed to be the same option; and  
  (c) subsection 49(4) shall be read as if the year in which the original option was granted and each year in which any extension or renewal thereof was granted were all initial years. 
  
  ### No disposition where obligation satisfied
  
  49.1 For greater certainty, where a taxpayer acquires a particular property in satisfaction of an absolute or contingent obligation of a person or partnership to provide the particular property pursuant to a contract or other arrangement one of the main objectives of which was to establish a right, whether absolute or contingent, to the particular property and that right was not under the terms of a trust, partnership agreement, share or debt obligation, the satisfaction of the obligation is not a disposition of that right. 
  
  ### Debts established to be bad debts and shares of bankrupt corporation
  
  50 (1) For the purposes of this Subdivision, where 
  (a) a debt owing to a taxpayer at the end of a taxation year (other than a debt owing to the taxpayer in respect of the disposition of personal-use property) is established by the taxpayer to have become a bad debt in the year, or 
  (b) a share (other than a share received by a taxpayer as consideration in respect of the disposition of personal-use property) of the capital stock of a corporation is owned by the taxpayer at the end of a taxation year and 
  (i) the corporation has during the year become a bankrupt, 
  (ii) the corporation is a corporation referred to in section 6 of the Winding-up Act that is insolvent (within the meaning of that Act) and in respect of which a winding-up order under that Act has been made in the year, or 
  (iii) at the end of the year, 
  (A) the corporation is insolvent, 
  (B) neither the corporation nor a corporation controlled by it carries on business, 
  (C) the fair market value of the share is nil, and 
  (D) it is reasonable to expect that the corporation will be dissolved or wound up and will not commence to carry on business and the taxpayer elects in the taxpayer’s return of income for the year to have this subsection apply in respect of the debt or the share, as the case may be, the taxpayer shall be deemed to have disposed of the debt or the share, as the case may be, at the end of the year for proceeds equal to nil and to have reacquired it immediately after the end of the year at a cost equal to nil. 
  
  ### Idem
  
  (1.1) Where 
  (a) a taxpayer is deemed because of subparagraph 50(1)(b)(iii) to have disposed of a share of the capital stock of a corporation at the end of a taxation year, and 
  (b) the taxpayer or a person with whom the taxpayer is not dealing at arm’s length owns the share at the earliest time, during the 24-month period immediately following the disposition, that the corporation or a corporation controlled by it carries on business, the taxpayer or the person, as the case may be, shall be deemed to have disposed of the share at that earliest time for proceeds of disposition equal to its adjusted cost base to the taxpayer determined immediately before the time of the disposition referred to in paragraph 50(1.1)(a) and to have reacquired it immediately after that earliest time at a cost equal to those proceeds. 
  
  ### Where debt a personal-use property
  
  (2) Where at the end of a taxation year a debt that is a personal-use property of a taxpayer is owing to the taxpayer by a person with whom the taxpayer deals at arm’s length and is established by the taxpayer to have become a bad debt in the year, 
  (a) the taxpayer shall be deemed to have disposed of it at the end of the year for proceeds equal to the amount, if any, by which 
  (i) its adjusted cost base to the taxpayer immediately before the end of the year exceeds 
  (ii) the amount of the taxpayer’s gain, if any, from the disposition of the personal-use property the proceeds of disposition of which included the debt; and 
  (b) the taxpayer shall be deemed to have reacquired the debt immediately after the end of the year at a cost equal to the amount of the proceeds determined under paragraph 50(2)(a). 
  
  ### Disposal of R.H.O.S.P. properties
  
  (3) Each trust that was at the end of 1985 governed by a registered home ownership savings plan (within the meaning assigned by paragraph 146.2(1)(h) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1985 taxation year) shall be deemed to have disposed, immediately before 1986, of each property it holds at that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired it immediately after 1985 at a cost equal to that fair market value.  
  
  ### Convertible property
  
  51 (1) Where a share of the capital stock of a corporation is acquired by a taxpayer from the corporation in exchange for 
  (a) a capital property of the taxpayer that is another share of the corporation (in this section referred to as a “convertible property”), or 
  (b) a capital property of the taxpayer that is a bond, debenture or note of the corporation the terms of which confer on the holder the right to make the exchange (in this section referred to as a “convertible property”) and no consideration other than the share is received by the taxpayer for the convertible property, 
  (c) except for the purposes of subsections 20(21) and 44.1(6) and (7) and paragraph 94(2)(m), the exchange is deemed not to be a disposition of the convertible property, 
  (d) the cost to the taxpayer of all the shares of a particular class acquired by the taxpayer on the exchange shall be deemed to be the amount determined by the formula is the adjusted cost base to the taxpayer of the convertible property immediately before the exchange, is the fair market value, immediately after the exchange, of all the shares of the particular class acquired by the taxpayer on the exchange, and is the fair market value, immediately after the exchange, of all the shares acquired by the taxpayer on the exchange, 
  (d.1) there shall be deducted, after the exchange, in computing the adjusted cost base to the taxpayer of a share acquired by the taxpayer on the exchange, the amount determined by the formula is the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before the exchange, the adjusted cost base to the taxpayer of the convertible property, is the fair market value, immediately after the exchange, of that share, and is the fair market value, immediately after the exchange, of all the shares acquired by the taxpayer on the exchange, 
  (d.2) the amount determined under paragraph 51(1)(d.1) in respect of a share shall be added, after the exchange, in computing the adjusted cost base to the taxpayer of the share, 
  (e) for the purposes of sections 74.4 and 74.5, the exchange shall be deemed to be a transfer of the convertible property by the taxpayer to the corporation, and 
  (f) where the convertible property is taxable Canadian property of the taxpayer, the share acquired by the taxpayer on the exchange is deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the taxpayer. 
  
  ### Idem
  
  (2) Notwithstanding subsection 51(1), where 
  (a) shares of the capital stock of a corporation have been acquired by a taxpayer in exchange for a convertible property in circumstances such that, but for this subsection, subsection 51(1) would have applied, 
  (b) the fair market value of the convertible property immediately before the exchange exceeds the fair market value of the shares immediately after the exchange, and 
  (c) it is reasonable to regard any portion of the excess (in this subsection referred to as the “gift portion”) as a benefit that the taxpayer desired to have conferred on a person related to the taxpayer, the following rules apply: 
  (d) the taxpayer shall be deemed to have disposed of the convertible property for proceeds of disposition equal to the lesser of 
  (i) the total of its adjusted cost base to the taxpayer immediately before the exchange and the gift portion, and 
  (ii) the fair market value of the convertible property immediately before the exchange, 
  (e) the taxpayer’s capital loss from the disposition of the convertible property shall be deemed to be nil, and 
  (f) the cost to the taxpayer of all the shares of a particular class acquired in exchange for the convertible property shall be deemed to be that proportion of the lesser of 
  (i) the adjusted cost base to the taxpayer of the convertible property immediately before the exchange, and 
  (ii) the total of the fair market value immediately after the exchange of all the shares acquired by the taxpayer in exchange for the convertible property and the amount that, but for paragraph 51(2)(e), would have been the taxpayer’s capital loss on the disposition of the convertible property, that 
  (iii) the fair market value, immediately after the exchange, of all the shares of the particular class acquired by the taxpayer on the exchange is of 
  (iv) the fair market value, immediately after the exchange, of all the shares acquired by the taxpayer on the exchange. 
  
  ### Computation of paid-up capital
  
  (3) Where subsection 51(1) applies to the exchange of convertible property described in paragraph 51(1)(a) (referred to in this subsection as the “old shares”), in computing the paid-up capital in respect of a particular class of shares of the capital stock of the corporation at any particular time that is the time of, or any time after, the exchange 
  (a) there shall be deducted the amount determined by the formula is the total of all amounts each of which is the amount of the increase, if any, as a result of the exchange, in the paid-up capital in respect of a class of shares of the capital stock of the corporation, computed without reference to this subsection as it applies to the exchange, is the paid-up capital immediately before the exchange in respect of the old shares, and is the increase, if any, as a result of the exchange, in the paid-up capital in respect of the particular class of shares, computed without reference to this subsection as it applies to the exchange; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid by the corporation before the particular time exceeds 
  (B) the total that would be determined under clause 51(3)(b)(i)(A) if this Act were read without reference to paragraph 51(3)(a), and 
  (ii) the total of all amounts required by paragraph 51(3)(a) to be deducted in respect of that particular class of shares before the particular time. 
  
  ### Application
  
  (4) Subsections 51(1) and 51(2) do not apply to any exchange to which subsection 85(1) or 85(2) or section 86 applies. 
  
  ### Conversion of debt obligation
  
  51.1 Where 
  (a) a taxpayer acquires a bond, debenture or note of a debtor (in this section referred to as the “new obligation”) in exchange for a capital property of the taxpayer that is another bond, debenture or note of the same debtor (in this section referred to as the “convertible obligation”), 
  (b) the terms of the convertible obligation conferred on the holder the right to make the exchange, and 
  (c) the principal amount of the new obligation is equal to the principal amount of the convertible obligation, the cost to the taxpayer of the new obligation and the proceeds of disposition of the convertible obligation shall be deemed to be equal to the adjusted cost base to the taxpayer of the convertible obligation immediately before the exchange. 
  
  ### Cost of certain property the value of which included in income
  
  52 (1) In applying this Subdivision, an amount equal to the particular amount described by paragraph (d) shall be added in computing the cost at any time to a taxpayer of a property if 
  (a) the taxpayer acquired the property after 1971; 
  (b) the amount was not at or before that time otherwise added to the cost, or included in computing the adjusted cost base, to the taxpayer of the property; 
  (c) the property is not an annuity contract, a right as a beneficiary under a trust to enforce payment of an amount by the trust to the taxpayer, property acquired in circumstances to which subsection (2) or (3) applies, or property acquired from a trust in satisfaction of all or part of the taxpayer’s capital interest in the trust; and 
  (d) a particular amount in respect of the property’s value was 
  (i) included, otherwise than under section 7, in computing 
  (A) the taxpayer’s taxable income or taxable income earned in Canada, as the case may be, for a taxation year during which the taxpayer was non-resident, or 
  (B) the taxpayer’s income for a taxation year throughout which the taxpayer was resident in Canada, or 
  (ii) for the purpose of computing the tax payable under Part XIII by the taxpayer, included in an amount that was paid or credited to the taxpayer. 
  (1.1)  [Repealed, 2001, c. 17, s. 35(1)]  
  
  ### Cost of property received as dividend in kind
  
  (2) Where any property has, after 1971, been received by a shareholder of a corporation at any time as, on account or in lieu of payment of, or in satisfaction of, a dividend payable in kind (other that a stock dividend) in respect of a share owned by the shareholder of the capital stock of the corporation, the shareholder shall be deemed to have acquired the property at a cost to the shareholder equal to its fair market value at that time, and the corporation shall be deemed to have disposed of the property at that time fore proceeds equal to that fair market value. 
  
  ### Cost of stock dividend
  
  (3) Where a shareholder of a corporation has, after 1971, received a stock dividend in respect of a share owned by the shareholder of the capital stock of the corporation, the shareholder shall be deemed to have acquired the share or shares received by the shareholder as a stock dividend at a cost to the shareholder equal to the total of 
  (a) where the stock dividend is a dividend, 
  (i) in the case of a shareholder that is an individual, the amount of the stock dividend, and 
  (ii) in any other case, the total of all amounts each of which is 
  (A) the amount, if any, by which 
  (I) the amount that is the lesser of the amount of the stock dividend and its fair market value exceeds 
  (II) the amount of the dividend that the shareholder may deduct under subsection 112(1) in computing the shareholder’s taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the amount of the separate dividend would not exceed the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series of transactions or events as part of which the dividend is received — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received, and 
  (B) the amount determined by the formula is the amount of the deemed gain under paragraph 55(2)(c) in respect of that stock dividend, and is the amount, if any, by which the amount of the reduction under paragraph 55(2.3)(b) in respect of that stock dividend to which paragraph 55(2)(a) would otherwise apply exceeds the amount determined for clause (A) in respect of that dividend; 
  (a.1) where the stock dividend is not a dividend, nil, and 
  (b) where an amount is included in the shareholder’s income in respect of the stock dividend under subsection 15(1.1), the amount so included. 
  
  ### Cost of property acquired as prize
  
  (4) Where any property has been acquired by a taxpayer at any time after 1971 as a prize in connection with a lottery scheme, the taxpayer shall be deemed to have acquired the property at a cost to the taxpayer equal to its fair market value at that time. 
  (6)  [Repealed, 2001, c. 17, s. 35(2)]  
  
  ### Cost of shares of subsidiary
  
  (7) Notwithstanding any other provision of this Act, where a corporation disposes of property to another corporation in a transaction to which paragraph 219(1)(l) applies, the cost to it of any share of a particular class of the capital stock of the other corporation received by it as consideration for the property is deemed to be the lesser of the cost of the share to the corporation otherwise determined immediately after the disposition and the amount by which the paid-up capital in respect of that class increases because of the issuance of the share. 
  
  ### Cost of shares of immigrant corporation
  
  (8) Notwithstanding any other provision of this Act, where at any time a corporation becomes resident in Canada, the cost to any shareholder who is not at that time resident in Canada of any share of the corporation’s capital stock, other than a share that was taxable Canadian property immediately before that time, is deemed to be equal to the fair market value of the share at that time. 
  
  ### Adjustments to cost base
  
  53 (1) In computing the adjusted cost base to a taxpayer of property at any time, there shall be added to the cost to the taxpayer of the property such of the following amounts in respect of the property as are applicable: 
  (a) any amount deemed by subsection 40(3) to be a gain of the taxpayer for a taxation year from a disposition before that time of the property; 
  (b) where the property is a share of the capital stock of a corporation resident in Canada, the amount, if any, by which 
  (i) the total of all amounts each of which is the amount of a dividend on the share deemed by subsection 84(1) to have been received by the taxpayer before that time exceeds 
  (ii) the portion of the total determined under subparagraph (i) that relates to dividends in respect of which the taxpayer was permitted a deduction under subsection 112(1) in computing the taxpayer’s taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the amount of the separate dividend would not exceed the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series of transactions or events as part of which the dividend is received — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received; 
  (b.1) where the property is a share of the capital stock of a corporation, the amount of any dividend deemed by paragraph 128.1(1)(c.2) to have been received in respect of the share by the taxpayer before that time and while the taxpayer was resident in Canada; 
  (c) where the property is a share of the capital stock of a corporation and the taxpayer has, after 1971, made a contribution of capital to the corporation otherwise than by way of a loan, by way of a disposition of shares of a foreign affiliate of the taxpayer to which subsection 85.1(3) or paragraph 95(2)(c) applies or, subject to subsection 53(1.1), a disposition of property in respect of which the taxpayer and the corporation have made an election under section 85, that proportion of such part of the amount of the contribution as cannot reasonably be regarded as a benefit conferred by the taxpayer on a person (other than the corporation) who was related to the taxpayer that 
  (i) the amount that may reasonably be regarded as the increase in the fair market value, as a result of the contribution, of the share is of 
  (ii) the amount that may reasonably be regarded as the increase in the fair market value, as a result of the contribution, of all shares of the capital stock of the corporation owned by the taxpayer immediately after the contribution; 
  (d) if the property is a share of the capital stock of a foreign affiliate of the taxpayer, any amount required by section 92 to be added in computing the adjusted cost base to the taxpayer of the share; 
  (d.01) where the property is a share of the capital stock of a corporation, any amount required by paragraph 139.1(16)(l) to be added in computing the adjusted cost base to the taxpayer of the share; 
  (d.1) if the property is a capital interest in a trust, any amount included under subsection 91(1) or (3) in computing the taxpayer’s income for a taxation year that ends at or before that time (or that would have been required to have been included under those subsections but for subsection 56(4.1) and sections 74.1 to 75 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952) in respect of that interest;  
  (d.2) where the property is a unit in a mutual fund trust, any amount required by subsection 132.1(2) to be added in computing the adjusted cost base to the taxpayer of the unit; 
  (d.3) where the property is a share of the capital stock of a corporation of which the taxpayer was, at any time, a specified shareholder, any expense incurred by the taxpayer in respect of land or a building of the corporation that was by reason of subsection 18(2) or 18(3.1) not deductible by the taxpayer in computing the taxpayer’s income for any taxation year commencing before that time; 
  (e) where the property is an interest in a partnership, 
  (i) an amount in respect of each fiscal period of the partnership ending after 1971 and before that time, equal to the total of all amounts each of which is the taxpayer’s share (other than a share under an agreement referred to in subsection 96(1.1)) of the income of the partnership from any source for that fiscal period, computed as if this Act were read without reference to 
  (A) paragraphs 38(a.1) to (a.3) and the fractions set out in the formula in paragraph 14(1)(b) and in subsection 14(5), paragraph 38(a) and subsection 41(1), 
  (A.1) subparagraph 39(1)(a)(i.1) in respect of an object referred to in that subparagraph that is not the subject of a gifting arrangement, as defined in subsection 237.1(1), nor a property that is a tax shelter, 
  (A.2) the description of C in the formula in paragraph 14(1)(b), and 
  (B) paragraph (i), paragraphs 12(1)(o) and (z.5), 18(1)(m), 20(1)(v.1) and 29(1)(b) and (2)(b), section 55, subsections 69(6) and (7) and paragraph 82(1)(b) of this Act and paragraphs 20(1)(gg) and 81(1)(r) and (s) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and the provisions of the Income Tax Application Rules relating to income from the operation of new mines,  
  (ii) the taxpayer’s share of any capital dividends and any life insurance capital dividends received by the partnership before that time on shares of the capital stock of a corporation that were partnership property, 
  (iii) the taxpayer’s share of the amount, if any, by which 
  (A) any proceeds of a life insurance policy received by the partnership after 1971 and before that time in consequence of the death of any person whose life was insured under the policy, exceeds the total of all amounts each of which is 
  (B) the 
  *adjusted cost basis* (in this subparagraph as defined in subsection 148(9)), immediately before the death, of  
  (I) if the death occurs before March 22, 2016, the policy to the partnership, and 
  (II) if the death occurs after March 21, 2016, a policyholder’s interest in the policy, 
  (C) the amount by which the fair market value of consideration given in respect of a disposition of an interest in the policy exceeds the greater of the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition and the adjusted cost basis to the policyholder of the interest immediately before the disposition, if 
  (I) the death occurs after March 21, 2016, and 
  (II) the disposition was by a policyholder (other than a taxable Canadian corporation) after 1999 and before March 22, 2016, or 
  (D) if the death occurs after March 21, 2016, an interest in the policy was disposed of by a policyholder (other than a taxable Canadian corporation) after 1999 and before March 22, 2016 and subsection 148(7) applied to the disposition, the amount, if any, determined by the formula is the amount, if any, by which the lesser of the adjusted cost basis to the policyholder of the interest immediately before the disposition and the fair market value of consideration given in respect of the disposition exceeds the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition, and is the absolute value of the negative amount, if any, that would be, in the absence of section 257, the adjusted cost basis, immediately before the death, of the interest in the policy, 
  (iv) where the taxpayer has, after 1971, made a contribution of capital to the partnership otherwise than by way of loan, such part of the amount of the contribution as cannot reasonably be regarded as a benefit conferred on any other member of the partnership who was related to the taxpayer, 
  (iv.1) each amount that is in respect of a specified amount described in subsection 80.2(1) and that is paid by the taxpayer to the partnership, to the extent that the amount paid is not deductible in computing the income of the taxpayer, 
  (v) where the time is immediately before the taxpayer’s death and the taxpayer was at that time a member of a partnership, the value, at the time of the taxpayer’s death, of the rights or things referred to in subsection 70(2) in respect of a partnership interest held by the taxpayer immediately before the taxpayer’s death, other than an interest referred to in subsection 96(1.5), 
  (vi) any amount deemed by subsection 40(3.1) to be a gain of the taxpayer for a taxation year from a disposition before that time of the property, 
  (vii) any amount deemed by paragraph 98(1)(c) or 98.1(1)(c) to be a gain of the taxpayer for a taxation year from a disposition before that time of the property, 
  (vii.1) a share of the taxpayer’s Canadian development expense or Canadian oil and gas property expense that was deducted at or before that time in computing the adjusted cost base to the taxpayer of the interest because of subparagraph 53(2)(c)(ii) and in respect of which the taxpayer elected under paragraph (f) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (b) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), as the case may be,  
  (viii) an amount deemed, before that time, by subsection 66.1(7), 66.2(6) or 66.4(6) to be an amount referred to in the description of G in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6), paragraph (a) of the description of F in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) or the description of G in that definition, or paragraph (a) of the description of F in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) or the description of G in that definition in respect of the taxpayer,  
  (viii.1) an amount deemed, before that time, by subsection 59(1.1) to be proceeds of disposition receivable by the taxpayer in respect of the disposition of a foreign resource property, 
  (ix) the amount, if any, by which 
  (A) the taxpayer’s share of the amount of any assistance or benefit that the partnership received or became entitled to receive after 1971 and before that time from a government, municipality or other public authority, whether as a grant, subsidy, forgivable loan, deduction from royalty or tax, investment allowance or any other form of assistance or benefit, in respect of or related to a Canadian resource property or an exploration or development expense incurred in Canada exceeds 
  (B) the part, if any, of the amount included in clause 53(1)(e)(ix)(A) in respect of the interest that was repaid before that time by the taxpayer under a legal obligation to repay all or any part of the amount, 
  (x) any amount required by section 97 to be added before that time in computing the adjusted cost base to the taxpayer of the interest, 
  (xi) of which the taxpayer’s share of any income or loss of the partnership was, at any time, 10% or more, any expense incurred by the taxpayer in respect of land or a building of the partnership that was by reason of subsection 18(2) or 18(3.1) not deductible by the taxpayer in computing the taxpayer’s income for any taxation year commencing before that time, 
  (xii) any amount required by paragraph 110.6(23)(a) to be added at that time in computing the adjusted cost base to the taxpayer of the interest, and 
  (xiii) any amount required by subsection 127(30) to be added to the taxpayer’s tax otherwise payable under this Part for a taxation year that ended before that time; 
  (xiv)  [Repealed, 2009, c. 2, s. 11]  
  (f) where the property is substituted property (within the meaning assigned by paragraph (a) of the definition 
  *superficial loss* in section 54) of the taxpayer, the amount, if any, by which  
  (i) the amount of the loss that was, because of the acquisition by the taxpayer of the property, a superficial loss of any taxpayer from a disposition of a property exceeds 
  (ii) where the property disposed of was a share of the capital stock of a corporation, the amount that would, but for paragraph 40(2)(g), be deducted under subsection 112(3), 112(3.1) or 112(3.2) in computing the loss of any taxpayer in respect of the disposition of the share; 
  (f.1) where the taxpayer is a taxable Canadian corporation and the property was disposed of by another taxable Canadian corporation to the taxpayer in circumstances such that 
  (i) paragraph 53(1)(f.2) does not apply to increase the adjusted cost base to the other corporation of shares of the capital stock of the taxpayer, and 
  (ii) the capital loss from the disposition was deemed by paragraph 40(2)(e.1) (or, where the property was acquired by the taxpayer before 1996, by paragraph 40(2)(e) or 85(4)(a) as those paragraphs read in their application to property acquired before April 26, 1995) to be nil, the amount that would otherwise have been the capital loss from the disposition; 
  (f.11) where the property was disposed of by a person (other than a non-resident person or a person exempt from tax under this Part on the person’s taxable income) or by an eligible Canadian partnership (as defined in subsection 80(1)) to the taxpayer in circumstances such that 
  (i) paragraph 53(1)(f.1) does not apply to increase the adjusted cost base to the taxpayer of the property, 
  (ii) paragraph 53(1)(f.2) does not apply to increase the adjusted cost base to that person of shares of the capital stock of the taxpayer, and 
  (iii) the capital loss from the disposition was deemed by paragraph 40(2)(e.1) (or, where the property was acquired by the taxpayer before 1996, by paragraph 85(4)(a) as it read in its application to property acquired before April 26, 1995) to be nil, the amount that would otherwise be the capital loss from the disposition; 
  (f.12) where the property is a particular commercial obligation (in this paragraph having the meaning assigned by subsection 80(1)) payable to the taxpayer as consideration for the settlement or extinguishment of another commercial obligation payable to the taxpayer and the taxpayer’s loss from the disposition of the other obligation was reduced because of paragraph 40(2)(e.2), the proportion of the reduction that the principal amount of the particular obligation is of the total of all amounts each of which is the principal amount of a commercial obligation payable to the taxpayer as consideration for the settlement or extinguishment of that other obligation; 
  (f.2) where the property is a share, any amount required by paragraph 40(3.6)(b) (or, where the property was acquired by the taxpayer before 1996, by paragraph 85(4)(b) as it read in its application to property disposed of before April 26, 1995) to be added in computing the adjusted cost base to the taxpayer of the share; 
  (g) where the property is a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation, the amount, if any, by which the principal amount of the obligation exceeds the amount for which the obligation was issued, if the excess was required by subsection 16(2) or (3) to be included in computing the income of the taxpayer for a taxation year commencing before that time; 
  (g.1) where the property is an indexed debt obligation, any amount determined under subparagraph 16(6)(a)(i) in respect of the obligation and required to be included in computing the taxpayer’s income for a taxation year beginning before that time; 
  (h) where the property is land of the taxpayer, any amount paid by the taxpayer or by another taxpayer in respect of whom the taxpayer was a person, corporation or partnership described in subparagraph (b)(i), (ii) or (iii) of the definition 
  *interest on debt relating to the acquisition of land* in subsection 18(3), after 1971 and before that time pursuant to a legal obligation to pay  
  (i) interest on debt relating to the acquisition of land (within the meaning assigned by subsection 18(3)), or 
  (ii) property taxes (not including income or profits taxes or taxes imposed by reference to the transfer of property) paid by the taxpayer in respect of the property to a province or to a Canadian municipality to the extent that the amount was, because of subsection 18(2), 
  (iii) not deductible in computing the taxpayer’s income from the land or from a business for any taxation year beginning before that time, or 
  (iv) not deductible in computing the income of the other taxpayer and was not included in or added to the cost to the other taxpayer of any property otherwise than because of subparagraph (d.3) or subparagraph (e)(xi); 
  (i) where the property is land used in a farming business carried on by the taxpayer, an amount in respect of each taxation year ending after 1971 and commencing before that time, equal to the taxpayer’s loss, if any, for that year from the farming business, to the extent that the loss 
  (i) was not, by virtue of section 31, deductible in computing the taxpayer’s income for that year, 
  (ii) was not deducted in computing the taxpayer’s taxable income for the taxation year in which the taxpayer disposed of the property or any preceding taxation year, 
  (iii) did not exceed the total of 
  (A) taxes (other than income or profits taxes or taxes imposed by reference to the transfer of the property) paid by the taxpayer in that year or payable by the taxpayer in respect of that year to a province or a Canadian municipality in respect of the property, and 
  (B) interest, paid by the taxpayer in that year or payable by the taxpayer in respect of that year, pursuant to a legal obligation to pay interest on borrowed money used to acquire the property or on any amount as consideration payable for the property, to the extent that those taxes and interest were included in computing the loss, and 
  (iv) did not exceed the remainder obtained when 
  (A) the total of each of the taxpayer’s losses from the farming business for taxation years preceding that year (to the extent that they are required by this paragraph to be added in computing the taxpayer’s adjusted cost base of the property), is deducted from 
  (B) the amount, if any, by which the taxpayer’s proceeds of disposition of the property exceed the adjusted cost base to the taxpayer of the property immediately before that time, determined without reference to this paragraph; 
  (j) if the property is a security (within the meaning assigned by subsection 7(7)) and, in respect of its acquisition by the taxpayer, a benefit was deemed by section 7 to have been received in any taxation year that ends after 1971 and begins before that time by the taxpayer or by a person that did not deal at arm’s length with the taxpayer or, if the security was acquired after February 27, 2000, would have been so deemed if section 7 were read without reference to subsections 7(1.1) and (8), the amount of the benefit that was, or would have been, so deemed to have been received; 
  (k) where the property is an expropriation asset of the taxpayer (within the meaning assigned by section 80.1) or an asset of the taxpayer assumed for the purposes of that section to be an expropriation asset thereof, any amount required by paragraph 80.1(2)(b) to be added in computing the adjusted cost base to the taxpayer of the asset; 
  (l) where the property is an interest in a related segregated fund trust referred to in section 138.1, 
  (i) each amount deemed by paragraph 138.1(1)(f) to be an amount payable to the taxpayer before that time in respect of that interest, 
  (ii) each amount required by subparagraph 138.1(1)(g)(ii) to be added before that time in respect of that interest, 
  (iii) each amount in respect of that interest that is a capital gain deemed to have been allocated under subsection 138.1(4) to the taxpayer before that time, and 
  (iv) each amount in respect of that interest that before that time was deemed by subsection 138.1(3) to be a capital gain of the taxpayer; 
  (m) where the property is an offshore investment fund property (within the meaning assigned by subsection 94.1(1)), 
  (i) any amount included in respect of the property by virtue of subsection 94.1(1) in computing the taxpayer’s income for a taxation year commencing before that time, or 
  (ii) where the taxpayer is a controlled foreign affiliate (within the meaning of subsection 95(1)), of a person resident in Canada, any amount included in respect of the property in computing the foreign accrual property income of the controlled foreign affiliate by reason of the description of C in the definition 
  *foreign accrual property income* in subsection 95(1) for a taxation year commencing before that time;  
  (n) the reasonable costs incurred by the taxpayer, before that time, of surveying or valuing the property for the purpose of its acquisition or disposition (to the extent that those costs are not deducted by the taxpayer in computing the taxpayer’s income for any taxation year or attributable to any other property); 
  (o) where the property is real property of the taxpayer, any amount required by paragraph 43.1(2)(b) to be added in computing the adjusted cost base to the taxpayer of the property; 
  (p) where the time is after 2004 and the property is an interest in or a share of the capital stock of a flow-through entity (within the meaning assigned by subsection 39.1(1)), the amount determined by the formula is the amount, if any, that would, if the definition 
  *exempt capital gains balance* in subsection 39.1(1) were read without reference to “that ends before 2005”, be the taxpayer’s exempt capital gains balance in respect of the entity for the taxpayer’s 2005 taxation year,  is the fair market value at that time of the property, and is the fair market value at that time of all the taxpayer’s interests in or shares of the capital stock of the entity; 
  (q) any amount required under paragraph 53(4)(b), (5)(b), (6)(b), 47(1)(d), 49(3.01)(b), 51(1)(d.2), 86(4)(b) or 87(5.1)(b) or (6.1)(b) to be added in computing the adjusted cost base to the taxpayer of the property; 
  (r) if the time is before 2005, the property is an interest in, or a share of the capital stock of, a flow-through entity described in any of paragraphs (a) to (f) and (h) of the definition 
  *flow-through entity* in subsection 39.1(1) and immediately after that time the taxpayer disposed of all their interests in, and shares of the capital stock of, the entity, the amount determined by the formula  is the amount, if any, by which the taxpayer’s exempt capital gains balance (as defined in subsection 39.1(1)) in respect of the entity for the taxpayer’s taxation year that includes that time exceeds the total of all amounts each of which is 
  (i) the amount by which a capital gain is reduced under section 39.1 for the year because of the taxpayer’s exempt capital gains balance in respect of the entity, or 
  (ii) twice an amount by which a taxable capital gain, or the income from a business, is reduced under section 39.1 for the year because of the taxpayer’s exempt capital gains balance in respect of the entity, is the fair market value at that time of the property, and is the fair market value at that time of all the taxpayer’s interests in, and shares of the capital stock of, the entity; 
  (s) if the property was acquired under a derivative forward agreement, any amount required to be included in respect of the property under subparagraph 12(1)(z.7)(i) in computing the income of the taxpayer for a taxation year; and 
  (t) if the property is disposed of under a derivative forward agreement, any amount required to be included in respect of the property under subparagraph 12(1)(z.7)(ii) in computing the income of the taxpayer for the taxation year that includes that time. 
  
  ### Deemed contribution of capital
  
  (1.1) For the purposes of paragraph 53(1)(c), where there has been a disposition of property before May 7, 1974 and 
  (a) the taxpayer and the corporation referred to in that paragraph have made an election under section 85 in respect of that property, and 
  (b) the consideration received by the taxpayer for the property did not include shares of the capital stock of the corporation, the disposition of property shall be deemed to be a contribution of capital equal to the amount, if any, by which 
  (c) the amount that the taxpayer and the corporation have agreed on in the election exceeds 
  (d) the fair market value at the time of the disposition of any consideration received by the taxpayer for the property so disposed of. 
  
  ### Flow-through entity before 2005
  
  (1.2) For the purposes of paragraph (1)(r), if the fair market value of all of a taxpayer’s interests in, and shares of the capital stock of, a flow-through entity is nil when the taxpayer disposes of those interests and shares, the fair market value of each such interest or share at that time is deemed to be $1. 
  
  ### Amounts to be deducted
  
  (2) In computing the adjusted cost base to a taxpayer of property at any time, there shall be deducted such of the following amounts in respect of the property as are applicable: 
  (a) where the property is a share of the capital stock of a corporation resident in Canada, 
  (i) any amount received by the taxpayer after 1971 and before that time as, on account or in lieu of payment of, or in satisfaction of, a dividend on the share (other than a taxable dividend or a dividend in respect of which the corporation paying the dividend has elected in accordance with subsection 83(2) or 83(2.1) in respect of the full amount thereof), 
  (ii) any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share, except to the extent that the amount is deemed by subsection 84(4) or 84(4.1) to be a dividend received by the taxpayer, 
  (iii) any amount required to be deducted before that time under section 84.1 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it applied before May 23, 1985 in computing the adjusted cost base to the taxpayer of the share,  
  (iv) any amount, to the extent that such amount is not proceeds of disposition of a share, received by the taxpayer before that time that would, but for subsection 84(8), be deemed by subsection 84(2) to be a dividend received by the taxpayer, and 
  (v) any amount required by paragraph 44.1(2)(b) to be deducted in computing the adjusted cost base to the taxpayer of the share; 
  (b) where the property is a share of the capital stock of a non-resident corporation, 
  (i) if the corporation is a foreign affiliate of the taxpayer, 
  (A) any amount required under paragraph 80.1(4)(d) or section 92 to be deducted in computing the adjusted cost base to the taxpayer of the share, and 
  (B) any amount received by the taxpayer before that time, on a reduction of the paid-up capital of the corporation in respect of the share, that is so received 
  (I) after 1971 and on or before August 19, 2011, or 
  (II) after August 19, 2011, where the reduction is a qualifying return of capital (within the meaning assigned by subsection 90(3)) in respect of the share, or 
  (ii) in any other case, any amount received by the taxpayer after 1971 and before that time on a reduction of the paid-up capital of the corporation in respect of the share; 
  (b.1) if the property is a capital interest in a trust, any amount deducted by the taxpayer by reason of subsection 91(2) or (4) in computing the taxpayer’s income for a taxation year that ends at or before that time (or that would have been so deductible by the taxpayer but for subsection 56(4.1) and sections 74.1 to 75 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952) in respect of that interest;  
  (b.2) if the property is property of a taxpayer that was subject to a loss restriction event at or before that time, any amount required by paragraph 111(4)(c) to be deducted in computing the adjusted cost base of the property; 
  (c) where the property is an interest in a partnership, 
  (i) an amount in respect of each fiscal period of the partnership ending after 1971 and before that time, equal to the total of amounts each of which is the taxpayer’s share (other than a share under an agreement referred to in subsection 96(1.1)) of any loss of the partnership from any source for that fiscal period, computed as if this Act were read without reference to 
  (A) the fractions set out in subsection 14(5), paragraph 38(b) and in the formula in paragraph 14(1)(b), 
  (A.1)  [Repealed, 2013, c. 34, s. 190]  
  (A.2) the description of C in the formula in paragraph 14(1)(b), 
  (B) paragraphs 12(1)(o) and 12(1)(z.5), 18(1)(m) and 20(1)(v.1), section 31, subsection 40(2), section 55 and subsections 69(6) and 69(7) of this Act and paragraphs 20(1)(gg) and 81(1)(r) and (s) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and  
  (C) subsections 100(4), 112(3.1), (4), (4.2) as it read in its application to dispositions of property that occurred before April 27, 1995 and (5.2), except to the extent that all or a portion of such a loss may reasonably be considered to have been included in the taxpayer’s limited partnership loss in respect of the partnership for the taxpayer’s taxation year in which that fiscal period ended, 
  (i.1) an amount in respect of each fiscal period of the partnership ending before that time that is the taxpayer’s limited partnership loss in respect of the partnership for the taxation year in which that fiscal period ends to the extent that such loss was deducted by the taxpayer in computing the taxpayer’s taxable income for any taxation year that commenced before that time, 
  (i.2) any amount deemed by subsection 40(3.12) to be a loss of the taxpayer for a taxation year from a disposition before that time of the property, 
  (i.3) if at that time the property is not a tax shelter investment as defined by section 143.2 and the taxpayer would be a member, described in subsection 40(3.1), of the partnership if the fiscal period of the partnership that includes that time ended at that time, the unpaid principal amount of any indebtedness of the taxpayer for which recourse is limited, either immediately or in the future and either absolutely or contingently, and that can reasonably be considered to have been used to acquire the property, 
  (i.4) unless that time is immediately before a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at that time a limited partner of the partnership for the purposes of subsection 40(3.1), 
  (A) where that time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under subsection 34.2(11), the portion of the amount deducted in computing the taxpayer’s income for the taxation year under subsection 34.2(11) in respect of the partnership that would have been deductible if the definition 
  *qualifying transitional income* in subsection 34.2(1) were read without reference to paragraph (b), and  
  (B) where that time is in any other taxation year, the portion of the amount deducted in computing the taxpayer’s income for the taxation year immediately preceding that other year under subsection 34.2(11) in respect of the partnership that would have been deductible if the definition 
  *qualifying transitional income* in subsection 34.2(1) were read without reference to paragraph (b),  
  (ii) an amount in respect of each fiscal period of the partnership ending after 1971 and before that time, other than a fiscal period after the fiscal period in which the taxpayer ceased to be a member of the partnership, equal to the taxpayer’s share of the total of 
  (A) amounts that, but for paragraph 96(1)(d), would be deductible in computing the income of the partnership for the fiscal period by virtue of the provisions of the Income Tax Application Rules relating to the exploration and development expenses,  
  (B) the Canadian exploration and development expenses and foreign resource pool expenses, if any, incurred by the partnership in the fiscal period, 
  (C) the Canadian exploration expense, if any, incurred by the partnership in the fiscal period, 
  (D) the Canadian development expense, if any, incurred by the partnership in the fiscal period, and 
  (E) the Canadian oil and gas property expense, if any, incurred by the partnership in the fiscal period, 
  (iii) any amount deemed by subsection 110.1(4) or 118.1(8) to have been the eligible amount of a gift made by the taxpayer by reason of the taxpayer’s membership in the partnership at the end of a fiscal period of the partnership ending before that time, 
  (iv) any amount required by section 97 to be deducted before that time in computing the adjusted cost base to the taxpayer of the interest, 
  (v) any amount received by the taxpayer after 1971 and before that time as, on account or in lieu of payment of, or in satisfaction of, a distribution of the taxpayer’s share (other than a share under an agreement referred to in subsection 96(1.1)) of the partnership profits or partnership capital, 
  (vi) an amount equal to that portion of all amounts deducted under subsection 127(5) in computing the tax otherwise payable by the taxpayer under this Part for the taxpayer’s taxation years ending before that time that may reasonably be attributed to amounts added in computing the investment tax credit of the taxpayer by virtue of subsection 127(8), 
  (vii) any amount added pursuant to subsection 127.2(4) in computing the taxpayer’s share-purchase tax credit for a taxation year ending before or after that time, 
  (viii) an amount equal to 50% of the amount deemed to be designated pursuant to subsection 127.3(4) before that time in respect of each share, debt obligation or right acquired by the partnership and deemed to have been acquired by the taxpayer under that subsection, 
  (ix) the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the partnership by virtue of subsection 13(7.2), 
  (x) any amount deductible by the taxpayer under subparagraph 20(1)(e)(vi) in respect of the partnership for a taxation year of the taxpayer ending at or after that time, 
  (xi) any amount required by paragraph 110.6(23)(b) to be deducted at that time in computing the adjusted cost base to the taxpayer of the interest, 
  (xii) any amount payable by the partnership, to the extent that the amount is deductible under subsection 20.01(1) in computing the taxpayer’s income for a taxation year that began before that time, and 
  (xiii) the amount of any reduction (within the meaning of paragraph 247(13)(a)) of the amount of a dividend deemed to have been received by the taxpayer in respect of a transaction (as defined in subsection 247(1)) or series of transactions in which the partnership was a participant; 
  (d) where the property is such that the taxpayer has, after 1971 and before that time, disposed of a part of it while retaining another part of it, the amount determined under section 43 to be the adjusted cost base to the taxpayer of the part so disposed of; 
  (e) if the property is a share, or an interest in or a right to — or, for civil law, a right in or to — a share, of the capital stock of a corporation acquired before August 1976, an amount equal to any expense incurred by the taxpayer in consideration therefor, to the extent that the expense was, by virtue of 
  (i) paragraph (e) of the definition 
  *Canadian exploration and development expenses* in subsection 66(15), a Canadian exploration and development expense,  
  (ii) paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), a Canadian exploration expense,  
  (iii) paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5), a Canadian development expense, or  
  (iv) paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), a Canadian oil and gas property expense  incurred by the taxpayer; 
  (f) where the property was received by the taxpayer as consideration for any payment or loan 
  (i) made before April 20, 1983 by the taxpayer as a shareholder corporation (within the meaning assigned by subsection 66(15)) to a joint exploration corporation of the shareholder, and 
  (ii) described in paragraph (a) of the definition 
  *agreed portion* in subsection 66(15),  or the property was substituted for such a property, such portion of the payment or loan as may reasonably be considered to be related to an agreed portion (within the meaning assigned by subsection 66(15)) of the joint exploration corporation’s 
  (iii) Canadian exploration and development expenses, 
  (iv) Canadian exploration expense, 
  (v) Canadian development expense, or 
  (vi) Canadian oil and gas property expense, as the case may be; 
  (f.1) where the property is a share of the capital stock of a joint exploration corporation resident in Canada and the taxpayer has, after 1971, made a contribution of capital to the corporation otherwise than by way of a loan, which contribution was included in computing the adjusted cost base of the property by virtue of paragraph 53(1)(c), such portion of the contribution as may reasonably be considered to be part of an agreed portion (within the meaning assigned by subsection 66(15)) of the corporation’s 
  (i) Canadian exploration and development expenses, 
  (ii) Canadian exploration expense, 
  (iii) Canadian development expense, or 
  (iv) Canadian oil and gas property expense, as the case may be; 
  (f.2) any amount required by paragraph 66(10.4)(a) to be deducted before that time in computing the adjusted cost base to the taxpayer of the property; 
  (g) where section 80 is applicable in respect of the taxpayer, the amount, if any, by which the adjusted cost base to the taxpayer of the property is required in prescribed manner to be reduced before that time; 
  (g.1) any amount required under paragraph 53(4)(a), 53(5)(a), 53(6)(a), 47(1)(c), 49(3.01)(a), 51(1)(d.1), 86(4)(a) or 87(5.1)(a) or 87(6.1)(a) to be deducted in computing the adjusted cost base to the taxpayer of the property or any amount by which that adjusted cost base is required to be reduced because of subsection 80(9), 80(10) or 80(11); 
  (h) where the property is a capital interest of the taxpayer in a trust (other than an interest in a personal trust that has never been acquired for consideration or an interest of a taxpayer in a trust described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1)),  
  (i) any amount paid to the taxpayer by the trust after 1971 and before that time as a distribution or payment of capital by the trust (otherwise than as proceeds of disposition of the interest or part thereof), to the extent that the amount became payable before 1988, 
  (i.1) any amount that has become payable to the taxpayer by the trust after 1987 and before that time in respect of the interest (otherwise than as proceeds of disposition of the interest or part thereof), except to the extent of the portion thereof 
  (A) that was included in the taxpayer’s income by reason of subsection 104(13) or from which an amount of tax was deducted under Part XIII by reason of paragraph 212(1)(c), 
  (A.1) that was deemed by subsection 104(16) to be a dividend received by the taxpayer, or 
  (B) where the trust was resident in Canada throughout its taxation year in which the amount became payable 
  (I) that is equal to the amount designated by the trust under subsection 104(21) in respect of the taxpayer, 
  (II) that was designated by the trust under subsection 104(20) in respect of the taxpayer, or 
  (III) that is an assessable distribution (as defined in subsection 218.3(1)) to the taxpayer, 
  (ii) an amount equal to that portion of all amounts deducted under subsection 127(5) in computing the tax otherwise payable by the taxpayer under this Part for the taxpayer’s taxation years ending before that time that may reasonably be attributed to amounts added in computing the investment tax credit of the taxpayer by virtue of subsection 127(7), 
  (iii) any amount added pursuant to subsection 127.2(3) in computing the taxpayer’s share-purchase tax credit for a taxation year ending before or after that time, 
  (iv) an amount equal to 50% of the amount deemed to be designated pursuant to subsection 127.3(3) before that time in respect of each share, debt obligation or right acquired by the trust and deemed to have been acquired by the taxpayer under that subsection, and 
  (v) an amount equal to the amount of all assistance received by the taxpayer before that time that has resulted in a reduction of the capital cost of a depreciable property to the trust by virtue of subsection 13(7.2); 
  (i) where the property is a capital interest in a trust (other than a unit trust) not resident in Canada that was purchased after 1971 and before that time by the taxpayer from a non-resident person at a time (in this paragraph referred to as the “purchase time”) when the property was not taxable Canadian property and the fair market value of such of the trust property as was 
  (i) a Canadian resource property, 
  (iii) an income interest in a trust resident in Canada, 
  (iv) taxable Canadian property, or 
  (v) a timber resource property was not less than 50% of the fair market value of all the trust property, that proportion of the amount, if any, by which 
  (vi) the fair market value at the purchase time of such of the trust properties as were properties described in any of subparagraphs (i) to (v) exceeds 
  (vii) the total of the cost amounts to the trust at the purchase time of such of the trust properties as were properties described in any of subparagraphs (i) to (v), that the fair market value at the purchase time of the interest is of the fair market value at the purchase time of all capital interests in the trust; 
  (j) where the property is a unit of a unit trust not resident in Canada that was purchased after 1971 and before that time by the taxpayer from a non-resident person at a time (in this paragraph referred to as the “purchase time”) when the property was not taxable Canadian property and the fair market value of such of the trust property as was 
  (i) a Canadian resource property, 
  (iii) an income interest in a trust resident in Canada, 
  (iv) taxable Canadian property, or 
  (v) a timber resource property was not less than 50% of the fair market value of all the trust property, that proportion of the amount, if any, by which 
  (vi) the fair market value at the purchase time of such of the trust properties as were properties described in any of subparagraphs (i) to (v) exceeds 
  (vii) the total of the cost amounts to the trust at the purchase time of such of the trust properties as were properties described in any of subparagraphs (i) to (v), that the fair market value at the purchase time of the unit is of the fair market value at the purchase time of all the issued units of the trust; 
  (k) where the property was acquired by the taxpayer after 1971, the amount, if any, by which the total of 
  (i) the amount of any assistance which the taxpayer has received or is entitled to receive before that time from a government, municipality or other public authority, in respect of, or for the acquisition of, the property, whether as a grant, subsidy, forgivable loan, deduction from tax not otherwise provided for under this paragraph, investment allowance or as any other form of assistance other than 
  (A) an amount described in paragraph 37(1)(d), 
  (B) an amount deducted as an allowance under section 65, 
  (C) the amount of prescribed assistance that the taxpayer has received or is entitled to receive in respect of, or for the acquisition of, shares of the capital stock of a prescribed venture capital corporation or a prescribed labour-sponsored venture capital corporation or shares of the capital stock of a taxable Canadian corporation that are held in a prescribed stock savings plan, or 
  (D) an amount included in income by virtue of paragraph 12(1)(u) or 56(1)(s), and 
  (ii) all amounts deducted under subsection 127(5) or 127(6) in respect of the property before that time, exceeds such part, if any, of the assistance referred to in subparagraph 53(2)(k)(i) as has been repaid before that time by the taxpayer pursuant to an obligation to repay all or any part of that assistance; 
  (l) where the property is a debt obligation, any amount that was deductible by virtue of subsection 20(14) in computing the taxpayer’s income for any taxation year commencing before that time in respect of interest on that debt obligation; 
  (l.1) where the property is an indexed debt obligation, 
  (i) any amount determined under subparagraph 16(6)(a)(ii) in respect of the obligation and deductible in computing the income of the taxpayer for a taxation year beginning before that time, and 
  (ii) the amount of any payment that was received or that became receivable by the taxpayer at or before that time in respect of an amount that was added under paragraph 53(1)(g.1) to the cost to the taxpayer of the obligation; 
  (m) any part of the cost to the taxpayer of the property that was deductible (otherwise than because of this Subdivision or paragraph 8(1)(r)) in computing the taxpayer’s income for any taxation year commencing before that time and ending after 1971; 
  (n) where the property is an expropriation asset of the taxpayer (within the meaning assigned by section 80.1) or an asset of the taxpayer assumed for the purposes of that section to be an expropriation asset thereof, any amount required by paragraph 80.1(2)(b) to be deducted in computing the adjusted cost base to the taxpayer of the asset; 
  (o) where the property is a right to receive partnership property within the meaning assigned by paragraph 98.2(a) or 100(3)(a), any amount received by the taxpayer in full or partial satisfaction of that right; 
  (p) where the property is a debt owing to the taxpayer by a corporation, any amount required to be deducted before that time under section 84.1 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it applied before May 23, 1985 or subsection 84.2(2) in computing the adjusted cost base to the taxpayer of the debt;  
  (q) where the property is an interest in a related segregated fund trust referred to in section 138.1, 
  (i) each amount in respect of that interest that is a capital loss deemed to have been allocated under subsection 138.1(4) to the taxpayer before that time, and 
  (ii) each amount in respect of that interest that before that time was deemed by subsection 138.1(3) to be a capital loss of the taxpayer; 
  (s) the amount, if any, by which 
  (i) the amount elected by the taxpayer before that time under subsection 53(2.1) exceeds 
  (ii) any repayment before that time by the taxpayer of an amount received by the taxpayer as described in subsection 53(2.1) that may reasonably be considered to relate to the amount elected where the repayment is made pursuant to a legal obligation to repay all or any part of the amount so received; 
  (t) if the property is a right to acquire shares or units under an agreement, any amount required by paragraph 164(6.1)(b) to be deducted in computing the adjusted cost base to the taxpayer of the right; 
  (u) where the property was at the end of February 22, 1994 a non-qualifying real property (within the meaning assigned by subsection 110.6(1) as that subsection applies to the 1994 taxation year) of a taxpayer, any amount required by paragraph 110.6(21)(b) to be deducted in computing the adjusted cost base to the taxpayer of the property; 
  (v) where the taxpayer elected under subsection 110.6(19) in respect of the property, any amount required by subsection 110.6(22) to be deducted in computing the adjusted cost base to the taxpayer of the property at that time; 
  (w) if the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under paragraph 20(1)(xx) in computing the income of the taxpayer for a taxation year; and 
  (x) if the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under paragraph 20(1)(xx) in computing the income of the taxpayer for the taxation year that includes that time. 
  
  ### Election
  
  (2.1) For the purpose of paragraph 53(2)(s), where in a taxation year a taxpayer receives an amount that would, but for this subsection, be included in the taxpayer’s income under paragraph 12(1)(x) in respect of the cost of a property (other than depreciable property) acquired by the taxpayer in the year, in the 3 taxation years preceding the year or in the taxation year following the year, the taxpayer may elect under this subsection on or before the date on or before which the taxpayer’s return of income under this Part for the year is required to be filed or, where the property is acquired in the following year, for that following year, to reduce the cost of the property by such amount as the taxpayer specifies, not exceeding the least of 
  (a) the adjusted cost base, determined without reference to paragraph 53(2)(s), at the time the property was acquired, 
  (b) the amount so received by the taxpayer, and 
  (c) where the taxpayer has disposed of the property before the year, nil. 
  (3)  [Repealed, 2001, c. 17, s. 36(13)]  
  
  ### Recomputation of adjusted cost base on transfers and deemed dispositions
  
  (4) If at any time in a taxation year a person or partnership (in this subsection referred to as the “vendor”) disposes of a specified property and the proceeds of disposition of the property are determined under paragraph 48.1(1)(c), section 70 or 73, subsection 85(1), paragraph 87(4)(a) or (c) or 88(1)(a), subsection 97(2) or 98(2), paragraph 98(3)(f) or (5)(f), subsection 104(4), paragraph 107(2)(a) or (2.1)(a), 107.4(3)(a) or 111(4)(e) or section 128.1, 
  (a) there shall be deducted after that time in computing the adjusted cost base to the person or partnership (in this subsection referred to as the “transferee”) who acquires or reacquires the property at or immediately after that time the amount, if any, by which 
  (i) the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the vendor of the property, exceeds 
  (ii) the amount that would be the vendor’s capital gain for the year from that disposition if this Act were read without reference to subparagraph 40(1)(a)(iii) and subsection 100(2); and 
  (b) the amount determined under paragraph 53(4)(a) in respect of that disposition shall be added after that time in computing the adjusted cost base to the transferee of the property. 
  
  ### Recomputation of adjusted cost base on other transfer
  
  (5) Where 
  (a) at any time in a taxation year a person or partnership (in this subsection referred to as the “vendor”) disposes of a specified property to another person or partnership (in this subsection referred to as the “transferee”), 
  (b) immediately before that time, the vendor and the transferee do not deal with each other at arm’s length or would not deal with each other at arm’s length if paragraph 80(2)(j) applied for the purpose of this subsection, 
  (c) paragraph 53(5)(b) would apply in respect of the disposition if each right referred to in paragraph 251(5)(b) that is a right of the transferee to acquire the specified property from the vendor or a right of the transferee to acquire other property as part of a transaction or event or series of transactions or events that includes the disposition were not taken into account, and 
  (d) the proceeds of the disposition are not determined under any of the provisions referred to in subsection 53(4), the following rules apply: 
  (e) there shall be deducted after that time in computing the adjusted cost base to the transferee of the property the amount, if any, by which 
  (i) the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the vendor of the property immediately before that time exceeds 
  (ii) the amount that would be the vendor’s capital gain for the year from that disposition if this Act were read without reference to subparagraph 40(1)(a)(iii) and subsection 100(2), and 
  (f) the amount determined under paragraph 53(5)(e) in respect of that disposition shall be added after that time in computing the adjusted cost base to the transferee of the property. 
  
  ### Recomputation of adjusted cost base on amalgamation
  
  (6) Where a capital property that is a specified property is acquired by a new corporate entity at any time as a result of the amalgamation or merger of 2 or more predecessor corporations, 
  (a) there shall be deducted after that time in computing the adjusted cost base to the new entity of the property the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to a predecessor corporation of the property, unless those amounts are otherwise deducted under that paragraph in computing the adjusted cost base to the new entity of the property; and 
  (b) the amount deducted under paragraph 53(6)(a) in respect of the acquisition shall be added after that time in computing the adjusted cost base to the new entity of the property. 
  
  ### Definitions
  
  54 In this Subdivision,  
  *adjusted cost base* to a taxpayer of any property at any time means, except as otherwise provided,  
  (a) where the property is depreciable property of the taxpayer, the capital cost to the taxpayer of the property as of that time, and 
  (b) in any other case, the cost to the taxpayer of the property adjusted, as of that time, in accordance with section 53, except that 
  (c) for greater certainty, where any property (other than an interest in or a share of the capital stock of a flow-through entity within the meaning assigned by subsection 39.1(1) that was last reacquired by the taxpayer as a result of an election under subsection 110.6(19)) of the taxpayer is property that was reacquired by the taxpayer after having been previously disposed of by the taxpayer, no adjustment to the cost to the taxpayer of the property that was required to be made under section 53 before its reacquisition by the taxpayer shall be made under that section to the cost to the taxpayer of the property as reacquired property of the taxpayer, and 
  (d) in no case shall the adjusted cost base to a taxpayer of any property at any time be less than nil; ( prix de base rajusté)   
  *capital property* of a taxpayer means  
  (a) any depreciable property of the taxpayer, and 
  (b) any property (other than depreciable property), any gain or loss from the disposition of which would, if the property were disposed of, be a capital gain or a capital loss, as the case may be, of the taxpayer; ( immobilisations)   
  *disposition* [Repealed, 2001, c. 17, s. 37]   
  *eligible capital property* [Repealed, 2016, c. 12, s. 17]   
  *exemption threshold*, of a taxpayer at a particular time in respect of a flow-through share class of property, means the amount determined by the formula  is the total of 
  (a) the total of all amounts, each of which is an amount that would be the cost to the taxpayer, computed without reference to subsection 66.3(3), of a flow-through share that was included at any time before the particular time in the flow-through share class of property and that was issued by a corporation to the taxpayer on or after the taxpayer’s fresh-start date in respect of the flow-through share class of property at that time, other than a flow-through share that the taxpayer was obligated, before March 22, 2011, to acquire pursuant to the terms of a flow-through share agreement entered into between the corporation and the taxpayer, and 
  (b) the total of all amounts, each of which is an amount that would be the adjusted cost base to the taxpayer of an interest in a partnership — computed as if subparagraph 53(1)(e)(vii.1) and clauses 53(2)(c)(ii)(C) and (D) did not apply to any amount incurred by the partnership in respect of a flow-through share held by the partnership, either directly or indirectly through another partnership — that was included at any time before the particular time in the flow-through share class of property, if 
  (i) the taxpayer 
  (A) acquired the interest on or after the taxpayer’s fresh-start date in respect of the flow-through share class of property at the particular time (other than an interest that the taxpayer was obligated, before August 16, 2011, to acquire pursuant to the terms of an agreement in writing entered into by the taxpayer), or 
  (B) made a contribution of capital to the partnership on or after August 16, 2011, 
  (ii) at any time after the taxpayer acquired the interest or made the contribution of capital, the taxpayer is deemed by subsection 66(18) to have made or incurred an outlay or expense in respect of a flow-through share held by the partnership, either directly or indirectly through another partnership, and 
  (iii) at any time between the time that the taxpayer acquired the interest or made the contribution of capital and the particular time, more than 50% of the fair market value of the assets of the partnership is attributable to property included in a flow-through share class of property, and is the total, if any, of all amounts, each of which is the lesser of 
  (a) the total of all amounts, each of which is a capital gain from a disposition of a property included in the flow-through share class of property, other than a capital gain referred to in paragraph 38.1(a), at an earlier time that is 
  (i) before the particular time, and 
  (ii) after the first time that the taxpayer acquired a flow-through share referred to in paragraph (a) of the description of A or acquired a partnership interest referred to in paragraph (b) of the description of A, and 
  (b) the exemption threshold of the taxpayer in respect of the flow-though share class of property immediately before that earlier time; ( seuil d’exonération)   
  *flow-through share class of property* means a group of properties,  
  (a) in respect of a class of shares of the capital stock of a corporation, each of which is 
  (i) a share of the class, if any share of the class or any right described in subparagraph (ii) is, at any time, a flow-through share to any person, 
  (ii) a right to acquire a share of the class, if any share of that class or any right described in this subparagraph is, at any time, a flow-through share to any person, or 
  (iii) a property that is an identical property of a property described in subparagraph (i) or (ii), or 
  (b) each of which is an interest in a partnership, if at any time more than 50% of the fair market value of the partnership’s assets is attributable to property included in a flow-through share class of property; ( catégorie de biens constituée d’actions accréditives)   
  *fresh-start date*, of a taxpayer at a particular time in respect of a flow-through share class of property, means  
  (a) in the case of a partnership interest that is included in the flow-through share class of property, the day that is the later of 
  (i) August 16, 2011, and 
  (ii) the last day, if any, before the particular time, on which the taxpayer held an interest in the partnership, and 
  (b) in the case of any other property that is included in the flow-though share class of property, the day that is the later of 
  (i) March 22, 2011, and 
  (ii) the last day, if any, before the particular time, on which the taxpayer disposed of all property included in the flow-through share class of property; ( date de nouveau départ)   
  *listed personal property* of a taxpayer means the taxpayer’s personal-use property that is all or any portion of, or any interest in or right to — or, for civil law, any right in or to — any  
  (a) print, etching, drawing, painting, sculpture, or other similar work of art, 
  (b) jewellery, 
  (c) rare folio, rare manuscript, or rare book, 
  (d) stamp, or 
  (e) coin; ( biens meubles déterminés)   
  *personal-use property* of a taxpayer includes  
  (a) property owned by the taxpayer that is used primarily for the personal use or enjoyment of the taxpayer or for the personal use or enjoyment of one or more individuals each of whom is 
  (i) the taxpayer, 
  (ii) a person related to the taxpayer, or 
  (iii) where the taxpayer is a trust, a beneficiary under the trust or any person related to the beneficiary, 
  (b) any debt owing to the taxpayer in respect of the disposition of property that was the taxpayer’s personal-use property, and 
  (c) any property of the taxpayer that is an option to acquire property that would, if the taxpayer acquired it, be personal-use property of the taxpayer, and 
  *personal-use property* of a partnership includes any partnership property that is used primarily for the personal use or enjoyment of any member of the partnership or for the personal use or enjoyment of one or more individuals each of whom is a member of the partnership or a person related to such a member; (biens à usage personnel)   
  *principal residence* of a taxpayer for a taxation year means a particular property that is a housing unit, a leasehold interest in a housing unit or a share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit a housing unit owned by the corporation and that is owned, whether jointly with another person or otherwise, in the year by the taxpayer, if  
  (a) where the taxpayer is an individual other than a personal trust, the housing unit was ordinarily inhabited in the year by the taxpayer, by the taxpayer’s spouse or common-law partner or former spouse or common-law partner or by a child of the taxpayer, 
  (a.1) where the taxpayer is a personal trust, the housing unit was ordinarily inhabited in the calendar year ending in the year by a specified beneficiary of the trust for the year, by the spouse or common-law partner or former spouse or common-law partner of such a beneficiary or by a child of such a beneficiary, or 
  (b) where the taxpayer is a personal trust or an individual other than a trust, the taxpayer 
  (i) elected under subsection 45(2) that relates to the change in use of the particular property in the year or a preceding taxation year, other than an election rescinded under subsection 45(2) in the taxpayer’s return of income for the year or a preceding taxation year, or 
  (ii) elected under subsection 45(3) that relates to a change in use of the particular property in a subsequent taxation year, except that, subject to section 54.1, a particular property shall be considered not to be a taxpayer’s principal residence for a taxation year 
  (c) where the taxpayer is an individual other than a personal trust, unless the particular property was designated by the taxpayer in prescribed form and manner to be the taxpayer’s principal residence for the year and no other property has been designated for the purposes of this definition for the year 
  (i) where the year is before 1982, by the taxpayer, or 
  (ii) where the year is after 1981, 
  (A) by the taxpayer, 
  (B) by a person who was throughout the year the taxpayer’s spouse or common-law partner (other than a spouse or common-law partner who was throughout the year living apart from, and was separated under a judicial separation or written separation agreement from, the taxpayer), 
  (C) by a person who was the taxpayer’s child (other than a child who was at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older), or 
  (D) where the taxpayer was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older, by a person who was the taxpayer’s 
  (I) mother or father, or 
  (II) brother or sister, where that brother or sister was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older, 
  (c.1) where the taxpayer is a personal trust, unless 
  (i) the particular property was designated by the trust in prescribed form and manner to be the taxpayer’s principal residence for the year, 
  (ii) the trust specifies in the designation each individual (in this definition referred to as a “specified beneficiary” of the trust for the year) who, in the calendar year ending in the year, 
  (A) is beneficially interested in the trust, and 
  (B) except where the trust is entitled to designate it for the year solely because of paragraph (b), ordinarily inhabited the housing unit or has a spouse or common-law partner, former spouse or common-law partner or child who ordinarily inhabited the housing unit, 
  (iii) no corporation (other than a registered charity) or partnership is beneficially interested in the trust at any time in the year, 
  (iii.1) if the year begins after 2016, the trust is, in the year, 
  (A) a trust 
  (I) for which a day is to be determined under paragraph 104(4)(a), (a.1) or (a.4) by reference to the death or later death, as the case may be, that has not occurred before the beginning of the year, of an individual who is resident in Canada during the year, and 
  (II) a specified beneficiary of which for the year is the individual referred to in subclause (I), 
  (B) a trust 
  (I) that is a qualified disability trust (as defined in subsection 122(3)) for the year, and  
  (II) an electing beneficiary (in this clause, as defined in subsection 122(3)) of which for the year is  
  1 resident in Canada during the year, 
  2 a specified beneficiary of the trust for the year, and 
  3 a spouse, common-law partner, former spouse or common-law partner or child of the settlor (in this subparagraph, as defined in subsection 108(1)) of the trust,  
  (C) a trust 
  (I) a specified beneficiary of which for the year is an individual 
  1 who is resident in Canada during the year, 
  2 who has not attained 18 years of age before the end of the year, and 
  3 a mother or father of whom is a settlor of the trust, and 
  (II) in respect of which either of the following conditions is met: 
  1 no mother or father of the individual referred to in subclause (I) is alive at the beginning of the year, or 
  2 the trust arose before the beginning of the year on and as a consequence of the death of a mother or father of the individual referred to in subclause (I), or 
  (D) a trust 
  (I) a specified beneficiary of which for the year is a qualifying individual for the year in respect of the trust, and 
  (II) under which no person other than a beneficiary described in subclause (I) may receive or otherwise obtain the use of, during the beneficiary’s lifetime, any of the income or capital of the trust and the trustees are required to consider the needs of the beneficiary including, without limiting the generality of the foregoing, the comfort, care and maintenance of the beneficiary, and 
  (iv) no other property has been designated for the purpose of this definition for the calendar year ending in the year by any specified beneficiary of the trust for the year, by a person who was throughout that calendar year such a beneficiary’s spouse or common-law partner (other than a spouse or common-law partner who was throughout that calendar year living apart from, and was separated pursuant to a judicial separation or written separation agreement from, the beneficiary), by a person who was such a beneficiary’s child (other than a child who was during that calendar year a married person or a person who is in a common-law partnership or a person 18 years or over) or, where such a beneficiary was not during that calendar year a married person or a person who is in a common-law partnership or a person 18 years or over, by a person who was such a beneficiary’s 
  (A) mother or father, or 
  (B) brother or sister, where that brother or sister was not during that calendar year a married person or a person who is in a common-law partnership or a person 18 years or over, or 
  (d) because of paragraph (b), if solely because of that paragraph the property would, but for this paragraph, have been a principal residence of the taxpayer for 4 or more preceding taxation years, and, for the purpose of this definition, 
  (e) the principal residence of a taxpayer for a taxation year shall be deemed to include, except where the particular property consists of a share of the capital stock of a co-operative housing corporation, the land subjacent to the housing unit and such portion of any immediately contiguous land as can reasonably be regarded as contributing to the use and enjoyment of the housing unit as a residence, except that where the total area of the subjacent land and of that portion exceeds 1/2 hectare, the excess shall be deemed not to have contributed to the use and enjoyment of the housing unit as a residence unless the taxpayer establishes that it was necessary to such use and enjoyment, 
  (f) a particular property designated under paragraph (c.1) by a trust for a year shall be deemed to be property designated for the purposes of this definition by each specified beneficiary of the trust for the calendar year ending in the year, and 
  (g) a qualifying individual, for a taxation year in respect of a trust, means an individual who meets the following conditions: 
  (i) the individual is, in the year, any of 
  (A) the settlor of the trust, 
  (B) the child, grandchild, great grandchild, parent, grandparent, great grandparent, brother, sister, uncle, aunt, niece or nephew of the settlor or of the spouse or common-law partner or former spouse or common-law partner of the settlor, and 
  (C) the spouse or common-law partner or former spouse or common-law partner of any person described in clause (A) or (B), 
  (ii) the individual is resident in Canada during the year, and 
  (iii) an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under subsection 118.3(1) in computing the individual’s tax payable under this Part for the year; ( résidence principale)   
  *proceeds of disposition* of property includes,  
  (a) the sale price of property that has been sold, 
  (b) compensation for property unlawfully taken, 
  (c) compensation for property destroyed, and any amount payable under a policy of insurance in respect of loss or destruction of property, 
  (d) compensation for property taken under statutory authority or the sale price of property sold to a person by whom notice of an intention to take it under statutory authority was given, 
  (e) compensation for property injuriously affected, whether lawfully or unlawfully or under statutory authority or otherwise, 
  (f) compensation for property damaged and any amount payable under a policy of insurance in respect of damage to property, except to the extent that such compensation or amount, as the case may be, has within a reasonable time after the damage been expended on repairing the damage, 
  (g) an amount by which the liability of a taxpayer to a mortgagee or hypothecary creditor is reduced as a result of the sale of mortgaged or hypothecated property under a provision of the mortgage or hypothec, plus any amount received by the taxpayer out of the proceeds of the sale, 
  (h) any amount included in computing a taxpayer’s proceeds of disposition of the property because of section 79, and 
  (i) in the case of a share, an amount deemed by subparagraph 88(2)(b)(ii) not to be a dividend on that share, but notwithstanding any other provision of this Part, does not include 
  (j) any amount that would otherwise be proceeds of disposition of a share to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed 
  (i) by paragraph 55(2)(b) to be proceeds of disposition of the share, or 
  (ii) by subparagraph 88(2)(b)(ii) not to be a dividend, or 
  (k) any amount that would otherwise be proceeds of disposition of property of a taxpayer to the extent that the amount is deemed by subsection 84.1(1), 212.1(1.1) or 212.2(2) to be a dividend paid to the taxpayer or, if the taxpayer is a partnership, to a member of the taxpayer; ( produit de disposition)   
  *specified property* of a taxpayer is capital property of the taxpayer that is  
  (a) a share, 
  (b) a capital interest in a trust, 
  (c) an interest in a partnership, or 
  (d) an option to acquire specified property of the taxpayer; ( bien déterminé)   
  *superficial loss* of a taxpayer means the taxpayer’s loss from the disposition of a particular property where  
  (a) during the period that begins 30 days before and ends 30 days after the disposition, the taxpayer or a person affiliated with the taxpayer acquires a property (in this definition referred to as the “substituted property”) that is, or is identical to, the particular property, and 
  (b) at the end of that period, the taxpayer or a person affiliated with the taxpayer owns or had a right to acquire the substituted property, except where the disposition was 
  (c) a disposition deemed to have been made by subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 138.2(4) or 142.5(2), section 142.6 or any of subsections 144(4.1) and (4.2) and 149(10), 
  (d) the expiry of an option, 
  (e) a disposition to which paragraph 40(2)(e.1) applies, 
  (f) a disposition by a taxpayer that was subject to a loss restriction event within 30 days after the disposition, 
  (g) a disposition by a person that, within 30 days after the disposition, became or ceased to be exempt from tax under this Part on its taxable income, or 
  (h) a disposition to which subsection 40(3.4) or 69(5) applies, and, for the purpose of this definition, 
  (i) a right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property, and 
  (j) a share of the capital stock of a SIFT wind-up corporation in respect of a SIFT wind-up entity is, if the share was acquired before 2013, deemed to be a property that is identical to equity in the SIFT wind-up entity. ( perte apparente)  
  
  ### Exception to principal residence rules
  
  54.1 (1) A taxation year in which a taxpayer does not ordinarily inhabit the taxpayer’s property as a consequence of the relocation of the place of employment of the taxpayer or the taxpayer’s spouse or common-law partner while the taxpayer or the taxpayer’s spouse or common-law partner, as the case may be, is employed by an employer who is not a person to whom the taxpayer or the taxpayer’s spouse or common-law partner is related is deemed not to be a previous taxation year referred to in paragraph (d) of the definition 
  *principal residence* in section 54 if  
  (a) the property subsequently becomes ordinarily inhabited by the taxpayer during the term of the taxpayer’s or the taxpayer’s spouse’s or common-law partner’s employment by that employer or before the end of the taxation year immediately following the taxation year in which the taxpayer’s or the spouse’s or common-law partner’s employment by that employer terminates; or 
  (b) the taxpayer dies during the term of the taxpayer’s or the spouse’s or common-law partner’s employment by that employer. 
  
  ### Definition of property 
  
  (2) In this section, 
  *property*, in relation to a taxpayer, means a housing unit  
  (a) owned by the taxpayer, 
  (b) in respect of which the taxpayer has a leasehold interest, or 
  (c) in respect of which the taxpayer owned a share of the capital stock of a co-operative housing corporation if the share was acquired for the sole purpose of acquiring the right to inhabit a housing unit owned by the corporation whether jointly with another person or otherwise in the year and that at all times was at least 40 kilometres farther from the taxpayer’s or the taxpayer’s spouse’s or common-law partner’s new place of employment than was the taxpayer’s subsequent place or places of residence. 
  
  ### Certain shares deemed to be capital property
  
  54.2 Where any person has disposed of property that consisted of all or substantially all of the assets used in an active business carried on by that person to a corporation for consideration that included shares of the corporation, the shares shall be deemed to be capital property of the person. 
  
  ### Definitions
  
  55 (1) In this section,  
  *distribution* means a direct or indirect transfer of property of a corporation (referred to in this section as the “distributing corporation”) to one or more corporations (each of which is referred to in this section as a “transferee corporation”) where, in respect of each type of property owned by the distributing corporation immediately before the transfer, each transferee corporation receives property of that type the fair market value of which is equal to or approximates the amount determined by the formula  is the fair market value, immediately before the transfer, of all property of that type owned at that time by the distributing corporation, is the fair market value, immediately before the transfer, of all the shares of the capital stock of the distributing corporation owned at that time by the transferee corporation, and is the fair market value, immediately before the transfer, of all the issued shares of the capital stock of the distributing corporation; ( attribution)   
  *permitted acquisition*, in relation to a distribution by a distributing corporation, means an acquisition of property by a person or partnership on, or as part of,  
  (a) a distribution, or 
  (b) a permitted exchange or permitted redemption in relation to a distribution by another distributing corporation; ( acquisition autorisée)   
  *permitted exchange*, in relation to a distribution by a distributing corporation, means  
  (a) an exchange of shares for shares of the capital stock of the distributing corporation to which subsection 51(1) or 86(1) applies or would, if the shares were capital property to the holder thereof, apply, other than an exchange that resulted in an acquisition of control of the distributing corporation by any person or group of persons, and 
  (b) an exchange of shares of the capital stock of the distributing corporation by one or more shareholders of the distributing corporation (each of whom is referred to in this paragraph as a “participant”) for shares of the capital stock of another corporation (referred to in this paragraph as the “acquiror”) in contemplation of the distribution where 
  (i) no share of the capital stock of the acquiror outstanding immediately after the exchange (other than directors’ qualifying shares) is owned at that time by any person or partnership other than a participant, and either 
  (ii) the acquiror owns, immediately before the distribution, all the shares each of which is a share of the capital stock of the distributing corporation that was owned immediately before the exchange by a participant, or 
  (iii) the fair market value, immediately before the distribution, of each participant’s shares of the capital stock of the acquiror is equal to or approximates the amount determined by the formula is the fair market value, immediately before the distribution, of all the shares of the capital stock of the acquiror then outstanding (other than shares issued to participants in consideration for shares of a specified class all the shares of which were acquired by the acquiror on the exchange), is the fair market value, immediately before the exchange, of all the shares of the capital stock of the distributing corporation (other than shares of a specified class none or all of the shares of which were acquired by the acquiror on the exchange) owned at that time by the participant, is the fair market value, immediately before the exchange, of all the shares (other than shares of a specified class none or all of the shares of which were acquired by the acquiror on the exchange and shares to be redeemed, acquired or cancelled by the distributing corporation pursuant to the exercise of a statutory right of dissent by the holder of the share) of the capital stock of the distributing corporation outstanding immediately before the exchange, and is the fair market value, immediately before the distribution, of all the shares issued to the participant by the acquiror in consideration for shares of a specified class all of the shares of which were acquired by the acquiror on the exchange; ( échange autorisé)   
  *permitted redemption*, in relation to a distribution by a distributing corporation, means  
  (a) a redemption or purchase for cancellation by the distributing corporation, as part of the reorganization in which the distribution was made, of all the shares of its capital stock that were owned, immediately before the distribution, by a transferee corporation in relation to the distributing corporation, 
  (b) a redemption or purchase for cancellation by a transferee corporation in relation to the distributing corporation, or by a corporation that, immediately after the redemption or purchase, was a subsidiary wholly-owned corporation of the transferee corporation, as part of the reorganization in which the distribution was made, of all of the shares of the capital stock of the transferee corporation or the subsidiary wholly-owned corporation that were acquired by the distributing corporation in consideration for the transfer of property received by the transferee corporation on the distribution, and 
  (c) a redemption or purchase for cancellation by the distributing corporation, in contemplation of the distribution, of all the shares of its capital stock each of which is 
  (i) a share of a specified class the cost of which, at the time of its issuance, to its original owner was equal to the fair market value at that time of the consideration for which it was issued, or 
  (ii) a share that was issued, in contemplation of the distribution, by the distributing corporation in exchange for a share described in subparagraph 55(1) permitted redemption (c)(i); ( rachat autorisé)   
  *qualified person*, in relation to a distribution, means a person or partnership with whom the distributing corporation deals at arm’s length at all times during the course of the series of transactions or events that includes the distribution if  
  (a) at any time before the distribution, 
  (i) all of the shares of each class of the capital stock of the distributing corporation that includes shares that cause that person or partnership to be a specified shareholder of the distributing corporation (in this definition all of those shares in all of those classes are referred to as the “exchanged shares”) are, in the circumstances described in paragraph (a) of the definition 
  *permitted exchange*, exchanged for consideration that consists solely of shares of a specified class of the capital stock of the distributing corporation (in this definition referred to as the “new shares”), or  
  (ii) the terms or conditions of all of the exchanged shares are amended (which shares are in this definition referred to after the amendment as the “amended shares”) and the amended shares are shares of a specified class of the capital stock of the distributing corporation, 
  (b) immediately before the exchange or amendment, the exchanged shares are listed on a designated stock exchange, 
  (c) immediately after the exchange or amendment, the new shares or the amended shares, as the case may be, are listed on a designated stock exchange, 
  (d) the exchanged shares would be shares of a specified class if they were not convertible into, or exchangeable for, other shares, 
  (e) the new shares or the amended shares, as the case may be, and the exchanged shares are non-voting in respect of the election of the board of directors of the distributing corporation except in the event of a failure or default under the terms or conditions of the shares, and 
  (f) no holder of the new shares or the amended shares, as the case may be, is entitled to receive on the redemption, cancellation or acquisition of the new shares or the amended shares, as the case may be, by the distributing corporation or by any person with whom the distributing corporation does not deal at arm’s length an amount (other than a premium for early redemption) that is greater than the total of the fair market value of the consideration for which the exchanged shares were issued and the amount of any unpaid dividends on the new shares or on the amended shares, as the case may be; ( personne admissible)   
  *safe-income determination time* for a transaction or event or a series of transactions or events means the time that is the earlier of  
  (a) the time that is immediately after the earliest disposition or increase in interest described in any of subparagraphs 55(3)(a)(i) to 55(3)(a)(v) that resulted from the transaction, event or series, and 
  (b) the time that is immediately before the earliest time that a dividend is paid as part of the transaction, event or series; ( moment de détermination du revenu protégé)   
  *specified class* means a class of shares of the capital stock of a distributing corporation where  
  (a) the paid-up capital in respect of the class immediately before the beginning of the series of transactions or events that includes a distribution by the distributing corporation was not less than the fair market value of the consideration for which the shares of that class then outstanding were issued, 
  (b) under neither the terms and conditions of the shares nor any agreement in respect of the shares are the shares convertible into or exchangeable for shares other than shares of a specified class or shares of the capital stock of a transferee corporation in relation to the distributing corporation, 
  (c) no holder of the shares is entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm’s length an amount (other than a premium for early redemption) that is greater than the total of the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends on the shares, and 
  (d) the shares are non-voting in respect of the election of the board of directors except in the event of a failure or default under the terms or conditions of the shares; ( catégorie exclue)   
  *specified corporation* in relation to a distribution means a distributing corporation  
  (a) that is a public corporation or a specified wholly-owned corporation of a public corporation, 
  (b) shares of the capital stock of which are exchanged for shares of the capital stock of another corporation (referred to in this definition and subsection (3.02) as an “acquiror”) in an exchange to which the definition 
  *permitted exchange* in this subsection would apply if that definition were read without reference to paragraph (a) and subparagraph (b)(ii) of that definition,  
  (c) that does not make a distribution, to a corporation that is not an acquiror, after 1998 and before the day that is three years after the day on which the shares of the capital stock of the distributing corporation are exchanged in a transaction described in paragraph (b), and 
  (d) no acquiror in relation to which makes a distribution after 1998 and before the day that is three years after the day on which the shares of the capital stock of the distributing corporation are exchanged in a transaction described in paragraph (b), and for the purposes of paragraphs (c) and (d) 
  (e) a corporation that is formed by an amalgamation of two or more other corporations is deemed to be the same corporation as, and a continuation of, each of the other corporations, and 
  (f) where there has been a winding-up of a corporation to which subsection 88(1) applies, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary; ( société déterminée)   
  *specified wholly-owned corporation* of a public corporation means a corporation all of the outstanding shares of the capital stock of which (other than directors’ qualifying shares and shares of a specified class) are held by  
  (a) the public corporation, 
  (b) a specified wholly-owned corporation of the public corporation, or 
  (c) any combination of corporations described in paragraph (a) or (b). ( filiale à cent pour cent déterminée)  
  
  ### Deemed proceeds or gain
  
  (2) If this subsection applies to a taxable dividend received by a dividend recipient, notwithstanding any other provision of this Act, the amount of the dividend (other than the portion of it, if any, subject to tax under Part IV that is not refunded as a consequence of the payment of a dividend by a corporation where the payment is part of the series referred to in subsection (2.1)) is deemed 
  (a) not to be a dividend received by the dividend recipient; 
  (b) if the dividend is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies, to be proceeds of disposition of the share that is redeemed, acquired or cancelled except to the extent that the dividend is otherwise included in computing those proceeds; and 
  (c) if paragraph (b) does not apply to the dividend, to be a gain of the dividend recipient, for the year in which the dividend was received, from the disposition of a capital property. 
  
  ### Application of subsection (2)
  
  (2.1) Subsection (2) applies to a taxable dividend received by a corporation resident in Canada (in subsections (2) to (2.2) and (2.4) referred to as the 
  *dividend recipient*) as part of a transaction or event or a series of transactions or events if  
  (a) the dividend recipient is entitled to a deduction in respect of the dividend under subsection 112(1) or (2) or 138(6); 
  (b) it is the case that 
  (i) one of the purposes of the payment or receipt of the dividend (or, in the case of a dividend under subsection 84(3), one of the results of which) is to effect a significant reduction in the portion of the capital gain that, but for the dividend, would have been realized on a disposition at fair market value of any share of capital stock immediately before the dividend, or 
  (ii) the dividend (other than a dividend that is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies) is received on a share that is held as capital property by the dividend recipient and one of the purposes of the payment or receipt of the dividend is to effect 
  (A) a significant reduction in the fair market value of any share, or 
  (B) a significant increase in the cost of property, such that the amount that is the total of the cost amounts of all properties of the dividend recipient immediately after the dividend is significantly greater than the amount that is the total of the cost amounts of all properties of the dividend recipient immediately before the dividend; and 
  (c) the amount of the dividend exceeds the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received. 
  
  ### Special rule — amount of the stock dividend
  
  (2.2) For the purpose of applying subsections (2), (2.1), (2.3) and (2.4), the amount of a stock dividend and the dividend recipient’s entitlement to a deduction under subsection 112(1) or (2) or 138(6) in respect of the amount of that dividend are to be determined as if paragraph (b) of the definition 
  *amount* in subsection 248(1) read as follows:  
  (b) in the case of a stock dividend paid by a corporation, the greater of 
  (i) the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and 
  (ii) the fair market value of the share or shares issued as a stock dividend at the time of payment, 
  
  ### Stock dividends and safe income
  
  (2.3) If this subsection applies in respect of a stock dividend 
  (a) the amount of the stock dividend is deemed for the purpose of subsection (2) to be a separate taxable dividend to the extent of the portion of the amount that does not exceed the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received; and 
  (b) the amount of the separate taxable dividend referred to in paragraph (a) is deemed to reduce the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received. 
  
  ### Application of subsection (2.3)
  
  (2.4) Subsection (2.3) applies in respect of a stock dividend if 
  (a) a dividend recipient holds a share upon which it receives the stock dividend; 
  (b) the fair market value of the share or shares issued as a stock dividend exceeds the amount by which the paid-up capital of the corporation that paid the stock dividend is increased because of the dividend; and 
  (c) subsection (2) would apply to the dividend if subsection (2.1) were read without reference to its paragraph (c). 
  
  ### Determination of reduction in fair market value
  
  (2.5) For the purpose of applying clause (2.1)(b)(ii)(A), whether a dividend causes a significant reduction in the fair market value of any share is to be determined as if the fair market value of the share, immediately before the dividend, was increased by an amount equal to the amount, if any, by which the fair market value of the dividend received on the share exceeds the fair market value of the share. 
  
  ### Application
  
  (3) Subsection 55(2) does not apply to any dividend received by a corporation (in this subsection and subsection 55(3.01) referred to as the “dividend recipient”) 
  (a) in the case of a dividend that is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies, if, as part of a transaction or event or a series of transactions or events as a part of which the dividend is received, there was not at any particular time 
  (i) a disposition of property, other than 
  (A) money disposed of on the payment of a dividend or on a reduction of the paid-up capital of a share, and 
  (B) property disposed of for proceeds that are not less than its fair market value, to a person or partnership that was an unrelated person immediately before the particular time, 
  (ii) a significant increase (other than as a consequence of a disposition of shares of the capital stock of a corporation for proceeds of disposition that are not less than their fair market value) in the total direct interest in any corporation of one or more persons or partnerships that were unrelated persons immediately before the particular time, 
  (iii) a disposition, to a person or partnership who was an unrelated person immediately before the particular time, of 
  (A) shares of the capital stock of the corporation that paid the dividend (referred to in this paragraph and subsection 55(3.01) as the “dividend payer”), or 
  (B) property (other than shares of the capital stock of the dividend recipient) more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend payer, 
  (iv) after the time the dividend was received, a disposition, to a person or partnership that was an unrelated person immediately before the particular time, of 
  (A) shares of the capital stock of the dividend recipient, or 
  (B) property more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend recipient, and 
  (v) a significant increase in the total of all direct interests in the dividend payer of one or more persons or partnerships who were unrelated persons immediately before the particular time; or 
  (b) if the dividend was received 
  (i) in the course of a reorganization in which 
  (A) a distributing corporation made a distribution to one or more transferee corporations, and 
  (B) the distributing corporation was wound up or all of the shares of its capital stock owned by each transferee corporation immediately before the distribution were redeemed or cancelled otherwise than on an exchange to which subsection 51(1), 85(1) or 86(1) applies, and 
  (ii) on a permitted redemption in relation to the distribution or on the winding-up of the distributing corporation. 
  
  ### Interpretation for par. (3)(a)
  
  (3.01) For the purposes of paragraph 55(3)(a), 
  (a) an unrelated person means a person (other than the dividend recipient) to whom the dividend recipient is not related or a partnership any member of which (other than the dividend recipient) is not related to the dividend recipient; 
  (b) a corporation that is formed by an amalgamation of 2 or more other corporations is deemed to be the same corporation as, and a continuation of, each of the other corporations; 
  (c) where there has been a winding-up of a corporation to which subsection 88(1) applies, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary; 
  (d) proceeds of disposition are to be determined without reference to 
  (i) subparagraph (j)(i) of the definition 
  *proceeds of disposition* in section 54, and  
  (ii) section 93; 
  (e) notwithstanding any other provision of this Act, where a non-resident person disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws; 
  (f) a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii) is deemed not to be described in that subparagraph if the increase was the result of the issuance of shares of the capital stock of the corporation solely for money and the shares were redeemed, acquired or cancelled by the corporation before the dividend was received; 
  (g) a disposition of property that would, but for this paragraph, be described in subparagraph (3)(a)(i), or a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii), is deemed not to be described in those subparagraphs if 
  (i) the dividend payer was related to the dividend recipient immediately before the dividend was received, 
  (ii) the dividend payer did not, as part of the series of transactions or events that includes the receipt of the dividend, cease to be related to the dividend recipient, 
  (iii) the disposition or increase occurred before the dividend was received, 
  (iv) the disposition or increase was the result of the disposition of shares to, or the acquisition of shares of, a particular corporation, and 
  (v) at the time the dividend was received, all the shares of the capital stock of the dividend recipient and the dividend payer were owned by the particular corporation, a corporation that controlled the particular corporation, a corporation controlled by the particular corporation or any combination of those corporations; and 
  (h) a winding-up of a subsidiary wholly-owned corporation to which subsection 88(1) applies, or an amalgamation to which subsection 87(11) applies of a corporation with one or more subsidiary wholly-owned corporations, is deemed not to result in a significant increase in the total direct interest, or in the total of all direct interests, in the subsidiary or subsidiaries, as the case may be. 
  
  ### Distribution by a specified corporation
  
  (3.02) For the purposes of the definition 
  *distribution* in subsection (1), where the transfer referred to in that definition is by a specified corporation to an acquiror described in the definition 
  *specified corporation* in subsection (1), the references in the definition 
  *distribution* to  
  (a) “each type of property” shall be read as “property”; and 
  (b) “property of that type” shall be read as “property”. 
  
  ### Where paragraph (3)(b) not applicable
  
  (3.1) Notwithstanding subsection 55(3), a dividend to which subsection 55(2) would, but for paragraph 55(3)(b), apply is not excluded from the application of subsection 55(2) where 
  (a) in contemplation of and before a distribution (other than a distribution by a specified corporation) made in the course of the reorganization in which the dividend was received, property became property of the distributing corporation, a corporation controlled by it or a predecessor corporation of any such corporation otherwise than as a result of 
  (i) an amalgamation of corporations each of which was related to the distributing corporation, 
  (ii) an amalgamation of a predecessor corporation of the distributing corporation and one or more corporations controlled by that predecessor corporation, 
  (iii) a reorganization in which a dividend was received to which subsection 55(2) would, but for paragraph 55(3)(b), apply, or 
  (iv) a disposition of property by 
  (A) the distributing corporation, a corporation controlled by it or a predecessor corporation of any such corporation to a corporation controlled by the distributing corporation or a predecessor corporation of the distributing corporation, 
  (B) a corporation controlled by the distributing corporation or by a predecessor corporation of the distributing corporation to the distributing corporation or predecessor corporation, as the case may be, or 
  (C) the distributing corporation, a corporation controlled by it or a predecessor corporation of any such corporation for consideration that consists only of money or indebtedness that is not convertible into other property, or of any combination thereof, 
  (b) the dividend was received as part of a series of transactions or events in which 
  (i) a person or partnership (referred to in this subparagraph as the “vendor”) disposed of property and 
  (A) the property is 
  (I) a share of the capital stock of a distributing corporation that made a distribution as part of the series or of a transferee corporation in relation to the distributing corporation, or 
  (II) property 10% or more of the fair market value of which was, at any time during the course of the series, derived from one or more shares described in subclause 55(3.1)(b)(i)(A)(I), 
  (B) the vendor (other than a qualified person in relation to the distribution) was, at any time during the course of the series, a specified shareholder of the distributing corporation or of the transferee corporation, and 
  (C) the property or any other property (other than property received by the transferee corporation on the (distribution) acquired by any person or partnership in substitution therefor was acquired (otherwise than on a permitted acquisition, permitted exchange or permitted redemption in relation to the (distribution) by a person (other than the vendor) who was not related to the vendor or, as part of the series, ceased to be related to the vendor or by a partnership, 
  (ii) control of a distributing corporation that made a distribution as part of the series or of a transferee corporation in relation to the distributing corporation was acquired (otherwise than as a result of a permitted acquisition, permitted exchange or permitted redemption in relation to the (distribution) by any person or group of persons, or 
  (iii) in contemplation of a distribution by a distributing corporation, a share of the capital stock of the distributing corporation was acquired (otherwise than on a permitted acquisition or permitted exchange in relation to the distribution or on an amalgamation of 2 or more predecessor corporations of the distributing corporation) by 
  (A) a transferee corporation in relation to the distributing corporation or by a person or partnership with whom the transferee corporation did not deal at arm’s length from a person to whom the acquiror was not related or from a partnership, 
  (B) a person or any member of a group of persons who acquired control of the distributing corporation as part of the series, 
  (C) a particular partnership any interest in which is held, directly or indirectly through one or more partnerships, by a person referred to in clause 55(3.1)(b)(iii)(B), or 
  (D) a person or partnership with whom a person referred to in clause 55(3.1)(b)(iii)(B) or a particular partnership referred to in clause 55(3.1)(b)(iii)(C) did not deal at arm’s length, 
  (c) the dividend was received by a transferee corporation from a distributing corporation that, immediately after the reorganization in the course of which a distribution was made and the dividend was received, was not related to the transferee corporation and the total of all amounts each of which is the fair market value, at the time of acquisition, of a property that 
  (i) was acquired, as part of the series of transactions or events that includes the receipt of the dividend, by a person (other than the transferee corporation) who was not related to the transferee corporation or, as part of the series, ceased to be related to the transferee corporation or by a partnership, otherwise than 
  (A) as a result of a disposition 
  (I) in the ordinary course of business, or 
  (II) before the distribution for consideration that consists solely of money or indebtedness that is not convertible into other property, or of any combination of the two, 
  (B) on a permitted acquisition in relation to a distribution, or 
  (C) as a result of an amalgamation of 2 or more corporations that were related to each other immediately before the amalgamation, and 
  (ii) is a property (other than money, indebtedness that is not convertible into other property, a share of the capital stock of the transferee corporation and property more than 10% of the fair market value of which is attributable to one or more such shares) 
  (A) that was received by the transferee corporation on the distribution, 
  (B) more than 10% of the fair market value of which was, at any time after the distribution and before the end of the series, attributable to property (other than money and indebtedness that is not convertible into other property) described in clause 55(3.1)(c)(ii)(A) or 55(3.1)(c)(ii)(C), or 
  (C) to which, at any time during the course of the series, the fair market value of property described in clause 55(3.1)(c)(ii)(A) was wholly or partly attributable is greater than 10% of the fair market value, at the time of the distribution, of all the property (other than money and indebtedness that is not convertible into other property) received by the transferee corporation on the distribution, or 
  (d) the dividend was received by a distributing corporation that, immediately after the reorganization in the course of which a distribution was made and the dividend was received, was not related to the transferee corporation that paid the dividend and the total of all amounts each of which is the fair market value, at the time of acquisition, of a property that 
  (i) was acquired, as part of the series of transactions or events that includes the receipt of the dividend, by a person (other than the distributing corporation) who was not related to the distributing corporation or, as part of the series, ceased to be related to the distributing corporation or by a partnership, otherwise than 
  (A) as a result of a disposition 
  (I) in the ordinary course of business, or 
  (II) before the distribution for consideration that consists solely of money or indebtedness that is not convertible into other property, or of any combination of the two, 
  (B) on a permitted acquisition in relation to a distribution, or 
  (C) as a result of an amalgamation of 2 or more corporations that were related to each other immediately before the amalgamation, and 
  (ii) is a property (other than money, indebtedness that is not convertible into other property, a share of the capital stock of the distributing corporation and property more than 10% of the fair market value of which is attributable to one or more such shares) 
  (A) that was owned by the distributing corporation immediately before the distribution and not disposed of by it on the distribution, 
  (B) more than 10% of the fair market value of which was, at any time after the distribution and before the end of the series, attributable to property (other than money and indebtedness that is not convertible into other property) described in clause 55(3.1)(d)(ii)(A) or 55(3.1)(d)(ii)(C), or 
  (C) to which, at any time during the course of the series, the fair market value of property described in clause 55(3.1)(d)(ii)(A) was wholly or partly attributable is greater than 10% of the fair market value at the time of the distribution, of all the property (other than money and indebtedness that is not convertible into other property) owned immediately before that time by the distributing corporation and not disposed of by it on the distribution. 
  
  ### Interpretation of paragraph (3.1)(b)
  
  (3.2) For the purpose of paragraph 55(3.1)(b), 
  (a) in determining whether the vendor referred to in subparagraph 55(3.1)(b)(i) is at any time a specified shareholder of a transferee corporation or of a distributing corporation, the references in the definition 
  *specified shareholder* in subsection 248(1) to “taxpayer” shall be read as “person or partnership”;  
  (b) a corporation that is formed by the amalgamation of 2 or more corporations (each of which is referred to in this paragraph as a “predecessor corporation”) shall be deemed to be the same corporation as, and a continuation of, each of the predecessor corporations; 
  (c) subject to paragraph 55(3.2)(d), each particular person who acquired a share of the capital stock of a distributing corporation in contemplation of a distribution by the distributing corporation shall be deemed, in respect of that acquisition, not to be related to the person from whom the particular person acquired the share unless 
  (i) the particular person acquired all the shares of the capital stock of the distributing corporation that were owned, at any time during the course of the series of transactions or events that included the distribution and before the acquisition, by the other person, or 
  (ii) immediately after the reorganization in the course of which the distribution was made, the particular person was related to the distributing corporation; 
  (d) where a share is acquired by an individual from a personal trust in satisfaction of all or a part of the individual’s capital interest in the trust, the individual shall be deemed, in respect of that acquisition, to be related to the trust; 
  (e) subject to paragraph 55(3.2)(f), where at any time a share of the capital stock of a corporation is redeemed or cancelled (otherwise than on an amalgamation where the only consideration received or receivable for the share by the shareholder on the amalgamation is a share of the capital stock of the corporation formed by the amalgamation), the corporation shall be deemed to have acquired the share at that time; 
  (f) where a share of the capital stock of a corporation is redeemed, acquired or cancelled by the corporation pursuant to the exercise of a statutory right of dissent by the holder of the share, the corporation shall be deemed not to have acquired the share; 
  (g) control of a corporation shall be deemed not to have been acquired by a person or group of persons where it is so acquired solely because of 
  (i) the incorporation of the corporation, or 
  (ii) the acquisition by an individual of one or more shares for the sole purpose of qualifying as a director of the corporation; and 
  (h) in relation to a distribution each corporation (other than a qualified person in relation to the distribution) that is a shareholder and a specified shareholder of the distributing corporation at any time during the course of a series of transactions or events, a part of which includes the distribution made by the distributing corporation, is deemed to be a transferee corporation in relation to the distributing corporation. 
  
  ### Interpretation of 
  *specified shareholder* changed 
  
  (3.3) In determining whether a person is a specified shareholder of a corporation for the purposes of subparagraph 55(3.1)(b)(i) and paragraph 55(3.2)(h), the reference in the definition 
  *specified shareholder* in subsection 248(1) to “or of any other corporation that is related to the corporation” shall be read as “or of any other corporation that is related to the corporation and that has a significant direct or indirect interest in any issued shares of the capital stock of the corporation”.  
  
  ### Specified shareholder exclusion
  
  (3.4) In determining whether a person is a specified shareholder of a corporation for the purposes of the definition 
  *qualified person* in subsection (1), subparagraph (3.1)(b)(i) and paragraph (3.2)(h) as it applies for the purpose of subparagraph (3.1)(b)(iii), the reference to “not less than 10% of the issued shares of any class of the capital stock of the corporation” in the definition 
  *specified shareholder* in subsection 248(1) is to be read as “not less than 10% of the issued shares of any class of the capital stock of the corporation, other than shares of a specified class (within the meaning of subsection 55(1))”.  
  
  ### Amalgamation of related corporations
  
  (3.5) For the purposes of paragraphs (3.1)(c) and (d), a corporation formed by an amalgamation of two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) that were related to each other immediately before the amalgamation, is deemed to be the same corporation as, and a continuation of, each of the predecessor corporations. 
  
  ### Avoidance of subsection (2)
  
  (4) For the purposes of this section, where it can reasonably be considered that one of the main purposes of one or more transactions or events was to cause 2 or more persons to be related to each other or to cause a corporation to control another corporation, so that subsection 55(2) would, but for this subsection, not apply to a dividend, those persons shall be deemed not to be related to each other or the corporation shall be deemed not to control the other corporation, as the case may be. 
  
  ### Applicable rules
  
  (5) For the purposes of this section, 
  (a) where a dividend referred to in subsection 55(2) was received by a corporation as part of a transaction or event or a series of transactions or events, the portion of a capital gain attributable to any income expected to be earned or realized by a corporation after the safe-income determination time for the transaction, event or series is deemed to be a portion of a capital gain attributable to anything other than income; 
  (b) the income earned or realized by a corporation for a period throughout which it was resident in Canada and not a private corporation shall be deemed to be the total of 
  (i) its income for the period otherwise determined on the assumption that no amounts were deductible by the corporation by reason of section 37.1 of this Act or paragraph 20(1)(gg) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,  
  (ii) the amount, if any, by which 
  (A) the amount, if any, by which the total of the capital gains of the corporation for the period exceeds the total of the taxable capital gains of the corporation for the period exceeds 
  (B) the amount, if any, by which the total of the capital losses of the corporation for the period exceeds the total of the allowable capital losses of the corporation for the period, 
  (iii) the total of all amounts each of which is an amount required to have been included under this subparagraph as it read in its application to a taxation year that ended before February 28, 2000, 
  (iv) the amount, if any, by which 
  (A) 1/2 of the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, exceeds 
  (B) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula is 1/2 of the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and 
  (C) in any other case, nil, and 
  (v) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ends after October 17, 2000, exceeds 
  (B) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ends after October 17, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula is the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and 
  (C) in any other case, nil; 
  (c) the income earned or realized by a corporation for a period throughout which it was a private corporation is deemed to be its income for the period otherwise determined on the assumption that no amounts were deductible by the corporation under section 37.1 of this Act, as that section applies for taxation years that ended before 1995, or paragraph 20(1)(gg) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952;  
  (d) the income earned or realized by a corporation (referred to in this paragraph as the “affiliate”) for a period ending at a time when the affiliate was a foreign affiliate of another corporation is deemed to be the lesser of 
  (i) the amount that would, if the Income Tax Regulations were read without reference to their subsection 5905(5.6), be the tax-free surplus balance (within the meaning of their subsection 5905(5.5)) of the affiliate in respect of the other corporation at that time, and  
  (ii) the fair market value at that time of all the issued and outstanding shares of the capital stock of the affiliate; 
  (e) in determining whether 2 or more persons are related to each other, in determining whether a person is at any time a specified shareholder of a corporation and in determining whether control of a corporation has been acquired by a person or group of persons, 
  (i) a person shall be deemed to be dealing with another person at arm’s length and not to be related to the other person if the person is the brother or sister of the other person, except in the case where the dividend was received or paid, as part of a transaction or event or a series of transactions or events, by a corporation of which a share of the capital stock is a qualified small business corporation share or a share of the capital stock of a family farm or fishing corporation within the meaning of subsection 110.6(1),  
  (ii) where at any time a person is related to each beneficiary (other than a registered charity) under a trust who is or may (otherwise than by reason of the death of another beneficiary under the trust) be entitled to share in the income or capital of the trust, the person and the trust shall be deemed to be related at that time to each other and, for this purpose, a person shall be deemed to be related to himself, herself or itself, 
  (iii) a trust and a person shall be deemed not to be related to each other unless they are deemed by paragraph 55(3.2)(d) or subparagraph 55(5)(e)(ii) to be related to each other or the person is a corporation that is controlled by the trust, and 
  (iv) this Act shall be read without reference to subsection 251(3) and paragraph 251(5)(b); and 
  (f) unless subsection (2.3) applies, if a corporation has received a dividend any portion of which is a taxable dividend (such a portion referred to as the 
  *taxable part* in this paragraph), as part of a transaction or event or series of transactions or events  
  (i) a portion of the dividend is deemed to be a separate taxable dividend equal to the lesser of 
  (A) the taxable part, and 
  (B) the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received, and 
  (ii) the amount, if any, by which the taxable part exceeds the portion referred to in subparagraph (i) is deemed to be a separate taxable dividend. 
  
  ### Unlisted shares deemed listed
  
  (6) A share (in this subsection referred to as the “reorganization share”) is deemed, for the purposes of subsection 116(6) and the definition 
  *taxable Canadian property* in subsection 248(1), to be listed on a designated stock exchange if  
  (a) a dividend, to which subsection (2) does not apply because of paragraph (3)(b), is received in the course of a reorganization; 
  (b) in contemplation of the reorganization 
  (i) the reorganization share is issued to a taxpayer by a public corporation in exchange for another share of that corporation (in this subsection referred to as the “old share”) owned by the taxpayer, and 
  (ii) the reorganization share is exchanged by the taxpayer for a share of another public corporation (in this subsection referred to as the “new share”) in an exchange that would be a permitted exchange if the definition 
  *permitted exchange* were read without reference to paragraph (a) and subparagraph (b)(ii) of that definition;  
  (c) immediately before the exchange, the old share 
  (i) is listed on a designated stock exchange, and 
  (ii) is not taxable Canadian property of the taxpayer; and 
  (d) the new share is listed on a designated stock exchange. 
  
  # SUBDIVISION D 
  
  ## Other Sources of Income 
  
  ### Amounts to be included in income for year
  
  56 (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year, 
  
  ### Pension benefits, unemployment insurance benefits, etc.
  
  (a) any amount received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of, 
  (i) a superannuation or pension benefit including, without limiting the generality of the foregoing, 
  (A) the amount of any pension, supplement or spouse’s or common-law partner’s allowance under the Old Age Security Act and the amount of any similar payment under a law of a province,  
  (B) the amount of any benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act,  
  (C) the amount of any payment out of or under a specified pension plan, and 
  (C.1) the amount of any payment out of or under a foreign retirement arrangement established under the laws of a country, except to the extent that the amount would not, if the taxpayer were resident in the country, be subject to income taxation in the country, but not including 
  (D) the portion of a benefit received out of or under an employee benefit plan that is required by paragraph 6(1)(g) to be included in computing the taxpayer’s income for the year, or would be required to be so included if that paragraph were read without reference to subparagraph 6(1)(g)(ii), 
  (E) the portion of an amount received out of or under a retirement compensation arrangement that is required by paragraph 56(1)(x) or 56(1)(z) to be included in computing the taxpayer’s income for the year, 
  (F) a benefit received under section 71 of the Canada Pension Plan or under a similar provision of a provincial pension plan as defined in section 3 of that Act, and  
  (G) an amount received out of or under a registered pension plan as a return of all or a portion of a contribution to the plan to the extent that the amount 
  (I) is a payment made to the taxpayer under subsection 147.1(19) or subparagraph 8502(d)(iii) of the Income Tax Regulations, and  
  (II) is not deducted in computing the taxpayer’s income for the year or a preceding taxation year, 
  (ii) a retiring allowance, other than an amount received out of or under an employee benefit plan, a retirement compensation arrangement or a salary deferral arrangement, 
  (iii) a death benefit, 
  (iv) a benefit under the Unemployment Insurance Act, other than a payment relating to a course or program designed to facilitate the re-entry into the labour force of a claimant under that Act, or a benefit under Part I, VII.1, VIII or VIII.1 of the Employment Insurance Act,  
  (v) a benefit under regulations made under an appropriation Act providing for a scheme of transitional assistance benefits to persons employed in the production of products to which the Canada-United States Agreement on Automotive Products, signed on January 16, 1965 applies, 
  (vi) except to the extent otherwise required to be included in computing the taxpayer’s income, a prescribed benefit under a government assistance program, 
  (vii) a benefit under the Act respecting parental insurance, R.S.Q., c. A-29.011, or  
  (viii) an income replacement benefit payable to the taxpayer under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act);  
  
  ### Benefits under CPP/QPP
  
  (a.1) where the taxpayer is an estate that arose on or as a consequence of the death of an individual, each benefit received under section 71 of the Canada Pension Plan, or under a similar provision of a provincial pension plan as defined in section 3 of that Act, after July 1997 and in the year in respect of the death of the individual;  
  
  ### Pension income reallocation
  
  (a.2) where the taxpayer is a pension transferee (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pension transferee for the taxation year; 
  
  ### Parents of victims of crime
  
  (a.3) amounts received by the taxpayer in the year under a program established under the authority of the Department of Employment and Social Development Act in respect of children who are deceased or missing as a result of an offence, or a probable offence, under the Criminal Code ;  
  
  ### Support
  
  (b) the total of all amounts each of which is an amount determined by the formula is the total of all amounts each of which is a support amount received after 1996 and before the end of the year by the taxpayer from a particular person where the taxpayer and the particular person were living separate and apart at the time the amount was received, is the total of all amounts each of which is a child support amount that became receivable by the taxpayer from the particular person under an agreement or order on or after its commencement day and before the end of the year in respect of a period that began on or after its commencement day, and is the total of all amounts each of which is a support amount received after 1996 by the taxpayer from the particular person and included in the taxpayer’s income for a preceding taxation year; 
  (c)  [Repealed, 1997, c. 25, s. 8]  
  (c.1)  [Repealed, 1994, c. 7, Sch. VIII, s. 17]  
  
  ### Reimbursement of support payments
  
  (c.2) an amount received by the taxpayer in the year under a decree, order or judgment of a competent tribunal as a reimbursement of an amount deducted under paragraph 60(b) or 60(c), or under paragraph 60(c.1) as it applies, in computing the taxpayer’s income for the year or a preceding taxation year to decrees, orders and judgments made before 1993; 
  
  ### Annuity payments
  
  (d) any amount received by the taxpayer in the year as an annuity payment other than an amount 
  (i) otherwise required to be included in computing the taxpayer’s income for the year, 
  (ii) with respect to an interest in an annuity contract to which subsection 12.2(1) applies (or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest), 
  (iii) received out of or under an annuity contract issued or effected as a TFSA, or 
  (iv) described in subsection 146.5(3) that is not required by that subsection to be included in the taxpayer’s income; 
  
  ### Idem
  
  (d.2) any amount received out of or under, or as proceeds of disposition of, an annuity the payment for which was 
  (i) deductible in computing the taxpayer’s income because of paragraph 60(l) or because of subsection 146(5.5) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,  
  (ii) made in circumstances to which subsection 146(21) applied, or 
  (iii) made pursuant to or under a deferred profit sharing plan by a trustee under the plan to purchase the annuity for a beneficiary under the plan; 
  
  ### Disposition of income-averaging annuity contract
  
  (e) any amount received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of, proceeds of the surrender, cancellation, redemption, sale or other disposition of an income-averaging annuity contract; 
  
  ### Idem
  
  (f) any amount deemed by subsection 61.1(1) to have been received by the taxpayer in the year as proceeds of the disposition of an income-averaging annuity contract; 
  
  ### Supplementary unemployment benefit plan
  
  (g) amounts received by the taxpayer in the year from a trustee under a supplementary unemployment benefit plan as provided by section 145; 
  
  ### Registered retirement savings plan, etc.
  
  (h) amounts required by section 146 in respect of a registered retirement savings plan or a registered retirement income fund to be included in computing the taxpayer’s income for the year; 
  
  ### Home buyers’ plan
  
  (h.1) amounts required by section 146.01 to be included in computing the taxpayer’s income for the year; 
  
  ### Lifelong learning plan
  
  (h.2) amounts required by section 146.02 to be included in computing the taxpayer’s income for the year; 
  
  ### Deferred profit sharing plan
  
  (i) amounts received by the taxpayer in the year under a deferred profit sharing plan as provided by section 147; 
  
  ### Life insurance policy proceeds
  
  (j) any amount required by subsection 148(1) or 148(1.1) to be included in computing the taxpayer’s income for the year; 
  
  ### Certain tools of an employee, re proceeds
  
  (k) all amounts received in the year by a person or partnership (in this paragraph referred to as the “vendor”) as consideration for the disposition by the vendor of a property the cost of which was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the vendor or in respect of a person with whom the vendor does not deal at arm’s length, to the extent that the total of those amounts received in respect of the disposition in the year and in preceding taxation years exceeds the total of the cost to the vendor of the property immediately before the disposition and all amounts included in respect of the disposition under this paragraph in computing the vendor’s income for a preceding taxation year, unless the property was acquired by the vendor in circumstances to which subsection 85(5.1) or subsection 97(5) applied; 
  
  ### Legal expenses
  
  (l) amounts received by the taxpayer in the year as 
  (i) legal costs awarded to the taxpayer by a court on an appeal in relation to an assessment of any tax, interest or penalties referred to in paragraph 60(o, 
  (ii) reimbursement of costs incurred in relation to a decision of the Canada Employment Insurance Commission under the Employment Insurance Act or to an appeal of such a decision to the Social Security Tribunal,  
  (iii) reimbursement of costs incurred in relation to an assessment or a decision under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act,  if with respect to that assessment or decision, as the case may be, an amount has been deducted or may be deductible under paragraph 60(o) in computing the taxpayer’s income; 
  
  ### Idem
  
  (l.1) amounts received by the taxpayer in the year as an award or a reimbursement in respect of legal expenses (other than those relating to a division or settlement of property arising out of, or on a breakdown of, a marriage or common-law partnership) paid to collect or establish a right to a retiring allowance or a benefit under a pension fund or plan (other than a benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act) in respect of employment;  
  
  ### Bad debt recovered
  
  (m) any amount received by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year on account of a debt in respect of which a deduction was made under paragraph 60(f) in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Scholarships, bursaries, etc.
  
  (n) the amount, if any, by which 
  (i) the total of all amounts (other than amounts described in paragraph 56(1)(q), amounts received in the course of business, and amounts received in respect of, in the course of or by virtue of an office or employment) received by the taxpayer in the year, each of which is an amount received by the taxpayer as or on account of a scholarship, fellowship or bursary, or a prize for achievement in a field of endeavour ordinarily carried on by the taxpayer, other than a prescribed prize, exceeds 
  (ii) the taxpayer’s scholarship exemption for the year computed under subsection (3); 
  (iii)  [Repealed, 2001, c. 17, s. 39]  
  
  ### Apprenticeship grants
  
  (n.1) the total of all amounts, each of which is an amount received by the taxpayer in the year under the Apprenticeship Incentive Grant program or the Apprenticeship Completion Grant program administered by the Department of Employment and Social Development; 
  
  ### Research grants
  
  (o) the amount, if any, by which any grant received by the taxpayer in the year to enable the taxpayer to carry on research or any similar work exceeds the total of expenses incurred by the taxpayer in the year for the purpose of carrying on the work, other than 
  (i) personal or living expenses of the taxpayer except travel expenses (including the entire amount expended for meals and lodging) incurred by the taxpayer while away from home in the course of carrying on the work, 
  (ii) expenses in respect of which the taxpayer has been reimbursed, or 
  (iii) expenses that are otherwise deductible in computing the taxpayer’s income for the year; 
  
  ### Refund of scholarships, bursaries and research grants
  
  (p) amounts as described in paragraph 60(q) received by the taxpayer in the year from an individual; 
  
  ### Education savings plan payments
  
  (q) amounts in respect of a registered education savings plan required by section 146.1 to be included in computing the taxpayer’s income for the year; 
  
  ### Registered disability savings plan payments
  
  (q.1) amounts in respect of a registered disability savings plan required by section 146.4 to be included in computing the taxpayer’s income for the year; 
  
  ### Financial assistance
  
  (r) amounts received in the year by the taxpayer as 
  (i) earnings supplements provided under a project sponsored by a government or government agency in Canada to encourage individuals to obtain or keep employment, 
  (ii) financial assistance under a program established by the Canada Employment Insurance Commission under Part II of the Employment Insurance Act,  
  (iii) financial assistance under a program that is 
  (A) established by a government or government agency in Canada or by an organization, and 
  (B)  [Repealed, 2022, c. 10, s. 407]  
  (C) the subject of an agreement between the government, government agency or organization and the Canada Employment Insurance Commission because of section 63 of that Act, 
  (iv) financial assistance provided under a program established by a government, or government agency, in Canada that provides income replacement benefits similar to income replacement benefits provided under a program established under the Employment Insurance Act, other than amounts referred to in subparagraph (iv.1),  
  (iv.1) financial assistance provided under 
  (A) the Canada Emergency Response Benefit Act,  
  (B) Part VIII.4 of the Employment Insurance Act,  
  (C) the Canada Emergency Student Benefit Act,  
  (D) the Canada Recovery Benefits Act,  
  (D.1) the Canada Worker Lockdown Benefit Act, or  
  (E) a program established by a government, or government agency, of a province, that provides income replacement benefits similar to income replacement benefits provided under a program established under an Act referred to in any of clauses (A) to (D), or 
  (v) amounts received by the taxpayer in the year under the Wage Earner Protection Program Act in respect of wages (within the meaning of that Act);  
  
  ### Grants under prescribed programs
  
  (s) the amount of any grant received in the year under a prescribed program of the Government of Canada relating to home insulation or energy conversion by 
  (i) the taxpayer, other than a married taxpayer or a taxpayer who is in a common-law partnership who resided with the taxpayer’s spouse or common-law partner at the time the grant was received and whose income for the year is less than the taxpayer’s spouse’s or common-law partner’s income for the year, or 
  (ii) the spouse or common-law partner of the taxpayer with whom the taxpayer resided at the time the grant was received, if the spouse’s or common-law partner’s income for the year is less than the taxpayer’s income for the year to the extent that the amount is not required by paragraph 12(1)(u) to be included in computing the taxpayer’s or the taxpayer’s spouse’s or common-law partner’s income for the year or a subsequent year; 
  
  ### Registered retirement income fund
  
  (t) amounts in respect of a registered retirement income fund required by section 146.3 to be included in computing the taxpayer’s income for the year; 
  
  ### Social assistance payments
  
  (u) a social assistance payment made on the basis of a means, needs or income test and received in the year by 
  (i) the taxpayer, other than a married taxpayer or a taxpayer who is in a common-law partnership who resided with the taxpayer’s spouse or common-law partner at the time the payment was received and whose income for the year is less than the spouse’s or common-law partner’s income for the year, or 
  (ii) the taxpayer’s spouse or common-law partner, if the taxpayer resided with the spouse or common-law partner at the time the payment was received and if the spouse’s or common-law partners income for the year is less than the taxpayer’s income for the year, except to the extent that the payment is otherwise required to be included in computing the income for a taxation year of the taxpayer or the taxpayer’s spouse or common-law partner; 
  
  ### Workers’ compensation
  
  (v) compensation received under an employees’ or workers’ compensation law of Canada or a province in respect of an injury, a disability or death; 
  
  ### Salary deferral arrangement
  
  (w) the total of all amounts each of which is an amount received by the taxpayer as a benefit (other than an amount received by or from a trust governed by a salary deferral arrangement) in the year out of or under a salary deferral arrangement in respect of a person other than the taxpayer except to the extent that the amount, or another amount that may reasonably be considered to relate thereto, has been included in computing the income of that other person for the year or for any preceding taxation year; 
  
  ### Retirement compensation arrangement
  
  (x) any amount, including a return of contributions, received in the year by the taxpayer or another person, other than an amount required to be included in that other person’s income for a taxation year under paragraph 12(1)(n.3), out of or under a retirement compensation arrangement that can reasonably be considered to have been received in respect of an office or employment of the taxpayer; 
  
  ### Idem
  
  (y) any amount received or that became receivable in the year by the taxpayer as proceeds from the disposition of an interest in a retirement compensation arrangement; 
  
  ### Idem
  
  (z) the total of all amounts, including a return of contributions, each of which is an amount received in the year by the taxpayer out of or under a retirement compensation arrangement that can reasonably be considered to have been received in respect of an office or employment of a person other than the taxpayer, except to the extent that the amount was required 
  (i) under paragraph 12(1)(n.3) to be included in computing the taxpayer’s income for a taxation year, or 
  (ii) under paragraph 56(1)(x) or subsection 70(2) to be included in computing the income for the year of a person resident in Canada other than the taxpayer; 
  
  ### Value of benefits
  
  (z.1) the value of benefits received or enjoyed by any person in the year in respect of workshops, seminars, training programs and similar development programs because of the taxpayer’s membership in a registered national arts service organization; 
  
  ### Employee life and health trust
  
  (z.2) the total of all amounts, each of which is an amount received in the year by the taxpayer that is required to be included in income under subsection 144.1(11) except to the extent that the amount was required under subsection 70(2) to be included in computing the income for the year by the taxpayer or other person resident in Canada; 
  
  ### Pooled registered pension plan
  
  (z.3) any amount required by section 147.5 to be included in computing the taxpayer’s income for the year other than an amount distributed under a PRPP as a return of all or a portion of a contribution to the plan to the extent that the amount 
  (i) is a payment described under clause 147.5(3)(d)(ii)(A) or (B), and 
  (ii) is not deducted in computing the taxpayer’s income for the year or a preceding taxation year; 
  
  ### Tax informant program
  
  (z.4) any amount received in the year by the taxpayer under a contract, to provide information to the Canada Revenue Agency, entered into by the taxpayer under a program administered by the Canada Revenue Agency to obtain information relating to tax non-compliance; 
  
  ### Advanced life deferred annuity
  
  (z.5) any amount required by section 146.5 to be included in computing the taxpayer’s income for the year; and 
  
  ### First home savings account
  
  (z.6) any amount required by section 146.6 to be included in computing the taxpayer’s income for the year. 
  
  ### Application of s. 12.2(11)
  
  (1.1) The definitions in subsection 12.2(11) apply to paragraph 56(1)(d). 
  
  ### Indirect payments
  
  (2) A payment or transfer of property made pursuant to the direction of, or with the concurrence of, a taxpayer to another person for the benefit of the taxpayer or as a benefit that the taxpayer desired to have conferred on the other person (other than by an assignment of any portion of a retirement pension under section 65.1 of the Canada Pension Plan or a comparable provision of a provincial pension plan as defined in section 3 of that Act) shall be included in computing the taxpayer’s income to the extent that it would be if the payment or transfer had been made to the taxpayer.  
  
  ### Exemption for scholarships, fellowships, bursaries and prizes
  
  (3) For the purpose of subparagraph (1)(n)(ii), a taxpayer’s scholarship exemption for a taxation year is the total of 
  (a) the total of all amounts each of which is the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the taxation year in respect of a scholarship, fellowship or bursary received in connection with the taxpayer’s enrolment 
  (i) in an educational program in respect of which the taxpayer is a qualifying student (as defined in subsection 118.6(1)) in the taxation year, in the immediately preceding taxation year or in the following taxation year, or  
  (ii) in an elementary or secondary school educational program, 
  (b) the total of all amounts each of which is the lesser of 
  (i) the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the taxation year in respect of a scholarship, fellowship, bursary or prize that is to be used by the taxpayer in the production of a literary, dramatic, musical or artistic work, and 
  (ii) the total of all amounts each of which is an expense incurred by the taxpayer in the taxation year for the purpose of fulfilling the conditions under which the amount described in subparagraph (i) was received, other than 
  (A) personal or living expenses of the taxpayer (except expenses in respect of travel, meals and lodging incurred by the taxpayer in the course of fulfilling those conditions and while absent from the taxpayer’s usual place of residence for the period to which the scholarship, fellowship, bursary or prize, as the case may be, relates), 
  (B) expenses for which the taxpayer is entitled to be reimbursed, and 
  (C) expenses that are otherwise deductible in computing the taxpayer’s income, and 
  (c) the lesser of $500 and the amount by which the total described in subparagraph (1)(n)(i) for the taxation year exceeds the total of the amounts determined under paragraphs (a) and (b). 
  
  ### Limitations of scholarship exemption
  
  (3.1) For the purpose of determining the total in paragraph (3)(a) for a taxation year, 
  (a) a scholarship, fellowship or bursary (in this subsection referred to as an “award”) is not considered to be received in connection with the taxpayer’s enrolment in an educational program described in subparagraph (3)(a)(i) except to the extent that it is reasonable to conclude that the award is intended to support the taxpayer’s enrolment in the program, having regard to all the circumstances, including the terms and conditions that apply in respect of the award, the duration of the program and the period for which support is intended to be provided; and 
  (b) if an award is received in connection with an educational program in respect of which the taxpayer is a qualifying student because of subparagraph (a)(ii) of the definition 
  *qualifying student* in subsection 118.6(1) in the taxation year, in the immediately preceding taxation year or in the following taxation year (in this paragraph referred to as the 
  *claim year*), the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the taxation year in respect of the award may not exceed the amount that is the total of amounts, each of which is the cost of materials related to the program or a fee paid to a 
  *designated educational institution* in respect of the program, as defined in subsection 118.6(1), in respect of the claim year.  
  
  ### Transfer of rights to income
  
  (4) Where a taxpayer has, at any time before the end of a taxation year, transferred or assigned to a person with whom the taxpayer was not dealing at arm’s length the right to an amount (other than any portion of a retirement pension assigned by the taxpayer under section 65.1 of the Canada Pension Plan or a comparable provision of a provincial pension plan as defined in section 3 of that Act) that would, if the right had not been so transferred or assigned, be included in computing the taxpayer’s income for the taxation year, the part of the amount that relates to the period in the year throughout which the taxpayer is resident in Canada shall be included in computing the taxpayer’s income for the year unless the income is from property and the taxpayer has also transferred or assigned the property.  
  
  ### Interest free or low interest loans
  
  (4.1) Where 
  (a) a particular individual (other than a trust) or a trust in which the particular individual is beneficially interested has, directly or indirectly by means of a trust or by any means whatever, received a loan from or become indebted to 
  (i) another individual (in this subsection referred to as the “creditor”) who 
  (A) does not deal at arm’s length with the particular individual, and 
  (B) is not a trust, or 
  (ii) a trust (in this subsection referred to as the “creditor trust”) to which another individual (in this subsection referred to as the “original transferor”) who 
  (A) does not deal at arm’s length with the particular individual, 
  (B) was resident in Canada at any time in the period during which the loan or indebtedness is outstanding, and 
  (C) is not a trust, has directly or indirectly by means of a trust or by any means whatever, transferred property, and 
  (b) it can reasonably be considered that one of the main reasons for making the loan or incurring the indebtedness was to reduce or avoid tax by causing income from 
  (i) the loaned property, 
  (ii) property that the loan or indebtedness enabled or assisted the particular individual, or the trust in which the particular individual is beneficially interested, to acquire, or 
  (iii) property substituted for property referred to in subparagraph 56(4.1)(b)(i) or 56(4.1)(b)(ii) to be included in the income of the particular individual, the following rules apply: 
  (c) any income of the particular individual for a taxation year from the property referred to in paragraph 56(4.1)(b) that relates to the period or periods in the year throughout which the creditor or the creditor trust, as the case may be, was resident in Canada and the particular individual was not dealing at arm’s length with the creditor or the original transferor, as the case may be, shall be deemed, 
  (i) where subparagraph 56(4.1)(a)(i) applies, to be income of the creditor for that year and not of the particular individual except to the extent that 
  (A) section 74.1 applies or would, but for subsection 74.5(3), apply, or 
  (B) subsection 75(2) applies to that income, and 
  (ii) where subparagraph 56(4.1)(a)(ii) applies, to be income of the creditor trust for that year and not of the particular individual except to the extent that 
  (A) subparagraph 56(4.1)(c)(i) applies, 
  (B) section 74.1 applies or would, but for subsection 74.5(3), apply, or 
  (C) subsection 75(2) applies (otherwise than because of paragraph 56(4.1)(d)) to that income; and 
  (d) where subsection 75(2) applies to any of the property referred to in paragraph 56(4.1)(b) and subparagraph 56(4.1)(c)(ii) applies to income from the property, subsection 75(2) applies after subparagraph 56(4.1)(c)(ii) is applied. 
  
  ### Exception
  
  (4.2) Notwithstanding any other provision of this Act, subsection 56(4.1) does not apply to any income derived in a particular taxation year where 
  (a) interest was charged on the loan or indebtedness at a rate equal to or greater than the lesser of 
  (i) the prescribed rate of interest in effect at the time the loan was made or the indebtedness arose, and 
  (ii) the rate that would, having regard to all the circumstances, have been agreed on, at the time the loan was made or the indebtedness arose, between parties dealing with each other at arm’s length; 
  (b) the amount of interest that was payable in respect of the particular year in respect of the loan or indebtedness was paid not later than 30 days after the end of the particular year; and 
  (c) the amount of interest that was payable in respect of each taxation year preceding the particular year in respect of the loan or indebtedness was paid not later than 30 days after the end of each of those preceding taxation years. 
  
  ### Repayment of existing indebtedness
  
  (4.3) For the purposes of subsection 56(4.1), where at any time a particular property is used to repay, in whole or in part, a loan or indebtedness that enabled or assisted an individual to acquire another property, there shall be included in computing the income from the particular property that proportion of the income or loss, as the case may be, derived after that time from the other property or from property substituted therefor that the amount so repaid is of the cost to the individual of the other property, but for greater certainty nothing in this subsection shall affect the application of subsection 56(4.1) to any income or loss derived from the other property or from property substituted therefor. 
  
  ### Exception for split income
  
  (5) Subsections (2), (4) and (4.1) do not apply to any amount that is included in computing a specified individual’s split income for a taxation year. 
  
  ### Child care benefit
  
  (6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts each of which is a benefit paid under section 4 of the Universal Child Care Benefit Act that is received in the taxation year by  
  (a) the taxpayer, if 
  (i) the taxpayer does not have a 
  *cohabiting spouse or common-law partner* (within the meaning assigned by section 122.6) at the end of the year and the taxpayer does not make a designation under subsection (6.1) for the taxation year, or  
  (ii) the income, for the taxation year, of the person who is the taxpayer’s cohabiting spouse or common-law partner at the end of the taxation year is equal to or greater than the income of the taxpayer for the taxation year; 
  (b) the taxpayer’s cohabiting spouse or common-law partner at the end of the taxation year, if the income of the cohabiting spouse or common-law partner for the taxation year is greater than the taxpayer’s income for the taxation year; or 
  (c) an individual who makes a designation under subsection (6.1) in respect of the taxpayer for the taxation year. 
  
  ### Designation
  
  (6.1) If, at the end of the taxation year, a taxpayer does not have a 
  *cohabiting spouse or common-law partner* (within the meaning assigned by section 122.6), the taxpayer may designate, in the taxpayer’s return of income for the taxation year, the total of all amounts, each of which is a benefit received in the taxation year by the taxpayer under section 4 of the Universal Child Care Benefit Act, to be income of  
  (a) if the taxpayer deducts an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of an individual, the individual; or 
  (b) in any other case, a child who is a qualified dependant (as defined in section 2 of the Universal Child Care Benefit Act) of the taxpayer.  
  (7)  [Repealed, 1994, c. 7, Sch. VII, s. 1]  
  
  ### CPP/QPP and UCCB amounts for previous years
  
  (8) Notwithstanding subsections (1) and (6), if 
  (a) one or more amounts 
  (i) are received by an individual (other than a trust) in a taxation year as, on account of, in lieu of payment of or in satisfaction of, any benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act, or  
  (ii) would be, but for this subsection, included in computing the income of an individual for a taxation year under subsection (6), and 
  (b) a portion, not less than $300, of the total of those amounts relates to one or more preceding taxation years, that portion shall, at the option of the individual, not be included in the individual’s income. 
  
  ### Meaning of 
  *income for the year* 
  
  (9) For the purposes of paragraphs 56(1)(s) and 56(1)(u), 
  *income for the year* of a person means the amount that would, but for those paragraphs, paragraphs 60(v.1) and 60(w) and section 63, be the income of that person for the year.  
  
  ### Meaning of 
  *income* 
  
  (9.1) For the purposes of subsection (6), 
  *income* of a person for a taxation year means the amount that would, in the absence of that subsection, paragraphs (1)(s) and (u) and 60(v.1), (w) and (y) and section 63, be the income of the person for the taxation year.  
  
  ### Severability of retirement compensation arrangement
  
  (10) Where a retirement compensation arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts not related to the retirement compensation arrangement are payable or provided, for the purposes of this Act, other than this subsection, 
  (a) the retirement compensation arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and 
  (b) subject to subsection 6(14), amounts paid out of or under the plan shall be deemed to have first been paid out of the retirement compensation arrangement unless a provision in the plan otherwise provides. 
  
  ### Disposition of property by RCA trust
  
  (11) For the purposes of paragraphs 56(1)(x) and 56(1)(z), where, at any time in a year, a trust governed by a retirement compensation arrangement 
  (a) disposes of property to a person for consideration less than the fair market value of the property at the time of the disposition, or for no consideration, 
  (b) acquires property from a person for consideration greater than the fair market value of the property at the time of the acquisition, or 
  (c) permits a person to use or enjoy property of the trust for no consideration or for consideration less than the fair market value of such use or enjoyment, the amount, if any, by which the fair market value differs from the consideration or, if there is no consideration, the amount of the fair market value shall be deemed to be an amount received at that time by the person out of or under the arrangement that can reasonably be considered to have been received in respect of an office or employment of a taxpayer. 
  
  ### Foreign retirement arrangement
  
  (12) If an amount in respect of a foreign retirement arrangement is, as a result of a transaction, an event or a circumstance, considered to be distributed to an individual under the income tax laws of the country in which the arrangement is established, the amount is, for the purpose of paragraph (1)(a), deemed to be received by the individual as a payment out of the arrangement in the taxation year that includes the time of the transaction, event or circumstance. 
  
  ### Support
  
  56.1 (1) For the purposes of paragraph 56(1)(b) and subsection 118(5), where an order or agreement, or any variation thereof, provides for the payment of an amount to a taxpayer or for the benefit of the taxpayer, children in the taxpayer’s custody or both the taxpayer and those children, the amount or any part thereof 
  (a) when payable, is deemed to be payable to and receivable by the taxpayer; and 
  (b) when paid, is deemed to have been paid to and received by the taxpayer. 
  
  ### Agreement
  
  (2) For the purposes of section 56, this section and subsection 118(5), the amount determined by the formula is the total of all amounts each of which is an amount (other than an amount that is otherwise a support amount) that became payable by a person in a taxation year, under an order of a competent tribunal or under a written agreement, in respect of an expense (other than an expenditure in respect of a self-contained domestic establishment in which the person resides or an expenditure for the acquisition of tangible property, or for civil law corporeal property, that is not an expenditure on account of a medical or education expense or in respect of the acquisition, improvement or maintenance of a self-contained domestic establishment in which the taxpayer described in paragraph (a) or (b) resides) incurred in the year or the preceding taxation year for the maintenance of a taxpayer, children in the taxpayer’s custody or both the taxpayer and those children, if the taxpayer is 
  (a) the person’s spouse or common-law partner or former spouse or common-law partner, or 
  (b) where the amount became payable under an order made by a competent tribunal in accordance with the laws of a province, an individual who is the parent of a child of whom the person is a legal parent, and is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount included in the total determined for A in respect of the acquisition or improvement of a self-contained domestic establishment in which the taxpayer resides, including any payment of principal or interest in respect of a loan made or indebtedness incurred to finance, in any manner whatever, such acquisition or improvement exceeds 
  (b) the total of all amounts each of which is an amount equal to 1/5 of the original principal amount of a loan or indebtedness described in paragraph (a), is, where the order or written agreement, as the case may be, provides that this subsection and subsection 60.1(2) shall apply to any amount paid or payable thereunder, deemed to be an amount payable to and receivable by the taxpayer as an allowance on a periodic basis, and the taxpayer is deemed to have discretion as to the use of that amount. 
  
  ### Prior payments
  
  (3) For the purposes of this section and section 56, where a written agreement or order of a competent tribunal made at any time in a taxation year provides that an amount received before that time and in the year or the preceding taxation year is to be considered to have been paid and received thereunder, 
  (a) the amount is deemed to have been received thereunder; and 
  (b) the agreement or order is deemed, except for the purpose of this subsection, to have been made on the day on which the first such amount was received, except that, where the agreement or order is made after April 1997 and varies a child support amount payable to the recipient from the last such amount received by the recipient before May 1997, each varied amount of child support received under the agreement or order is deemed to have been receivable under an agreement or order the commencement day of which is the day on which the first payment of the varied amount is required to be made. 
  
  ### Definitions
  
  (4) The definitions in this subsection apply in this section and section 56.  
  *child support amount* means any support amount that is not identified in the agreement or order under which it is receivable as being solely for the support of a recipient who is a spouse or common-law partner or former spouse or common-law partner of the payer or who is a parent of a child of whom the payer is a legal parent. (pension alimentaire pour enfants)   
  *commencement day* at any time of an agreement or order means  
  (a) where the agreement or order is made after April 1997, the day it is made; and 
  (b) where the agreement or order is made before May 1997, the day, if any, that is after April 1997 and is the earliest of 
  (i) the day specified as the commencement day of the agreement or order by the payer and recipient under the agreement or order in a joint election filed with the Minister in prescribed form and manner, 
  (ii) where the agreement or order is varied after April 1997 to change the child support amounts payable to the recipient, the day on which the first payment of the varied amount is required to be made, 
  (iii) where a subsequent agreement or order is made after April 1997, the effect of which is to change the total child support amounts payable to the recipient by the payer, the commencement day of the first such subsequent agreement or order, and 
  (iv) the day specified in the agreement or order, or any variation thereof, as the commencement day of the agreement or order for the purposes of this Act. ( date d’exécution)   
  *support amount* means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and  
  (a) the recipient is the spouse or common-law partner or former spouse or common-law partner of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage or common-law partnership and the amount is receivable under an order of a competent tribunal or under a written agreement; or 
  (b) the payer is a legal parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province. ( pension alimentaire)  
  
  ### Reserve claimed for debt forgiveness
  
  56.2 There shall be included in computing an individual’s income for a taxation year during which the individual was not a bankrupt the amount, if any, deducted under section 61.2 in computing the individual’s income for the preceding taxation year. 
  
  ### Reserve claimed for debt forgiveness
  
  56.3 There shall be included in computing a taxpayer’s income for a taxation year during which the taxpayer was not a bankrupt the amount, if any, deducted under section 61.4 in computing the taxpayer’s income for the preceding taxation year. 
  
  ## Restrictive Covenants 
  
  ### Definitions
  
  56.4 (1) The following definitions apply in this section.  
  *eligible corporation*, of a taxpayer, means a taxable Canadian corporation of which the taxpayer holds, directly or indirectly, shares of the capital stock. (société admissible)   
  *eligible individual*, in respect of a vendor, at any time means an individual (other than a trust) who is related to the vendor and who has attained the age of 18 years at or before that time. (particulier admissible)   
  *eligible interest*, of a taxpayer, means capital property of the taxpayer that is  
  (a) a partnership interest in a partnership that carries on a business; 
  (b) a share of the capital stock of a corporation that carries on a business; or 
  (c) a share of the capital stock of a corporation 90% or more of the fair market value of which is attributable to eligible interests in one other corporation. ( participation admissible)   
  *goodwill amount*, of a taxpayer, is an amount the taxpayer has or may become entitled to receive that would, if this Act were read without reference to this section, be required to be included in the proceeds of disposition of a property included in Class 14.1 of Schedule II to the Income Tax Regulations, or is an amount to which subsection 13(38) applies, in respect of a business carried on by the taxpayer through a permanent establishment located in Canada. (montant pour achalandage)   
  *permanent establishment* means a permanent establishment as defined for the purpose of subsection 16.1(1). (établissement stable)   
  *restrictive covenant*, of a taxpayer, means an agreement entered into, an undertaking made, or a waiver of an advantage or right by the taxpayer, whether legally enforceable or not, that affects, or is intended to affect, in any way whatever, the acquisition or provision of property or services by the taxpayer or by another taxpayer that does not deal at arm’s length with the taxpayer, other than an agreement or undertaking  
  (a) that disposes of the taxpayer’s property; or 
  (b) that is in satisfaction of an obligation described in section 49.1 that is not a disposition except where the obligation being satisfied is in respect of a right to property or services that the taxpayer acquired for less than its fair market value. ( clause restrictive)   
  *taxpayer* includes a partnership. (contribuable)  
  
  ### Income — restrictive covenants
  
  (2) There is to be included in computing a taxpayer’s income for a taxation year the total of all amounts each of which is an amount in respect of a restrictive covenant of the taxpayer that is received or receivable in the taxation year by the taxpayer or by a taxpayer with whom the taxpayer does not deal at arm’s length (other than an amount that has been included in computing the taxpayer’s income because of this subsection for a preceding taxation year or in the taxpayer’s eligible corporation’s income because of this subsection for the taxation year or a preceding taxation year). 
  
  ### Non-application of subsection (2)
  
  (3) Subsection (2) does not apply to an amount received or receivable by a particular taxpayer in a taxation year in respect of a restrictive covenant granted by the particular taxpayer to another taxpayer (referred to in this subsection and subsection (4) as the “purchaser”) with whom the particular taxpayer deals at arm’s length (determined without reference to paragraph 251(5)(b)), if 
  (a) section 5 or 6 applied to include the amount in computing the particular taxpayer’s income for the taxation year or would have so applied if the amount had been received in the taxation year; 
  (b) the amount would, if this Act were read without reference to this section, be required to be included in the proceeds of disposition of a property included in Class 14.1 of Schedule II to the Income Tax Regulations, or is an amount to which subsection 13(38) applies, in respect of the business to which the restrictive covenant relates, and the particular taxpayer elects (or if the amount is payable by the purchaser in respect of a business carried on in Canada by the purchaser, the particular taxpayer and the purchaser jointly elect) in prescribed form to apply this paragraph in respect of the amount; or  
  (c) subject to subsection (9), the amount directly relates to the particular taxpayer’s disposition of property that is, at the time of the disposition, an eligible interest in the partnership or corporation that carries on the business to which the restrictive covenant relates, or that is at that time an eligible interest by virtue of paragraph (c) of the definition 
  *eligible interest* in subsection (1) where the other corporation referred to in that paragraph carries on the business to which the restrictive covenant relates, and  
  (i) the disposition is to the purchaser (or to a person related to the purchaser), 
  (ii) the amount is consideration for an undertaking by the particular taxpayer not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the purchaser (or by a person related to the purchaser), 
  (iii) the restrictive covenant may reasonably be considered to have been granted to maintain or preserve the value of the eligible interest disposed of to the purchaser; 
  (iv) if the restrictive covenant is granted on or after July 18, 2005, subsection 84(3) does not apply to the disposition, 
  (v) the amount is added to the particular taxpayer’s proceeds of disposition, as defined by section 54, for the purpose of applying this Act to the disposition of the particular taxpayer’s eligible interest, and 
  (vi) the particular taxpayer and the purchaser elect in prescribed form to apply this paragraph in respect of the amount. 
  
  ### Treatment of purchaser
  
  (4) An amount paid or payable by a purchaser for a restrictive covenant is 
  (a) if the amount is required because of section 5 or 6 to be included in computing the income of an employee of the purchaser, to be considered to be wages paid or payable by the purchaser to the employee; 
  (b) if an election has been made under paragraph (3)(b) in respect of the amount, to be considered to be incurred by the purchaser on account of capital for the purpose of determining the cost of the property or for the purposes of subsection 13(35), as the case may be, and not to be an amount paid or payable for all other purposes of the Act; and 
  (c) if an election has been made under paragraph (3)(c), in respect of the amount and the amount relates to the purchaser’s acquisition of property that is, immediately after the acquisition, an eligible interest of the purchaser, to be included in computing the cost to the purchaser of that eligible interest and considered not to be an amount paid or payable for all other purposes of the Act. 
  
  ### Non-application of section 68
  
  (5) If this subsection applies to a restrictive covenant granted by a taxpayer, section 68 does not apply to deem consideration to be received or receivable by the taxpayer for the restrictive covenant. 
  
  ### Application of subsection (5) — if employee provides covenant
  
  (6) Subsection (5) applies to a restrictive covenant if 
  (a) the restrictive covenant is granted by an individual to another taxpayer with whom the individual deals at arm’s length (referred to in this subsection as the “purchaser”); 
  (b) the restrictive covenant directly relates to the acquisition from one or more other persons (in this subsection and subsection (12) referred to as the “vendors”) by the purchaser of an interest, or for civil law purposes a right, in the individual’s employer, in a corporation related to that employer or in a business carried on by that employer; 
  (c) the individual deals at arm’s length with the employer and with the vendors; 
  (d) the restrictive covenant is an undertaking by the individual not to provide, directly or indirectly, property or services in competition with property or services provided or to be provided by the purchaser (or by a person related to the purchaser) in the course of carrying on the business to which the restrictive covenant relates; 
  (e) no proceeds are received or receivable by the individual for granting the restrictive covenant; and 
  (f) the amount that can reasonably be regarded to be consideration for the restrictive covenant is received or receivable only by the vendors. 
  
  ### Application of subsection (5) — realization of goodwill amount and disposition of property
  
  (7) Subject to subsection (10), subsection (5) applies to a restrictive covenant granted by a taxpayer if 
  (a) the restrictive covenant is granted by the taxpayer (in this subsection and subsection (8) referred to as the “vendor”) to 
  (i) another taxpayer (in this subsection referred to as the “purchaser”) with whom the vendor deals at arm’s length (determined without reference to paragraph 251(5)(b)) at the time of the grant of the restrictive covenant, or 
  (ii) another person who is an eligible individual in respect of the vendor at the time of the grant of the restrictive covenant; 
  (b) where subparagraph (a)(i) applies, the restrictive covenant is an undertaking of the vendor not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the purchaser (or by a person related to the purchaser) in the course of carrying on the business to which the restrictive covenant relates, and 
  (i) the amount that can reasonably be regarded as being consideration for the restrictive covenant is 
  (A) included by the vendor in computing a goodwill amount of the vendor, or 
  (B) received or receivable by a corporation that was an eligible corporation of the vendor when the restrictive covenant was granted and included by the eligible corporation in computing a goodwill amount of the eligible corporation in respect of the business to which the restrictive covenant relates, or 
  (ii) it is reasonable to conclude that the restrictive covenant is integral to an agreement in writing, 
  (A) under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in clause (B) or subparagraph (i)) to the purchaser, or the purchaser’s eligible corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or 
  (B) under which shares of the capital stock of a corporation (in this subsection and subsection (12) referred to as the “target corporation”) are disposed of to the purchaser or to another person that is related to the purchaser and with whom the vendor deals at arm’s length (determined without reference to paragraph 251(5)(b)), 
  (c) where subparagraph (a)(ii) applies, the restrictive covenant is an undertaking of the vendor not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the eligible individual (or by an eligible corporation of the eligible individual) in the course of carrying on the business to which the restrictive covenant relates, and 
  (i) either 
  (A) the amount that can reasonably be regarded as being consideration for the restrictive covenant is 
  (I) included by the vendor in computing a goodwill amount of the vendor, or 
  (II) received or receivable by a corporation that was an eligible corporation of the vendor when the restrictive covenant was granted and included by the eligible corporation in computing a goodwill amount of the eligible corporation in respect of the business to which the restrictive covenant relates, or 
  (B) it is reasonable to conclude that the restrictive covenant is integral to an agreement in writing 
  (I) under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in subclause (II) or clause (A)) to the eligible individual, or the eligible individual’s corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or 
  (II) under which shares of the capital stock of the vendor’s eligible corporation (in this subsection and subsection (12) referred to as the “family corporation”) are disposed of to the eligible individual or the eligible individual’s eligible corporation, 
  (ii) the vendor is resident in Canada at the time of the grant of the restrictive covenant and the disposition referred to in clause (i)(B), and 
  (iii) the vendor does not, at any time after the grant of the restrictive covenant and whether directly or indirectly in any manner whatever, have an interest, or for civil law a right, in the family corporation or in the eligible corporation of the eligible individual, as the case may be; 
  (d) no proceeds are received or receivable by the vendor for granting the restrictive covenant; 
  (e) subsection 84(3) does not apply in respect of the disposition of a share of the target corporation or family corporation, as the case may be; 
  (f) the restrictive covenant can reasonably be regarded to have been granted to maintain or preserve the fair market value of any of 
  (i) the benefit of the expenditure derived from the goodwill amount referred to in subparagraph (b)(i) or clause (c)(i)(A) and for which a joint election referred to in paragraph (g) was made, 
  (ii) the property referred to in clause (b)(ii)(A) or subclause (c)(i)(B)(I), or 
  (iii) the shares referred to in clause (b)(ii)(B) or subclause (c)(i)(B)(II); and 
  (g) a joint election in prescribed form to apply subsection (5) to the amount referred to in subparagraph (b)(i) or clause (c)(i)(A), if otherwise applicable, is made by 
  (i) in the case of subparagraph (b)(i), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the purchaser, or the purchaser’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be, or 
  (ii) in the case of clause (c)(i)(A), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the eligible individual, or the eligible individual’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be. 
  
  ### Application of subsection (7) and section 69 — special rules
  
  (8) For the purpose 
  (a) of applying subsection (7), clause (7)(b)(ii)(A) and subclause (7)(c)(i)(B)(I) apply to a grant of a restrictive covenant only if 
  (i) the consideration that can reasonably be regarded as being in part the consideration for the restrictive covenant is received or receivable by the vendor or the vendor’s eligible corporation, as the case may be, as consideration for the disposition of the property, and 
  (ii) if all or a part of the consideration can reasonably be regarded as being for a goodwill amount, subsection (2), paragraph (3)(b), subparagraph (7)(b)(i) or clause (7)(c)(i)(A) applies to that consideration; and 
  (b) of determining if the conditions described in paragraph (7)(c) have been met, and for the purpose of applying section 69, in respect of a restrictive covenant granted by a vendor, the fair market value of a property is the amount that can reasonably be regarded as being the fair market value of the property if the restrictive covenant were part of the property. 
  
  ### Anti-avoidance rule — non-application of paragraph (3)(c)
  
  (9) Paragraph (3)(c) does not apply to an amount that would, if this Act were read without reference to subsections (2) to (14), be included in computing a taxpayer’s income from a source that is an office or employment or a business or property under paragraph 3(a). 
  
  ### Anti-avoidance — non-application of subsection (7)
  
  (10) Subsection (7) does not apply in respect of a taxpayer’s grant of a restrictive covenant if one of the results of not applying section 68 to the consideration received or receivable in respect of the taxpayer’s grant of the restrictive covenant would be that paragraph 3(a) would not apply to consideration that would, if this Act were read without reference to subsections (2) to (14), be included in computing a taxpayer’s income from a source that is an office or employment or a business or property. 
  
  ### Clarification if subsection (2) applies — where another person receives the amount
  
  (11) For greater certainty, if subsection (2) applies to include in computing a taxpayer’s income an amount received or receivable by another taxpayer, that amount is not to be included in computing the income of that other taxpayer. 
  
  ### Clarification if subsection (5) applies
  
  (12) For greater certainty, if subsection (5) applies in respect of a restrictive covenant, 
  (a) the amount referred to in paragraph (6)(f) is to be added in computing the amount received or receivable by the vendors as consideration for the disposition of the interest or right referred to in paragraph (6)(b); and 
  (b) the amount that can reasonably be regarded as being in part consideration received or receivable for a restrictive covenant to which clause (7)(b)(ii)(B) or subclause (7)(c)(i)(B)(II) applies is to be added in computing the consideration that is received or receivable by each taxpayer who disposes of shares of the target corporation, or shares of the family corporation, as the case may be, to the extent of the portion of the consideration that is received or receivable by that taxpayer. 
  
  ### Filing of prescribed form
  
  (13) For the purpose of paragraphs (3)(b) and (c) and subsection (7), an election in prescribed form filed under any of those provisions is to include a copy of the restrictive covenant and be filed 
  (a) if the person who granted the restrictive covenant was a person resident in Canada when the restrictive covenant was granted, by the person with the Minister on or before the person’s filing-due date for the taxation year that includes the day on which the restrictive covenant was granted; and 
  (b) in any other case, with the Minister on or before the day that is six months after the day on which the restrictive covenant is granted. 
  
  ### Non-application of section 42
  
  (14) Section 42 does not apply to an amount received or receivable as consideration for a restrictive covenant. 
  
  ### Certain superannuation or pension benefits
  
  57 (1) Notwithstanding subparagraph 56(1)(a)(i), there shall be included in computing the income of a taxpayer in respect of a payment received by the taxpayer out of or under a superannuation or pension fund or plan the investment income of which has at some time been exempt from taxation under the Income War Tax Act by reason of an election for that exemption by the trustees or corporation administering the fund or plan, only that part of the payment that remains after deducting the proportion thereof  
  (a) that the total of the paid by the taxpayer into or under the fund or plan during the period when its income was exempt by reason of that election is of the total of all amounts paid by the taxpayer into or under the fund or plan, or 
  (b) that the total of the amounts paid by the taxpayer into or under the fund or plan during the period when its income was exempt by reason of that election together with simple interest on each amount so paid from the end of the year of payment thereof to the commencement of the superannuation allowance or pension at 3% per annum is of the total of all amounts paid by the taxpayer into or under the fund or plan together with simple interest, computed in the same manner, on each amount so paid, whichever is the greater. 
  
  ### Exception
  
  (2) This section does not apply in respect of a payment received by a taxpayer out of or under a superannuation or pension fund or plan if the taxpayer made no payment into or under the fund or plan. 
  
  ### Limitation
  
  (3) Where a payment, to which subsection 57(1) would otherwise be applicable, is received by a taxpayer out of or under a superannuation or pension fund or plan in respect of a period of service for part only of which the taxpayer made payments into or under the fund or plan, subsection 57(1) is applicable only to that part of the payment which may reasonably be regarded as having been received in respect of the period for which the taxpayer made payments into or under the fund or plan and any part of the payment which may reasonably be regarded as having been received in respect of a period for which the taxpayer made no payments into or under the fund or plan shall be included in computing the taxpayer’s income for the year without any deduction whatever. 
  
  ### Certain payments from pension plan
  
  (4) Where a taxpayer, during the period from August 15, 1944 to December 31, 1945, made a contribution in excess of $300 to or under a registered pension plan in respect of services rendered by the taxpayer before the taxpayer became a contributor, there shall be included in computing the taxpayer’s income in respect of a payment received by the taxpayer out of or under the plan only that part of the payment that remains after deducting the proportion thereof that the contribution so made minus $300 is of the total of the amounts paid by the taxpayer to or under the plan. 
  
  ### Payments to widow, etc., of contributor
  
  (5) Where, in respect of the death of a taxpayer who was a contributor to or under a superannuation or pension fund or plan described in subsection 57(1) or 57(4), a payment is received by a person in a taxation year out of or under the fund or plan, there shall be included in computing the income of that person for the year in respect thereof only that part of the payment that would, if the payment had been received by the taxpayer in the year out of or under the fund or plan, have been included by virtue of this section in computing the income of the taxpayer for the year. 
  
  ### Government annuities and like annuities
  
  58 (1) In determining the amount that shall be included in computing the income of a taxpayer in respect of payments received by the taxpayer in a taxation year under contracts entered into before May 26, 1932 with the Government of Canada or annuity contracts like those issued under the Government Annuities Act entered into before that day with the government of a province or a corporation incorporated or licensed to carry on an annuities business in Canada, there may be deducted from the total of the payments received the lesser of  
  (a) the total of the amounts that would have been so received if the contracts had continued in force as they were immediately before June 25, 1940, without the exercise of any option or contractual right to enlarge the annuity by the payment of additional sums or premiums unless those additional sums or premiums had been paid before that day, and 
  (b) $5,000. 
  
  ### Annuities before 1940
  
  (2) In determining the amount that shall be included in computing the income of a taxpayer in respect of payments received by the taxpayer in a taxation year under annuity contracts entered into after May 25, 1932, and before June 25, 1940, with the Government of Canada or annuity contracts like those issued under the Government Annuities Act entered into during that period with the government of a province or a corporation incorporated or licensed to carry on an annuities business in Canada, there may be deducted from the total of the payments received the lesser of  
  (a) the total of the amounts that would have been received under the contracts if they had continued in force as they were immediately before June 25, 1940, without the exercise of any option or contractual right to enlarge the annuity by the payment of additional sums or premiums unless such additional sums or premiums had been paid before that day, and 
  (b) $1,200. 
  
  ### Limitation
  
  (3) Where a taxpayer has received annuity payments in respect of which the taxpayer would otherwise be entitled to make deductions under both subsection 58(1) and subsection 58(2), 
  (a) if the amount deductible under subsection 58(1) is $1,200 or more, he may not make a deduction under subsection 58(2); and 
  (b) if the amount deductible under subsection 58(1) is less than $1,200, the taxpayer may make one deduction computed as though subsection 58(2) applied to all contracts entered into before June 25, 1940. 
  
  ### Capital element
  
  (4) The amount remaining after deducting from the total of the annuity payments to which this section applies received in a taxation year the deductions permitted by subsection 58(1), 58(2) or 58(3) shall be deemed to be the annuity payment in respect of which the capital element is deductible under paragraph 60(a. 
  
  ### Spouses or common-law partners
  
  (5) Where a taxpayer and the taxpayer’s spouse or common-law partner each received annuity payments in respect of which they may deduct amounts under this section, the amount deductible shall be computed as if their annuities belonged to one person and may be deducted by either of them or be apportioned between them in such manner as is agreed to by them or, in case of disagreement, as the Minister determines. 
  
  ### Pension benefits
  
  (6) This section does not apply to superannuation or pension benefits received out of or under a registered pension plan. 
  
  ### Enlargement of annuity
  
  (7) For the purpose of this section, an annuity shall be deemed to have been enlarged on or after June 25, 1940, if what is payable under the contract has, at any such time, been increased whether by increasing the amount of each periodic payment, by increasing the number of payments or otherwise. 
  
  ### Consideration for foreign resource property
  
  59 (1) Where a taxpayer has disposed of a foreign resource property, there shall be included in computing the taxpayer’s income for a taxation year the amount, if any, by which 
  (a) the portion of the taxpayer’s proceeds of disposition from the disposition of the property that becomes receivable in the year exceeds 
  (b) the total of 
  (i) all amounts each of which is an outlay or expense made or incurred by the taxpayer for the purpose of making the disposition that was not otherwise deductible for the purposes of this Part, and 
  (ii) where the property is a foreign resource property in respect of a country, the amount designated under this subparagraph in prescribed form filed with the taxpayer’s return of income for the year in respect of the disposition. 
  
  ### Partnerships
  
  (1.1) Where a taxpayer is a member of a partnership in a fiscal period of the partnership, the taxpayer’s share of the amount that would be included under subsection (1) in respect of a disposition of a foreign resource property in computing the partnership’s income for a taxation year if the partnership were a person, the fiscal period were a taxation year, subsection (1) were read without reference to subparagraph (1)(b)(ii) and section 96 were read without reference to paragraph 96(1)(d) is deemed to be proceeds of disposition that become receivable by the taxpayer at the end of the fiscal period in respect of a disposition of the property by the taxpayer. 
  
  ### Deduction under former s. 64 in preceding year
  
  (2) There shall be included in computing a taxpayer’s income for a taxation year any amount that has been deducted as a reserve under subsection 64(1), (1.1) or (1.2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the immediately preceding taxation year.  
  
  ### Recovery of exploration and development expenses
  
  (3.2) There shall be included in computing a taxpayer’s income for a taxation year 
  (a) any amount referred to in paragraph 66(12.4)(b); 
  (b) any amount referred to in subsection 66.1(1); 
  (c) any amount referred to in subsection 66.2(1); 
  (c.1) any amount referred to in subsection 66.21(3); 
  (d) any amount referred to in subparagraph 66(10.4)(b)(ii); and 
  (e) any amount referred to in paragraph 66(10.4)(c). 
  
  ### Amounts to be included in income
  
  (3.3) There shall be included in computing a taxpayer’s income for a taxation year 
  (a) 33 1/3% of the total of all amounts, each of which is the stated percentage of 
  (i) an amount that became receivable by the taxpayer after December 31, 1983 and in the year (other than an amount that would have been a Canadian oil and gas exploration expense if it had been an expense incurred by the taxpayer at the time it became receivable), 
  (ii) an amount that became receivable by the taxpayer after December 31, 1983 and in the year that would have been a Canadian oil and gas exploration expense described in paragraph (c) or (d) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) in respect of a qualified tertiary oil recovery project if it had been an expense incurred by the taxpayer at the time it became receivable, or  
  (iii) 30% of an amount that became receivable by the taxpayer in the year and in 1984 that would have been a Canadian oil and gas exploration expense (other than an expense described in paragraph (c) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) in respect of a qualified tertiary oil recovery project) incurred in respect of non-conventional lands if it had been an expense incurred by the taxpayer at the time it became receivable  and in respect of which the consideration given by the taxpayer was a property (other than a share, depreciable property of a prescribed class or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure that was added in computing the earned depletion base of the taxpayer or in computing the earned depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor; 
  (b) 33 1/3% of the total of all amounts, each of which is the stated percentage of an amount in respect of a disposition of depreciable property of a prescribed class (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and in the year, the capital cost of which was added in computing the earned depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the earned depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of 
  (i) the proceeds of disposition of the property, and 
  (ii) the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arm’s length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3); 
  (c) 33 1/3% of the total of all amounts, each of which is an amount in respect of a disposition of depreciable property of a prescribed class that is bituminous sands equipment (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and before 1990 and in the year, the capital cost of which was added in computing the supplementary depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the supplementary depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of 
  (i) the proceeds of disposition of the property, and 
  (ii) the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arm’s length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3); 
  (d) 50% of the total of all amounts, each of which is an amount in respect of a disposition of depreciable property of a prescribed class that is enhanced recovery equipment (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and before 1990 and in the year, the capital cost of which was added in computing the supplementary depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the supplementary depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of 
  (i) the proceeds of disposition of the property, and 
  (ii) the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arms’ length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3); 
  (e) 66 2/3% of the total of all amounts, each of which is an amount that became receivable by the taxpayer after December 11, 1979 and before 1990 and in the year and in respect of which the consideration given by the taxpayer was a property (other than a share or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure in connection with an oil or gas well in respect of which an amount was included in computing the taxpayer’s frontier exploration base or in computing the frontier exploration base of a predecessor where the taxpayer is a successor corporation to the predecessor; and 
  (f) 33 1/3% of the total of all amounts, each of which is the stated percentage of an amount that became receivable by the taxpayer after April 19, 1983 and in the year and in respect of which the consideration given by the taxpayer was a property (other than a share, depreciable property of a prescribed class or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure that was included in computing the mining exploration depletion base of the taxpayer or in computing the mining exploration depletion base of a specified predecessor of the taxpayer. 
  
  ### Definitions
  
  (3.4) For the purposes of this subsection and subsection 59(3.3),  
  *specified predecessor* of a taxpayer means a person who is a predecessor of  
  (a) the taxpayer, or 
  (b) a person who is a specified predecessor of the taxpayer; ( prédécesseur déterminé)   
  *stated percentage* means  
  (a) in respect of an amount described in paragraph 59(3.3)(a) or 59(3.3)(f) that became receivable by a taxpayer, 
  (i) 100% where the amount became receivable before July, 1988, 
  (ii) 50% where the amount became receivable after June, 1988 and before 1990, and 
  (iii) 0% where the amount became receivable after 1989, and 
  (b) in respect of the disposition described in paragraph 59(3.3)(b) of a depreciable property of a taxpayer, 
  (i) 100% where the property was disposed of before July, 1988, 
  (ii) 50% where the property was disposed of after June, 1988 and before 1990, and 
  (iii) 0% where the property was disposed of after 1989; ( pourcentage indiqué)   
  *successor corporation* means a corporation that has at any time after November 7, 1969 acquired, by purchase, amalgamation, merger, winding-up or otherwise (other than pursuant to an amalgamation that is described in subsection 87(1.2) or a winding-up to which the rules in subsection 88(1) apply), from another person (in this subsection and subsection 59(3.3) referred to as the “predecessor”) all or substantially all of the Canadian resource properties of the predecessor in circumstances in which any of subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1) and 66.7(3) to 66.7(5) apply to the corporation. (société remplaçante)  
  
  ### Variation of stated percentage
  
  (3.5) Notwithstanding the definition 
  *stated percentage* in subsection 59(3.4), where  
  (a) an amount became receivable by a taxpayer within 60 days after the end of 1989 in respect of a disposition of property or services, and 
  (b) the person to whom the disposition was made is a corporation that, before the end of 1989, had issued, or had undertaken to issue, a flow-through share and the corporation renounces under subsection 66(12.66), effective on December 31, 1989, an amount in respect of Canadian exploration expenses that includes an expenditure in respect of the amount referred to in paragraph 59(3.5)(a), the stated percentage in respect of the amount described in paragraph 59(3.5)(a) shall be 50%. 
  
  ### Definition of proceeds of disposition 
  
  (5) In this section, 
  *proceeds of disposition* has the meaning assigned by section 54.  
  
  ### Definitions in regulations under s. 65
  
  (6) In this section, 
  *bituminous sands equipment*, 
  *Canadian oil and gas exploration expense*, 
  *earned depletion base*, 
  *enhanced recovery equipment*, 
  *frontier exploration base*, 
  *mining exploration depletion base*, 
  *non-conventional lands*, 
  *qualified tertiary oil recovery project* and 
  *supplementary depletion base* have the meanings assigned by regulations made for the purposes of section 65.  
  
  ### Involuntary disposition of resource property
  
  59.1 Where in a particular taxation year an amount is deemed by subsection 44(2) to have become receivable by a taxpayer as proceeds of disposition described in paragraph (d) of the definition 
  *proceeds of disposition* in section 54 of any Canadian resource property and the taxpayer elects, in the taxpayer’s return of income under this Part for the year, to have this section apply to those proceeds of disposition,  
  (a) there shall be deducted in computing the taxpayer’s income for the particular year such amount as the taxpayer may claim, not exceeding the least of, 
  (i) the total of all those proceeds so becoming receivable in the particular year by the taxpayer to the extent that they have been included in the amount referred to in paragraph (a) of the description of F in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) or in paragraph (a) of the description of F in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) in respect of the taxpayer,  
  (ii) the amount required to be included in computing the taxpayer’s income for the particular year by virtue of paragraph 59(3.2)(c), and 
  (iii) the taxpayer’s income for the particular year determined without reference to this section; 
  (b) the amount, if any, by which 
  (i) the amount deducted under paragraph 59.1(a exceeds 
  (ii) the total of such of the Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses made or incurred by the taxpayer in the taxpayer’s ten taxation years immediately following the particular year as were designated by the taxpayer in the taxpayer’s return of income for the year in which the expense was made or incurred, shall be included in computing the taxpayer’s income for the particular year and, notwithstanding subsections 152(4) and 152(5), such reassessment of the taxpayer’s tax, interest or penalties for any year shall be made as is necessary to give effect to the inclusion; and 
  (c) any Canadian exploration expense, Canadian development expense or Canadian oil and gas property expense made or incurred by the taxpayer and designated in the taxpayer’s return of income in accordance with subparagraph 59.1(b(ii) shall (except for the purposes of subsections 66(12.1), 66(12.2), 66(12.3) and 66(12.5) and for the purpose of computing the taxpayer’s earned depletion base within the meaning assigned by regulations made for the purposes of section 65) be deemed not to be a Canadian exploration expense, a Canadian development expense or a Canadian oil and gas property expense, as the case may be, of the taxpayer. 
  
  # SUBDIVISION E 
  
  ## Deductions in Computing Income 
  
  ### Other deductions
  
  60 There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable 
  
  ### Capital element of annuity payments
  
  (a) the capital element of each annuity payment included by virtue of paragraph 56(1)(d) in computing the taxpayer’s income for the year, that is to say, 
  (i) if the annuity was paid under a contract, an amount equal to that part of the payment determined in prescribed manner to have been a return of capital, and 
  (ii) if the annuity was paid under a will or trust, such part of the payment as can be established by the recipient not to have been paid out of the income of the estate or trust; 
  
  ### Support
  
  (b) the total of all amounts each of which is an amount determined by the formula is the total of all amounts each of which is a support amount paid after 1996 and before the end of the year by the taxpayer to a particular person, where the taxpayer and the particular person were living separate and apart at the time the amount was paid, is the total of all amounts each of which is a child support amount that became payable by the taxpayer to the particular person under an agreement or order on or after its commencement day and before the end of the year in respect of a period that began on or after its commencement day, and is the total of all amounts each of which is a support amount paid by the taxpayer to the particular person after 1996 and deductible in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Pension income reallocation
  
  (c) where the taxpayer is a pensioner (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pensioner for the taxation year; 
  (c.1)  [Repealed, 1994, c. 7, Sch. VIII, s. 20(2)]  
  
  ### Repayment of support payments
  
  (c.2) an amount paid by the taxpayer in the year or one of the 2 preceding taxation years under a decree, order or judgment of a competent tribunal as a repayment of an amount included under paragraph 56(1)(b) or 56(1)(c), or under paragraph 56(1)(c.1) (as it applies, in computing the taxpayer’s income for the year or a preceding taxation year, to decrees, orders and judgments made before 1993) to the extent that it was not so deducted for a preceding taxation year; 
  
  ### Interest on death duties
  
  (d) an amount equal to annual interest accruing within the taxation year in respect of succession duties, inheritance taxes or estate taxes; 
  
  ### CPP/QPP contributions on self-employed earnings
  
  (e) the total of 
  (i) 1/2 of the lesser of 
  (A) the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1) of the Canada Pension Plan or as a like contribution under a 
  *provincial pension plan*, as defined in section 3 of that Act, and  
  (B) the maximum amount of such contributions payable by the taxpayer for the year under the plan, and 
  (ii) the lesser of 
  (A) the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1.‍1) or (1.‍2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and  
  (B) the maximum amount of such contributions payable by the taxpayer for the year under the plan; 
  
  ### Enhanced CPP contributions
  
  (e.1) the lesser of 
  (i) the total of all amounts each of which is an amount payable by the taxpayer for the year as an employee’s contribution under subsection 8(1.‍1) or (1.‍2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and  
  (ii) the maximum amount of such contributions payable by the taxpayer for the year under the plan; 
  
  ### Restrictive covenant — bad debt
  
  (f) all debts owing to a taxpayer that are established by the taxpayer to have become bad debts in the taxation year and that are in respect of an amount included because of the operation of subsection 6(3.1) or 56.4(2) in computing the taxpayer’s income in a preceding taxation year; 
  
  ### Quebec parental insurance plan — self-employed premiums
  
  (g) the amount determined by the formula is the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the taxation year as a premium under the Act respecting parental insurance, R.S.Q., c. A-29.011, and  is the total of all amounts each of which is an amount that would be payable by the taxpayer as an employee’s premium under the Act respecting parental insurance, R.S.Q., c. A-29.011, if those earnings were employment income of the taxpayer for the taxation year;  
  
  ### Premium or payment – FHSA, PRPP, RRSP or RRIF
  
  (i) any amount that is deductible under section 146, 146.3 or 146.6 or subsection 147.3(13.1) or 147.5(19) in computing the income of the taxpayer for the year; 
  
  ### Transfer of superannuation benefits
  
  (j) such part of the total of all amounts each of which is 
  (i) a superannuation or pension benefit (other than any amount in respect of the benefit that is deducted in computing the taxable income of the taxpayer for a taxation year because of subparagraph 110(1)(f)(i) or a benefit that is part of a series of periodic payments) payable out of or under a pension plan that is not a registered pension plan, attributable to services rendered by the taxpayer or a spouse or common-law partner or former spouse or common-law partner of the taxpayer in a period throughout which that person was not resident in Canada, and included in computing the income of the taxpayer for the year because of subparagraph 56(1)(a)(i), or 
  (ii) an eligible amount in respect of the taxpayer for the year under section 60.01, subsection 104(27) or 104(27.1) or paragraph 147(10.2)(d), as 
  (iii) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and 
  (iv) does not exceed the total of all amounts each of which is an amount paid by the taxpayer in the year or within 60 days after the end of the year 
  (A) as a contribution to or under a registered pension plan for the taxpayer’s benefit, other than the portion thereof deductible under paragraph 8(1)(m) in computing the taxpayer’s income for the year, or 
  (B) as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by subsection 146(1)), other than the portion thereof designated for a taxation year for the purposes of paragraph 60(l, to the extent that the amount was not deducted in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Transfer of surplus
  
  (j.01) such part of the total of all amounts each of which is an amount received by the taxpayer before March 28, 1988 that can reasonably be considered to be a payment in respect of the actuarial surplus under a defined benefit provision (within the meaning assigned by subsection 147.1(1)) of a registered pension plan and that is included in computing the income of the taxpayer for the year by virtue of subparagraph 56(1)(a)(i) (other than any portion thereof deducted by the taxpayer under subsection 60.2(1) in computing the taxpayer’s income for the year) as 
  (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and 
  (ii) does not exceed the total of all amounts each of which as an amount paid by the taxpayer in the year or within 60 days after the end of the year 
  (A) as a contribution to or under a registered pension plan for the taxpayer’s benefit, other than the portion thereof deductible under paragraph 60(j) or 60(j.1) or 8(1)(m) of this Act or paragraph 8(1)(m.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year, or  
  (B) as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by subsection 146(1)), other than the portion thereof that has been designated for the purposes of paragraph 60(j), 60(j.1) or 60(l, to the extent that it was not deducted in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Payment to registered pension plan
  
  (j.02) an amount equal to the lesser of 
  (i) the total of 
  (A) all contributions made in the year by the taxpayer to registered pension plans in respect of eligible service of the taxpayer before 1990 under the plans, where the taxpayer was obliged under the terms of an agreement in writing entered into before March 28, 1988 to make the contributions, and 
  (B) all amounts each of which is an amount paid in the year by the taxpayer to a registered pension plan as 
  (I) a repayment under a prescribed statutory provision of an amount received from the plan that was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending before 1990, where the taxpayer was obliged as a consequence of a written election made before March 28, 1988 to make the repayment, or 
  (II) interest in respect of a repayment referred to in subclause 60(j.02)(i)(B)(I), other than the portion of that total that is deductible under paragraph 8(1)(m) or paragraph 60(j.03) in computing the taxpayer’s income for the year, and 
  (ii) the total of all amounts each of which is an amount paid out of or under a registered pension plan as part of a series of periodic payments and included under subsection 56(1) in computing the taxpayer’s income for the year, other than the portion of that total that can reasonably be considered to have been designated by the taxpayer for the purpose of paragraph 60(j.2); 
  
  ### Repayments of pre-1990 pension benefits
  
  (j.03) an amount equal to the lesser of 
  (i) the total of all amounts each of which is an amount paid in the year or a preceding taxation year by the taxpayer to a registered pension plan that was not deductible in computing the taxpayer’s income for a preceding taxation year and that was paid as 
  (A) a repayment under a prescribed statutory provision of an amount received from the plan that was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending before 1990, or 
  (B) interest in respect of a repayment referred to in clause 60(j.03)(i)(A), and 
  (ii) the amount, if any, by which $3,500 exceeds the amount deducted under paragraph 8(1)(m) in computing the taxpayer’s income for the year; 
  
  ### Repayments of post-1989 pension benefits
  
  (j.04) the total of all amounts each of which is an amount paid in the year by the taxpayer to a registered pension plan as 
  (i) a repayment under a prescribed statutory provision of an amount received from the plan that 
  (A) was included under subsection 56(1) in computing the taxpayer’s income for a taxation year ending after 1989, and 
  (B) can reasonably be considered not to have been designated by the taxpayer for the purpose of paragraph 60(j.2), or 
  (ii) interest in respect of a repayment referred to in subparagraph 60(j.04)(i), except to the extent that the total was deductible under paragraph 8(1)(m) in computing the taxpayer’s income for the year; 
  
  ### Transfer of retiring allowances
  
  (j.1) such part of the total of all amounts each of which is an amount paid to the taxpayer by an employer, or under a retirement compensation arrangement to which the employer has contributed, as a retiring allowance and included in computing the taxpayer’s income for the year by virtue of subparagraph 56(1)(a)(ii) or paragraph 56(1)(x) as 
  (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, 
  (ii) does not exceed the amount, if any, by which the total of 
  (A) $2,000 multiplied by the number of years before 1996 during which the employee or former employee in respect of whom the payment was made (in this paragraph referred to as the “retiree”) was employed by the employer or a person related to the employer, and 
  (B) $1,500 multiplied by the number by which the number of years before 1989 described in clause 60(j.1)(ii)(A) exceeds the number that can reasonably be regarded as the equivalent number of years before 1989 in respect of which employer contributions under either a pension plan or a deferred profit sharing plan of the employer or a person related to the employer had vested in the retiree at the time of the payment exceeds the total of 
  (C) all amounts deducted under this paragraph in respect of amounts paid before the year in respect of the retiree 
  (I) by the employer or a person related to the employer, or 
  (II) under a retirement compensation arrangement to which the employer or a person related to the employer has contributed, 
  (C.1) all other amounts deducted under this paragraph for the year in respect of amounts paid in the year in respect of the retiree 
  (I) by a person related to the employer, or 
  (II) under a retirement compensation arrangement to which a person related to the employer has contributed, and 
  (D) all amounts deducted under paragraph 60(t) in computing the retiree’s income for the year in respect of a retirement compensation arrangement to which the employer or a person related to the employer has contributed, and 
  (iii) does not exceed the total of all amounts each of which is an amount paid by the taxpayer in the year or within 60 days after the end of the year in respect of the amount so designated 
  (A) as a contribution to or under a registered pension plan, other than the portion thereof deductible under paragraph 60(j) or 8(1)(m) in computing the taxpayer’s income for the year, or 
  (B) as a premium (within the meaning assigned by section 146) under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by section 146), other than the portion thereof that has been designated for the purposes of paragraph 60(j) or 60(l, to the extent that it was not deducted in computing the taxpayer’s income for a preceding taxation year and for the purposes of this paragraph, 
  *person related to the employer* includes  
  (iv) any person whose business was acquired or continued by the employer, and 
  (v) a previous employer of the retiree whose service therewith is recognized in determining the retiree’s pension benefits; 
  
  ### Transfer to spousal RRSP
  
  (j.2) for taxation years ending after 1988 and before 1995, such part of the total of all amounts (other than amounts paid out of or under a registered retirement savings plan or a registered retirement income fund that by reason of section 254 are considered to be amounts paid out of or under a registered pension plan) paid on a periodic basis out of or under a registered pension plan or a deferred profit sharing plan and included, by reason of subsection 56(1), in computing the taxpayer’s income for the year as 
  (i) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, and 
  (ii) does not exceed the least of 
  (A) $6,000, 
  (B) the amount, if any, by which that total exceeds the part of that total designated for the year for the purposes of paragraph 60(j) of this Act or deducted under paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year, and  
  (C) the total of all amounts each of which is paid by the taxpayer in the year or within 60 days after the end of the year as a premium (within the meaning assigned by subsection 146(1)) under a registered retirement savings plan under which the taxpayer’s spouse or common-law partner (or, where the taxpayer died in the year or within 60 days after the end of the year, an individual who was the taxpayer’s spouse or common-law partner immediately before the death) is the annuitant (within the meaning assigned by subsection 146(1)), to the extent that the amount was not deducted in computing the taxpayer’s income for a preceding taxation year; 
  
  ### Transfer of refund of premiums under RRSP
  
  (l) the total of all amounts each of which is an amount paid by or on behalf of the taxpayer in the year or within 60 days after the end of the year (or within such longer period after the end of the year as is acceptable to the Minister) 
  (i) as a premium under a registered retirement savings plan under which the taxpayer is the annuitant, 
  (ii) to acquire, from a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, an annuity 
  (A) under which the taxpayer is the annuitant 
  (I) for the taxpayer’s life, or for the lives jointly of the taxpayer and the taxpayer’s spouse or common-law partner either without a guaranteed period, or with a guaranteed period that is not greater than 90 years minus the lesser of the age in whole years of the taxpayer and the age in whole years of the taxpayer’s spouse or common-law partner at the time the annuity was acquired, or 
  (II) for a term equal to 90 years minus the age in whole years of the taxpayer or the age in whole years of the taxpayer’s spouse or common-law partner, at the time the annuity was acquired, or 
  (B) under which the taxpayer is the annuitant for a term not exceeding 18 years minus the age in whole years of the taxpayer at the time the annuity was acquired that does not provide for any payment thereunder except 
  (C) the single payment by or on behalf of the taxpayer, 
  (D) annual or more frequent periodic payments 
  (I) beginning not later than one year after the date of the payment referred to in clause 60(l(ii)(C), and 
  (II) each of which is equal to all other such payments or not equal to all other such payments solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v), and 
  (E) payments in full or partial commutation of the annuity and, where the commutation is partial, 
  (I) equal annual or more frequent periodic payments thereafter, or 
  (II) annual or more frequent periodic payments thereafter that are not equal solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v); or 
  (iii) to a carrier as consideration for a registered retirement income fund under which the taxpayer is the annuitant where that total 
  (iv) is designated by the taxpayer in the taxpayer’s return of income under this Part for the year, 
  (v) does not exceed the total of 
  (A) the amount included in computing the taxpayer’s income for the year as a refund of premiums out of or under a registered retirement savings plan under which the taxpayer’s spouse or common-law partner was the annuitant, 
  (A.1) the amount included in computing the taxpayer’s income for the year as a payment (other than a payment that is part of a series of periodic payments) received by the taxpayer out of or under a pooled registered pension plan as a consequence of the death of an individual who was, immediately before the death, a spouse or common-law partner of the taxpayer, 
  (A.2) the amount included by subsection 146.5(3) in computing the taxpayer’s income for the year as a payment received by the taxpayer as a consequence of the death of an individual who was 
  (I) immediately before the death, the spouse or common-law partner of the taxpayer, or 
  (II) a parent or grandparent of the taxpayer, if, immediately before the death, the taxpayer was financially dependent on the individual for support because of mental or physical infirmity, 
  (B) the amount included in computing the taxpayer’s income for the year as a refund of premiums out of or under a registered retirement savings plan where the taxpayer was dependent by reason of physical or mental infirmity on the annuitant under the plan, 
  (B.01) the amount included in computing the taxpayer’s income for the year as a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan as a consequence of the death of an individual of whom the taxpayer was a child or grandchild, if the taxpayer was, immediately before the death, financially dependent on the individual for support because of mental or physical infirmity, 
  (B.1) the least of 
  (I) the amount paid by or on behalf of the taxpayer to acquire an annuity that would be described in subparagraph 60(l(ii) if that subparagraph were read without reference to clause (A) thereof, 
  (II) the amount (other than any portion of it that is included in the amount determined under clause (B), (B.01) or (B.2)) that is included in computing the taxpayer’s income for the year as 
  1 a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan, 
  2 a refund of premiums out of or under a registered retirement savings plan, or 
  3 a designated benefit in respect of a registered retirement income fund (in this clause having the meaning assigned by subsection 146.3(1)) as a consequence of the death of an individual of whom the taxpayer is a child or grandchild, and 
  (III) the amount, if any, by which the amount determined for the year under subclause 60(1)(v)(B.1)(II) in respect of the taxpayer exceeds the amount, if any, by which 
  1 the total of all designated benefits of the taxpayer for the year in respect of registered retirement income funds exceeds 
  2 the total of all amounts that would be eligible amounts of the taxpayer for the year in respect of those funds (within the meaning that would be assigned by subsection 146.3(6.11) if the taxpayer were described in paragraph (b) thereof), and 
  (B.2) all eligible amounts of the taxpayer for the year in respect of registered retirement income funds (within the meaning assigned by subsection 146.3(6.11)), and where the amount is paid by a direct transfer from the issuer of a registered retirement savings plan or a carrier of a registered retirement income fund, 
  (C) the amount included in computing the taxpayer’s income for the year as a consequence of a payment described in subparagraph 146(2)(b)(ii), and 
  (D) the amount, if any, by which 
  (I) the amount received by the taxpayer out of or under a registered retirement income fund under which the taxpayer is the annuitant and included because of subsection 146.3(5) in computing the taxpayer’s income for the year exceeds 
  (II) the amount, if any, by which the minimum amount (within the meaning assigned by subsection 146.3(1)) under the fund for the year exceeds the total of all amounts received out of or under the fund in the year by an individual who was an annuitant under the fund before the taxpayer became the annuitant under the fund and that were included because of subsection 146.3(5) in computing that individual’s income for the year, and 
  (vi) was not deducted in computing the taxpayer’s income for a preceding taxation year; 
  (m) such amount in respect of payments to a registered disability savings plan as is permitted under section 60.02; 
  
  ### Succession duties applicable to certain property
  
  (m.1) that proportion of any superannuation or pension benefit, death benefit, benefit under a registered retirement savings plan, benefit under a deferred profit sharing plan or benefit that is a payment under an income-averaging annuity contract, received by the taxpayer in the year, on or after the death of a predecessor, in payment of or on account of property to which the taxpayer is the successor, that 
  (i) such part of any succession duties payable under a law of a province in respect of the death of the predecessor as may reasonably be regarded as attributable to the property in payment of or on account of which the benefit was so received, is of 
  (ii) the value of the property in payment of or on account of which the benefit was so received, as computed for the purposes of the law referred to in subparagraph 60(m.1)(i); 
  
  ### Repayment of pension or benefits
  
  (n) any amount paid by the taxpayer in the year as a repayment (otherwise than because of Part VII of the Unemployment Insurance Act, chapter U-1 of the Revised Statutes of Canada, 1985, Part VII of the Employment Insurance Act or section 8 of the Canada Recovery Benefits Act) of any of the following amounts to the extent that the amount was included in computing the taxpayer’s income, and not deducted in computing the taxpayer’s taxable income, for the year or for a preceding taxation year, namely,  
  (i) a pension described in clause 56(1)(a)(i)(A), 
  (ii) a benefit described in clause 56(1)(a)(i)(B), 
  (iii) an amount described in subparagraph 56(1)(a)(ii), 
  (iv) a benefit described in subparagraph 56(1)(a)(iv), 
  (v) a benefit described in subparagraph 56(1)(a)(vi), 
  (v.1) a benefit described in subparagraph 56(1)(a)(vii), and 
  (vi) an amount described in paragraph 56(1)(r); 
  
  ### Repayment of pension benefits
  
  (n.1) an amount paid by the taxpayer in the year to a pooled registered pension plan or registered pension plan if 
  (i) the taxpayer is an individual, 
  (ii) the amount is paid as 
  (A) a repayment of an amount received from the plan that was included in computing the taxpayer’s income for the year or a preceding year, if 
  (I) it is reasonable to consider that the amount was paid under the plan as a consequence of an error and not as an entitlement to benefits, or 
  (II) it was subsequently determined that, as a consequence of a settlement of a dispute in respect of the taxpayer’s employment, the taxpayer was not entitled to the amount, or 
  (B) interest in respect of a repayment described in clause (A), and 
  (iii) no portion of the amount is deductible under any of paragraph 8(1)(m) and subsections 146(5) to (5.2) in computing the taxpayer’s income for the year; 
  
  ### Legal Expenses
  
  (o) amounts paid by the taxpayer in the year in respect of fees or expenses incurred in preparing, instituting or prosecuting an objection to, or an appeal in relation to, 
  (i) an assessment of tax, interest or penalties under this Act or an Act of a province that imposes a tax similar to the tax imposed under this Act, 
  (ii) a decision of the Canada Employment Insurance Commission under the Employment Insurance Act or to an appeal of such a decision to the Social Security Tribunal,  
  (iii) an assessment of any income tax deductible by the taxpayer under section 126 or any interest or penalty with respect thereto, or 
  (iv) an assessment or a decision made under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act;  
  
  ### Idem
  
  (o.1) the amount, if any, by which the lesser of 
  (i) the total of all legal expenses (other than those relating to a division or settlement of property arising out of, or on a breakdown of, a marriage or common-law partnership) paid by the taxpayer in the year or in any of the 7 preceding taxation years to collect or establish a right to an amount of 
  (A) a benefit under a pension fund or plan (other than a benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act) in respect of the employment of the taxpayer or a deceased individual of whom the taxpayer was a dependant, relation or legal representative, or  
  (B) a retiring allowance of the taxpayer or a deceased individual of whom the taxpayer was a dependant, relation or legal representative, and 
  (ii) the amount, if any, by which the total of all amounts each of which is 
  (A) an amount described in clause 60(o.1)(i)(A) or 60(o.1)(i)(B) 
  (I) that is received after 1985, 
  (II) in respect of which legal expenses described in subparagraph 60(o.1)(i) were paid, and 
  (III) that is included in computing the income of the taxpayer for the year or a preceding taxation year, or 
  (B) an amount included in computing the income of the taxpayer under paragraph 56(1)(l.1) for the year or a preceding taxation year, exceeds the total of all amounts each of which is an amount deducted under paragraph 60(j), 60(j.01), 60(j.1) or 60(j.2) in computing the income of the taxpayer for the year or a preceding taxation year, to the extent that the amount may reasonably be considered to have been deductible as a consequence of the receipt of an amount referred to in clause 60(o.1)(ii)(A), exceeds 
  (iii) the portion of the total described in subparagraph 60(o.1)(i) in respect of the taxpayer that may reasonably be considered to have been deductible under this paragraph in computing the income of the taxpayer for a preceding taxation year; 
  
  ### Repayment of apprenticeship grants
  
  (p) the total of all amounts each of which is an amount paid in the taxation year as a repayment under the Apprenticeship Incentive Grant program or the Apprenticeship Completion Grant program of an amount that was included under paragraph 56(1)(n.1) in computing the taxpayer’s income for the taxation year or a preceding taxation year; 
  
  ### Refund of income payments
  
  (q) where the taxpayer is an individual, an amount paid by the taxpayer in the year to a person with whom the taxpayer was dealing at arm’s length (in this paragraph referred to as the “payer”) if 
  (i) the amount has been included in computing the income of the taxpayer for the year or a preceding taxation year as an amount described in subparagraph 56(1)(n)(i) or paragraph 56(1)(o) paid to the taxpayer by the payer, 
  (ii) at the time the amount was paid by the payer to the taxpayer a condition was stipulated for the taxpayer to fulfil, 
  (iii) as a result of the failure of the taxpayer to fulfil the condition referred to in subparagraph 60(q(ii) the taxpayer was required to repay the amount to the payer, 
  (iv) during the period for which the amount referred to in subparagraph 60(q(i) was paid the taxpayer did not provide other than occasional services to the payer as an officer or under a contract of employment, and 
  (v) the amount was paid to the taxpayer for the purpose of enabling the taxpayer to further the taxpayer’s education; 
  
  ### Amounts included under s. 146.2(6)
  
  (r) where an amount has been included in computing the income of the taxpayer by virtue of subsection 146.2(6) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 (as it read in its application to the 1985 taxation year) for any of the taxpayer’s three immediately preceding taxation years, the taxpayer may deduct the lesser of  
  (i) the amount that had been so included in computing the taxpayer’s income, and 
  (ii) the total of all amounts used by the taxpayer to acquire in the year the taxpayer’s owner-occupied home (within the meaning assigned by paragraph 146.2(1)(f) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1985 taxation year),  except that no amount may be deducted by the taxpayer for the year under this paragraph if an amount has been deducted 
  (iii) under subsection 146.2(6.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 (as it read in its application to taxation years before 1986) in computing the taxpayer’s income for any taxation year ending before 1986, or  
  (iv) under this paragraph for any preceding taxation year ending after 1985; 
  
  ### Repayment of policy loan
  
  (s) the total of all repayments made by the taxpayer in the year in respect of a policy loan (within the meaning assigned by subsection 148(9)) made under a life insurance policy, not exceeding the amount, if any, by which 
  (i) the total of all amounts required by subsection 148(1) to be included in computing the taxpayer’s income for the year or a preceding taxation year from a disposition described in paragraph (b) of the definition 
  *disposition* in subsection 148(9) in respect of that policy  exceeds 
  (ii) the total of all repayments made by the taxpayer in respect of the policy loan that were deductible in computing the taxpayer’s income for a preceding taxation year; 
  
  ### RCA distributions
  
  (t) where an amount in respect of a particular retirement compensation arrangement is required by paragraph 56(1)(x) or 56(1)(z) or subsection 70(2) to be included in computing the taxpayer’s income for the year, an amount equal to the lesser of 
  (i) the total of all amounts in respect of the particular arrangement so required to be included in computing the taxpayer’s income for the year, and 
  (ii) the amount, if any, by which the total of all amounts each of which is 
  (A) an amount (other than an amount deductible under paragraph 8(1)(m.2) or transferred to the particular arrangement under circumstances in which subsection 207.6(7) applies) contributed under the particular arrangement by the taxpayer while it was a retirement compensation arrangement and before the end of the year, 
  (A.1) an amount transferred in respect of the taxpayer before the end of the year to the particular arrangement from another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under this paragraph in respect of the other arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the other arrangement, 
  (B) an amount paid by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada to acquire an interest in the particular arrangement, or 
  (C) an amount that was received or became receivable by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada as proceeds from the disposition of an interest in the particular arrangement, exceeds the total of all amounts each of which is 
  (D) an amount deducted under this paragraph or paragraph 60(u) in respect of the particular arrangement in computing the taxpayer’s income for a preceding taxation year, or 
  (E) an amount transferred in respect of the taxpayer before the end of the year from the particular arrangement to another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under this paragraph in respect of the particular arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the particular arrangement; 
  
  ### RCA dispositions
  
  (u) where an amount in respect of a particular retirement compensation arrangement is required by paragraph 56(1)(y) to be included in computing the taxpayer’s income for the year, an amount equal to the lesser of 
  (i) the total of all amounts in respect of the particular arrangement so required to be included in computing the taxpayer’s income for the year, and 
  (ii) the amount, if any, by which the total of all amounts each of which is 
  (A) an amount (other than an amount deductible under paragraph 8(1)(m.2) or transferred to the particular arrangement under circumstances in which subsection 207.6(7) applies) contributed under the particular arrangement by the taxpayer while it was a retirement compensation arrangement and before the end of the year, 
  (A.1) an amount transferred in respect of the taxpayer before the end of the year to the particular arrangement from another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under paragraph 60(t) in respect of the other arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the other arrangement, or 
  (B) an amount paid by the taxpayer before the end of the year and at a time when the taxpayer was resident in Canada to acquire an interest in the particular arrangement exceeds the total of all amounts each of which is 
  (C) an amount deducted under paragraph 60(t) in respect of the particular arrangement in computing the taxpayer’s income for the year or a preceding taxation year, 
  (D) an amount deducted under this paragraph in respect of the particular arrangement in computing the taxpayer’s income for a preceding taxation year, or 
  (E) an amount transferred in respect of the taxpayer before the end of the year from the particular arrangement to another retirement compensation arrangement under circumstances in which subsection 207.6(7) applies, to the extent that the amount would have been deductible under paragraph 60(t) in respect of the particular arrangement in computing the taxpayer’s income if it had been received by the taxpayer out of the particular arrangement; 
  
  ### Repayment — parents of victims of crime
  
  (v) the total of all amounts each of which is an amount paid in the year as a repayment of a benefit that was included because of paragraph 56(1)(a.3) in computing the taxpayer’s income for the year or a preceding taxation year; 
  
  ### UI and EI benefit repayment
  
  (v.1) any benefit repayment payable by the taxpayer under Part VII of the Unemployment Insurance Act or Part VII of the Employment Insurance Act on or before April 30 of the following year, to the extent that the amount was not deductible in computing the taxpayer’s income for any preceding taxation year;  
  
  ### Canada Recovery Benefit Repayment
  
  (v.2) any benefit repayment payable by the taxpayer under section 8 of the Canada Recovery Benefits Act on or before the taxpayer’s balance-due day for the taxation year, to the extent that the amount was not deductible in computing the taxpayer’s income for any preceding taxation year;  
  
  ### COVID-19 – other benefit repayments
  
  (v.3) any benefit repaid by the taxpayer before 2023 to the extent that the amount of the benefit was included in computing the taxpayer’s income for the year under any of clauses 56(1)(r)(iv.1)(A) to (D), except to the extent that the amount is 
  (i) deducted in computing the taxpayer’s income for any year under paragraph (n), or 
  (ii) deductible in computing the taxpayer’s income for any year under paragraph (v.2); 
  
  ### Tax under Part I.2
  
  (w) the amount of the taxpayer’s tax payable under Part I.2 for the year; 
  
  ### Repayment under Canada Education Savings Act 
  
  (x) the total of all amounts each of which is an amount paid by the taxpayer in the year as a repayment, under the Canada Education Savings Act or under a designated provincial program (as defined in subsection 146.1(1)), of an amount that was included because of subsection 146.1(7) in computing the taxpayer’s income for the year or a preceding taxation year;  
  
  ### Repayment of UCCB
  
  (y) the total of all amounts each of which is an amount paid in the taxation year as a repayment, under the Universal Child Care Benefit Act, of a benefit that was included because of subsection 56(6) in computing the taxpayer’s income for the taxation year or a preceding taxation year;  
  
  ### Repayment under the Canada Disability Savings Act 
  
  (z) the total of all amounts each of which is an amount paid in the taxation year as a repayment, under or because of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1), of an amount that was included because of section 146.4 in computing the taxpayer’s income for the taxation year or a preceding taxation year; and  
  
  ### Tax informant program
  
  (z.1) the total of all amounts each of which is an amount paid in the year as a repayment of an amount that was included, because of paragraph 56(1)(z.4), in computing the taxpayer’s income for the year or a preceding taxation year. 
  60.001  [Repealed, 2013, c. 40, s. 27]  
  
  ### Eligible amount
  
  60.01 For the purpose of paragraph 60(j), the amount, if any, by which 
  (a) the amount of any payment received by a taxpayer in a taxation year out of or under a foreign retirement arrangement and included in computing the taxpayer’s income because of clause 56(1)(a)(i)(C.1) (other than any portion thereof that is included in respect of the taxpayer for the year under subparagraph 60(j(i) or that is part of a series of periodic payments) exceeds 
  (b) the portion, if any, of the payment included under paragraph 60.01(a) that can reasonably be considered to derive from contributions to the foreign retirement arrangement made by a person other than the taxpayer or the taxpayer’s spouse or common-law partner or former spouse or common-law partner, is an eligible amount in respect of the taxpayer for the year. 
  
  ### Meaning of 
  *lifetime benefit trust* 
  
  60.011 (1) For the purpose of subsection (2), a trust is at any particular time a lifetime benefit trust with respect to a taxpayer and the estate of a deceased individual if 
  (a) immediately before the death of the deceased individual, the taxpayer 
  (i) was both a spouse or common-law partner of the deceased individual and mentally infirm, or 
  (ii) was both a child or grandchild of the deceased individual and dependent on the deceased individual for support because of mental infirmity; and 
  (b) the trust is, at the particular time, a personal trust under which 
  (i) no person other than the taxpayer may receive or otherwise obtain the use of, during the taxpayer’s lifetime, any of the income or capital of the trust, and 
  (ii) the trustees 
  (A) are empowered to pay amounts from the trust to the taxpayer, and 
  (B) are required — in determining whether to pay, or not to pay, an amount to the taxpayer — to consider the needs of the taxpayer including, without limiting the generality of the foregoing, the comfort, care and maintenance of the taxpayer. 
  
  ### Meaning of 
  *qualifying trust annuity* 
  
  (2) Each of the following is a qualifying trust annuity with respect to a taxpayer: 
  (a) an annuity that meets the following conditions: 
  (i) it is acquired after 2005, 
  (ii) the annuitant under it is a trust that is, at the time the annuity is acquired, a lifetime benefit trust with respect to the taxpayer and the estate of a deceased individual, 
  (iii) it is for the life of the taxpayer (with or without a guaranteed period), or for a fixed term equal to 90 years minus the age in whole years of the taxpayer at the time it is acquired, and 
  (iv) if it is with a guaranteed period or for a fixed term, it requires that, in the event of the death of the taxpayer during the guaranteed period or fixed term, any amounts that would otherwise be payable after the death of the taxpayer be commuted into a single payment; 
  (b) an annuity that meets the following conditions: 
  (i) it is acquired after 1988, 
  (ii) the annuitant under it is a trust under which the taxpayer is the sole person beneficially interested (determined without regard to any right of a person to receive an amount from the trust only on or after the death of the taxpayer) in amounts payable under the annuity, 
  (iii) it is for a fixed term not exceeding 18 years minus the age in whole years of the taxpayer at the time it is acquired, and 
  (iv) if it is acquired after 2005, it requires that, in the event of the death of the taxpayer during the fixed term, any amounts that would otherwise be payable after the death of the taxpayer be commuted into a single payment; and 
  (c) an annuity that meets the following conditions: 
  (i) it is acquired 
  (A) after 2000 and before 2005 at a time at which the taxpayer was mentally or physically infirm, or 
  (B) in 2005 at a time at which the taxpayer was mentally infirm, 
  (ii) the annuitant under it is a trust under which the taxpayer is the sole person beneficially interested (determined without regard to any right of a person to receive an amount from the trust only on or after the death of the taxpayer) in amounts payable under the annuity, and 
  (iii) it is for the life of the taxpayer (with or without a guaranteed period), or for a fixed term equal to 90 years minus the age in whole years of the taxpayer at the time it is acquired. 
  
  ### Application of paragraph 60(l) to 
  *qualifying trust annuity* 
  
  (3) For the purpose of paragraph 60(l), 
  (a) in determining if a qualifying trust annuity with respect to a taxpayer is an annuity described in subparagraph 60(l)(ii), clauses 60(l)(ii)(A) and (B) are to be read without regard to their requirement that the taxpayer be the annuitant under the annuity; and 
  (b) if an amount paid to acquire a qualifying trust annuity with respect to a taxpayer would, if this Act were read without reference to this subsection, not be considered to have been paid by or on behalf of the taxpayer, the amount is deemed to have been paid on behalf of the taxpayer where 
  (i) it is paid 
  (A) by the estate of a deceased individual who was, immediately before death, 
  (I) a spouse or common-law partner of the taxpayer, or 
  (II) a parent or grandparent of the taxpayer on whom the taxpayer was dependent for support, or 
  (B) by the trust that is the annuitant under the qualifying trust annuity, and 
  (ii) it would, if it had been paid by the taxpayer, be deductible under paragraph 60(l) in computing the taxpayer’s income for a taxation year and the taxpayer elects, in the taxpayer’s return of income under this Part for that taxation year, to have this paragraph apply to the amount. 
  
  ### Definitions
  
  60.02 (1) The definitions in this subsection apply in this section and section 146.4,  
  *eligible individual* means a child or grandchild of a deceased annuitant under a registered retirement savings plan or a registered retirement income fund, or of a deceased member of a pooled registered pension plan, a registered pension plan or a specified pension plan, who was financially dependent on the deceased for support, at the time of the deceased’s death, by reason of mental or physical infirmity. (particulier admissible)   
  *eligible proceeds* means an amount (other than an amount that was deducted under paragraph 60(l) in computing the eligible individual’s income) received by an eligible individual as a consequence of the death after March 3, 2010 of a parent or grandparent of the eligible individual that is  
  (a) a refund of premiums (as defined in subsection 146(1)); 
  (b) an eligible amount under subsection 146.3(6.11); or 
  (c) a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan. ( produit admissible)   
  *specified RDSP payment* in respect of an eligible individual means a payment that  
  (a) is made to a registered disability savings plan under which the eligible individual is the beneficiary; 
  (b) complies with the conditions set out in paragraphs 146.4(4)(f) to (h); 
  (c) is made after June 2011; 
  (d) has been designated in prescribed form for a taxation year by the holder of the plan and the eligible individual at the time that the payment is made; and 
  (e) if the eligible individual is not a DTC-eligible individual (as defined in subsection 146.4(1)), is made not later than the end of the fourth taxation year following the first taxation year throughout which the beneficiary is not a DTC-eligible individual. (paiement de REEI déterminé)   
  *transitional eligible proceeds* of a taxpayer means  
  (a) any amount (other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income) that is received by the taxpayer as a consequence of the death of an individual after 2007 and before 2011 out of or under 
  (i) a registered retirement savings plan or registered retirement income fund, or 
  (ii) a registered pension plan (other than an amount that is received as part of a series of periodic payments or that relates to an actuarial surplus); or 
  (b) an amount withdrawn from the taxpayer’s registered retirement savings plan or a registered retirement income fund (in this subsection referred to as the “RRSP withdrawal”) if 
  (i) the taxpayer previously deducted an amount under paragraph 60(l) in respect of an amount that would be described by paragraph (a) if it were read without reference to “other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income”, 
  (ii) the RRSP withdrawal is included in computing the taxpayer’s income for the year of the withdrawal, and 
  (iii) the RRSP withdrawal does not exceed the amount deducted under subparagraph (i). ( produit admissible transitoire)  
  
  ### Rollover to RDSP on death
  
  (2) There may be deducted in computing the income for a taxation year of a taxpayer who is an eligible individual an amount that 
  (a) does not exceed the lesser of 
  (i) the total specified RDSP payments made in the year or within 60 days after the end of the year (or within any longer period after the end of the year that is acceptable to the Minister) in respect of the taxpayer; and 
  (ii) the total amount of eligible proceeds that is included in computing the taxpayer’s income in the year; and 
  (b) was not deducted in computing the taxpayer’s income for a preceding taxation year. 
  
  ### Application of subsections (4) and (5)
  
  (3) Subsections (4) and (5) do not apply unless 
  (a) a taxpayer who was the annuitant under a registered retirement savings plan or a registered retirement income fund or was a member of a registered pension plan died after 2007 and before 2011; 
  (b) the taxpayer was, immediately before the taxpayer’s death, the parent or grandparent of an eligible individual; 
  (c) transitional eligible proceeds were received from the plan or fund by 
  (i) an eligible individual in respect of the taxpayer, 
  (ii) a person who was the spouse or common-law partner of the taxpayer immediately before the taxpayer’s death, or 
  (iii) a person who is a beneficiary of the taxpayer’s estate or who directly received transitional eligible proceeds as a consequence of the death of the taxpayer; and 
  (d) the transitional eligible proceeds were included in computing the income of a person for a taxation year. 
  
  ### Transitional rule
  
  (4) There may be deducted in computing the income of a taxpayer described in paragraph (3)(c) for a taxation year an amount approved by the Minister that does not exceed the lesser of 
  (a) the total specified RDSP payments made by the taxpayer before 2012, and 
  (b) the amount of transitional eligible proceeds included in computing the taxpayer’s income for the year. 
  
  ### Transitional rule — deceased taxpayer
  
  (5) There may be deducted in computing the income of a taxpayer for the taxation year in which the taxpayer died an amount approved by the Minister that does not exceed the lesser of 
  (a) the total specified RDSP payments made before 2012 by an individual described in subparagraph (3)(c)(iii), and 
  (b) the amount by which the total of all amounts that were included in computing the taxpayer’s income for the year under subsection 146(8.8) or 146.3(6) exceeds the total of all amounts, if any, that were deducted in computing the taxpayer’s income for the year under subsection 146(8.92) or 146.3(6.3). 
  
  ### Limitation
  
  (6) The total amounts that may be deducted under subsections (4) and (5) in respect of transitional eligible proceeds received in respect of the death of a taxpayer shall not exceed the total transitional eligible proceeds received in respect of the deceased taxpayer. 
  
  ### Additions to clause 60(l)(v)(B.2) for 2008
  
  60.021 (1) In determining the amount that may be deducted because of paragraph 60(l) in computing a taxpayer’s income for the 2008 taxation year, clause 60(l)(v)(B.2) shall be read as follows: 
  (B.2) the total of all amounts each of which is 
  (I) the taxpayer’s eligible amount (within the meaning assigned by subsection 146.3(6.11)) for the year in respect of a registered retirement income fund, 
  (II) the taxpayer’s eligible RRIF withdrawal amount (within the meaning assigned by subsection 60.021(2)) for the year in respect of a registered retirement income fund, or 
  (III) the taxpayer’s eligible variable benefit withdrawal amount (within the meaning assigned by subsection 60.021(3)) for the year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan, 
  
  ### Meaning of eligible RRIF withdrawal amount
  
  (2) A taxpayer’s eligible RRIF withdrawal amount for a taxation year in respect of a registered retirement income fund under which the taxpayer is the annuitant at the beginning of the taxation year is 
  (a) except where paragraph (b) applies, the amount determined by the formula is the lesser of 
  (i) the total of all amounts included, because of subsection 146.3(5), in computing the income of the taxpayer for the taxation year in respect of amounts received out of or under the fund (other than an amount paid by direct transfer from the fund to another fund or to a registered retirement savings plan), and 
  (ii) the amount that would, in the absence of subsection 146.3(1.1), be the minimum amount under the fund for the taxation year, and is the minimum amount under the fund for the taxation year; and 
  (b) if the taxpayer attained 70 years of age in 2007, nil. 
  
  ### Meaning of eligible variable benefit withdrawal amount
  
  (3) A taxpayer’s eligible variable benefit withdrawal amount for a taxation year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan is the amount determined by the formula is the lesser of 
  (a) the total of all amounts each of which is the amount of a retirement benefit (other than a retirement benefit permissible under any of paragraphs 8506(1)(a) to (e) of the Regulations) paid from the plan in the taxation year in respect of the account and included, because of paragraph 56(1)(a), in computing the taxpayer’s income for the taxation year, and 
  (b) the amount that would, in the absence of paragraph 8506(7)(b) of the Regulations, be the minimum amount for the account for the taxation year; is the minimum amount for the account for the taxation year; and is the total of all contributions made by the taxpayer under the provision and designated for the purposes of subsection 8506(10) of the Regulations. 
  
  ### Expressions used in this section
  
  (4) For the purposes of this section, 
  (a) the term “money purchase provision” has the meaning assigned by subsection 147.1(1); 
  (b) the term “retirement benefit” has the meaning assigned by subsection 8500(1) of the Regulations; and 
  (c) the minimum amount for an account of a taxpayer under a money purchase provision of a registered pension plan is the amount determined in accordance with subsection 8506(5) of the Regulations. 
  
  ### Additions to clause 60(l)(v)(B.2) for 2015
  
  60.022 (1) In determining the amount that may be deducted because of paragraph 60(l) in computing a taxpayer’s income for the 2015 taxation year, clause 60(l)(v)(B.2) is to be read as follows: 
  (B.2) the total of all amounts each of which is 
  (I) the taxpayer’s eligible amount (within the meaning of subsection 146.3(6.11)) for the year in respect of a registered retirement income fund, 
  (II) the taxpayer’s eligible RRIF withdrawal amount (within the meaning of subsection 60.022(2)) for the year in respect of a RRIF, 
  (III) the taxpayer’s eligible variable benefit withdrawal amount (within the meaning of subsection 60.022(3)) for the year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan, or 
  (IV) the taxpayer’s eligible PRPP withdrawal amount (within the meaning of subsection 60.022(4)) for the year in respect of an account of the taxpayer under a PRPP, 
  
  ### Eligible RRIF withdrawal amount
  
  (2) A taxpayer’s eligible RRIF withdrawal amount for the taxation year in respect of a RRIF under which the taxpayer is the annuitant at the beginning of the taxation year is the amount determined by the formula is the lesser of 
  (a) the total of all amounts included, because of subsection 146.3(5), in computing the taxpayer’s income for the taxation year in respect of amounts received out of or under the fund (other than an amount paid by direct transfer from the fund to another fund or to a registered retirement savings plan), and 
  (b) the amount that would be the minimum amount under the fund for the 2015 taxation year if it were determined using the prescribed factors under subsection 7308(3) or (4), as the case may be, of the Income Tax Regulations as they read on December 31, 2014; and  is the minimum amount under the fund for the taxation year. 
  
  ### Eligible variable benefit withdrawal amount
  
  (3) A taxpayer’s eligible variable benefit withdrawal amount for a taxation year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan is the amount determined by the formula is the lesser of 
  (a) the total of all amounts each of which is the amount of a retirement benefit (other than a retirement benefit permissible under any of paragraphs 8506(1)(a) to (e) of the Income Tax Regulations) paid from the plan in the taxation year in respect of the account and included, because of paragraph 56(1)(a), in computing the taxpayer’s income for the taxation year, and  
  (b) the amount that would be the minimum amount for the account for the 2015 taxation year if it were determined using the factor designated under subsection 7308(4) of the Income Tax Regulations as they read on December 31, 2014;  is the minimum amount for the account for the taxation year; and is the total of all contributions made by the taxpayer under the provision and designated for the purposes of subsection 8506(12) of the Income Tax Regulations.  
  
  ### Eligible PRPP withdrawal amount
  
  (4) A taxpayer’s eligible PRPP withdrawal amount for a taxation year in respect of an account of the taxpayer under a PRPP is the amount determined by the formula is the lesser of 
  (a) the total of all amounts each of which is the amount of a distribution made from the account in the taxation year and included, because of subsection 147.5(13), in computing the taxpayer’s income for the taxation year, and 
  (b) the amount that would be the minimum amount for the account for the 2015 taxation year if it were determined using the factor designated under subsection 7308(4) of the Income Tax Regulations as they read on December 31, 2014, and  is the minimum amount for the account for the taxation year. 
  
  ### Expressions used in this section
  
  (5) For the purposes of this section, 
  (a)  
  *money purchase provision* has the same meaning as in subsection 147.1(1);  
  (b)  
  *retirement benefits* has the same meaning as in subsection 8500(1) of the Income Tax Regulations ;  
  (c) the minimum amount for an account of a taxpayer under a money purchase provision of a registered pension plan is the amount determined under subsection 8506(5) of the Income Tax Regulations ; and  
  (d) the minimum amount for an account of a taxpayer under a PRPP is the amount that would be the minimum amount for the calendar year under subsection 8506(5) of the Income Tax Regulations if the taxpayer’s account were an account under a money purchase provision of a registered pension plan.  
  
  ### Definitions
  
  60.03 (1) The following definitions apply in this section.  
  *eligible pension income*, of an individual for a taxation year, means the total of  
  (a) the eligible pension income (as defined in subsection 118(7)) of the individual for the year, 
  (b) if the individual has attained the age of 65 years before the end of the year, the lesser of 
  (i) the total of all amounts each of which is a payment made in the year to the individual 
  (A) out of or under a retirement compensation arrangement that provides benefits that supplement the benefits provided under a registered pension plan (other than an individual pension plan for the purposes of Part LXXXIII of the Income Tax Regulations), and  
  (B) in respect of a life annuity that is attributable to periods of employment for which benefits are also provided to the individual under the registered pension plan, 
  (ii) the amount, if any, by which the defined benefit limit (as defined in subsection 8500(1) of the Income Tax Regulations) for the year multiplied by 35 exceeds the amount determined under paragraph (a), and  
  (c) the lesser of 
  (i) the total of all amounts received by the individual in the year on account of 
  (A) a retirement income security benefit payable to the individual under Part 2 of the Veterans Well-being Act, or  
  (B) an income replacement benefit payable to the individual under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act), and  
  (ii) the amount, if any, by which the defined benefit limit (as defined in subsection 8500(1) of the Income Tax Regulations) for the year multiplied by 35 exceeds the total of the amounts determined under paragraphs (a) and (b). (revenu de pension déterminé)   
  *joint election* in respect of a pensioner and a pension transferee for a taxation year means an election made jointly in prescribed form by the pensioner and the pension transferee and filed with the Minister with both the pensioner’s and the pension transferee’s returns of income for the taxation year in respect of which the election is made, on or before their respective filing-due dates for the taxation year. (choix conjoint)   
  *pensioner* for a taxation year means an individual who  
  (a) receives eligible pension income in the taxation year; and 
  (b) is resident in Canada, 
  (i) if the individual dies in the taxation year, at the time that is immediately before the individual’s death, or 
  (ii) in any other case, at the end of the calendar year in which the taxation year ends. ( pensionné)   
  *pension income* has the meaning assigned by section 118. (revenu de pension)   
  *pension transferee* for a taxation year means an individual who  
  (a) is resident in Canada, 
  (i) if the individual dies in the taxation year, at the time that is immediately before the individual’s death, or 
  (ii) in any other case, at the end of the calendar year in which the taxation year ends; and 
  (b) at any time in the taxation year is married to, or in a common-law partnership with, a pensioner and is not, by reason of the breakdown of their marriage or common-law partnership, living separate and apart from the pensioner at the end of the taxation year and for a period of at least 90 days commencing in the taxation year. ( cessionnaire)   
  *qualified pension income* has the meaning assigned by section 118. (revenu de pension admissible)   
  *split-pension amount* for a taxation year is the amount elected by a pensioner and a pension transferee in a joint election for the taxation year not exceeding the amount determined by the formula  is the eligible pension income of the pensioner for the taxation year; is the number of months in the pensioner’s taxation year at any time during which the pensioner was married to, or was in a common-law partnership with, the pension transferee; and is the number of months in the pensioner’s taxation year. ( montant de pension fractionné)  
  
  ### Effect of pension income split
  
  (2) For the purpose of subsection 118(3), if a pensioner and a pension transferee have made a joint election in a taxation year, 
  (a) the pensioner is deemed not to have received the portion of the pensioner’s pension income, qualified pension income or an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1), as the case may be, for the taxation year that is equal to the amount of the pensioner’s split-pension amount for that taxation year; and  
  (b) the pension transferee is deemed to have received the split-pension amount 
  (i) as pension income, to the extent that the split-pension amount was pension income to the pensioner, 
  (ii) as qualified pension income, to the extent that the split-pension amount was qualified pension income to the pensioner, and 
  (iii) as an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1) to the extent that the split-pension amount was received by the pensioner as an amount described in subparagraph (c)(i) of that definition, if the pension transferee has attained the age of 65 years before the end of the taxation year.  
  
  ### Limitation
  
  (3) A pensioner may file only one joint election for a particular taxation year. 
  
  ### False declaration
  
  (4) A joint election is invalid if the Minister establishes that a pensioner or a pension transferee has knowingly or under circumstances amounting to gross negligence made a false declaration in the joint election. 
  
  ### Support
  
  60.1 (1) For the purposes of paragraph 60(b) and subsection 118(5), where an order or agreement, or any variation thereof, provides for the payment of an amount by a taxpayer to a person or for the benefit of the person, children in the person’s custody or both the person and those children, the amount or any part thereof 
  (a) when payable, is deemed to be payable to and receivable by that person; and 
  (b) when paid, is deemed to have been paid to and received by that person. 
  
  ### Agreement
  
  (2) For the purposes of section 60, this section and subsection 118(5), the amount determined by the formula is the total of all amounts each of which is an amount (other than an amount that is otherwise a support amount) that became payable by a taxpayer in a taxation year, under an order of a competent tribunal or under a written agreement, in respect of an expense (other than an expenditure in respect of a self-contained domestic establishment in which the taxpayer resides or an expenditure for the acquisition of tangible property, or for civil law corporeal property, that is not an expenditure on account of a medical or education expense or in respect of the acquisition, improvement or maintenance of a self-contained domestic establishment in which the person described in paragraph (a) or (b) resides) incurred in the year or the preceding taxation year for the maintenance of a person, children in the person’s custody or both the person and those children, if the person is 
  (a) the taxpayer’s spouse or common-law partner or former spouse or common-law partner, or 
  (b) where the amount became payable under an order made by a competent tribunal in accordance with the laws of a province, an individual who is a parent of a child of whom the taxpayer is a legal parent, and is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount included in the total determined for A in respect of the acquisition or improvement of a self-contained domestic establishment in which that person resides, including any payment of principal or interest in respect of a loan made or indebtedness incurred to finance, in any manner whatever, such acquisition or improvement exceeds 
  (b) the total of all amounts each of which is an amount equal to 1/5 of the original principal amount of a loan or indebtedness described in paragraph (a), is, where the order or written agreement, as the case may be, provides that this subsection and subsection 56.1(2) shall apply to any amount paid or payable thereunder, deemed to be an amount payable by the taxpayer to that person and receivable by that person as an allowance on a periodic basis, and that person is deemed to have discretion as to the use of that amount. 
  
  ### Prior payments
  
  (3) For the purposes of this section and section 60, where a written agreement or order of a competent tribunal made at any time in a taxation year provides that an amount paid before that time and in the year or the preceding taxation year is to be considered to have been paid and received thereunder, 
  (a) the amount is deemed to have been paid thereunder; and 
  (b) the agreement or order is deemed, except for the purpose of this subsection, to have been made on the day on which the first such amount was paid, except that, where the agreement or order is made after April 1997 and varies a child support amount payable to the recipient from the last such amount paid to the recipient before May 1997, each varied amount of child support paid under the agreement or order is deemed to have been payable under an agreement or order the commencement day of which is the day on which the first payment of the varied amount is required to be made. 
  
  ### Definitions
  
  (4) The definitions in subsection 56.1(4) apply in this section and section 60. 
  60.11  [Repealed, 2013, c. 40, s. 29]  
  
  ### Refund of undeducted past service AVCs
  
  60.2 (1) There may be deducted in computing a taxpayer’s income for a taxation year an amount equal to the total of 
  (a) where the taxation year ends before 1991, the total of all amounts each of which is that portion of an amount paid to the taxpayer before 1991 and included by reason of subparagraph 56(1)(a)(i) or paragraph 56(1)(h) or 56(1)(t) in computing the taxpayer’s income for the year or a preceding taxation year that can reasonably be considered to be a refund of additional voluntary contributions made by the taxpayer before October 9, 1986 to a registered pension plan for the taxpayer’s benefit in respect of services rendered by the taxpayer before the year in which the contributions were made, to the extent that the contributions were not deducted in computing the taxpayer’s income for any taxation year; and 
  (b) the least of 
  (i) $3,500, 
  (ii) the total of all amounts each of which is an amount included after 1986 by reason of subparagraph 56(1)(a)(i) or paragraph 56(1)(d.2), 56(1)(h) or 56(1)(t) in computing the taxpayer’s income for the year, and 
  (iii) the balance of the annuitized voluntary contributions of the taxpayer at the end of the year. 
  
  ### Definition of 
  *balance of the annuitized voluntary contributions* 
  
  (2) For the purposes of subsection 60.2(1), 
  *balance of the annuitized voluntary contributions* of a taxpayer at the end of a taxation year means the amount, if any, by which  
  (a) such part of the total of all amounts each of which is an additional voluntary contribution made by the taxpayer to a registered pension plan before October 9, 1986 in respect of services rendered by the taxpayer before the year in which the contribution was made, to the extent that the contribution was not deducted in computing the taxpayer’s income for any taxation year, as may reasonably be considered as having been 
  (i) used before October 9, 1986 to acquire or provide an annuity for the taxpayer’s benefit under a registered pension plan or registered retirement savings plan, or 
  (ii) transferred before October 9, 1986 to a registered retirement income fund under which the taxpayer was the annuitant (within the meaning assigned by subsection 146.3(1)) at the time of the transfer exceeds 
  (b) the total of all amounts each of which is 
  (i) an amount deducted under paragraph 60.2(1)(b) in computing the taxpayer’s income for a preceding taxation year, or 
  (ii) an amount deducted under paragraph 60.2(1)(a) in computing the taxpayer’s income for the year or a preceding taxation year, to the extent that the amount can reasonably be considered to be in respect of a refund of additional voluntary contributions included in determining the total under paragraph 60.2(2)(a). 
  
  ### Payment made as consideration for income-averaging annuity
  
  61 (1) In computing the income for a taxation year of an individual resident in Canada, there may be deducted an amount equal to the lesser of 
  (a) such amount as the individual may claim, not exceeding the total of amounts each of which is a single payment 
  (i) made by the individual in the year or within 60 days after the end of the year as consideration for an income-averaging annuity contract of the individual, and 
  (ii) in respect of which no amount has been deducted in computing the individual’s income for the immediately preceding taxation year, and 
  (b) the amount, if any, by which the total of 
  (i) the remainder obtained when the total of the amounts deductible in computing the individual’s income for the year by reason of paragraphs 60(j) and 60(l) of this Act and paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, is deducted from the total of amounts described in subsection 61(2) in respect of the individual for the year,  
  (ii) the amount, if any, by which the amount determined under paragraph 3(b) in respect of the individual for the year exceeds the total of amounts each of which is an allowable business investment loss of the individual for the year, 
  (iii) the individual’s income for the year from the production of a literary, dramatic, musical or artistic work, 
  (iv) the individual’s income for the year from the individual’s activities as an athlete, a musician or a public entertainer such as a theatre, motion picture, radio or television artist, and 
  (iv.1) the amount, if any, by which the amount included in computing the income of the individual for the year by virtue of section 59 exceeds the total of amounts deducted in computing the individual’s income for the year under sections 64, 66, 66.1, 66.2 and 66.4 and under section 29 of the Income Tax Application Rules,  exceeds 
  (v) the total of amounts each of which is the annual annuity amount of the individual in respect of an income-averaging annuity contract in respect of the consideration for which any amount has been deducted under this subsection in computing the individual’s income for the year. 
  
  ### Idem
  
  (2) For the purposes of subsection 61(1), an amount described in this subsection in respect of an individual for a taxation year is any following amount: 
  (a) any single payment received by the individual in the year 
  (i) out of or under a superannuation or pension fund or plan 
  (A) on the death, withdrawal or retirement from employment of an employee or former employee, 
  (B) on the winding-up of the fund or plan in full satisfaction of all rights of the payee in or under the fund or plan, or 
  (C) to which the payee is entitled by virtue of an amendment to the plan although the payee continues to be an employee to whom the plan is applicable, 
  (ii) on retirement as an employee in recognition of long service and not made out of or under a superannuation fund or plan, 
  (iii) pursuant to an employees profit sharing plan in full satisfaction of all the individual’s rights in or under the plan, to the extent that the amount thereof is required to be included in computing the individual’s income for the year in which the payment was received, or 
  (iv) pursuant to a deferred profit sharing plan on the death, withdrawal or retirement from employment of an employee or former employee, to the extent that the amount thereof is required to be included in computing the individual’s income for the year; 
  (b) a payment or payments made by an employer to the individual as an employee or former employee on or after retirement in respect of loss of office or employment, if made in the year of retirement or within one year after that year; 
  (c) a payment or payments paid to the individual as a death benefit, if paid in the year of death or within one year after that year; 
  (d) any amount included in computing the individual’s income for the year by virtue of subsection 146(8), to the extent that the amount is a refund of premiums, as defined by section 146, under a registered retirement savings plan received by the individual under the plan on or after the death of the person who was, immediately before the person’s death, the annuitant thereunder; 
  (e) any amount included in computing the individual’s income for the year by virtue of section 13, 14 or 23, subsection 28(4) or 28(5) or paragraph 106(2)(a) of this Act or subparagraph 56(1)(a)(viii) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952;  
  (f) any amount deemed by section 7 to be a benefit received by the individual in the year by virtue of the individual’s employment; 
  (g) the amount, if any, by which any amount received by the individual in the year as or on account of a prize for achievement in a field of endeavour ordinarily carried on by the individual exceeds $500; 
  (h) any amount included in computing the individual’s income for the year by virtue of subsection 146.2(6) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952;  
  (i) a payment made in the year to an individual by virtue of paragraph 51(2)(b) of the Judges Act ;  
  (j) except where the individual claimed a deduction under paragraph 23(3)(a) of the Income Tax Application Rules in computing the individual’s income for the year, any amount included in computing that income by virtue of paragraph 23(3)(c) of that Act; and  
  (k) where the individual ceased to be a member of a partnership in the year or the preceding year and paragraph 34(a) applied in computing the individual’s income therefrom in the preceding year, the amount included in the individual’s income for the year by virtue of paragraph 3(a) to the extent that, having regard to all the circumstances including the proportion in which the members of the partnership have agreed to share the profits of the partnership, it can reasonably be considered to be in respect of the individual’s share of the work in progress of the partnership at the time the individual ceased to be a member thereof, if, during the remainder of the year in which the individual ceased to be a member and in the following year, the individual did not 
  (i) become employed in the business that had been carried on by the partnership, 
  (ii) carry on a business that is a profession, or 
  (iii) become a member of a partnership that carries on a business that is a profession. 
  
  ### Definitions
  
  (4) In this section,  
  *annual annuity amount* of an individual in respect of an income-averaging annuity contract means the total of the equal payments described in paragraph (c) of the definition 
  *income-averaging annuity contract* in this subsection that, under the contract, are receivable by the individual in the twelve month period commencing on the day that the first such payment under the contract becomes receivable by the individual; (montant annuel de la rente)   
  *income-averaging annuity contract* of an individual means a contract between the individual and a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business or a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, under which  
  (a) in consideration of a qualifying payment as consideration under the contract, that person agrees to pay to the individual, commencing at a time not later than 10 months after the individual has made the qualifying payment, 
  (i) an annuity to the individual for the individual’s life, with or without a guaranteed term not exceeding the number of years that is the lesser of 
  (A) 15, and 
  (B) 85 minus the age of the individual at the time the annuity payments commence, or 
  (ii) an annuity to the individual for a guaranteed term described in subparagraph (i), or 
  (b) in consideration of a single payment in respect of the individual’s 1981 taxation year, other than a qualifying payment, made by the individual as consideration under the contract, that person makes all payments provided for under the contract to the individual before 1983 and under which no payments are provided except the single payment by the individual and, 
  (c) in respect of a contract referred to in paragraph (a), equal annuity payments that are to be made annually or at more frequent periodic intervals, or 
  (d) in respect of a contract referred to in paragraph (b), payments described therein to the individual; ( contrat de rente à versements invariables)   
  *qualifying payment* means a single payment made before November 13, 1981 (or made on or after November 13, 1981 pursuant to an agreement in writing entered into before that date to make such a payment in respect of the individual’s 1981 taxation year, or pursuant to an arrangement in writing made before that date to have funds withheld before 1982 from any of the individual’s remuneration described in paragraph 61(1)(b) earned or received before November 13, 1981 and paid by or on behalf of the individual). (paiement admissible)  
  
  ### Where income-averaging annuity contract ceases to be such
  
  61.1 (1) Where a contract that was at any time an income-averaging annuity contract of an individual has, at a subsequent time, ceased to be an income-averaging annuity contract otherwise than by virtue of the surrender, cancellation, redemption, sale or the disposition thereof, the individual shall be deemed to have received at that subsequent time as proceeds of the disposition of an income-averaging annuity contract an amount equal to the fair market value of the contract at that subsequent time and to have acquired the contract, as another contract not being an income-averaging annuity contract, immediately thereafter at a cost to the individual equal to that fair market value. 
  
  ### Where annuitant dies and payments continued
  
  (2) Where an individual who was an annuitant under an income-averaging annuity contract has died and payments are subsequently made under that contract, the payments shall be deemed to be payments under an income-averaging annuity contract. 
  
  ### Reserve for debt forgiveness for resident individuals
  
  61.2 There may be deducted in computing the income for a taxation year of an individual (other than a trust) resident in Canada throughout the year such amount as the individual claims not exceeding the amount determined by the formula is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount that, because of the application of section 80 to an obligation payable by the individual (or a partnership of which the individual was a member) was included under subsection 80(13) in computing the income of the individual for the year or the income of the partnership for a fiscal period that ends in the year (to the extent that, where the amount was included in computing income of a partnership, it relates to the individual’s share of that income) exceeds 
  (b) the total of all amounts deducted because of paragraph 80(15)(a) in computing the individual’s income for the year, is the amount, if any, included under section 56.2 in computing the individual’s income for the year, and is the greater of $40,000 and the individual’s income for the year, determined without reference to this section, paragraph 20(1)(ww), section 56.2, paragraph 60(w), subsection 80(13) and paragraph 80(15)(a). 
  
  ### Deduction for insolvency with respect to resident corporations
  
  61.3 (1) There shall be deducted in computing the income for a taxation year of a corporation resident in Canada throughout the year that is not exempt from tax under this Part on its taxable income, the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that, because of the application of section 80 to a commercial obligation (in this section having the meaning assigned by subsection 80(1)) issued by the corporation (or a partnership of which the corporation was a member) was included under subsection 80(13) in computing the income of the corporation for the year or the income of the partnership for a fiscal period that ends in the year (to the extent that the amount, where it was included in computing income of a partnership, relates to the corporation’s share of that income) exceeds 
  (ii) the total of all amounts deducted because of paragraph 80(15)(a) in computing the corporation’s income for the year, and 
  (b) the amount determined by the formula is the amount determined under paragraph 61.3(1)(a) in respect of the corporation for the year, is the total of 
  (i) the fair market value of the assets of the corporation at the end of the year, 
  (ii) the amounts paid before the end of the year on account of the corporation’s tax payable under this Part or any of Parts I.3, II, VI and XIV for the year or on account of a similar tax payable for the year under an Act of a province, and 
  (iii) all amounts paid by the corporation in the 12-month period preceding the end of the year to a person with whom the corporation does not deal at arm’s length 
  (A) as a dividend (other than a stock dividend), 
  (B) on a reduction of paid-up capital in respect of any class of shares of its capital stock, 
  (C) on a redemption, acquisition or cancellation of its shares, or 
  (D) as a distribution or appropriation in any manner whatever to or for the benefit of the shareholders of any class of its capital stock, to the extent that the distribution or appropriation cannot reasonably be considered to have resulted in a reduction in the amount otherwise determined for C in respect of the corporation for the year, is the total liabilities of the corporation at the end of the year (determined without reference to the corporation’s liabilities for tax payable under this Part or any of Parts I.3, II, VI and XIV for the year or for a similar tax payable for the year under an Act of a province) and, for this purpose, 
  (i) the equity and consolidation methods of accounting shall not be used, and 
  (ii) subject to subparagraph 61.3(1)(b)(i) and except as otherwise provided in this description, the total liabilities of the corporation shall 
  (A) where the corporation is not an insurance corporation, a federal credit union or a bank to which clause (B) or (C) applies and the balance sheet as of the end of the year was presented to the shareholders of the corporation and was prepared in accordance with generally accepted accounting principles, be considered to be the total liabilities shown on the balance sheet, 
  (B) where the corporation is a bank, a federal credit union or an insurance corporation that is required to report to the Superintendent of Financial Institutions and the balance sheet as of the end of the year was accepted by the Superintendent, be considered to be the total liabilities shown on that balance sheet, 
  (C) where the corporation is an insurance corporation that is required to report to the superintendent of insurance or other similar officer or authority of the province under whose laws the corporation is incorporated and the balance sheet as of the end of the year was accepted by that officer or authority, be considered to be the total liabilities shown on that balance sheet, and 
  (D) in any other case, be considered to be the amount that would be shown as total liabilities of the corporation at the end of the year on a balance sheet prepared in accordance with generally accepted accounting principles, is the total of all amounts each of which is the principal amount at the end of the year of a distress preferred share (within the meaning assigned by subsection 80(1)) issued by the corporation, and is 50% of the amount, if any, by which 
  (i) the amount that would be the corporation’s income for the year if that amount were determined without reference to this section and section 61.4 exceeds 
  (ii) the amount determined under paragraph 61.3(1)(a) in respect of the corporation for the year. 
  
  ### Reserve for insolvency with respect to non-resident corporations
  
  (2) There shall be deducted in computing the income for a taxation year of a corporation that is non-resident at any time in the year, the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that, because of the application of section 80 to a commercial obligation issued by the corporation (or a partnership of which the corporation was a member) was included under subsection 80(13) in computing the corporation’s taxable income or taxable income earned in Canada for the year or the income of the partnership for a fiscal period that ends in the year (to the extent that, where the amount was included in computing income of a partnership, it relates to the corporation’s share of the partnership’s income added in computing the corporation’s taxable income or taxable income earned in Canada for the year) exceeds 
  (ii) the total of all amounts deducted because of paragraph 80(15)(a) in computing the corporation’s taxable income or taxable income earned in Canada for the year, and 
  (b) the amount determined by the formula is the amount determined under paragraph 61.3(2)(a) in respect of the corporation for the year, is the total of 
  (i) the fair market value of the assets of the corporation at the end of the year, 
  (ii) the amounts paid before the end of the year on account of the corporation’s tax payable under this Part or any of Parts I.3, II, VI and XIV for the year or on account of a similar tax payable for the year under an Act of a province, and 
  (iii) all amounts paid in the 12-month period preceding the end of the year by the corporation to a person with whom the corporation does not deal at arm’s length 
  (A) as a dividend (other than a stock dividend), 
  (B) on a reduction of paid-up capital in respect of any class of shares of its capital stock, 
  (C) on a redemption, acquisition or cancellation of its shares, or 
  (D) as a distribution or appropriation in any manner whatever to or for the benefit of the shareholders of any class of its capital stock, to the extent that the distribution or appropriation cannot reasonably be considered to have resulted in a reduction of the amount otherwise determined for C in respect of the corporation for the year, is the total liabilities of the corporation at the end of the year (determined without reference to the corporation’s liabilities for tax payable under this Part or any of Parts I.3, II, VI and XIV for the year or for a similar tax payable for the year under an Act of a province), determined in the manner described in the description of C in paragraph 61.3(1)(b), is the total of all amounts each of which is the principal amount at the end of the year of a distress preferred share (within the meaning assigned by subsection 80(1)) issued by the corporation, and is 50% of the amount, if any, by which 
  (i) the amount that would be the corporation’s taxable income or taxable income earned in Canada for the year if that amount were determined without reference to this section and section 61.4 exceeds 
  (ii) the amount determined under paragraph 61.3(2)(a) in respect of the corporation for the year. 
  
  ### Anti-avoidance
  
  (3) Subsections 61.3(1) and 61.3(2) do not apply to a corporation for a taxation year where property was transferred in the 12-month period preceding the end of the year or the corporation became indebted in that period and it can reasonably be considered that one of the reasons for the transfer or the indebtedness was to increase the amount that the corporation would, but for this subsection, be entitled to deduct under subsection 61.3(1) or 61.3(2). 
  
  ### Reserve for debt forgiveness for corporations and others
  
  61.4 There may be deducted as a reserve in computing the income for a taxation year of a taxpayer that is a corporation or trust resident in Canada throughout the year or a non-resident person who carried on business through a fixed place of business in Canada at the end of the year such amount as the taxpayer claims not exceeding the least of 
  (a) the amount determined by the formula is the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that, because of the application of section 80 to a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the taxpayer (or a partnership of which the taxpayer was a member) was included under subsection 80(13) in computing the income of the taxpayer for the year or a preceding taxation year or of the partnership for a fiscal period that ends in that year or preceding year (to the extent that, where the amount was included in computing income of a partnership, it relates to the taxpayer’s share of that income) exceeds the total of 
  (ii) all amounts each of which is an amount deducted under paragraph 80(15)(a) in computing the taxpayer’s income for the year or a preceding taxation year, and 
  (iii) all amounts deducted under section 61.3 in computing the taxpayer’s income for the year or a preceding taxation year, and is the amount, if any, by which the amount determined for A in respect of the taxpayer for the year exceeds the total of 
  (i) the amount that would be determined for A in respect of the taxpayer for the year if that value did not take into account amounts included or deducted in computing the taxpayer’s income for any preceding taxation year, and 
  (ii) the amount, if any, included under section 56.3 in computing the taxpayer’s income for the year, 
  (b) the total of 
  (i) 4/5 of the amount that would be determined for A in paragraph 61.4(a) in respect of the taxpayer for the year if that value did not take into account amounts included or deducted in computing the taxpayer’s income for any preceding taxation year, 
  (ii) 3/5 of the amount that would be determined for A in paragraph 61.4(a) in respect of the taxpayer for the year if that value did not take into account amounts included or deducted in computing the taxpayer’s income for the year or any preceding taxation year (other than the last preceding taxation year), 
  (iii) 2/5 of the amount that would be determined for A in paragraph 61.4(a) in respect of the taxpayer for the year if that value did not take into account amounts included or deducted in computing the taxpayer’s income for the year or any preceding taxation year (other than the second last preceding taxation year), and 
  (iv) 1/5 of the amount that would be determined for A in paragraph 61.4(a) in respect of the taxpayer for the year if that value did not take into account amounts included or deducted in computing the taxpayer’s income for the year or any preceding taxation year (other than the third last preceding taxation year), and 
  (c) where the taxpayer is a corporation that commences to wind up in the year (otherwise than in circumstances to which the rules in subsection 88(1) apply), nil. 
  
  ### Moving expenses
  
  62 (1) There may be deducted in computing a taxpayer’s income for a taxation year amounts paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation, to the extent that 
  (a) they were not paid on the taxpayer’s behalf in respect of, in the course of or because of, the taxpayer’s office or employment; 
  (b) they were not deductible because of this section in computing the taxpayer’s income for the preceding taxation year; 
  (c) the total of those amounts does not exceed 
  (i) in any case described in subparagraph (a)(i) of the definition 
  *eligible relocation* in subsection 248(1), the total of all amounts, each of which is an amount included in computing the taxpayer’s income for the taxation year from the taxpayer’s employment at a new work location or from carrying on the business at the new work location, or because of subparagraph 56(1)(r)(v) in respect of the taxpayer’s employment at the new work location, and  
  (ii) in any case described in subparagraph (a)(ii) of the definition 
  *eligible relocation* in subsection 248(1), the total of amounts included in computing the taxpayer’s income for the year because of paragraphs 56(1)(n) and (o); and  
  (d) all reimbursements and allowances received by the taxpayer in respect of those expenses are included in computing the taxpayer’s income. 
  
  ### Moving expenses of students
  
  (2) There may be deducted in computing a taxpayer’s income for a taxation year the amount, if any, that the taxpayer would be entitled to deduct under subsection (1) if the definition eligible relocation in subsection 248(1) were read without reference to subparagraph (a)(i) of that definition and if the word “both” in paragraph (c) of that definition were read as “either or both”.  
  
  ### Definition of 
  *moving expenses* 
  
  (3) In subsection 62(1), 
  *moving expenses* includes any expense incurred as or on account of  
  (a) travel costs (including a reasonable amount expended for meals and lodging), in the course of moving the taxpayer and members of the taxpayer’s household from the old residence to the new residence, 
  (b) the cost to the taxpayer of transporting or storing household effects in the course of moving from the old residence to the new residence, 
  (c) the cost to the taxpayer of meals and lodging near the old residence or the new residence for the taxpayer and members of the taxpayer’s household for a period not exceeding 15 days, 
  (d) the cost to the taxpayer of cancelling the lease by virtue of which the taxpayer was the lessee of the old residence, 
  (e) the taxpayer’s selling costs in respect of the sale of the old residence, 
  (f) where the old residence is sold by the taxpayer or the taxpayer’s spouse or common-law partner as a result of the move, the cost to the taxpayer of legal services in respect of the purchase of the new residence and of any tax, fee or duty (other than any goods and services tax or value-added tax) imposed on the transfer or registration of title to the new residence, 
  (g) interest, property taxes, insurance premiums and the cost of heating and utilities in respect of the old residence, to the extent of the lesser of $5,000 and the total of such expenses of the taxpayer for the period 
  (i) throughout which the old residence is neither ordinarily occupied by the taxpayer or by any other person who ordinarily resided with the taxpayer at the old residence immediately before the move nor rented by the taxpayer to any other person, and 
  (ii) in which reasonable efforts are made to sell the old residence, and 
  (h) the cost of revising legal documents to reflect the address of the taxpayer’s new residence, of replacing drivers’ licenses and non-commercial vehicle permits (excluding any cost for vehicle insurance) and of connecting or disconnecting utilities, but, for greater certainty, does not include costs (other than costs referred to in paragraph 62(3)(f)) incurred by the taxpayer in respect of the acquisition of the new residence. 
  
  ### Child care expenses
  
  63 (1) Subject to subsection 63(2), where a prescribed form containing prescribed information is filed with a taxpayer’s return of income (other than a return filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) under this Part for a taxation year, there may be deducted in computing the taxpayer’s income for the year such amount as the taxpayer claims not exceeding the total of all amounts each of which is an amount paid, as or on account of child care expenses incurred for services rendered in the year in respect of an eligible child of the taxpayer, 
  (a) by the taxpayer, where the taxpayer is described in subsection (2) and the supporting person of the child for the year is a person described in clause (i)(D) of the description of C in the formula in that subsection, or 
  (b) by the taxpayer or a supporting person of the child for the year, in any other case, to the extent that 
  (c) the amount is not included in computing the amount deductible under this subsection by an individual (other than the taxpayer), and 
  (d) the amount is not an amount (other than an amount that is included in computing a taxpayer’s income and that is not deductible in computing the taxpayer’s taxable income) in respect of which any taxpayer is or was entitled to a reimbursement or any other form of assistance, and the payment of which is proven by filing with the Minister one or more receipts each of which was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number, but not exceeding the amount, if any, by which 
  (e) the lesser of 
  (i) 2/3 of the taxpayer’s earned income for the year, and 
  (ii) the total of all amounts each of which is the annual child care expense amount in respect of an eligible child of the taxpayer for the year exceeds 
  (f) the total of all amounts each of which is an amount that is deducted, in respect of the taxpayer’s eligible children for the year, under this section in computing the income for the year of an individual (other than the taxpayer) to whom subsection 63(2) applies for the year. 
  
  ### Income exceeding income of supporting person
  
  (2) Where the income for a taxation year of a taxpayer who has an eligible child for the year exceeds the income for that year of a supporting person of that child (on the assumption that both incomes are computed without reference to this section and paragraphs 60(v.1) and 60(w), the amount that may be deducted by the taxpayer under subsection 63(1) for the year as or on account of child care expenses shall not exceed the lesser of 
  (a) the amount that would, but for this subsection, be deductible by the taxpayer for the year under subsection 63(1), and 
  (b) the amount determined by the formula is the total of all amounts each of which is the periodic child care expense amount in respect of an eligible child of the taxpayer for the year, and  [Repealed, 2001, c. 17, s. 42]  is the total of 
  (i) the number of weeks in the year during which the child care expenses were incurred and throughout which the supporting person was 
  (A) a student in attendance at a designated educational institution or a secondary school and enrolled in a program of the institution or school of not less than 3 consecutive weeks duration that provides that each student in the program spend not less than 10 hours per week on courses or work in the program, 
  (B) a person certified in writing by a medical doctor or a nurse practitioner to be a person who 
  (I) was incapable of caring for children because of the person’s mental or physical infirmity and confinement throughout a period of not less than 2 weeks in the year to bed, to a wheelchair or as a patient in a hospital, an asylum or other similar institution, or 
  (II) was in the year, and is likely to be for a long, continuous and indefinite period, incapable of caring for children, because of the person’s mental or physical infirmity, 
  (C) a person confined to a prison or similar institution throughout a period of not less than 2 weeks in the year, or 
  (D) a person who, because of a breakdown of the person’s marriage or common-law partnership, was living separate and apart from the taxpayer at the end of the year and for a period of at least 90 days that began in the year, and 
  (ii) the number of months in the year (other than a month that includes all or part of a week included in the number of weeks referred to in subparagraph (i)), each of which is a month during which the child care expenses were incurred and the supporting person was a student in attendance at a designated educational institution or a secondary school and enrolled in a program of the institution or school that is not less than 3 consecutive weeks duration and that provides that each student in the program spend not less than 12 hours in the month on courses in the program. 
  
  ### Taxpayer and supporting person with equal incomes
  
  (2.1) For the purposes of this section, where in any taxation year the income of a taxpayer who has an eligible child for the year and the income of a supporting person of the child are equal (on the assumption that both incomes are computed without reference to this section and paragraphs 60(v.1) and 60(w), no deduction shall be allowed under this section to the taxpayer and the supporting person in respect of the child unless they jointly elect to treat the income of one of them as exceeding the income of the other for the year. 
  
  ### Expenses while at school
  
  (2.2) There may be deducted in computing a taxpayer’s income for a taxation year such part of the amount determined under subsection 63(2.3) as the taxpayer claims, where 
  (a) the taxpayer is, at any time in the year, a student in attendance at a designated educational institution or a secondary school and enrolled in a program of the institution or school of not less than 3 consecutive weeks duration that provides that each student in the program spend not less than 
  (i) 10 hours per week on courses or work in the program, or 
  (ii) 12 hours per month on courses in the program; 
  (b) there is no supporting person of an eligible child of the taxpayer for the year or the income of the taxpayer for the year exceeds the income for the year of a supporting person of the child (on the assumption that both incomes are computed without reference to this section and paragraphs 60(v.1) and 60(w); and 
  (c) a prescribed form containing prescribed information is filed with the taxpayer’s return of income (other than a return filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) for the year. 
  
  ### Amount deductible
  
  (2.3) For the purpose of subsection 63(2.2), the amount determined in respect of a taxpayer for a taxation year is the least of 
  (a) the amount by which the total of all amounts, each of which is an amount paid as or on account of child care expenses incurred for services rendered in the year in respect of an eligible child of the taxpayer, exceeds the amount that is deductible under subsection 63(1) in computing the taxpayer’s income for the year, 
  (b) 2/3 of the taxpayer’s income for the year computed without reference to this section and paragraphs 60(v.1) and 60(w, 
  (c) the amount determined by the formula is the total of all amounts each of which is the periodic child care expense amount in respect of an eligible child of the taxpayer for the year, and  [Repealed, 2001, c. 17, s. 42]  is 
  (i) if there is a supporting person of an eligible child of the taxpayer for the year, 
  (A) the number of weeks, in the year, in which both the taxpayer and the supporting person were students who would be described in paragraph (2.2)(a) if that paragraph were read without reference to subparagraph (ii), and 
  (B) the number of months in the year (other than a month that includes all or part of a week included in the number of weeks referred to in clause (A)), in which both the taxpayer and the supporting person were students described in paragraph (2.2)(a), and 
  (ii) in any other case, 
  (A) the number of weeks, in the year, in which the taxpayer was a student who would be described in paragraph (2.2)(a) if that paragraph were read without reference to subparagraph (ii), and 
  (B) the number of months in the year (other than a month that includes all or part of a week included in the number of weeks referred to in clause (A)), in which the taxpayer was a student described in paragraph (2.2)(a), 
  (d) the amount by which the total calculated under subparagraph 63(1)(e)(ii) in respect of eligible children of the taxpayer for the year exceeds the amount that is deductible under subsection 63(1) in computing the taxpayer’s income for the year, and 
  (e) where there is a supporting person of an eligible child of the taxpayer for the year, the amount by which the amount calculated under paragraph 63(2)(b) for the year in respect of the taxpayer exceeds 2/3 of the taxpayer’s earned income for the year. 
  
  ### Definitions
  
  (3) In this section,  
  *annual child care expense amount*, in respect of an eligible child of a taxpayer for a taxation year, means  
  (a) $11,000, if the child is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year, and 
  (b) if the child is not a person referred to in paragraph (a), 
  (i) $8,000, if the child is under 7 years of age at the end of the year, and 
  (ii) $5,000, in any other case; ( montant annuel de frais de garde d’enfants)   
  *child care expense* means an expense incurred in a taxation year for the purpose of providing in Canada, for an eligible child of a taxpayer, child care services including baby sitting services, day nursery services or services provided at a boarding school or camp if the services were provided  
  (a) to enable the taxpayer, or the supporting person of the child for the year, who resided with the child at the time the expense was incurred, 
  (i) to perform the duties of an office or employment, 
  (ii) to carry on a business either alone or as a partner actively engaged in the business, 
  (iii)  [Repealed, 1996, c. 23, s. 173]  
  (iv) to carry on research or any similar work in respect of which the taxpayer or supporting person received a grant, or 
  (v) to attend a designated educational institution or a secondary school, where the taxpayer is enrolled in a program of the institution or school of not less than three consecutive weeks duration that provides that each student in the program spend not less than 
  (A) 10 hours per week on courses or work in the program, or 
  (B) 12 hours per month on courses in the program, and 
  (b) by a resident of Canada other than a person 
  (i) who is the father or the mother of the child, 
  (ii) who is a supporting person of the child or is under 18 years of age and related to the taxpayer, or 
  (iii) in respect of whom an amount is deducted under section 118 in computing the tax payable under this Part for the year by the taxpayer or by a supporting person of the child, except that 
  (c) any such expenses paid in the year for a child’s attendance at a boarding school or camp to the extent that the total of those expenses exceeds the product obtained when the periodic child care expense amount in respect of the child for the year is multiplied by the number of weeks in the year during which the child attended the school or camp, and 
  (d) for greater certainty, any expenses described in subsection 118.2(2) and any other expenses that are paid for medical or hospital care, clothing, transportation or education or for board and lodging, except as otherwise expressly provided in this definition, are not child care expenses; ( frais de garde d’enfants)   
  *earned income* of a taxpayer means the total of  
  (a) all salaries, wages and other remuneration, including gratuities, received by the taxpayer in respect of in the course of, or because of, offices and employments, 
  (b) all amounts that are included, or that would, but for paragraph 81(1)(a) or subsection 81(4), be included, because of section 6 or 7 or paragraph 56(1) (n), (n.1), (o) or (r), in computing the taxpayer’s income, 
  (c) all the taxpayer’s incomes or the amounts that would, but for paragraph 81(1)(a), be the taxpayer’s incomes from all businesses carried on either alone or as a partner actively engaged in the business, and 
  (d) all amounts received by the taxpayer as, on account of, in lieu of payment of or in satisfaction of, a disability pension under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act; (revenu gagné)   
  *eligible child* of a taxpayer for a taxation year means  
  (a) a child of the taxpayer or of the taxpayer’s spouse or common-law partner, or 
  (b) a child dependent on the taxpayer or the taxpayer’s spouse or common-law partner for support and whose income for the year does not exceed the amount determined for F in subsection 118(1.1) for the year if at any time during the year, the child 
  (c) is under 16 years of age, or 
  (d) is dependent on the taxpayer or on the taxpayer’s spouse or common-law partner and has a mental or physical infirmity; ( enfant admissible)   
  *periodic child care expense amount*, in respect of an eligible child of a taxpayer for a taxation year, means 1/40 of the annual child care expense amount in respect of the child for the year; (montant périodique de frais de garde d’enfants)   
  *supporting person* of an eligible child of a taxpayer for a taxation year means a person, other than the taxpayer, who is  
  (a) a parent of the child, 
  (b) the taxpayer’s spouse or common-law partner, or 
  (c) an individual who deducted an amount under section 118 for the year in respect of the child if the parent, spouse or common-law partner or individual, as the case may be, resided with the taxpayer at any time during the year and at any time within 60 days after the end of the year. ( personne assumant les frais d’entretien)  
  
  ### COVID-19 – child care expenses
  
  (3.1) For the purpose of applying this section in respect of a taxpayer for the 2020 or 2021 taxation year, 
  (a) the definition child care expense in subsection (3) is to be read without reference to its paragraph (a) if at any time in the year the taxpayer was entitled to an amount referred to in subparagraph 56(1)(a)(iv) or (vii) or paragraph 56(1)(r), in respect of the year; and  
  (b) paragraph (b) of the definition earned income in subsection (3) is to be read as follows:  
  (b) all amounts that are included, or that would, but for paragraph 81(1)(a) or subsection 81(4), be included, because of section 6 or 7, subparagraph 56(1)(a)(iv) or (vii) or paragraph 56(1)(n), (n.1), (o) or (r), in computing the taxpayer’s income, 
  
  ### Commuter’s child care expense
  
  (4) Where in a taxation year a person resides in Canada near the boundary between Canada and the United States and while so resident incurs expenses for child care services that would be child care expenses if 
  (a) the definition 
  *child care expense* in subsection 248(1) were read without reference to the words “in Canada”, and  
  (b) the reference in paragraph (b) of the definition 
  *child care expense* in subsection 248(1) to “resident of Canada” were read as “person”,  those expenses (other than expenses paid for a child’s attendance at a boarding school or camp outside Canada) shall be deemed to be child care expenses for the purpose of this section if the child care services are provided at a place that is closer to the person’s principal place of residence by a reasonably accessible route, having regard to the circumstances, than any place in Canada where such child care services are available and, in respect of those expenses, subsection 63(1) shall be read without reference to the words “and contains, where the payee is an individual, that individual’s Social Insurance Number”. 
  
  ### Disability supports deduction
  
  64 If a taxpayer files with the taxpayer’s return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) for the taxation year a prescribed form containing prescribed information, there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the amount determined by the formula is the total of all amounts each of which is an amount paid by the taxpayer in the year and that 
  (i) was paid to enable the taxpayer 
  (A) to perform the duties of an office or employment, 
  (B) to carry on a business either alone or as a partner actively engaged in the business, 
  (C) to attend a designated educational institution or a secondary school at which the taxpayer is enrolled in an educational program, or 
  (D) to carry on research or any similar work in respect of which the taxpayer received a grant, 
  (ii) was paid 
  (A) where the taxpayer has a speech or hearing impairment, for the cost of sign-language interpretation services or real time captioning services and to a person engaged in the business of providing such services, 
  (B) where the taxpayer is deaf or mute, for the cost of a teletypewriter or similar device, including a telephone ringing indicator, prescribed by a medical practitioner, to enable the taxpayer to make and receive telephone calls, 
  (C) where the taxpayer is blind, for the cost of a device or equipment, including synthetic speech systems, Braille printers, and large-print on-screen devices, prescribed by a medical practitioner, and designed to be used by blind individuals in the operation of a computer, 
  (D) where the taxpayer is blind, for the cost of an optical scanner or similar device, prescribed by a medical practitioner, and designed to be used by blind individuals to enable them to read print, 
  (E) where the taxpayer is mute, for the cost of an electronic speech synthesizer, prescribed by a medical practitioner, and designed to be used by mute individuals to enable them to communicate by use of a portable keyboard, 
  (F) where the taxpayer has an impairment in physical or mental functions, for the cost of note-taking services and to a person engaged in the business of providing such services, if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires such services, 
  (G) where the taxpayer has an impairment in physical functions, for the cost of voice recognition software, if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires that software, 
  (H) where the taxpayer has a learning disability or an impairment in mental functions, for the cost of tutoring services that are rendered to, and supplementary to the primary education of, the taxpayer and to a person ordinarily engaged in the business of providing such services to individuals who are not related to the person, if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that disability or impairment, requires those services, 
  (I) where the taxpayer has a perceptual disability, for the cost of talking textbooks used by the taxpayer in connection with the taxpayer’s enrolment at a secondary school in Canada or at a designated educational institution, if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that disability, requires those textbooks, 
  (J) where the taxpayer has an impairment in physical or mental functions, for the cost of attendant care services provided in Canada and to a person who is neither the taxpayer’s spouse or common-law partner nor under 18 years of age, if the taxpayer is a taxpayer in respect of whom an amount may be deducted because of section 118.3, or if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment is, and is likely to be indefinitely, dependent on others for their personal needs and care and who as a result requires a full-time attendant, 
  (K) where the taxpayer has a severe and prolonged impairment in physical or mental functions, for the cost of job coaching services (not including job placement or career counselling serv­ices) and to a person engaged in the business of providing such services if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires such services, 
  (L) where the taxpayer is blind or has a severe learning disability, for the cost of reading services and to a person engaged in the business of providing such services, if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment or disability, requires those services, 
  (M) where the taxpayer is blind and profoundly deaf, for the cost of deaf-blind intervening services and to a person engaged in the business of providing such services, 
  (N) where the taxpayer has a speech impairment, for the cost of a device that is a Bliss symbol board, or a similar device, that is prescribed by a medical practitioner to help the taxpayer communicate by selecting the symbols or spelling out words, 
  (O) where the taxpayer is blind, for the cost of a device that is a Braille note-taker, prescribed by a medical practitioner, to allow the taxpayer to take notes (that can, by the device, be read back to them or printed or displayed in Braille) with the help of a keyboard, 
  (P) where the taxpayer has a severe and prolonged impairment in physical functions that markedly restricts their ability to use their arms or hands, for the cost of a device that is a page turner prescribed by a medical practitioner to help the taxpayer to turn the pages of a book or other bound document, and 
  (Q) where the taxpayer is blind, or has a severe learning disability, for the cost of a device or software that is prescribed by a medical practitioner and designed to enable the taxpayer to read print, 
  (iii) is evidenced by one or more receipts filed with the Minister each of which was issued by the payee and contains, where the payee is an individual who is a person referred to in clause (ii)(J), that individual’s Social Insurance Number, and 
  (iv) is not included in computing a deduction under section 118.2 for any taxpayer for any taxation year, and is the total of all amounts each of which is the amount of a reimbursement or any other form of assistance (other than prescribed assistance or an amount that is included in computing a taxpayer’s income and that is not deductible in computing the taxpayer’s taxable income) that any taxpayer is or was entitled to receive in respect of an amount included in computing the value of A, and 
  (b) the total of 
  (i) the total of all amounts each of which is 
  (A) an amount included under section 5, 6 or 7 or paragraph 56(1)(n), (o) or (r) in computing the taxpayer’s income for the year, or 
  (B) the taxpayer’s income for the year from a business carried on either alone or as a partner actively engaged in the business, and 
  (ii) where the taxpayer is in attendance at a designated educational institution or a secondary school at which the taxpayer is enrolled in an educational program, the least of 
  (A) $15,000, 
  (B) $375 times the number of weeks in the year during which the taxpayer is in attendance at the institution or school, and 
  (C) the amount, if any, by which the amount that would, if this Act were read without reference to this section, be the taxpayer’s income for the year exceeds the total determined under subparagraph (i) in respect of the taxpayer for the year. 
  
  ### COVID-19 – disability supports deduction
  
  64.01 For the purpose of applying section 64 in respect of a taxpayer for the 2020 or 2021 taxation year, 
  (a) the description of A in paragraph 64(a) is to be read without reference to its subparagraph (i) if at any time in the year the taxpayer was entitled to an amount referred to in subparagraph 56(1)(a)(iv) or (vii) or paragraph 56(1)(r), in respect of the year; and 
  (b) clause 64(b)(i)(A) is to be read as follows: 
  (A) an amount included under section 5, 6 or 7, subparagraph 56(1)(a)(iv) or (vii) or paragraph 56(1)(n), (o) or (r) in computing the taxpayer’s income for the year, or 
  
  ### Individuals absent from Canada
  
  64.1 In applying sections 63 and 64 in respect of a taxpayer who is, throughout all or part of a taxation year, absent from but resident in Canada, the following rules apply for the year or that part of the year, as the case may be: 
  (a) the definition 
  *child care expense* in subsection 63(3), and section 64, shall be read without reference to the words “in Canada”;  
  (b) subsection 63(1) and section 64 shall be read without reference to the words “and contains, where the payee is an individual, that individual’s Social Insurance Number”, if the payment referred to in that subsection or section, as the case may be, is made to a person who is not resident in Canada; and 
  (c) paragraph (b) of the definition 
  *child care expense* in subsection 63(3) shall be read as if the word “person” were substituted for the words “resident of Canada” where they appear therein.  
  
  ### Allowance for oil or gas well, mine or timber limit
  
  65 (1) There may be deducted in computing a taxpayer’s income for a taxation year such amount as an allowance, if any, in respect of 
  (a) a natural accumulation of petroleum or natural gas, oil or gas well, mineral resource or timber limit, 
  (b) the processing of ore (other than iron ore or tar sands) from a mineral resource to any stage that is not beyond the prime metal stage or its equivalent, 
  (c) the processing of iron ore from a mineral resource to any stage that is not beyond the pellet stage or its equivalent, or 
  (d) the processing of tar sands from a mineral resource to any stage that is not beyond the crude oil stage or its equivalent as is allowed to the taxpayer by regulation. 
  
  ### Regulations
  
  (2) For greater certainty it is hereby declared that, in the case of a regulation made under subsection 65(1) allowing to a taxpayer an amount in respect of a natural accumulation of petroleum or natural gas, an oil or gas well or a mineral resource or in respect of the processing of ore, 
  (a) there may be allowed to the taxpayer by that regulation an amount in respect of any or all 
  (i) natural accumulations of petroleum or natural gas, oil or gas wells or mineral resources in which the taxpayer has any interest or, for civil law, right, or 
  (ii) processing operations described in any of paragraphs 65(1)(b), (c) and (d) that are carried on by the taxpayer; and 
  (b) notwithstanding any other provision contained in this Act, the Governor in Council may prescribe the formula by which the amount that may be allowed to the taxpayer by that regulation shall be determined. 
  
  ### Lessee’s share of allowance
  
  (3) Where a deduction is allowed under subsection 65(1) in respect of a coal mine operated by a lessee, the lessor and lessee may agree as to what portion of the allowance each may deduct and, in the event that they cannot agree, the Minister may fix the portions. 
  
  ### Exploration and development expenses of principal-business corporations
  
  66 (1) A principal-business corporation may deduct, in computing its income for a taxation year, the lesser of 
  (a) the total of such of its Canadian exploration and development expenses as were incurred by it before the end of the taxation year, to the extent that they were not deductible in computing income for a previous taxation year, and 
  (b) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this subsection, section 65 or subsection 66.1(2), minus the deductions allowed for the year by sections 112 and 113. 
  
  ### Expenses of special product corporations
  
  (2) A corporation (other than a principal-business corporation the principal business of which is described in paragraph (a) or (b) of the definition 
  *principal-business corporation* in subsection 66(15)), whose principal business is the production or marketing of sodium chloride or potash or whose business includes manufacturing products the manufacturing of which involves processing sodium chloride or potash, may deduct, in computing its income for a taxation year, the drilling and exploration expenses incurred by it in the year and before May 7, 1974 on or in respect of exploring or drilling for halite or sylvite.  
  
  ### Expenses of other taxpayers
  
  (3) A taxpayer other than a principal-business corporation may deduct, in computing the taxpayer’s income for a taxation year, the total of the taxpayer’s Canadian exploration and development expenses to the extent that they were not deducted in computing the taxpayer’s income for a preceding taxation year. 
  
  ### Foreign exploration and development expenses
  
  (4) A taxpayer who is resident throughout a taxation year in Canada may deduct, in computing the taxpayer’s income for that taxation year, the lesser of 
  (a) the amount, if any, by which 
  (i) the total of the foreign exploration and development expenses incurred by the taxpayer 
  (A) before the end of the year, 
  (B) at a time at which the taxpayer was resident in Canada, and 
  (C) where the taxpayer became resident in Canada before the end of the year, after the last time (before the end of the year) that the taxpayer became resident in Canada, exceeds the total of 
  (ii) such of the expenses described in subparagraph 66(4)(a)(i) as were deductible in computing the taxpayer’s income for a preceding taxation year, and 
  (iii) all amounts by which the amount described in this paragraph in respect of the taxpayer is required because of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) of that total, the greater of 
  (i) the amount, if any, claimed by the taxpayer not exceeding 10% of the amount determined under paragraph (a) in respect of the taxpayer for the year, and 
  (ii) the total of 
  (A) the part of the taxpayer’s income for the year, determined without reference to this subsection and subsection 66.21(4), that can reasonably be regarded as attributable to 
  (I) the production of petroleum or natural gas from natural accumulations outside Canada or from oil or gas wells outside Canada, or 
  (II) the production of minerals from mines outside Canada, 
  (B) the taxpayer’s income for the year from royalties in respect of a natural accumulation of petroleum or natural gas outside Canada, an oil or gas well outside Canada or a mine outside Canada, determined without reference to this subsection and subsection 66.21(4), and 
  (C) all amounts each of which is an amount, in respect of a foreign resource property that has been disposed of by the taxpayer, equal to the amount, if any, by which 
  (I) the amount included in computing the taxpayer’s income for the year by reason of subsection 59(1) in respect of the disposition exceeds 
  (II) the total of all amounts each of which is that portion of an amount deducted under subsection 66.7(2) in computing the taxpayer’s income for the year that 
  1 can reasonably be considered to be in respect of the foreign resource property, and 
  2 cannot reasonably be considered to have reduced the amount otherwise determined under clause (A) or (B) in respect of the taxpayer for the year. 
  
  ### Country-by-country FEDE allocations
  
  (4.1) For greater certainty, the portion of an amount deducted under subsection (4) in computing a taxpayer’s income for a taxation year that can reasonably be considered to be in respect of specified foreign exploration and development expenses of the taxpayer in respect of a country is considered to apply to a source in that country. 
  
  ### Method of allocation
  
  (4.2) For the purpose of subsection (4.1), where a taxpayer has incurred specified foreign exploration and development expenses in respect of two or more countries, an allocation to each of those countries for a taxation year shall be determined in a manner that is 
  (a) reasonable having regard to all the circumstances, including the level and timing of 
  (i) the taxpayer’s specified foreign exploration and development expenses in respect of the country, and 
  (ii) the profits or gains to which those expenses relate; and 
  (b) not inconsistent with the allocation made under subsection (4.1) for the preceding taxation year. 
  
  ### FEDE deductions where change of individual’s residence
  
  (4.3) Where at any time in a taxation year an individual becomes or ceases to be resident in Canada, 
  (a) subsection (4) applies to the individual as if the year were the period or periods in the year throughout which the individual was resident in Canada; and 
  (b) for the purpose of applying subsection (4), subsection (13.1) does not apply to the individual for the year. 
  
  ### Dealers
  
  (5) Subsections (3) and (4) and sections 59, 64, 66.1, 66.2, 66.21, 66.4 and 66.7 do not apply in computing the income for a taxation year of a taxpayer (other than a principal-business corporation) whose business includes trading or dealing in rights, licences or privileges to explore for, drill for or take minerals, petroleum, natural gas or other related hydrocarbons. 
  (10) to (10.3)  [Repealed, 1997, c. 25, s. 13(1)]  
  
  ### Idem
  
  (10.4) Where a taxpayer has, after April 19, 1983, made a payment or loan described in paragraph (a) of the definition 
  *agreed portion* in subsection 66(15) to a joint exploration corporation in respect of which the corporation has at any time renounced in favour of the taxpayer any Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses (in this subsection referred to as “resource expenses”) under subsection 66(10.1), 66(10.2) or 66(10.3), the following rules apply:  
  (a) where the taxpayer receives as consideration for the payment or loan property that is capital property to the taxpayer, 
  (i) there shall be deducted in computing the adjusted cost base to the taxpayer of the property at any time the amount of any resource expenses renounced by the corporation in the taxpayer’s favour in respect of the loan or payment at or before that time, 
  (ii) there shall be deducted in computing the adjusted cost base to the taxpayer at any time of any property for which the property, or any property substituted therefor, was exchanged the amount of any resource expenses renounced by the corporation in the taxpayer’s favour in respect of the loan or payment at or before that time (except to the extent such amount has been deducted under subparagraph 66(10.4)(a)(i)), and 
  (iii) the amount of any resource expenses renounced by the corporation in favour of the taxpayer in respect of the loan or payment at any time, except to the extent that the renunciation of those expenses results in a deduction under subparagraph 66(10.4)(a)(i) or 66(10.4)(a)(ii), shall, for the purposes of this Act, be deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of property at that time; 
  (b) where the taxpayer receives as consideration for the payment or loan property that is not capital property to the taxpayer, 
  (i) there shall be deducted in computing the cost to the taxpayer of the property at any time the amount of any resource expenses renounced by the corporation in the taxpayer’s favour in respect of the loan or payment at or before that time, and 
  (ii) there shall be included in computing the amount referred to in paragraph 59(3.2)(d) for a taxation year the amount of any resource expenses renounced by the corporation in the taxpayer’s favour in respect of the loan or payment at any time in the year, except to the extent that the amount has been deducted under subparagraph 66(10.4)(b)(i); and 
  (c) where the taxpayer does not receive any property as consideration for the payment, there shall be included in computing the amount referred to in paragraph 59(3.2)(e) for a taxation year the amount of any resource expenses renounced by the corporation in the taxpayer’s favour in respect of the payment in the year, except to the extent that the amount has been deducted from the adjusted cost base to the taxpayer of shares of the corporation under paragraph 53(2)(f.1) in respect of the payment. 
  
  ### Acquisition of control
  
  (11) Where after March 31, 1977 and before November 13, 1981 control of a corporation has been acquired by a person or persons who did not control the corporation at the time when it last ceased to carry on active business, 
  (a) the amount by which the Canadian exploration and development expenses incurred by the corporation before it last ceased to carry on active business exceeds the total of all amounts otherwise deductible by the corporation in respect of Canadian exploration and development expenses in computing its income for taxation years ending before control was so acquired, shall be deemed to have been deductible under this section by the corporation in computing its income for taxation years ending before control was so acquired; 
  (b) the amount by which the cumulative Canadian exploration expense of the corporation at the time it last ceased to carry on active business exceeds the total of amounts otherwise deducted under section 66.1 in computing its income for taxation years ending after that time and before control was so acquired, shall be deemed to have been deducted under that section by the corporation in computing its income for taxation years ending before control was so acquired; 
  (c) the amount by which the cumulative Canadian development expense of the corporation at the time it last ceased to carry on active business exceeds the total of amounts otherwise deducted under section 66.2 in computing its income for taxation years ending after that time and before control was so acquired, shall be deemed to have been deducted under that section by the corporation in computing its income for taxation years ending before control was so acquired; 
  (d) the amount by which the cumulative Canadian oil and gas property expense of the corporation at the time it last ceased to carry on active business exceeds the total of amounts otherwise deducted under section 66.4 in computing its income for taxation years ending after that time and before control was so acquired, shall be deemed to have been deducted under that section by the corporation in computing its income for taxation years ending before control was so acquired; and 
  (e) the amount by which the foreign exploration and development expenses incurred by the corporation before it last ceased to carry on active business exceeds the total of all amounts otherwise deductible by the corporation in respect of foreign exploration and development expenses in computing its income for taxation years ending before control was so acquired, shall be deemed to have been deductible under this section by the corporation in computing its income for taxation years ending before control was so acquired. 
  
  ### Control
  
  (11.3) For the purposes of subsections 66(11) and 66.7(10), where a corporation acquired control of another corporation after November 12, 1981 and before 1983 by reason of the acquisition of shares of the other corporation pursuant to an agreement in writing concluded on or before November 12, 1981, it shall be deemed to have acquired that control on or before November 12, 1981. 
  
  ### Loss restriction event
  
  (11.4) If 
  (a) at any time a taxpayer is subject to a loss restriction event, 
  (b) within the 12-month period that ended immediately before that time, the taxpayer, a partnership of which the taxpayer was a majority-interest partner or a trust of which the taxpayer was a majority-interest beneficiary (as defined in subsection 251.1(3)) acquired a Canadian resource property or a foreign resource property (other than a property that was held, by the taxpayer, partnership or trust or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition 
  *controlled* in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer, partnership or trust), and  
  (c) immediately before the 12-month period began the taxpayer, partnership or trust was not, or would not be if it were a corporation, a principal-business corporation, for the purposes of subsection (4) and sections 66.2, 66.21 and 66.4, except as those provisions apply for the purposes of section 66.7, the property is deemed not to have been acquired by the taxpayer, partnership or trust, as the case may be, before that time, except that if the property has been disposed of by it before that time and not reacquired by it before that time, the property is deemed to have been acquired by the taxpayer, partnership or trust, as the case may be, immediately before it disposed of the property. 
  
  ### Affiliation  — subsection (11.4)
  
  (11.5) For the purposes of subsection (11.4), if the taxpayer referred to in that subsection was formed or created in the 12-month period referred to in that subsection, the taxpayer is deemed to have been, throughout the period that began immediately before the 12-month period and ended immediately after it was formed or created, 
  (a) in existence; and 
  (b) affiliated with every person with whom it was affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) throughout the period that began when it was formed or created and that ended immediately before the time at which the taxpayer was subject to the loss restriction event referred to in that subsection. 
  
  ### Trust loss restriction event  — successor
  
  (11.6) If at any time a trust is subject to a loss restriction event, 
  (a) for the purposes of the provisions of this Act relating to deductions in respect of drilling and exploration expenses, prospecting, exploration and development expenses, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses (in this subsection referred to as “resource expenses”) incurred by the trust before that time, the following rules apply: 
  (i) the trust is (other than for purposes of this subsection and subsections (11.4), (11.5) and 66.7(10) to (11)) deemed to be a corporation that 
  (A) after that time is a successor (within the meaning assigned by any of subsections 66.7(1), (2) and (2.3) to (5)), and 
  (B) at that time, acquired all the properties held by the trust immediately before that time from an original owner of those properties, 
  (ii) if the trust did not hold a foreign resource property immediately before that time, the trust is deemed to have owned a foreign resource property immediately before that time, 
  (iii) a joint election is deemed to have been filed in accordance with subsections 66.7(7) and (8) in respect of the acquisition described in clause (i)(B), 
  (iv) the resource expenses incurred by the trust before that time are deemed to have been incurred by an original owner of the properties and not by the trust, 
  (v) the original owner is deemed to have been resident in Canada at every time before that time at which the trust was resident in Canada, 
  (vi) if at that time the trust is a member of a partnership and the property of the partnership includes a Canadian resource property or a foreign resource property, 
  (A) for the purposes of clause (i)(B), the trust is deemed to have held immediately before that time that portion of the partnership’s property at that time that is equal to the trust’s percentage share of the total of amounts that would be paid to all members of the partnership if it were wound up at that time, and 
  (B) for the purposes of clauses 66.7(1)(b)(i)(C) and (2)(b)(i)(B), subparagraph 66.7(2.3)(b)(i) and clauses 66.7(3)(b)(i)(C), (4)(b)(i)(B) and (5)(b)(i)(B) for a taxation year that ends after that time, the lesser of the following amounts is deemed to be income of the trust for the year that can reasonably be regarded as attributable to production from the property: 
  (I) the trust’s share of the part of the income of the partnership for the fiscal period of the partnership that ends in the year that can reasonably be regarded as attributable to the production from the property, and 
  (II) an amount that would be determined under subclause (I) for the year if the trust’s share of the income of the partnership for the fiscal period of the partnership that ends in the year were determined on the basis of the percentage share referred to in clause (A), and 
  (vii) if after that time the trust disposes of property that was at that time held by the trust to another person, subsections 66.7(1) to (5) do not apply in respect of the acquisition by the other person of the property; and 
  (b) if before that time, the trust or a partnership of which the trust was a member acquired a property that is a Canadian resource property, a foreign resource property or an interest in a partnership and it can reasonably be considered that one of the main purposes of the acquisition is to avoid any limitation provided in any of subsections 66.7(1) to (5) on the deduction in respect of any expenses incurred by the trust, then the trust or the partnership, as the case may be, is deemed, for the purposes of applying those subsections to or in respect of the trust, not to have acquired the property. 
  
  ### Computation of exploration and development expenses
  
  (12) In computing a taxpayer’s Canadian exploration and development expenses, 
  (a) there shall be deducted any amount paid to the taxpayer before May 7, 1974 
  (i) and after 1971 under the Northern Mineral Exploration Assistance Regulations made under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, or  
  (ii) pursuant to any agreement entered into between the taxpayer and Her Majesty in right of Canada under the Northern Mineral Grants Program or the Development Program of the Department of Indian Affairs and Northern Development, to the extent that the amount has been expended by the taxpayer as or on account of Canadian exploration and development expenses incurred by the taxpayer; and 
  (b) there shall be included any amount, except an amount in respect of interest, paid by the taxpayer after 1971 and before May 7, 1974 under the Regulations referred to in subparagraph 66(12)(a)(i) to Her Majesty in right of Canada. 
  
  ### Limitations of Canadian exploration and development expenses
  
  (12.1) Except as expressly otherwise provided in this Act, 
  (a) if as a result of a transaction occurring after May 6, 1974 an amount has become receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer therefor was property (other than a share or a Canadian resource property, or an interest in or a right to — or, for civil law, a right in or to — the share or the property) or services, the original cost of which to the taxpayer may reasonably be regarded as having been primarily Canadian exploration and development expenses of the taxpayer (or would have been so regarded if they had been incurred by the taxpayer after 1971 and before May 7, 1974) or a Canadian exploration expense, there shall at that time be included in the amount determined for G in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6) in respect of the taxpayer the amount that became receivable by the taxpayer at that time; and  
  (b) if as a result of a transaction occurring after May 6, 1974 an amount has become receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer therefor was property (other than a share or a Canadian resource property, or an interest in or a right to — or, for civil law, a right in or to — the share or the property) or services, the original cost of which to the taxpayer may reasonably be regarded as having been primarily a Canadian development expense, there shall at that time be included in the amount determined for G in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) in respect of the taxpayer the amount that became receivable by the taxpayer at that time.  
  
  ### Unitized oil or gas field in Canada
  
  (12.2) Where, pursuant to an agreement between a taxpayer and another person to unitize an oil or gas field in Canada, an amount has become receivable by the taxpayer at a particular time after May 6, 1974 from that other person in respect of Canadian exploration expense incurred by the taxpayer or Canadian exploration and development expenses incurred by the taxpayer (or expenses that would have been Canadian exploration and development expenses if they had been incurred by the taxpayer after 1971 and before May 7, 1974) in respect of that field or any part thereof, the following rules apply: 
  (a) there shall, at that time, be included by the taxpayer in the amount determined for G in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6) the amount that became receivable by the taxpayer; and  
  (b) there shall, at that time, be included by the other person in the amount referred to in paragraph (c) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) the amount that became payable by that person.  
  
  ### Idem
  
  (12.3) Where, pursuant to an agreement between a taxpayer and another person to unitize an oil or gas field in Canada, an amount has become receivable by the taxpayer at a particular time after May 6, 1974 from that other person in respect of Canadian development expense incurred by the taxpayer in respect of that field or any part thereof, the following rules apply: 
  (a) there shall, at that time, be included by the taxpayer in the amount determined for G in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) the amount that became receivable by the taxpayer; and  
  (b) there shall, at that time, be included by the other person in the amount referred to in paragraph (a) of the definition 
  *Canadian development expense* in subsection 66.2(5) the amount that became payable by that person.  
  
  ### Limitation of FEDE
  
  (12.4) Where, as a result of a transaction that occurs after May 6, 1974, an amount becomes receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer for the amount receivable is property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily foreign exploration and development expenses of the taxpayer (or would have been so regarded if they had been incurred by the taxpayer after 1971 and the definition 
  *foreign exploration and development expenses* in subsection (15) were read without reference to paragraph (k) of that definition), the following rules apply:  
  (a) in computing the taxpayer’s foreign exploration and development expenses at that time, there shall be deducted the amount receivable by the taxpayer; 
  (b) where the amount receivable exceeds the total of the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, there shall be included in the amount referred to in paragraph 59(3.2)(a) the amount, if any, by which the amount receivable exceeds the total of 
  (i) the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, and 
  (ii) the amount, designated by the taxpayer in prescribed form filed with the taxpayer’s return of income for the year, not exceeding the portion of the amount receivable for which the consideration given by the taxpayer was property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily 
  (A) specified foreign exploration and development expenses in respect of a country, or 
  (B) foreign resource expenses in respect of a country; and 
  (c) where an amount is included in the amount referred to in paragraph 59(3.2)(a) by virtue of paragraph 66(12.4)(b), the total of the taxpayer’s foreign exploration and development expenses at that time shall be deemed to be nil. 
  
  ### Limitations of foreign resource expenses
  
  (12.41) Where a particular amount described in subsection (12.4) becomes receivable by a taxpayer at a particular time, there shall at that time be included in the value determined for G in the definition 
  *cumulative foreign resource expense* in subsection 66.21(1) in respect of the taxpayer and a country the amount designated under subparagraph (12.4)(b)(ii) by the taxpayer in respect of the particular amount and the country.  
  
  ### Partnerships
  
  (12.42) For the purposes of subsections (12.4) and (12.41), where a person or partnership is a member of a particular partnership and a particular amount described in subsection (12.4) becomes receivable by the particular partnership in a fiscal period of the particular partnership, 
  (a) the member’s share of the particular amount is deemed to be an amount that became receivable by the member at the end of the fiscal period; and 
  (b) the amount deemed by paragraph (a) to be an amount receivable by the member is deemed to be an amount 
  (i) that is described in subsection (12.4) in respect of the member, and 
  (ii) that has the same attributes for the member as it did for the particular partnership. 
  
  ### Unitized oil or gas field in Canada
  
  (12.5) Where, pursuant to an agreement between a taxpayer and another person to unitize an oil or gas field in Canada, an amount has become receivable by the taxpayer at a particular time from that other person in respect of Canadian oil and gas property expense incurred by the taxpayer in respect of that field or any part thereof, the following rules apply: 
  (a) there shall, at that time, be included by the taxpayer in the amount determined for G in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) the amount that became receivable by the taxpayer; and  
  (b) there shall, at that time, be included by the other person in the amount referred to in paragraph (a) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5) the amount that became payable by that person.  
  
  ### Canadian exploration expenses to flow-through shareholder
  
  (12.6) If a person gave consideration under an agreement to a corporation for the issue of a flow-through share of the corporation and, in the period that begins on the day on which the agreement was made and ends 24 months after the end of the month that includes that day, the corporation incurred Canadian exploration expenses (other than an expense deemed by subsection 66.1(9) to be a Canadian exploration expense of the corporation), the corporation may, after it complies with subsection (12.68) in respect of the share and before March of the first calendar year that begins after the period, renounce, effective on the day on which the renunciation is made or on an earlier day set out in the form prescribed for the purpose of subsection (12.7), to the person in respect of the share the amount, if any, by which the portion of those expenses that was incurred on or before the effective date of the renunciation (which portion is in this subsection referred to as the “specified expenses”) exceeds the total of 
  (a) the assistance that the corporation has received, is entitled to receive or can reasonably be expected to receive at any time, and that can reasonably be related to the specified expenses or to Canadian exploration activities to which the specified expenses relate (other than assistance that can reasonably be related to expenses referred to in any of paragraphs (b) to (b.2)), 
  (b) all specified expenses that are prescribed Canadian exploration and development overhead expenses of the corporation, 
  (b.1) all specified expenses each of which is a cost of, or for the use of, seismic data 
  (i) that had been acquired (otherwise than as a consequence of performing work that resulted in the creation of the data) by any other person before the cost was incurred, 
  (ii) in respect of which a right to use had been acquired by any other person before the cost was incurred, or 
  (iii) all or substantially all of which resulted from work performed more than one year before the cost was incurred, 
  (b.2) if the agreement is made after March 2023, all specified expenses that are not described in paragraph (b) or (b.1) and that would be Canadian exploration expenses if 
  (i) the definition Canadian exploration expense in subsection 66.1(6) were read without reference to its paragraph (g.1), and  
  (ii) the definition mineral resource in subsection 248(1) were read without reference to its paragraphs (a) and (d), and  
  (c) the total of amounts that are renounced on or before the date on which the renunciation is made by any other renunciation under this subsection in respect of those expenses, but not in any case 
  (d) exceeding the amount, if any, by which the consideration for the share exceeds the total of other amounts renounced under this subsection or subsection 66(12.601) or 66(12.62) in respect of the share on or before the day on which the renunciation is made, or 
  (e) exceeding the amount, if any, by which the cumulative Canadian exploration expense of the corporation on the effective date of the renunciation computed before taking into account any amounts renounced under this subsection on the date on which the renunciation is made, exceeds the total of all amounts renounced under this subsection in respect of any other share 
  (i) on the date on which the renunciation is made, and 
  (ii) effective on or before the effective date of the renunciation. 
  
  ### COVID-19 – time extension to 36 months
  
  (12.6001) The references to “24 months” in subsections (12.6) and (12.62) are to be read as references to “36 months” in respect of agreements entered into after February 2018 and before 2021. 
  
  ### Flow-through share rules for first $1 million of Canadian development expenses
  
  (12.601) Where 
  (a) a person gave consideration under an agreement to a corporation for the issue of a flow-through share of the corporation, 
  (a.1) the corporation’s taxable capital amount at the time the consideration was given was not more than $15,000,000, and 
  (b) during the period beginning on the particular day the agreement was entered into and ending on the earlier of December 31, 2018 and the day that is 24 months after the end of the month that included that particular day, the corporation incurred Canadian development expenses (excluding expenses that are deemed by subsection (12.66) to have been incurred on December 31, 2018) described in paragraph (a) or (b) of the definition Canadian development expense in subsection 66.2(5) or that would be described in paragraph (f) of that definition if the words “paragraphs (a) to (e)” in that paragraph were read as “paragraphs (a) and (b)”,  the corporation may, after it complies with subsection 66(12.68) in respect of the share and before March of the first calendar year that begins after that period, renounce, effective on the day on which the renunciation is made or on an earlier day set out in the form prescribed for the purposes of subsection 66(12.7), to the person in respect of the share the amount, if any, by which the part of those expenses that was incurred on or before the effective date of the renunciation (which part is in this subsection referred to as the “specified expenses”) exceeds the total of 
  (c) the assistance that the corporation has received, is entitled to receive, or can reasonably be expected to receive at any time, and that can reasonably be related to the specified expenses or Canadian development activities to which the specified expenses relate (other than assistance that can reasonably be related to expenses referred to in paragraph 66(12.601)(d)), 
  (d) all specified expenses that are prescribed Canadian exploration and development overhead expenses of the corporation, and 
  (e) all amounts that are renounced on or before the day on which the renunciation is made by any other renunciation under this subsection or subsection 66(12.62) in respect of those expenses. 
  
  ### Taxable capital amount
  
  (12.6011) For the purpose of subsection 66(12.601), a particular corporation’s taxable capital amount at any time is the total of 
  (a) its taxable capital employed in Canada for its last taxation year that ended more than 30 days before that time, and 
  (b) the total of all amounts each of which is the taxable capital employed in Canada of another corporation associated at that time with the particular corporation for the other corporation’s last taxation year that ended more than 30 days before that time. 
  
  ### Taxable capital employed in Canada
  
  (12.6012) For the purpose of determining a corporation’s taxable capital amount at a particular time under subsection 66(12.6011) and for the purpose of subsection 66(12.6013), a particular corporation’s taxable capital employed in Canada for a taxation year is the amount that would be its taxable capital employed in Canada for the year, determined in accordance with subsection 181.2(1) and without reference to the portion of its investment allowance (as determined under subsection 181.2(4)) that is attributable to shares of the capital stock of, dividends payable by, or indebtedness of, another corporation that 
  (a) was not associated with the particular corporation at the particular time; and 
  (b) was associated with the particular corporation at the end of the particular corporation’s last taxation year that ended more than 30 days before that time. 
  
  ### Amalgamations and mergers
  
  (12.6013) For the purpose of determining the taxable capital amount at a particular time under subsection 66(12.6011) of any corporation and for the purpose of this subsection, a particular corporation that was created as a consequence of an amalgamation or merger of other corporations (each of which is in this subsection referred to as a “predecessor corporation”), and that does not have a taxation year that ended more than 30 days before the particular time, is deemed to have taxable capital employed in Canada for a taxation year that ended more than 30 days before the particular time equal to the total of all amounts each of which is the taxable capital employed in Canada of a predecessor corporation for its last taxation year that ended more than 30 days before the particular time. 
  
  ### Idem
  
  (12.602) A corporation shall be deemed not to have renounced any particular amount under subsection 66(12.601) in respect of a share where 
  (a) the particular amount exceeds the amount, if any, by which the consideration for the share exceeds the total of other amounts renounced in respect of the share under subsection 66(12.6), 66(12.601) or 66(12.62) on or before the day on which the renunciation is made; 
  (b) the particular amount exceeds the amount, if any, by which 
  (i) the cumulative Canadian development expense of the corporation on the effective date of the renunciation, computed before taking into account any amounts renounced under subsection 66(12.601) on the day on which the renunciation is made, exceeds 
  (ii) the total of all amounts renounced under subsection 66(12.601) by the corporation in respect of any other share 
  (A) on the day on which the renunciation is made, and 
  (B) effective on or before the effective date of the renunciation; or 
  (c) the particular amount relates Canadian development expenses incurred by the corporation in a calendar year and the total amounts renounced, on or before the day on which the renunciation is made, under subsection 66(12.601) in respect of 
  (i) Canadian development expenses incurred by the corporation in that calendar year, or 
  (ii) Canadian development expenses incurred in that calendar year by another corporation associated with the corporation at the time the other corporation incurred such expenses exceeds $1,000,000. 
  
  ### Effect of renunciation
  
  (12.61) Subject to subsections 66(12.69) to 66(12.702), where under subsection 66(12.6) or 66(12.601) a corporation renounces an amount to a person, 
  (a) the Canadian exploration expenses or Canadian development expenses to which the amount relates shall be deemed to be Canadian exploration expenses incurred in that amount by the person on the effective date of the renunciation; and 
  (b) the Canadian exploration expenses or Canadian development expenses to which the amount relates shall, except for the purposes of that renunciation, be deemed on and after the effective date of the renunciation never to have been Canadian exploration expenses or Canadian development expenses incurred by the corporation. 
  
  ### Canadian development expenses to flow-through shareholder
  
  (12.62) Where a person gave consideration under an agreement to a corporation for the issue of a flow-through share of the corporation and, in the period that begins on the day the agreement was made and ends 24 months after the end of the month that includes that day, the corporation incurred Canadian development expenses, the corporation may, after it complies with subsection 66(12.68) in respect of the share and before March of the first calendar year that begins after the period, renounce, effective on the day on which the renunciation is made or on an earlier day set out in the form prescribed for the purposes of subsection 66(12.7), to the person in respect of the share the amount, if any, by which the part of those expenses that was incurred on or before the effective date of the renunciation (which part is in this subsection referred to as the “specified expenses”) exceeds the total of 
  (a) the assistance that the corporation has received, is entitled to receive, or can reasonably be expected to receive at any time, and that can reasonably be related to the specified expenses or to Canadian development activities to which the specified expenses relate (other than assistance that can reasonably be related to expenses referred to in any of paragraphs (b) to (b.2)), 
  (b) all specified expenses that are prescribed Canadian exploration and development overhead expenses of the corporation, 
  (b.1) all specified expenses that are described in paragraph (e) of the definition 
  *Canadian development expense* in subsection 66.2(5) or that are described in paragraph (f) of that definition because of the reference in the latter paragraph to paragraph 66(12.62)(e),  
  (b.2) if the agreement is made after March 2023, all specified expenses that are not described in paragraph (b) or (b.1) and that would be Canadian development expenses if the definition mineral resource in subsection 248(1) were read without reference to its paragraphs (a) and (d), and  
  (c) the total of amounts that are renounced on or before the day on which the renunciation is made by any other renunciation under this subsection or subsection 66(12.601) in respect of those expenses, but not in any case 
  (d) exceeding the amount, if any, by which the consideration for the share exceeds the total of other amounts renounced in respect of the share under this subsection or subsection 66(12.6) or 66(12.601) on or before the day on which the renunciation is made, or 
  (e) exceeding the amount, if any, by which the cumulative Canadian development expense of the corporation on the effective date of the renunciation computed before taking into account any amounts renounced under this subsection on the date on which the renunciation is made, exceeds the total of all amounts renounced under this subsection in respect of any other share 
  (i) on the date on which the renunciation is made, and 
  (ii) effective on or before the effective date of the renunciation. 
  
  ### Effect of renunciation
  
  (12.63) Subject to subsections (12.69) to (12.702), if under subsection (12.62) a corporation renounces an amount to a person, 
  (a) the Canadian development expenses to which the amount relates shall be deemed to be Canadian development expenses incurred in that amount by the person on the effective date of the renunciation; and 
  (b) the Canadian development expenses to which the amount relates shall, except for the purposes of that renunciation, be deemed on and after the effective date of the renunciation never to have been Canadian development expenses incurred by the corporation. 
  (12.64) and (12.65)  [Repealed, 1997, c. 25, s. 13(15)]  
  
  ### Expenses in the first 60 days of year
  
  (12.66) Where 
  (a) a corporation that issues a flow-through share to a person under an agreement incurs, in a particular calendar year, Canadian exploration expenses or Canadian development expenses, 
  (a.1) the agreement was made in the preceding calendar year, 
  (b) the expenses 
  (i) are described in paragraph (a), (d), (f) or (g.1) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) or paragraph (a) or (b) of the definition 
  *Canadian development expense* in subsection 66.2(5),  
  (ii) would be described in paragraph (h) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) if the reference to “paragraphs (a) to (d) and (f) to (g.4)” in that paragraph were read as “paragraphs (a), (d), (f) and (g.1)”, or  
  (iii) would be described in paragraph (f) of the definition 
  *Canadian development expense* in subsection 66.2(5) if the words “any of paragraphs 66(12.66)(a) to (e)” were read as “paragraph 66(12.66)(a) or (b)”,  
  (c) before the end of that preceding year the person paid the consideration in money for the share to be issued, 
  (d) the corporation and the person deal with each other at arm’s length throughout the particular year, and 
  (e) in January, February or March of the particular year, the corporation renounces an amount in respect of the expenses to the person in respect of the share in accordance with subsection 66(12.6) or 66(12.601) and the effective date of the renunciation is the last day of that preceding year, the corporation is, for the purpose of subsection (12.6), or of subsection (12.601) and paragraph (12.602)(b), as the case may be, deemed to have incurred the expenses on the last day of that preceding year. 
  
  ### Restrictions on renunciation
  
  (12.67) A corporation shall be deemed 
  (a) not to have renounced under any of subsections 66(12.6), 66(12.601) and 66(12.62) any expenses that are deemed to have been incurred by it because of a renunciation under this section by another corporation that is not related to it; 
  (b) not to have renounced under subsection 66(12.601) to a trust, corporation or partnership any Canadian development expenses (other than expenses renounced to another corporation that renounces under subsection 66(12.6) any Canadian exploration expense deemed to have been incurred by it because of the renunciation under subsection 66(12.601)) if, in respect of the renunciation under subsection 66(12.601), it has a prohibited relationship with the trust, corporation or partnership; 
  (c) not to have renounced under subsection 66(12.601) any Canadian development expenses deemed to have been incurred by it because of a renunciation under subsection 66(12.62); and 
  (d) not to have renounced under subsection 66(12.6) to a particular trust, corporation or partnership any Canadian exploration expenses (other than expenses ultimately renounced by another corporation under subsection 66(12.6) to an individual (other than a trust) or to a trust, corporation or partnership with which that other corporation does not have, in respect of that ultimate renunciation, a prohibited relationship) deemed to be incurred by it because of a renunciation under subsection 66(12.601) if, in respect of the renunciation under subsection 66(12.6), it has a prohibited relationship with the particular trust, corporation or partnership. 
  
  ### Prohibited relationship
  
  (12.671) For the purposes of subsection 66(12.67), where a trust, corporation (in paragraph 66(12.671)(b) referred to as the “shareholder corporation”) or partnership, as the case may be, gave consideration under a particular agreement for the issue of a flow-through share of a particular corporation, the particular corporation has, in respect of a renunciation under subsection 66(12.6) or 66(12.601) in respect of the share, a prohibited relationship 
  (a) with the trust if, at any time after the particular agreement was entered into and before the share is issued to the trust, the particular corporation or any corporation related to the particular corporation is beneficially interested in the trust; 
  (b) with the shareholder corporation if, immediately before the particular agreement was entered into, the shareholder corporation was related to the particular corporation; or 
  (c) with the partnership if any part of the amount renounced would, but for subsection 66(12.7001), be included, because of paragraph (h) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), in the Canadian exploration expense of  
  (i) the particular corporation, or 
  (ii) any other corporation that, at any time 
  (A) after the particular agreement was entered into, and 
  (B) before that part of the amount renounced would, but for this paragraph, be incurred, would, if flow-through shares issued by the particular corporation under agreements entered into at the same time as or after the time the particular agreement was entered into were disregarded, be related to the particular corporation. 
  
  ### Filing selling instruments
  
  (12.68) A corporation that agrees to issue or prepares a selling instrument in respect of flow-through shares shall file with the Minister a prescribed form together with a copy of the selling instrument or agreement to issue the shares on or before the last day of the month following the earlier of 
  (a) the month in which the agreement to issue the shares is entered into, and 
  (b) the month in which the selling instrument is first delivered to a potential investor, and the Minister shall thereupon assign an identification number to the form and notify the corporation of the number. 
  
  ### Filing re partners
  
  (12.69) Where, in a fiscal period of a partnership, an expense is incurred by the partnership as a consequence of a renunciation of an amount under subsection 66(12.6), 66(12.601) or 66(12.62), the partnership shall, before the end of the third month that begins after the end of the period, file with the Minister a prescribed form identifying the share of the expense attributable to each member of the partnership at the end of the period. 
  
  ### Consequences of failure to file
  
  (12.6901) Where a partnership fails to file a prescribed form as required under subsection 66(12.69) in respect of an expense, except for the purpose of subsection 66(12.69) the partnership is deemed not to have incurred the expense. 
  
  ### Filing re assistance
  
  (12.691) Where a partnership receives or becomes entitled to receive assistance as an agent for its members or former members at a particular time in respect of any Canadian exploration expense or Canadian development expense that is or, but for paragraph 66(12.61)(b) or 66(12.63)(b), would be incurred by a corporation, the following rules apply: 
  (a) where the entitlement of any such member or former member to any part of the assistance is known by the partnership as of the end of the partnership’s first fiscal period ending after the particular time and that part of the assistance was not required to be reported under paragraph 66(12.691)(b) in respect of a calendar year ending before the end of that fiscal period, the partnership shall, on or before the last day of the third month following the end of that fiscal period, file with the Minister a prescribed form indicating the share of that part of the assistance paid to each of those members or former members before the end of that fiscal period or to which each of those members or former members is entitled at the end of that fiscal period; 
  (b) where the entitlement of any of those members or former members to any part of the assistance is known by the partnership as of the end of a calendar year that ends after the particular time and that part of the assistance was not required to be reported under paragraph 66(12.691)(a) in respect of a fiscal period ending at or before the end of that calendar year, or under this paragraph in respect of a preceding calendar year, the partnership shall, on or before the last day of the third month following the end of that calendar year, file with the Minister a prescribed form indicating the share of that part of the assistance paid to each of those members or former members before the end of that fiscal period or to which each of those members or former members is entitled at the end of that calendar year; and 
  (c) where a prescribed form required to be filed under paragraph 66(12.691)(a) or 66(12.691)(b) is not so filed, the part of that expense relating to the assistance required to be reported in the prescribed form shall be deemed not to have been incurred by the partnership. 
  
  ### Filing re renunciation
  
  (12.7) Where a corporation renounces an amount in respect of Canadian exploration expenses or Canadian development expenses under subsection 66(12.6), 66(12.601) or 66(12.62), the corporation shall file a prescribed form in respect of the renunciation with the Minister before the end of the first month after the month in which the renunciation is made. 
  
  ### Consequences of failure to file
  
  (12.7001) Where a corporation fails to file a prescribed form as required under subsection 66(12.7) in respect of a renunciation of an amount, subsections 66(12.61) and 66(12.63) do not apply in respect of the amount. 
  
  ### Filing re assistance
  
  (12.701) Where a corporation receives or becomes entitled to receive assistance as an agent in respect of any Canadian exploration expense or Canadian development expense that is or, but for paragraph 66(12.61)(b) or 66(12.63)(b), would be incurred by the corporation, the corporation shall, before the end of the first month after the particular month in which it first becomes known to the corporation that a person that holds a flow-through share of the corporation is entitled to a share of any part of the assistance, file with the Minister a prescribed form identifying the share of the assistance to which each of those persons is entitled at the end of the particular month. 
  
  ### Consequences of failure to file
  
  (12.702) Where a corporation fails to file a prescribed form as required under subsection 66(12.701) in respect of assistance, except for the purpose of subsection 66(12.701) the Canadian exploration expense or Canadian development expense to which the assistance relates is deemed not to have been incurred by the corporation. 
  
  ### Restriction on renunciation
  
  (12.71) A corporation may renounce an amount under subsection 66(12.6), 66(12.601) or 66(12.62) in respect of Canadian exploration expenses or Canadian development expenses incurred by it only to the extent that, but for the renunciation, it would be entitled to a deduction in respect of the expenses in computing its income. 
  (12.72)  [Repealed, 1997, c. 25, s. 13(23)]  
  
  ### Reductions in renunciations
  
  (12.73) Where an amount that a corporation purports to renounce to a person under subsection 66(12.6), 66(12.601) or 66(12.62) exceeds the amount that it can renounce to the person under that subsection, 
  (a) the corporation shall file a statement with the Minister in prescribed form where 
  (i) the Minister sends a notice in writing to the corporation demanding the statement, or 
  (ii) the excess arose as a consequence of a renunciation purported to be made in a calendar year under subsection 66(12.6) or 66(12.601) because of the application of subsection 66(12.66) and, at the end of the year, the corporation knew or ought to have known of all or part of the excess; 
  (b) where subparagraph 66(12.73)(a)(i) applies, the statement shall be filed not later than 30 days after the Minister sends a notice in writing to the corporation demanding the statement; 
  (c) where subparagraph 66(12.73)(a)(ii) applies, the statement shall be filed before March of the calendar year following the calendar year in which the purported renunciation was made; 
  (d) except for the purpose of Part XII.6, any amount that is purported to have been so renounced to any person is deemed, after the statement is filed with the Minister, to have always been reduced by the portion of the excess identified in the statement in respect of that purported renunciation; and 
  (e) where a corporation fails in the statement to apply the excess fully to reduce one or more purported renunciations, the Minister may at any time reduce the total amount purported to be renounced by the corporation to one or more persons by the amount of the unapplied excess in which case, except for the purpose of Part XII.6, the amount purported to have been so renounced to a person is deemed, after that time, always to have been reduced by the portion of the unapplied excess allocated by the Minister in respect of that person. 
  
  ### COVID-19 – agreements in 2019 or 2020
  
  (12.731) If an agreement is entered into in 2019 or 2020 by a corporation to issue flow-through shares of the corporation, 
  (a) the reference in subparagraph (12.73)(a)(ii) to “at the end of the year” is to be read as a reference to “at the end of the subsequent year”; and 
  (b) the reference in paragraph (12.73)(c) to “before March of the calendar year” is to be read as a reference to “before March of the second calendar year”. 
  
  ### Late filed forms
  
  (12.74) A corporation or partnership may file with the Minister a document referred to in subsection 66(12.68), 66(12.69), 66(12.691), 66(12.7) or 66(12.701) after the particular day on or before which the document is required to be filed under the applicable subsection and the document shall, except for the purposes of this subsection and subsection 66(12.75), be deemed to have been filed on the day on or before which it was required to be filed if 
  (a) it is filed 
  (i) on or before the day that is 90 days after the particular day, or 
  (ii) after the day that is 90 days after the particular day where, in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit the document to be filed; and 
  (b) the corporation or partnership, as the case may be, pays to the Receiver General at the time of filing a penalty in respect of the late filing. 
  
  ### Late renunciation
  
  (12.741) Where a corporation purports to renounce an amount under subsection 66(12.6), 66(12.601) or 66(12.62) after the period in which the corporation was entitled to renounce the amount, the amount is deemed, except for the purposes of this subsection and subsections 66(12.7) and 66(12.75), to have been renounced at the end of the period if 
  (a) the corporation purports to renounce the amount 
  (i) on or before the day that is 90 days after the end of that period, or 
  (ii) after the day that is 90 days after the end of that period where, in the opinion of the Minister, the circumstances are such that it would be just and equitable that the amount be renounced; and 
  (b) the corporation pays to the Receiver General a penalty in respect of the renunciation not more than 90 days after the renunciation. 
  
  ### Penalty
  
  (12.75) For the purposes of subsections 66(12.74) and 66(12.741), the penalty in respect of the late filing of a document referred to in subsection 66(12.68), 66(12.69), 66(12.691), 66(12.7) or 66(12.701) or in respect of a renunciation referred to in subsection 66(12.741) is the lesser of $15,000 and 
  (a) where the penalty is in respect of the late filing of a document referred to in subsection 66(12.68), 66(12.69) or 66(12.7), the greater of 
  (i) $100, and 
  (ii) 1/4 of 1% of the maximum amount in respect of the Canadian exploration expenses and Canadian development expenses renounced or attributed or to be renounced or attributed as set out in the document; 
  (b) where the penalty is in respect of the late filing of a document referred to in subsection 66(12.691) or 66(12.701), the greater of 
  (i) $100, and 
  (ii) 1/4 of 1% of the assistance reported in the document; and 
  (c) where the penalty is in respect of a renunciation referred to in subsection 66(12.741), the greater of 
  (i) $100, and 
  (ii) 1/4 of 1% of the amount of the renunciation. 
  
  ### Limitation
  
  (13) Where a taxpayer has incurred an outlay or expense in respect of which a deduction from income is authorized under more than one provision of this section or section 66.1, 66.2 or 66.4, the taxpayer is not entitled to make the deduction under more than one provision but is entitled to select the provision under which to make the deduction. 
  
  ### Short taxation year
  
  (13.1) If a taxpayer has a taxation year that is less than 51 weeks, the amount determined in respect of the year under each of subparagraph (4)(b)(i), paragraphs 66.2(2)(c) and (d), subparagraph (b)(i) of the definition global foreign resource limit in subsection 66.21(1), subparagraph 66.21(4)(a)(i), clause 66.21(4)(a)(ii)(B) and paragraphs 66.4(2)(b) and (c) and 66.7(2.3)(a), (4)(a) and (5)(a) shall not exceed that proportion of the amount otherwise determined that the number of days in the year is of 365.  
  
  ### Amounts deemed deductible under this Subdivision
  
  (14) For the purposes of section 3, any amount deductible under the Income Tax Application Rules in respect of this subsection shall be deemed to be deductible under this Subdivision.  
  
  ### Designation respecting Canadian exploration expense
  
  (14.1) A corporation may designate for a taxation year, by filing a designation in prescribed form with the Minister on or before the day on or before which it is required to file a return of its income for the year under section 150, a particular amount not exceeding the lesser of 
  (a) its prescribed Canadian exploration expense for the year, and 
  (b) its cumulative Canadian exploration expense at the end of the year, and the particular amount shall be added in computing its cumulative offset account immediately before the end of the year and deducted in computing its cumulative Canadian exploration expense at any time after the end of the year. 
  
  ### Designation respecting cumulative Canadian development expense
  
  (14.2) A corporation may designate for a taxation year, by filing a designation in prescribed form with the Minister on or before the day on or before which it is required to file a return of its income for the year under section 150, a particular amount not exceeding 
  (a) where a deduction has been made under subsection 66.2(2) in computing its income for the year, the lesser of 
  (i) 30% of its prescribed Canadian development expense for the year, and 
  (ii) the amount, if any, by which 30% of its cumulative Canadian development expense at the end of the year exceeds the amount, if any, deducted for the year under subsection 66.2(2) in computing its income for the year, or 
  (b) where a deduction has not been made under subsection 66.2(2) in computing its income for the year, the lesser of 
  (i) 30% of its prescribed Canadian development expense for the year, and 
  (ii) 30% of the amount, if any, of its adjusted cumulative Canadian development expense at the end of the year, and the particular amount shall be added in computing its cumulative offset account immediately before the end of the year and deducted in computing its cumulative Canadian development expense at any time after the end of the year. 
  
  ### Definition of 
  *adjusted cumulative Canadian development expense* 
  
  (14.3) For the purposes of paragraph 66(14.2)(b), 
  *adjusted cumulative Canadian development expense* of a corporation at the end of a taxation year means the amount, if any, that would be its cumulative Canadian development expense at the end of the year, if no Canadian resource property were disposed of by it in the year.  
  
  ### Special cases
  
  (14.4) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable 
  (a) to permit a designation under subsection 66(14.1) or 66(14.2) to be filed after the day on or before which it is required by that subsection to be filed, or 
  (b) to permit a designation filed under subsection 66(14.1) or 66(14.2) to be amended, the Minister may permit the designation to be filed or amended, as the case may be, after that day, and where the designation or amendment is filed pursuant to that permission, it shall be deemed to have been filed on the day on or before which it was required to be filed if 
  (c) it is filed with the Minister in prescribed form, and 
  (d) the corporation filing it pays to the Receiver General at the time of filing the penalty in respect of it, and where a designation is amended under this subsection, the designation to which the amendment is made shall be deemed not to have been effective. 
  
  ### Penalty for late designation
  
  (14.5) For the purposes of this section, the penalty in respect of a designation or amended designation referred to in paragraph 66(14.4)(a) or 66(14.4)(b) is the lesser of 
  (a) an amount determined by the formula is 
  (i) in the case of a late-filed designation, the amount designated therein, and 
  (ii) in the case of an amended designation, the amount, if any, by which the amount designated in the designation being amended differs from the amount designated in the amended designation, and is the number of months each of which is included in whole or in part in the period commencing on the day on or before which the designation was required to be filed under subsection 66(14.1) or 66(14.2), as the case may be, and ending on the day the late-filed designation or amended designation, as the case may be, is filed, and 
  (b) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is included in whole or in part in the period referred to in the description of B in paragraph 66(14.5)(a). 
  
  ### Deduction of carved-out income
  
  (14.6) A taxpayer may deduct in computing the taxpayer’s income under this Part for a taxation year, an amount equal to the total of the taxpayer’s carved-out incomes for the year within the meaning assigned by subsection 209(1). 
  
  ### Definitions
  
  (15) In this section,  
  *agreed portion* in respect of a corporation that was a shareholder corporation of a joint exploration corporation means such amount as may be agreed on between the joint exploration corporation and the shareholder corporation not exceeding  
  (a) the total of all amounts each of which is a payment or loan referred to in paragraph (b) of the definition 
  *shareholder corporation* in this subsection 66(15) except to the extent that the payment or loan was made by a shareholder corporation that was not a Canadian corporation and was used by the joint exploration corporation to acquire a Canadian resource property after December 11, 1979 from a shareholder corporation that was not a Canadian corporation) made by the shareholder corporation to the joint exploration corporation during the period it was a shareholder corporation of the joint exploration corporation,  minus 
  (b) the total of the amounts, if any, previously renounced by the joint exploration corporation under any of subsections 66(10) to 66(10.3) in favour of the shareholder corporation; ( partie convenue)   
  *assistance* means any amount, other than a prescribed amount, received or receivable at any time from a person or government, municipality or other public authority whether the amount is by way of a grant, subsidy, rebate, forgivable loan, deduction from royalty or tax, rebate of royalty or tax, investment allowance or any other form of assistance or benefit; (montant à titre d’aide)   
  *Canadian exploration and development expenses* incurred by a taxpayer means any expense incurred before May 7, 1974 that is  
  (a) any drilling or exploration expense, including any general geological or geophysical expense, incurred by the taxpayer after 1971 on or in respect of exploring or drilling for petroleum or natural gas in Canada, 
  (b) any prospecting, exploration or development expense incurred by the taxpayer after 1971 in searching for minerals in Canada, 
  (c) the cost to the taxpayer of any Canadian resource property acquired by the taxpayer after 1971, 
  (d) the taxpayer’s share of the Canadian exploration and development expenses incurred after 1971 by any association, partnership or syndicate in a fiscal period thereof, if at the end of that fiscal period the taxpayer was a member or partner thereof, 
  (e) any expense incurred by the taxpayer after 1971 pursuant to an agreement with a corporation under which the taxpayer incurred the expense solely in consideration for shares of the capital stock of the corporation issued to the taxpayer by the corporation or any interest in such shares or right thereto, to the extent that the expense was incurred as or on account of the cost of 
  (i) drilling or exploration activities, including any general geological or geophysical activities, in or in respect of exploring or drilling for petroleum or natural gas in Canada, 
  (ii) prospecting, exploration or development activities in searching for minerals in Canada, or 
  (iii) acquiring a Canadian resource property, and 
  (f) any annual payment made by the taxpayer for the preservation of a Canadian resource property, but, for greater certainty, does not include 
  (g) any consideration given by the taxpayer for any share or any interest therein or right thereto, except as provided by paragraph (e), or 
  (h) any expense described in paragraph (e) incurred by another taxpayer to the extent that the expense was, by virtue of that paragraph, a Canadian exploration and development expense of that other taxpayer; ( frais d’exploration et d’aménagement au Canada)   
  *Canadian resource property* of a taxpayer means any property of the taxpayer that is  
  (a) any right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in Canada, 
  (b) any right, licence or privilege to 
  (i) store underground petroleum, natural gas or related hydrocarbons in Canada, or 
  (ii) prospect, explore, drill or mine for minerals in a mineral resource in Canada other than a bituminous sands deposit or an oil shale deposit, 
  (c) any oil or gas well in Canada or any real property or immovable in Canada the principal value of which depends on its petroleum, natural gas or related hydrocarbon content (not including any depreciable property), 
  (d) any right to a rental or royalty computed by reference to the amount or value of production from an oil or a gas well in Canada, or from a natural accumulation of petroleum, natural gas or a related hydrocarbon in Canada, if the payer of the rental or royalty has an interest in, or for civil law a right in, the well or accumulation, as the case may be, and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the well or accumulation, 
  (e) any right to a rental or royalty computed by reference to the amount or value of production from a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, if the payer of the rental or royalty has an interest in, or for civil law a right in, the mineral resource and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the mineral resource, 
  (f) any real property or immovable in Canada (not including any depreciable property) the principal value of which depends on its mineral resource content other than where the mineral resource is a bituminous sands deposit or an oil shale deposit, 
  (g) any right to or interest in — or, for civil law, any right to or in — any property described in any of paragraphs (a) to (e), other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or 
  (h) an interest in real property described in paragraph (f) or a real right in an immovable described in that paragraph, other than an interest or a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership; ( avoir minier canadien)   
  *drilling or exploration expense* incurred on or in respect of exploring or drilling for petroleum or natural gas includes any expense incurred on or in respect of  
  (a) drilling or converting a well for the disposal of waste liquids from a petroleum or natural gas well, 
  (b) drilling for water or gas for injection into a petroleum or natural gas formation, or 
  (c) drilling or converting a well for the injection of water or gas to assist in the recovery of petroleum or natural gas from another well; ( frais d’exploration ou de forage)   
  *expense*, incurred before a particular time by a taxpayer,  
  (a) includes an amount designated by the taxpayer at that time under paragraph 98(3)(d) or (5)(d) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as a cost in respect of property that is a Canadian resource property or a foreign resource property,  but 
  (b) for greater certainty, does not include any amount paid or payable 
  (i) as consideration for services to be rendered after that time, or 
  (ii) as, on account or in lieu of payment of, or in satisfaction of, rent in respect of a period after that time; ( dépenses)   
  *flow-through share* means a share (other than a prescribed share) of the capital stock of a principal-business corporation, or a right (other than a prescribed right) to acquire a share of the capital stock of a principal-business corporation, issued to a person under an agreement in writing made between the person and the corporation under which the corporation, for consideration that does not include property to be exchanged or transferred by the person under the agreement in circumstances to which any of sections 51, 85, 85.1, 86 and 87 applies, agrees  
  (a) to incur, in the period that begins on the day on which the agreement was made and ends 24 months after the month that includes that day, Canadian exploration expenses or Canadian development expenses in an amount not less than the consideration for which the share or right is to be issued, and 
  (b) to renounce, in prescribed form and before March of the first calendar year that begins after that period, to the person in respect of the share or right, an amount in respect of the Canadian exploration expenses or Canadian development expenses so incurred by it not exceeding the consideration received by the corporation for the share or right; ( action accréditive)   
  *foreign exploration and development expenses* incurred by a taxpayer means  
  (a) any drilling or exploration expense, including any general geological or geophysical expense, incurred by the taxpayer after 1971 on or in respect of exploring or drilling for petroleum or natural gas outside Canada, 
  (b) any expense incurred by the taxpayer for the purpose of determining the existence, location, extent or quality of a mineral resource outside Canada, including any expense incurred in the course of 
  (i) prospecting, 
  (ii) carrying out geological, geophysical or geochemical surveys, 
  (iii) drilling by rotary, diamond, percussion or other method, or 
  (iv) trenching, digging test pits and preliminary sampling, 
  (c) the cost to the taxpayer of any foreign resource property acquired by him, 
  (d) subject to section 66.8, the taxpayer’s share of the foreign exploration and development expenses incurred after 1971 by a partnership in a fiscal period thereof, if at the end of that period the taxpayer was a member of the partnership, and 
  (e) any annual payment made by the taxpayer for the preservation of a foreign resource property; but does not include 
  (f) any amount included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class, 
  (g) an expenditure incurred at any time after the commencement of production from a foreign resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the foreign resource property relates, 
  (h) an expenditure (other than a drilling expense) incurred at any time after the commencement of production from a foreign resource property of the taxpayer in order to assist in the recovery of petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the foreign resource property relates, 
  (i) an expenditure incurred at any time relating to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir, 
  (j) an expenditure that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after December 21, 2000, 
  (k) foreign resource expenses in respect of a country, or 
  (l) an expenditure made after February 27, 2000 by the taxpayer unless the expenditure was made 
  (i) pursuant to an agreement in writing made by the taxpayer before February 28, 2000, 
  (ii) for the acquisition of foreign resource property by the taxpayer, or 
  (iii) for the purpose of 
  (A) enhancing the value of foreign resource property that the taxpayer owned at the time the expenditure was incurred or that the taxpayer had a reasonable expectation of owning after that time, or 
  (B) assisting in evaluating whether a foreign resource property is to be acquired by the taxpayer; ( frais d’exploration et d’aménagement à l’étranger)   
  *foreign resource property* of a taxpayer means any property that would be a Canadian resource property of the taxpayer if the definition 
  *Canadian resource property* in this subsection were read as if the references therein to “in Canada” were references to “outside Canada”; (avoir minier étranger)   
  *joint exploration corporation* means a principal-business corporation that has not at any time since its incorporation had more than 10 shareholders, not including any individual holding a share for the sole purpose of qualifying as a director; (société d’exploration en commun)   
  *original owner* of a Canadian resource property or a foreign resource property means a person  
  (a) who owned the property and disposed of it to a corporation that acquired it in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property, and  
  (b) who would, but for subsection 66.7(12), (13), (13.1) or (17), as the case may be, be entitled in computing that person’s income for a taxation year that ends after that person disposed of the property to a deduction under section 29 of the Income Tax Application Rules or subsection (2), (3) or (4), 66.1(2) or (3), 66.2(2), 66.21(4) or 66.4(2) of this Act in respect of expenses described in subparagraph 29(25)(c)(i) or (ii) of that Act, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the person before the person disposed of the property; (propriétaire obligé)   
  *outlay*, made before a particular time by a taxpayer, has the meaning assigned to the expression 
  *expense* by this subsection; (dépenses)   
  *predecessor owner* of a Canadian resource property or a foreign resource property means a corporation  
  (a) that acquired the property in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property,  
  (b) that disposed of the property to another corporation that acquired it in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the other corporation had continued to own the property, to the other corporation in respect of the property, and  
  (c) that would, but for subsection 66.7(14), (15), (15.1) or (17), as the case may be, be entitled in computing its income for a taxation year ending after it disposed of the property to a deduction under subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) in respect of expenses incurred by an original owner of the property; (propriétaire antérieur)   
  *principal-business corporation* means a corporation the principal business of which is any of, or a combination of,  
  (a) the production, refining or marketing of petroleum, petroleum products or natural gas, 
  (a.1) exploring or drilling for petroleum or natural gas, 
  (b) mining or exploring for minerals, 
  (c) the processing of mineral ores for the purpose of recovering metals or minerals from the ores, 
  (d) the processing or marketing of metals or minerals that were recovered from mineral ores and that include metals or minerals recovered from mineral ores processed by the corporation, 
  (e) the fabrication of metals, 
  (f) the operation of a pipeline for the transmission of oil or gas, 
  (f.1) the production or marketing of calcium chloride, gypsum, kaolin, sodium chloride or potash, 
  (g) the manufacturing of products, where the manufacturing involves the processing of calcium chloride, gypsum, kaolin, sodium chloride or potash, 
  (h) the generation or distribution of energy, or the production of fuel, using property described in Class 43.1 or 43.2 of Schedule II to the Income Tax Regulations, and  
  (i) the development of projects for which it is reasonable to expect that at least 50% of the capital cost of the depreciable property to be used in each project would be the capital cost of property described in Class 43.1 or 43.2 of Schedule II to the Income Tax Regulations,  or a corporation all or substantially all of the assets of which are shares of the capital stock or indebtedness of one or more principal-business corporations that are related to the corporation (otherwise than because of a right referred to in paragraph 251(5)(b)), ( société exploitant une entreprise principale)   
  *production* from a Canadian resource property or a foreign resource property means  
  (a) petroleum, natural gas and related hydrocarbons produced from the property, 
  (b) heavy crude oil produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent, (c) ore (other than iron ore or tar sands) produced from the property processed to any stage that is not beyond the prime metal stage or its equivalent, 
  (d) iron ore produced from the property processed to any stage that is not beyond the pellet stage or its equivalent, 
  (e) tar sands produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent, and 
  (f) any rental or royalty from the property computed by reference to the amount or value of the production of petroleum, natural gas or related hydrocarbons or ore; ( production)   
  *reserve amount* of a corporation for a taxation year in respect of an owner or predecessor owner of a Canadian resource property means the amount determined by the formula  is the total of all amounts that are 
  (a) required by subsection 59(2) to be included in computing the corporation’s income for the year, and 
  (b) in respect of a reserve, deducted in computing the income of the original owner or predecessor owner and deemed by paragraph 87(2)(g) or by virtue of that paragraph and paragraph 88(1)(e.2) to have been deducted by the corporation as a reserve in computing its income for a preceding taxation year, and is the total of amounts deducted in computing the corporation’s income for the year by virtue of subsection 64(1), 64(1.1) or 64(1.2) in respect of dispositions by the original owner or predecessor owner, as the case may be; ( provision)   
  *selling instrument* in respect of flow-through shares means a prospectus, registration statement, offering memorandum, term sheet or other similar document that describes the terms of the offer (including the price and number of shares) pursuant to which a corporation offers to issue flow-through shares; (avis d’émission)   
  *shareholder corporation* of a joint exploration corporation means a corporation that for the period in respect of which the expression is being applied  
  (a) was a shareholder of the joint exploration corporation, and 
  (b) made a payment or loan to the joint exploration corporation in respect of Canadian exploration and development expenses, a Canadian exploration expense, a Canadian development expense or a Canadian oil and gas property expense incurred or to be incurred by the joint exploration corporation; ( société actionnaire)   
  *specified foreign exploration and development expense* of a taxpayer in respect of a country (other than Canada) means an amount that is included in the taxpayer’s foreign exploration and development expenses and that is  
  (a) a drilling or exploration expense, including any general geological or geophysical expense, incurred by the taxpayer on or in respect of exploring or drilling for petroleum or natural gas in that country, 
  (a.1) an expense incurred by the taxpayer after December 21, 2000 (otherwise than pursuant to an agreement in writing made before December 22, 2000) for the purpose of determining the existence, location, extent or quality of a mineral resource in that country, including any expense incurred in the course of 
  (i) prospecting, 
  (ii) carrying out geological, geophysical or geochemical surveys, 
  (iii) drilling by rotary, diamond, percussion or other methods, or 
  (iv) trenching, digging test pits and preliminary sampling, 
  (b) a prospecting, exploration or development expense incurred by the taxpayer before December 22, 2000 (or after December 21, 2000 pursuant to an agreement in writing made before December 22, 2000) in searching for minerals in that country, 
  (c) the cost to the taxpayer of the taxpayer’s foreign resource property in respect of that country, 
  (d) an annual payment made by the taxpayer in a taxation year of the taxpayer for the preservation of a foreign resource property in respect of that country, 
  (e) an amount deemed by subsection 21(2) or (4) to be a foreign exploration and development expense incurred by the taxpayer, to the extent that it can reasonably be considered to relate to an amount that, without reference to this paragraph and paragraph (f), would be a specified foreign exploration and development expense in respect of that country, or 
  (f) subject to section 66.8, the taxpayer’s share of the specified foreign exploration and development expenses of a partnership incurred in respect of that country in a fiscal period of the partnership if, at the end of that period, the taxpayer was a member of the partnership. ( frais d’exploration et d’aménagement à l’étranger déterminés)  
  
  ### Other definitions
  
  (15.1) The definitions in subsections 66.1(6), 66.2(5), 66.21(1), 66.4(5) and 66.5(2) apply in this section. 
  
  ### Partnerships
  
  (16) For the purposes of subsections 66(12.6) to 66(12.73), the definitions 
  *assistance* and 
  *flow-through share* in subsection 66(15) and subsections 66(18), 66(19) and 66.3(3) and 66.3(4), a partnership is deemed to be a person and its taxation year is deemed to be its fiscal period.  
  
  ### Non-arm’s length partnerships
  
  (17) For the purpose of paragraph (12.66)(d), a partnership and a corporation are, at all times in a calendar year, 
  (a) deemed not to deal with each other at arm’s length, if 
  (i) an expense is deemed by subsection (12.61) to be incurred by the partnership, 
  (ii) the expense would, if this Act were read without reference to paragraph (12.61)(b), be incurred in the calendar year by the corporation, and 
  (iii) a share of the expense is included, because of paragraph (h) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), in the Canadian exploration expense of the corporation or of a member of the partnership with whom the corporation, at any time in that calendar year, does not deal at arm’s length; and  
  (b) deemed to deal with each other at arm’s length, in any other case. 
  
  ### Members of partnerships
  
  (18) For the purposes of this section, subsection 21(2), sections 59.1 and 66.1 to 66.7, paragraph (d) of the definition 
  *investment expense* in subsection 110.6(1), the definition 
  *pre-production mining expenditure* in subsection 127(9) and the descriptions of C and D in subsection 211.91(1), where a person’s share of an outlay or expense made or incurred by a partnership in a fiscal period of the partnership is included in respect of the person under paragraph (d) of the definition 
  *foreign exploration and development expenses* in subsection (15), paragraph (h) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), paragraph (f) of the definition 
  *Canadian development expense* in subsection 66.2(5), paragraph (e) of the definition 
  *foreign resource expense* in subsection 66.21(1) or paragraph (b) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), the portion of the outlay or expense so included is deemed, except for the purposes of applying the definitions 
  *foreign exploration and development expenses*, 
  *Canadian exploration expense*, 
  *Canadian development expense*, 
  *foreign resource expense* and 
  *Canadian oil and gas property expense* in respect of the person, to be made or incurred by the person at the end of that fiscal period.  
  
  ### Renunciation by corporate partner, etc.
  
  (19) A corporation is not entitled to renounce under subsection 66(12.6), 66(12.601) or 66(12.62) to a person a specified amount in respect of the corporation where the corporation would not be entitled to so renounce the specified amount if 
  (a) the expression “end of that fiscal period” in subsection 66(18) were read as “time the outlay or expense was made or incurred by the partnership”; and 
  (b) the expression “on the effective date of the renunciation” in each of paragraphs 66(12.61)(a) and 66(12.63)(a) were read as “at the earliest time that any part of such expense was incurred by the corporation”. 
  
  ### Specified amount
  
  (20) For the purpose of subsection 66(19), a specified amount in respect of a corporation is an amount that represents 
  (a) all or part of the corporation’s share of an outlay or expense made or incurred by a partnership of which the corporation is a member or former member; or 
  (b) all or part of an amount renounced to the corporation under subsection 66(12.6), 66(12.601) or 66(12.62). 
  
  ### Amount to be included in income
  
  66.1 (1) There shall be included in computing the amount referred to in paragraph 59(3.2)(b) in respect of a taxpayer for a taxation year the amount, if any, by which 
  (a) the total of all amounts referred to in the descriptions of F to M in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6) that are deducted in computing the taxpayer’s cumulative Canadian exploration expense at the end of the year  exceeds the total of 
  (b) all amounts referred to in the descriptions of A to E.1 in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6) that are included in computing the taxpayer’s cumulative Canadian exploration expense at the end of the year, and  
  (c) the total determined under subparagraph 66.7(12.1)(a)(i) in respect of the taxpayer for the year. 
  
  ### Deduction for certain principal-business corporations
  
  (2) In computing the income for a taxation year of a principal-business corporation (other than a corporation that would not be a principal-business corporation if the definition 
  *principal-business corporation* in subsection 66(15) were read without reference to paragraphs (h) and (i) of that definition), there may be deducted any amount that the corporation claims not exceeding the lesser of  
  (a) the total of 
  (i) the amount, if any, by which its cumulative Canadian exploration expense at the end of the year exceeds the amount, if any, designated by it for the year under subsection 66(14.1), and 
  (ii) the amount, if any, by which 
  (A) the total determined under subparagraph 66.7(12.1)(a)(i) in respect of the corporation for the year exceeds 
  (B) the amount that would be determined under subsection 66.1(1) in respect of the corporation for the year, if that subsection were read without reference to paragraph (c) thereof, and 
  (b) the amount, if any, by which 
  (i) the amount that would be its income for the year if no deduction (other than a prescribed deduction) were allowed under this subsection or section 65 exceeds 
  (ii) the total of all amounts each of which is an amount deducted by the corporation under section 112 or 113 in computing its taxable income for the year. 
  
  ### Expenses of other taxpayer
  
  (3) In computing the income for a taxation year of a taxpayer that is not a principal-business corporation, or that is a corporation that would not be a principal-business corporation if the definition 
  *principal-business corporation* in subsection 66(15) were read without reference to paragraphs (h) and (i) of that definition, there may be deducted such amount as the taxpayer claims not exceeding the total of  
  (a) the amount, if any, by which the taxpayer’s cumulative Canadian exploration expense at the end of the year exceeds the amount, if any, designated by the taxpayer for the year under subsection 66(14.1), and 
  (b) the amount, if any, by which 
  (i) the total determined under subparagraph 66.7(12.1)(a)(i) in respect of the taxpayer for the year exceeds 
  (ii) the amount that would, but for paragraph 66.1(1)(c), be the amount determined under subsection 66.1(1) in respect of the taxpayer for the year. 
  
  ### Definitions
  
  (6) In this section,  
  *bitumen mine development project*, of a taxpayer, means an undertaking for the sole purpose of developing a new mine to extract and process tar sands from a mineral resource of the taxpayer to produce bitumen or a similar product; (projet de mise en valeur d’une mine de bitume)   
  *bitumen upgrading development project*, of a taxpayer, means an undertaking for the sole purpose of constructing an upgrading facility to process bitumen or a similar feedstock (all or substantially all of which is from a mineral resource of the taxpayer) from a new mine to the crude oil stage or its equivalent; (projet de valorisation du bitume)   
  *Canadian exploration expense* of a taxpayer means any expense incurred after May 6, 1974 that is  
  (a) any expense incurred by the taxpayer (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) for the purpose of determining the existence, location, extent or quality of an accumulation of petroleum or natural gas (other than a mineral resource) in Canada, including such an expense that is 
  (i) a geological, geophysical or geochemical expense, or 
  (ii) an expense for environmental studies or community consultations (including studies or consultations that are undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of an accumulation of petroleum or natural gas), 
  (b) any expense (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) incurred by the taxpayer after March, 1985 for the purpose of bringing a natural accumulation of petroleum or natural gas (other than a mineral resource) in Canada into production and incurred prior to the commencement of the production (other than the production from an oil or gas well) in reasonable commercial quantities from such accumulation, including 
  (i) clearing, removing overburden and stripping, and 
  (ii) sinking a shaft or constructing an adit or other underground entry, 
  (c) any expense incurred before April, 1987 in drilling or completing an oil or gas well in Canada or in building a temporary access road to, or preparing a site in respect of, any such well, 
  (i) incurred by the taxpayer in the year, or 
  (ii) incurred by the taxpayer in any previous year and included by the taxpayer in computing the taxpayer’s Canadian development expense for a previous taxation year, if, within six months after the end of the year, the drilling of the well is completed and 
  (iii) it is determined that the well is the first well capable of production in commercial quantities from an accumulation of petroleum or natural gas (other than a mineral resource) not previously known to exist, or 
  (iv) it is reasonable to expect that the well will not come into production in commercial quantities within twelve months of its completion, 
  (d) any expense incurred by the taxpayer after March, 1987 and in a taxation year of the taxpayer in drilling or completing an oil or gas well in Canada or in building a temporary access road to, or preparing a site in respect of, any such well if 
  (i) the drilling or completing of the well resulted in the discovery that a natural underground reservoir contains petroleum or natural gas, where 
  (A) before the time of the discovery, no person or partnership had discovered that the reservoir contained either petroleum or natural gas, 
  (B) the discovery occurred at any time before six months after the end of the year, and 
  (C) the expense is incurred 
  (I) before 2021 (excluding an expense that is deemed by subsection 66(12.66) to have been incurred on December 31, 2020), if the expense is incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a license or permit) by the taxpayer before March 22, 2017, or 
  (II) before 2019 (excluding an expense that is deemed by subsection 66(12.66) to have been incurred on December 31, 2018), in any other case, 
  (ii) the well is abandoned in the year or within six months after the end of the year without ever having produced otherwise than for specified purposes, 
  (iii) the period of 24 months commencing on the day of completion of the drilling of the well ends in the year, the expense was incurred within that period and in the year and the well has not within that period produced otherwise than for specified purposes, or 
  (iv) there has been filed with the Minister, on or before the day that is 6 months after the end of the taxation year of the taxpayer in which the drilling of the well was commenced, a certificate issued by the Minister of Natural Resources certifying that, on the basis of evidence submitted to that Minister, that Minister is satisfied that 
  (A) the total of expenses incurred and to be incurred in drilling and completing the well, in building a temporary access road to the well and in preparing the site in respect of the well will exceed $5,000,000, and 
  (B) the well will not produce, otherwise than for a specified purpose, within the period of 24 months commencing on the day on which the drilling of the well is completed, 
  (e) any expense deemed by subsection 66.1(9) to be a Canadian exploration expense incurred by the taxpayer, 
  (f) any expense incurred by the taxpayer (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) for the purpose of determining the existence, location, extent or quality of a mineral resource in Canada including such an expense for environmental studies or community consultations (including, notwithstanding subparagraph (v), studies or consultations that are undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in Canada) and any expense incurred in the course of 
  (i) prospecting, 
  (ii) carrying out geological, geophysical or geochemical surveys, 
  (iii) drilling by rotary, diamond, percussion or other methods, or 
  (iv) trenching, digging test pits and preliminary sampling, but not including 
  (v) any Canadian development expense, 
  (v.1) any expense described in subparagraph (i), (iii) or (iv) in respect of the mineral resource, incurred before a new mine in the mineral resource comes into production in reasonable commercial quantities, that results in revenue or can reasonably be expected to result in revenue earned before the new mine comes into production in reasonable commercial quantities, except to the extent that the total of all such expenses exceeds the total of those revenues, or 
  (vi) any expense that may reasonably be considered to be related to a mine in the mineral resource that has come into production in reasonable commercial quantities or to be related to a potential or actual extension of the mine, 
  (g) any expense incurred by the taxpayer after November 16, 1978 and before March 21, 2013 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production in reasonable commercial quantities and incurred before the new mine comes into production in such quantities, including an expense for clearing, removing overburden, stripping, sinking a mine shaft or constructing an adit or other underground entry, but not including any expense that results in revenue or can reasonably be expected to result in revenue earned before the new mine comes into production in reasonable commercial quantities, except to the extent that the total of all such expenses exceeds the total of those revenues, 
  (g.1) any Canadian renewable and conservation expense incurred by the taxpayer, 
  (g.2) any expense incurred by the taxpayer after March 21, 2011, that is 
  (i) a specified oil sands mine development expense, or 
  (ii) an eligible oil sands mine development expense, 
  (g.3) any expense incurred by the taxpayer that would be described in paragraph (g) if the reference to “March 21, 2013” in that paragraph were “2017” and that is incurred 
  (i) under an agreement in writing entered into by the taxpayer before March 21, 2013, or 
  (ii) as part of the development of a new mine, if 
  (A) the construction of the new mine was started by, or on behalf of, the taxpayer before March 21, 2013 (and for this purpose construction does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), or 
  (B) the engineering and design work for the construction of the new mine, as evidenced in writing, was started by, or on behalf of, the taxpayer before March 21, 2013 (and for this purpose engineering and design work does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), 
  (g.4) any expense incurred by the taxpayer, the amount of which is determined by the formula is an expense that would be described in paragraph (g) if the reference to “March 21, 2013” in that paragraph were “2018” and that is not described in paragraph (g.3), and is 
  (i) 100% if the expense is incurred before 2015, 
  (ii) 80% if the expense is incurred in 2015, 
  (iii) 60% if the expense is incurred in 2016, and 
  (iv) 30% if the expense is incurred in 2017, 
  (h) subject to section 66.8, the taxpayer’s share of any expense referred to in any of paragraphs (a) to (d) and (f) to (g.4) incurred by a partnership in a fiscal period of the partnership, if at the end of the period the taxpayer is a member of the partnership, or 
  (i) any expense referred to in any of paragraphs (a) to (g) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares, but for greater certainty, shall not include 
  (j) any consideration given by the taxpayer for any share or any interest in or right to — or, for civil law, any right in or to — a share, except as provided by paragraph (i), 
  (k) any expense described in paragraph (i) incurred by any other taxpayer to the extent that the expense was, 
  (i) by virtue of that paragraph, a Canadian exploration expense of that other taxpayer, 
  (ii) by virtue of paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5), a Canadian development expense of that other taxpayer, or  
  (iii) by virtue of paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), a Canadian oil and gas property expense of that other taxpayer,  
  (k.1) an expense that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after 1987, 
  (k.2)  [Repealed, 2011, c. 24, s. 14]  
  (l) any amount (other than a Canadian renewable and conservation expense) included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class, 
  (m) an expenditure incurred at any time after the commencement of production from a Canadian resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of, or to assist in the recovery of, petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the Canadian resource property relates, 
  (n) an expenditure incurred at any time relating to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir, or 
  (o) the taxpayer’s share of any consideration, expense, cost or expenditure referred to in any of paragraphs (j) to (n) given or incurred by a partnership, but any assistance that a taxpayer has received or is entitled to receive after May 25, 1976 in respect of or related to the taxpayer’s Canadian exploration expense shall not reduce the amount of any of the expenses described in any of paragraphs (a) to (i); ( frais d’exploration au Canada)   
  *Canadian renewable and conservation expense* has the meaning assigned by regulation, and for the purpose of determining whether an outlay or expense in respect of a prescribed energy conservation property is a Canadian renewable and conservation expense, the Technical Guide to Canadian Renewable and Conservation Expenses (CRCE), as amended from time to time and published by the Department of Natural Resources, shall apply conclusively with respect to engineering and scientific matters; (frais liés aux énergies renouvelables et à l’économie d’énergie au Canada)   
  *completion*, of a specified oil sands mine development project, means the first attainment of a level of average output, measured over a 60-day period, equal to at least 60% of the planned level of average daily output (as determined in paragraph (b) of the definition 
  *specified oil sands mine development project*) for the specified oil sands mine development project; (achèvement)   
  *cumulative Canadian exploration expense* of a taxpayer at any time in a taxation year means the amount determined by the formula  is the total of all Canadian exploration expenses made or incurred by the taxpayer before that time, is the total of all amounts that were, because of subsection (1), included in computing the amount referred to in paragraph 59(3.2)(b) for the taxpayer’s taxation years ending before that time, is the total of all amounts, except amounts in respect of interest, paid by the taxpayer after May 6, 1974 and before that time to Her Majesty in right of Canada in respect of amounts paid to the taxpayer before May 25, 1976 under the regulations referred to in paragraph (a) of the description of H, is the total of all amounts referred to in the description of G that are established by the taxpayer to have become bad debts before that time, is such part, if any, of the amount determined for J as has been repaid before that time by the taxpayer pursuant to a legal obligation to repay all or any part of that amount, is the total of all specified amounts determined under paragraph 66.7(12.1)(a) in respect of the taxpayer for taxation years ending before that time, is the total of all amounts deducted or required to be deducted in computing the taxpayer’s income for a taxation year ending before that time in respect of the taxpayer’s cumulative Canadian exploration expense, is the total of all amounts that became receivable by the taxpayer before that time that are to be included in the amount determined under this description by virtue of paragraph 66(12.1)(a) or 66(12.2)(a), is the total of all amounts paid to the taxpayer after May 6, 1974 and before May 25, 1976 
  (a) under the Northern Mineral Exploration Assistance Regulations made under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, or  
  (b) pursuant to any agreement entered into between the taxpayer and Her Majesty in right of Canada under the Northern Mineral Grants Program or the Development Program of the Department of Indian Affairs and Northern Development, to the extent that the amounts have been expended by the taxpayer as or on account of Canadian exploration and development expenses or Canadian exploration expense incurred by the taxpayer, is the total of all amounts each of which is an amount received before that time on account of any amount referred to in the description of, is the total amount of assistance that the taxpayer has received or is entitled to receive in respect of any Canadian exploration expense incurred after 1980 or that can reasonably be related to Canadian exploration activities after 1980, to the extent that the assistance has not reduced the taxpayer’s Canadian exploration expense by virtue of paragraph 66.1(9)(g), is the total of all amounts by which the cumulative Canadian exploration expense of the taxpayer is required because of subsection 80(8) to be reduced at or before that time, is the total of all amounts that are required to be deducted before that time under subsection 66(14.1) in computing the taxpayer’s cumulative Canadian exploration expense, is that portion of the total of all amounts each of which was deducted by the taxpayer under subsection 127(5) or (6) for a taxation year that ended before that time and that can reasonably be attributed to a qualified Canadian exploration expenditure, a pre-production mining expenditure, a flow-through mining expenditure or a flow-through critical mineral mining expenditure (each expenditure as defined in subsection 127(9)) made in a preceding taxation year, and  is the total of all amounts that are required to be deducted before that time under paragraph 66.7(12)(b) in computing the taxpayer’s cumulative Canadian exploration expense; ( frais cumulatifs d’exploration au Canada)   
  *designated asset*, in respect of an oil sands mine development project of a taxpayer, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,  
  (a) in the case of a bitumen mine development project, 
  (i) a crusher, 
  (ii) a froth treatment plant, 
  (iii) a primary separation unit, 
  (iv) a steam generation plant, 
  (v) a cogeneration plant, or 
  (vi) a water treatment plant, or 
  (b) in the case of a bitumen upgrading development project, 
  (i) a gasifier unit, 
  (ii) a vacuum distillation unit, 
  (iii) a hydrocracker unit, 
  (iv) a hydrotreater unit, 
  (v) a hydroprocessor unit, or 
  (vi) a coker; ( bien désigné)   
  *eligible oil sands mine development expense*, of a taxpayer, means an expense incurred by the taxpayer after March 21, 2011 and before 2016, the amount of which is determined by the formula  is an expense that would be a Canadian exploration expense of the taxpayer described in paragraph (g) of the definition 
  *Canadian exploration expense* if that paragraph were read without reference to “and before March 21, 2013” and “other than a bituminous sands deposit or an oil shale deposit”, but does not include an expense that is a specified oil sands mine development expense, and  is 
  (a) 100% if the expense is incurred before 2013, 
  (b) 80% if the expense is incurred in 2013, 
  (c) 60% if the expense is incurred in 2014, and 
  (d) 30% if the expense is incurred in 2015; ( frais d’aménagement admissibles relatifs à une mine de sables bitumineux)   
  *oil sands mine development project*, of a taxpayer, means a bitumen mine development project or a bitumen upgrading development project of the taxpayer; (projet de mise en valeur d’une mine de sables bitumineux)   
  *preliminary work activity*, in respect of an oil sands mine development project, means activity that is preliminary to the acquisition, construction, fabrication or installation by or on behalf of a taxpayer of designated assets in respect of the taxpayer’s oil sands mine development project including, without limiting the generality of the foregoing, the following activities:  
  (a) obtaining permits or regulatory approvals, 
  (b) performing design or engineering work, 
  (c) conducting feasibility studies, 
  (d) conducting environmental assessments, and 
  (e) entering into contracts; ( travaux préliminaires)   
  *restricted expense* of a taxpayer means an expense  
  (a) incurred by the taxpayer before April, 1987, 
  (b) that is deemed by paragraph 66(10.2)(c) to have been incurred by the taxpayer, or included by the taxpayer in the amount referred to in paragraph (a) of the definition 
  *Canadian development expense* in subsection 66.2(5) by virtue of paragraph 66(12.3)(b), to the extent that the expense was originally incurred before April, 1987,  
  (c) that was renounced by the taxpayer under subsection 66(10.2), 66(12.601) or 66(12.62), 
  (d) in respect of which an amount referred to in subsection 66(12.3) becomes receivable by the taxpayer, 
  (e) deemed to be a Canadian exploration expense of the taxpayer or any other taxpayer by virtue of subsection 66.1(9), or 
  (f) where the taxpayer is a corporation, that was incurred by the corporation before the time control of the corporation was last acquired by a person or persons; ( frais spécifiés)   
  *specified oil sands mine development expense*, of a taxpayer, means an expense that  
  (a) would be a Canadian exploration expense described in paragraph (g) of the definition 
  *Canadian exploration expense* if that paragraph were read without reference to “and before March 21, 2013” and “other than a bituminous sands deposit or an oil shale deposit”,  
  (b) is incurred by the taxpayer after March 21, 2011 and before 2015, and 
  (c) is incurred by the taxpayer to achieve completion of a specified oil sands mine development project of the taxpayer; ( frais d’aménagement déterminés relatifs à une mine de sables bitumineux)   
  *specified oil sands mine development project*, of a taxpayer, means an oil sands mine development project (not including any preliminary work activity) in respect of which  
  (a) one or more designated assets was, before March 22, 2011, 
  (i) acquired by the taxpayer, or 
  (ii) in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer, and 
  (b) the planned level of average daily output (where that output is bitumen or a similar product in the case of a bitumen mine development project, or synthetic crude oil or a similar product in the case of a bitumen upgrading development project) that can reasonably be expected, is the lesser of 
  (i) the level that was the demonstrated intention of the taxpayer as of March 21, 2011 to produce from the oil sands mine development project, and 
  (ii) the maximum level of output associated with the design capacity, as of March 21, 2011, of the designated asset referred to in paragraph (a); ( projet déterminé de mise en valeur d’une mine de sables bitumineux)   
  *specified purpose* means  
  (a) the operation of an oil or gas well for the sole purpose of testing the well or the well head and related equipment, in accordance with generally accepted engineering practices, 
  (b) the burning of natural gas and related hydrocarbons to protect the environment, and 
  (c) prescribed purposes. ( fin admise)  
  
  ### Application of ss. 66(15), 66.2(5) and 66.4(5)
  
  (6.1) The definitions in subsections 66(15), 66.2(5) and 66.4(5) apply to this section. 
  
  ### Deductible expense
  
  (6.2) An expense of a taxpayer that is not included in paragraph (f) or (g) of the definition 
  *Canadian exploration expense* in subsection (6) because the taxpayer earned revenue from a mine in a mineral resource is deemed, for the purposes of this Part, not to be an outlay or payment described in paragraph 18(1)(b).  
  
  ### Share of partner
  
  (7) Where a taxpayer is a member of a partnership, the taxpayer’s share of any amount that would be an amount referred to in the description of E, G or J in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6) in respect of the partnership for a taxation year of the partnership if section 96 were read without reference to paragraph 96(1)(d) shall, for the purposes of this Act, be deemed to be an amount referred to in the description of E, G or J, as the case may be, in that definition in respect of the taxpayer for the taxation year of the taxpayer in which the partnership’s taxation year ends.  
  (8)  [Repealed, 1997, c. 25, s. 14(6)]  
  
  ### Canadian development expenses for preceding years
  
  (9) Where at any time in a taxpayer’s taxation year 
  (a) the drilling or completing of an oil or gas well resulted in the discovery that a natural underground reservoir contains petroleum or natural gas and, before the time of the discovery, no person or partnership had discovered that the reservoir contained either petroleum or natural gas, 
  (b) the period of 24 months commencing on the day of completion of the drilling of an oil or gas well ends and the well has not, within that period, produced otherwise than for specified purposes, or 
  (c) an oil or gas well that has never produced, otherwise than for specified purposes, is abandoned, the amount, if any, by which the total of 
  (d) all Canadian development expenses (other than restricted expenses) described in subparagraph (a)(ii) of the definition 
  *Canadian development expense* in subsection 66.2(5) in respect of the well that are deemed by subsection 66(10.2) or 66(12.63) to have been incurred by the taxpayer in the year or a preceding taxation year,  
  (e) all Canadian development Canadian development expenses (other than restricted expenses) described in subparagraph (a)(ii) of the definition 
  *Canadian development expense* in subsection 66.2(5) in respect of the well that are required by paragraph 66(12.3)(b) to be included by the taxpayer in the amount referred to in paragraph (a) of that definition for the year or a preceding taxation year, and  
  (f) all Canadian development expenses described in subparagraph (a)(ii) of the definition Canadian development expense in subsection 66.2(5) incurred by the taxpayer in respect of the well in a taxation year preceding the year, other than  
  (i) expenses referred to in paragraph (d) or (e), 
  (ii) restricted expenses, and 
  (iii) expenses for a well referred to in paragraph (a) that are incurred 
  (A) after 2020 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2020), if the expenses are incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a licence or permit) by the taxpayer before March 22, 2017, and 
  (B) after 2018 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2018), in any other case, exceeds 
  (g) any assistance that the taxpayer or a partnership of which the taxpayer is a member has received or is entitled to receive in respect of the expenses referred to in any of paragraphs 66.1(9)(d) to 66.1(9)(f), shall, for the purposes of this Act, be deemed to be a Canadian exploration expense referred to in paragraph (e) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) incurred by the taxpayer at that time.  
  
  ### Certificate ceasing to be valid
  
  (10) A certificate in respect of an oil or gas well issued by the Minister of Natural Resources for the purposes of subparagraph (d)(iv) of the definition 
  *Canadian exploration expense* in subsection 66.1(6) shall be deemed never to have been issued and never to have been filed with the Minister where  
  (a) the well produces, otherwise than for a specified purpose, within the period of 24 months commencing on the day on which the drilling of the well was completed; or 
  (b) in applying for the certificate, the applicant, in any material respect, provided any incorrect information or failed to provide information. 
  
  ### Amount to be included in income
  
  66.2 (1) There shall be included in computing the amount referred to in paragraph 59(3.2)(c) in respect of a taxpayer for a taxation year the amount, if any, by which the total of 
  (a) all amounts referred to in the descriptions of E to O in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) that are deducted in computing the taxpayer’s cumulative Canadian development expense at the end of the year, and  
  (b) the amount that is designated by the taxpayer for the year under subsection 66(14.2) exceeds the total of 
  (c) all amounts referred to in the descriptions of A to.1 in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) that are included in computing the taxpayer’s cumulative Canadian development expense at the end of the year, and  
  (d) the total determined under subparagraph 66.7(12.1)(b)(i) in respect of the taxpayer for the year. 
  
  ### Deduction for cumulative Canadian development expenses
  
  (2) A taxpayer may deduct, in computing the taxpayer’s income for a taxation year, such amount as the taxpayer may claim not exceeding the total of 
  (a) the lesser of 
  (i) the total of 
  (A) the taxpayer’s cumulative Canadian development expense at the end of the year, and 
  (B) the amount, if any, by which 
  (I) the total determined under subparagraph 66.7(12.1)(b)(i) in respect of the taxpayer for the year exceeds 
  (II) the amount that would, but for paragraph 66.2(1)(d), be determined under subsection 66.2(1) in respect of the taxpayer for the year, and 
  (ii) the amount, if any, by which the amount determined under subparagraph 66.4(2)(a)(ii) exceeds the amount determined under subparagraph 66.4(2)(a)(i), 
  (b) the lesser of 
  (i) the amount, if any, by which the amount determined under subparagraph 66.2(2)(a)(i) exceeds the amount determined under subparagraph 66.2(2)(a)(ii), and 
  (ii) the amount, if any, by which the total of all amounts each of which is 
  (A) an amount included in the taxpayer’s income for the year by virtue of a disposition in the year of inventory described in section 66.3 that was a share or any interest in or right to — or, for civil law, any right in or to — a share, acquired by the taxpayer under circumstances described in paragraph (g) of the definition 
  *Canadian development expense* in subsection (5) or paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), or  
  (B) an amount included by virtue of paragraph 12(1)(e) in computing the taxpayer’s income for the year to the extent that it relates to inventory described in clause 66.2(2)(b)(ii)(A) exceeds 
  (C) the total of all amounts deducted as a reserve by virtue of paragraph 20(1)(n) in computing the taxpayer’s income for the year to the extent that the reserve relates to inventory described in clause 66.2(2)(b)(ii)(A), 
  (c) 30% of the amount, if any, by which the amount determined under subparagraph 66.2(2)(b)(i) exceeds the amount determined under subparagraph 66.2(2)(b)(ii), and 
  (d) the amount determined by the formula is 
  (i) for taxation years that end before 2024, 15%, 
  (ii) for taxation years that begin before 2024 and end after 2023, the amount determined by the formula is the total of all accelerated Canadian development expenses incurred by the taxpayer before 2024 and in the taxation year, is the total of all accelerated Canadian development expenses incurred by the taxpayer in the taxation year, and is the total of all accelerated Canadian development expenses incurred by the taxpayer after 2023 and in the taxation year, and 
  (iii) for taxation years that begin after 2023, 7.5%, is the total of all accelerated Canadian development expenses incurred by the taxpayer in the taxation year, and is the amount determined by the formula is the total of the amounts determined for E to O in the definition cumulative Canadian development expense in subsection (5) at the end of the taxation year,  is the total of the amounts determined for E to O in the definition cumulative Canadian development expense in subsection (5) at the beginning of the taxation year,  is the total of the amounts determined for A to D.1 in the definition cumulative Canadian development expense in subsection (5) at the end of the taxation year,  is the total of the amounts determined for A to D.1 in the definition cumulative Canadian development expense in subsection (5) at the end of the preceding taxation year, and  is the amount determined for B. 
  
  ### Definitions
  
  (5) In this section,  
  *accelerated Canadian development expense*, of a taxpayer, means any cost or expense incurred by the taxpayer during a taxation year if the cost or expense  
  (a) qualifies as a Canadian development expense at the time it is incurred, other than 
  (i) an expense in respect of which the taxpayer is a successor, within the meaning of subsection 66.7(4), and 
  (ii) a cost in respect of a Canadian resource property acquired by the taxpayer, or a partnership in which the taxpayer is a member, from a person or partnership with which the taxpayer does not deal at arm’s length, 
  (b) is incurred after November 20, 2018 and before 2028, other than expenses deemed to have been incurred on December 31, 2027 because of subsection 66(12.66), and 
  (c) if the Canadian development expense is deemed to be a Canadian development expense incurred by the taxpayer because of paragraph 66(12.63)(a), is an amount renounced under an agreement entered into after November 20, 2018; ( frais d’aménagement au Canada accélérés)   
  *Canadian development expense* of a taxpayer means any cost or expense incurred after May 6, 1974 that is  
  (a) any expense incurred by the taxpayer in 
  (i) drilling or converting a well in Canada for the disposal of waste liquids from an oil or gas well, 
  (ii) drilling or completing an oil or gas well in Canada, building a temporary access road to the well or preparing a site in respect of the well, to the extent that the expense was not a Canadian exploration expense of the taxpayer in the taxation year in which it was incurred, 
  (iii) drilling or converting a well in Canada for the injection of water, gas or any other substance to assist in the recovery of petroleum or natural gas from another well, 
  (iv) drilling for water or gas in Canada for injection into a petroleum or natural gas formation, or 
  (v) drilling or converting a well in Canada for the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum or natural gas, 
  (b) any expense incurred by the taxpayer in drilling or recompleting an oil or gas well in Canada after the commencement of production from the well, 
  (c) any expense incurred by the taxpayer before November 17, 1978 for the purpose of bringing a mineral resource in Canada into production and incurred prior to the commencement of production from the resource in reasonable commercial quantities, including 
  (i) clearing, removing overburden and stripping, and 
  (ii) sinking a mine shaft, constructing an adit or other underground entry, 
  (c.1) any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer for the purpose of bringing a new mine in a mineral resource in Canada that is a bituminous sands deposit or an oil shale deposit into production and incurred before the new mine comes into production in reasonable commercial quantities, including an expense for clearing the land, removing overburden and stripping, or building an entry ramp, 
  (c.2) any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer after March 20, 2013 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production in reasonable commercial quantities and incurred before the new mine comes into production in such quantities, including an expense for clearing, removing overburden, stripping, sinking a mine shaft or constructing an adit or other underground entry, 
  (d) any expense (other than an amount included in the capital cost of depreciable property) incurred by the taxpayer after 1987 
  (i) in sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, for a mine in a mineral resource in Canada built or excavated after the mine came into production, or 
  (ii) in extending any such shaft, haulage way or work, 
  (e) the cost to the taxpayer of, including any payment for the preservation of a taxpayer’s rights in respect of, any property described in paragraph (b), (e) or (f) of the definition 
  *Canadian resource property* in subsection 66(15), or any right to or interest in — or for civil law, any right in or to — the property (other than a right or an interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership),  
  (f) subject to section 66.8, the taxpayer’s share of any expense referred to in any of paragraphs (a) to (e) incurred by a partnership in a fiscal period thereof at the end of which the taxpayer was a member of the partnership, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is 6 months after the taxpayer’s taxation year in which that period ends, or 
  (g) any cost or expense referred to in any of paragraphs (a) to (e) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the cost or expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares, but for greater certainty, shall not include 
  (h) any consideration given by the taxpayer for any share or any interest in or right to — or, for civil law, any right in or to — a share, except as provided by paragraph (g), 
  (i) any expense described in paragraph (g) incurred by any other taxpayer to the extent that the expense was, 
  (i) by virtue of that paragraph, a Canadian development expense of that other taxpayer, 
  (ii) by virtue of paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), a Canadian exploration expense of that other taxpayer, or  
  (iii) by virtue of paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), a Canadian oil and gas property expense of that other taxpayer,  
  (i.1) an expense that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after 1987, 
  (j) any amount included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class, or 
  (k) the taxpayer’s share of any consideration, expense, cost or expenditure referred to in any of paragraphs (h) to (j) given or incurred by a partnership, but any assistance that a taxpayer has received or is entitled to receive after May 25, 1976 in respect of or related to the taxpayer’s Canadian development expense shall not reduce the amount of any of the expenses described in any of paragraphs (a) to (g); ( frais d’aménagement au Canada)   
  *cumulative Canadian development expense* of a taxpayer at any time in a taxation year means the amount determined by the formula  is the total of all Canadian development expenses made or incurred by the taxpayer before that time, is the total of all amounts that were, because of subsection (1), included in computing the amount referred to in paragraph 59(3.2)(c) for taxation years ending before that time, is the total of all amounts referred to in the description of F or G that are established by the taxpayer to have become bad debts before that time, is such part, if any, of the amount determined for M as has been repaid before that time by the taxpayer pursuant to a legal obligation to repay all or any part of that amount, is the total of all specified amounts, determined under paragraph 66.7(12.1)(b) in respect of the taxpayer for taxation years ending before that time, is the total of all amounts deducted in computing the taxpayer’s income for a taxation year ending before that time in respect of the taxpayer’s cumulative Canadian development expense, is the total of all amounts each of which is an amount in respect of property described in paragraph (b), (e) or (f) of the definition 
  *Canadian resource property* in subsection 66(15) or property disposed of after March 21, 2011 which was described in any of those paragraphs and the cost of which when acquired by the taxpayer was included in the Canadian development expense of the taxpayer, or any right to or interest in — or, for civil law, any right in or to — such a property, other than such a right or an interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership, (in this description referred to as “the particular property”) disposed of by the taxpayer before that time equal to the amount, if any, by which  
  (a) the amount, if any, by which the proceeds of disposition in respect of the particular property that became receivable by the taxpayer after May 6, 1974 and before that time exceed any outlays or expenses that were made or incurred by the taxpayer after May 6, 1974 and before that time for the purpose of making the disposition and that were not otherwise deductible for the purposes of this Part exceeds 
  (b) the amount, if any, by which 
  (i) the total of all amounts that would be determined under paragraph 66.7(4)(a), immediately before the time (in this paragraph referred to as the “relevant time”) when such proceeds of disposition became receivable, in respect of the taxpayer and an original owner of the particular property (or of any other property acquired by the taxpayer with the particular property in circumstances in which subsection 66.7(4) applied and in respect of which the proceeds of disposition became receivable by the taxpayer at the relevant time) if 
  (A) amounts that became receivable at or after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(4)(a) were read without reference to “30% of”, and 
  (D) no reduction under subsection 80(8) at or after the relevant time were taken into account exceeds the total of 
  (ii) all amounts that would be determined under paragraph 66.7(4)(a) at the relevant time in respect of the taxpayer and an original owner of the particular property (or of that other property) if 
  (A) amounts that became receivable after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable at or before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(4)(a) were read without reference to “30% of”, 
  (D) amounts described in subparagraph 66.7(4)(a)(iii) that became receivable at the relevant time were not taken into account, and 
  (E) no reduction under subsection 80(8) at or after the relevant time were taken into account, and 
  (iii) such portion of the amount otherwise determined under this paragraph as was otherwise applied to reduce the amount otherwise determined under this description, is the total of all amounts that became receivable by the taxpayer before that time that are to be included in the amount determined under this description by virtue of paragraph 66(12.1)(b) or 66(12.3)(a), is the total of all amounts each of which is an amount included by the taxpayer as an expense under paragraph (a) of the definition 
  *Canadian development expense* in this subsection in computing the taxpayer’s Canadian development expense for a previous taxation year that has become a Canadian exploration expense of the taxpayer by virtue of subparagraph (c)(ii) of the definition 
  *Canadian exploration expense* in subsection 66.1(6),  is the total of all amounts each of which is an amount that before that time has become a Canadian exploration expense of the taxpayer by virtue of subsection 66.1(9), is the total of all amounts each of which is an amount received before that time on account of any amount referred to in the description of C is the total of all amounts paid to the taxpayer after May 6, 1974 and before May 25, 1976 
  (a) under the Northern Mineral Exploration Assistance Regulations made under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, or  
  (b) pursuant to any agreement, entered into between the taxpayer and Her Majesty in right of Canada under the Northern Mineral Grants Program or the Development Program of the Department of Indian Affairs and Northern Development, to the extent that the amounts have been expended by the taxpayer as or on account of Canadian development expense incurred by the taxpayer, is the amount by which the total of all amounts determined under subsection 66.4(1) in respect of a taxation year of the taxpayer ending at or before that time exceeds the total of all amounts each of which is the least of 
  (a) the amount that would be determined under paragraph 66.7(4)(a), at a time (hereafter in this description referred to only as the “particular time”) that is the end of the latest taxation year of the taxpayer ending at or before that time, in respect of the taxpayer as successor in respect of a disposition (in this description referred to as the “original disposition”) of Canadian resource property by a person who is an original owner of the property because of the original disposition, if 
  (i) that paragraph were read without reference to “30% of”, 
  (ii) where the taxpayer has disposed of all or part of the property in circumstances in which subsection 66.7(4) applied, that subsection continued to apply to the taxpayer in respect of the original disposition as if subsequent successors were the same person as the taxpayer, and 
  (iii) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable before the particular time were made before the particular time, 
  (b) the amount, if any, by which the total of all amounts each of which became receivable at or before the particular time and before 1993 by the taxpayer and is included in computing the amount determined under subparagraph 66.7(5)(a)(ii) in respect of the original disposition exceeds the amount, if any, by which 
  (i) where the taxpayer disposed of all or part of the property before the particular time in circumstances in which subsection 66.7(5) applied, the amount that would be determined at the particular time under subparagraph 66.7(5)(a)(i) in respect of the original disposition if that subparagraph continued to apply to the taxpayer in respect of the original disposition as if subsequent successors were the same person as the taxpayer, and 
  (ii) in any other case, the amount determined at the particular time under subparagraph 66.7(5)(a)(i) in respect of the original disposition exceeds 
  (iii) the amount that would be determined at the particular time under subparagraph 66.7(5)(a)(ii) in respect of the original disposition if that subparagraph were read without reference to the words “or the successor”, wherever they appear therein, and if amounts that became receivable after 1992 were not taken into account, and 
  (c) where 
  (i) after the original disposition and at or before the particular time, the taxpayer disposed of all or part of the property in circumstances in which subsection 66.7(4) applied, otherwise than by way of an amalgamation or merger or solely because of the application of paragraph 66.7(10)(c), and 
  (ii) the winding-up of the taxpayer began at or before that time or the taxpayer’s disposition referred to in subparagraph (i) (other than a disposition under an agreement in writing entered into before December 22, 1992) occurred after December 21, 1992, nil is the total amount of assistance that the taxpayer has received or is entitled to receive in respect of any Canadian development expense (including an expense that has become a Canadian exploration expense of the taxpayer by virtue of subsection 66.1(9)) incurred after 1980 or that can reasonably be related to Canadian development activities after 1980, is the total of all amounts by which the cumulative Canadian development expense of the taxpayer is required because of subsection 80(8) to be reduced at or before that time, is the total of all amounts that are required to be deducted before that time under subsection 66(14.2) in computing the taxpayer’s cumulative Canadian development expense, and is the total of all amounts that are required to be deducted before that time under paragraph 66.7(12)(c) in computing the taxpayer’s cumulative Canadian development expense. ( frais cumulatifs d’aménagement au Canada)  
  
  ### Application of ss. 66(15), 66.1(6) and 66.4(5)
  
  (5.1) The definitions in subsections 66(15), 66.1(6) and 66.4(5) apply to this section. 
  
  ### Share of partner
  
  (6) Except as provided in subsection 66.2(7), where a taxpayer is a member of a partnership, the taxpayer’s share of any amount that would be an amount referred to in the description of in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5), in paragraph (a) of the description of F in that definition or in the description of G or M in that definition in respect of the partnership for a taxation year of the partnership if section 96 were read without reference to paragraph 96(1)(d) shall, for the purposes of this Act, be deemed to be an amount referred to in the description of in the definition 
  *cumulative Canadian development expense* in subsection (5), in paragraph (a) of the description of F in that definition or in the description of G or M in that definition, whichever is applicable, in respect of the taxpayer for the taxation year of the taxpayer in which the partnership’s taxation year ends.  
  
  ### Exception
  
  (7) Where a non-resident person is a member of a partnership that is deemed under paragraph 115(4)(b) to have disposed of any Canadian resource property, the person’s share of any amount that would be an amount referred to in the description of in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5), in paragraph (a) of the description of F in that definition or in the description of G or M in that definition in respect of the partnership for a taxation year of the partnership if section 96 were read without reference to paragraph 96(1)(d) shall, for the purposes of this Act, be deemed to be an amount referred to in the description of in the definition 
  *cumulative Canadian development expense* in subsection (5), in paragraph (a) of the description of F in that definition or in the description of G or M in that definition, whichever is applicable, in respect of the person for the taxation year of the person that is deemed under paragraph 115(4)(a) to have ended.  
  
  ### Presumption
  
  (8) Where pursuant to the terms of an arrangement in writing entered into before December 12, 1979 a taxpayer acquired a property described in paragraph (a) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), for the purposes of this Act, the cost of acquisition shall be deemed to be a Canadian development expense incurred at the time the taxpayer acquired the property.  
  
  ### Definitions
  
  66.21 (1) The definitions in this subsection apply in this section.  
  *adjusted cumulative foreign resource expense* of a taxpayer, in respect of a country, at the end of a taxation year means the total of  
  (a) the cumulative foreign resource expense of the taxpayer, in respect of that country, at the end of the year; and 
  (b) the amount, if any, by which 
  (i) the total determined under paragraph 66.7(13.2)(a) in respect of that country and the taxpayer for the year exceeds 
  (ii) the amount that would, but for paragraph (3)(c), be determined under subsection (3) in respect of that country and the taxpayer for the year. ( frais cumulatifs rajustés relatifs à des ressources à l’étranger)   
  *cumulative foreign resource expense* of a taxpayer, in respect of a country other than Canada at a particular time, means the amount determined by the formula  is the total of all foreign resource expenses, in respect of that country, made or incurred by the taxpayer 
  (a) before the particular time, and 
  (b) at a time (in this definition referred to as a “resident time”) 
  (i) at which the taxpayer was resident in Canada, and 
  (ii) where the taxpayer became resident in Canada before the particular time, that is after the last time (before the particular time) that the taxpayer became resident in Canada; is the total of all foreign resource expenses, in respect of that country, that is the cost to the taxpayer of any of the taxpayer’s foreign resource property in respect of that country that is deemed to have been acquired by the taxpayer under paragraph 128.1(1)(c) at the last time (before the particular time) that the taxpayer became resident in Canada; is the total of all amounts included in computing the amount referred to in paragraph 59(3.2)(c.1) in respect of that country, for taxation years that ended before the particular time and at a resident time; is the total of all amounts referred to in the description of F or G that are established by the taxpayer to have become a bad debt before the particular time and at a resident time; is the total of all specified amounts determined under subsection 66.7(13.2), in respect of the taxpayer and that country, for taxation years that ended before the particular time and at a resident time; is the total of all amounts deducted, in computing the taxpayer’s income for a taxation year that ended before the particular time and at a resident time, in respect of the taxpayer’s cumulative foreign resource expense in respect of that country; is the total of all amounts each of which is an amount in respect of a foreign resource property, in respect of that country, (in this description referred to as the “particular property”) disposed of by the taxpayer equal to the amount, if any, by which 
  (a) the amount designated under subparagraph 59(1)(b)(ii) by the taxpayer in respect of the portion of the proceeds of that disposition that became receivable before the particular time and at a resident time exceeds 
  (b) the amount, if any, by which 
  (i) the total of all amounts that would be determined under paragraph 66.7(2.3)(a), immediately before the time (in this paragraph referred to as the “relevant time”) when such proceeds of disposition became receivable, in respect of the taxpayer, that country and an original owner of the particular property (or of any other property acquired by the taxpayer with the particular property in circumstances to which subsection 66.7(2.3) applied and in respect of which the proceeds of disposition became receivable by the taxpayer at the relevant time) if 
  (A) amounts that became receivable at or after the relevant time were not taken into account, 
  (B) paragraph 66.7(2.3)(a) were read without reference to “30% of”, and 
  (C) no reduction under subsection 80(8) at or after the relevant time were taken into account exceeds the total of 
  (ii) all amounts that would be determined under paragraph 66.7(2.3)(a) at the relevant time in respect of the taxpayer, that country and an original owner of the particular property (or of that other property) if 
  (A) amounts that became receivable after the relevant time were not taken into account, 
  (B) paragraph 66.7(2.3)(a) were read without reference to “30% of”, and 
  (C) no reduction under subsection 80(8) at or after the relevant time were taken into account, and 
  (iii) the portion of the amount otherwise determined under this paragraph that was otherwise applied to reduce the amount otherwise determined under this description; is the total of all amounts, in respect of that country, each of which is an amount included in the amount determined under this description by reason of subsection 66(12.41) that became receivable by the taxpayer before the particular time and at a resident time; is the total of all amounts each of which is an amount received before the particular time and at a resident time on account of any amount referred to in the description of C; is the total of all amounts each of which is an amount by which the cumulative foreign resource expense of the taxpayer, in respect of that country, is required, by reason of subsection 80(8), to be reduced at or before the particular time and at a resident time; and is the total of all amounts each of which is an amount that is required to be deducted, before the particular time and at a resident time, under paragraph 66.7(13.1)(a) in computing the taxpayer’s cumulative foreign resource expense. ( frais cumulatifs relatifs à des ressources à l’étranger)   
  *foreign resource expense* of a taxpayer, in respect of a country other than Canada, means  
  (a) any drilling or exploration expense, including any general geological or geophysical expense, incurred by the taxpayer on or in respect of exploring or drilling for petroleum or natural gas in that country, 
  (b) any expense incurred by the taxpayer for the purpose of determining the existence, location, extent or quality of a mineral resource in that country, including any expense incurred in the course of 
  (i) prospecting, 
  (ii) carrying out geological, geophysical or geochemical surveys, 
  (iii) drilling by rotary, diamond, percussion or other methods, or 
  (iv) trenching, digging test pits and preliminary sampling, 
  (c) the cost to the taxpayer of any of the taxpayer’s foreign resource property in respect of that country, 
  (d) any annual payment made by the taxpayer for the preservation of a foreign resource property in respect of that country, and 
  (e) subject to section 66.8, the taxpayer’s share of an expense, cost or payment referred to in any of paragraphs (a) to (d) that is made or incurred by a partnership in a fiscal period of the partnership that begins after 2000 if, at the end of that period, the taxpayer was a member of the partnership but does not include 
  (f) an expenditure that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class, 
  (g) an expenditure incurred at any time after the commencement of production from a foreign resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the foreign resource property relates, 
  (h) an expenditure (other than a drilling expense) incurred at any time after the commencement of production from a foreign resource property of the taxpayer in order to assist in the recovery of petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the foreign resource property relates, 
  (i) an expenditure, incurred at any time, that relates to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir, 
  (j) an expenditure incurred by the taxpayer, unless the expenditure was made 
  (i) for the acquisition of foreign resource property by the taxpayer, or 
  (ii) for the purpose of 
  (A) enhancing the value of foreign resource property that the taxpayer owned at the time the expenditure was incurred or that the taxpayer had a reasonable expectation of owning after that time, or 
  (B) assisting in evaluating whether a foreign resource property is to be acquired by the taxpayer, or 
  (k) the taxpayer’s share of any cost or expenditure referred to in any of paragraphs (f) to (j) that is incurred by a partnership. ( frais relatifs à des ressources à l’étranger)   
  *foreign resource income* of a taxpayer for a taxation year, in respect of a country other than Canada, means the total of  
  (a) that part of the taxpayer’s income for the year, determined without reference to subsections (4) and 66(4), that is reasonably attributable to 
  (i) the production of petroleum or natural gas from natural accumulations of petroleum or natural gas in that country or from oil or gas wells in that country, or 
  (ii) the production of minerals from mines in that country; 
  (b) the taxpayer’s income for the year from royalties in respect of a natural accumulation of petroleum or natural gas in that country, an oil or gas well in that country or a mine in that country, determined without reference to subsections (4) and 66(4); and 
  (c) all amounts each of which is an amount, in respect of a foreign resource property in respect of that country that has been disposed of by the taxpayer, equal to the amount, if any, by which 
  (i) the amount included in computing the taxpayer’s income for the year by reason of subsection 59(1) in respect of that disposition exceeds 
  (ii) the total of all amounts each of which is that portion of an amount deducted under subsection 66.7(2) in computing the taxpayer’s income for the year that 
  (A) can reasonably be considered to be in respect of the foreign resource property, and 
  (B) cannot reasonably be considered to have reduced the amount otherwise determined under paragraph (a) or (b) in respect of the taxpayer for the year. ( revenu provenant de ressources à l’étranger)   
  *foreign resource loss* of a taxpayer for a taxation year in respect of a country other than Canada means the taxpayer’s loss for the year in respect of the country determined in accordance with the definition 
  *foreign resource income* with such modifications as the circumstances require. (perte résultant de ressources à l’étranger)   
  *global foreign resource limit* of a taxpayer for a taxation year means the amount that is the lesser of  
  (a) the amount, if any, by which 
  (i) the amount determined under subparagraph 66(4)(b)(ii) in respect of the taxpayer for the year exceeds the total of 
  (ii) the total of all amounts each of which is the maximum amount that the taxpayer would be permitted to deduct, in respect of a country, under subsection (4) in computing the taxpayer’s income for the year if, in its application to the year, subsection (4) were read without reference to paragraph (4)(b), and 
  (iii) the amount deducted for the year under subsection 66(4) in computing the taxpayer’s income for the year; and 
  (b) the amount, if any, by which 
  (i) 30% of the total of all amounts each of which is, at the end of the year, the taxpayer’s adjusted cumulative foreign resource expense in respect of a country exceeds 
  (ii) the total described in subparagraph (a)(ii). ( limite globale des frais relatifs à des ressources à l’étranger)  
  
  ### Application of subsection 66(15)
  
  (2) The definitions in subsection 66(15) apply in this section. 
  
  ### Amount to be included in income
  
  (3) For the purpose of paragraph 59(3.2)(c.1), the amount referred to in this subsection in respect of a taxpayer for a taxation year is the amount, if any, by which 
  (a) the total of all amounts referred to in the descriptions of E to J in the definition 
  *cumulative foreign resource expense* in subsection (1) that are deducted in computing the taxpayer’s cumulative foreign resource expense at the end of the year in respect of a country  exceeds the total of 
  (b) the total of all amounts referred to in the descriptions of A to D in the definition 
  *cumulative foreign resource expense* in subsection (1) that are included in computing the taxpayer’s cumulative foreign resource expense at the end of the year in respect of the country, and  
  (c) the total determined under paragraph 66.7(13.2)(a) for the year in respect of the taxpayer and the country. 
  
  ### Deduction for cumulative foreign resource expense
  
  (4) In computing a taxpayer’s income for a taxation year throughout which the taxpayer is resident in Canada, the taxpayer may deduct the amount claimed by the taxpayer, in respect of a country other than Canada, not exceeding the total of 
  (a) the greater of 
  (i) 10% of a particular amount equal to the taxpayer’s adjusted cumulative foreign resource expense in respect of the country at the end of the year, and 
  (ii) the least of 
  (A) if the taxpayer ceased to be resident in Canada immediately after the end of the year, the particular amount, 
  (B) if clause (A) does not apply, 30% of the particular amount, 
  (C) the amount, if any, by which the taxpayer’s foreign resource income for the year in respect of the country exceeds the portion of the amount, deducted under subsection 66(4) in computing the taxpayer’s income for the year, that applies to a source in the country, and 
  (D) the amount, if any, by which 
  (I) the total of all amounts each of which is the taxpayer’s foreign resource income for the year in respect of a country exceeds the total of 
  (II) all amounts each of which is the taxpayer’s foreign resource loss for the year in respect of a country, and 
  (III) the amount deducted under subsection 66(4) in computing the taxpayer’s income for the year, and 
  (b) the lesser of 
  (i) the amount, if any, by which the particular amount exceeds the amount determined for the year under paragraph (a) in respect of the taxpayer, and 
  (ii) that portion of the taxpayer’s global foreign resource limit for the year that is designated for the year by the taxpayer, in respect of that country and no other country, in prescribed form filed with the Minister with the taxpayer’s return of income for the year. 
  
  ### Individual changing residence
  
  (5) Where at any time in a taxation year an individual becomes or ceases to be resident in Canada, 
  (a) subsection (4) applies to the individual as if the year were the period or periods in the year throughout which the individual was resident in Canada; and 
  (b) for the purpose of applying this section, subsection 66(13.1) does not apply to the individual for the year. 
  
  ### Exploration and development shares
  
  66.3 (1) Any shares of the capital stock of a corporation or any interest in any such shares or right thereto acquired by a taxpayer under circumstances described in paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5)  
  (a) shall, if acquired before November 13, 1981, be deemed 
  (i) not to be a capital property of the taxpayer, 
  (ii) subject to subsection 142.6(3), to be inventory of the taxpayer, and 
  (iii) to have been acquired by the taxpayer at a cost to the taxpayer of nil; and 
  (b) shall, if acquired after November 12, 1981, be deemed to have been acquired by the taxpayer at a cost to the taxpayer of nil. 
  
  ### Deductions from paid-up capital
  
  (2) If, at any time after May 23, 1985, a corporation has issued a share of its capital stock under circumstances described in paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5) or has issued a share of its capital stock on the exercise of an interest in or right to — or, for civil law, a right in or to — such a share granted under circumstances described in any of those paragraphs, in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that included that share  
  (a) there shall be deducted the amount, if any, by which 
  (i) the increase as a result of the issue of the share in the paid-up capital, determined without reference to this subsection as it applies to the share, in respect of all of the shares of that class exceeds 
  (ii) the amount, if any, by which 
  (A) the total amount of consideration received by the corporation in respect of the share, including any consideration for the interest or right in respect of the share exceeds 
  (B) 50% of the amount of the expense referred to in paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5) that was incurred by a taxpayer who acquired the share or the interest or right on the exercise of which the share was issued, as the case may be, pursuant to an agreement with the corporation under which the taxpayer incurred the expense solely as consideration for the share, interest or right, as the case may be; and  
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the corporation after May 23, 1985 and before the particular time exceeds 
  (B) the total that would be determined under clause (A) if this Act were read without reference to paragraph 66.3(2)(a), and 
  (ii) the total of all amounts each of which is an amount required by paragraph 66.3(2)(a) to be deducted in computing the paid-up capital in respect of that class of shares after May 22, 1985 and before the particular time. 
  
  ### Cost of flow-through shares
  
  (3) Any flow-through share (within the meaning assigned by subsection 66(15)) of a corporation acquired by a person who was a party to the agreement pursuant to which it was issued shall be deemed to have been acquired by the person at a cost to the person of nil. 
  
  ### Paid-up capital
  
  (4) Where, at any time after February, 1986, a corporation has issued a flow-through share (within the meaning assigned by subsection 66(15)), in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that included that share 
  (a) there shall be deducted the amount, if any, by which 
  (i) the increase as a result of the issue of the share in the paid-up capital, determined without reference to this subsection as it applies to the share, in respect of all of the shares of that class exceeds 
  (ii) the amount, if any, by which 
  (A) the total amount of consideration received by the corporation in respect of the share exceeds 
  (B) 50% of the total of the expenses that were renounced by the corporation under subsection 66(12.6), (12.601), (12.62) or (12.64) in respect of the share; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the corporation after February, 1986 and before the particular time exceeds 
  (B) the total that would be determined under clause (A) if this Act were read without reference to paragraph 66.3(4)(a), and 
  (ii) the total of all amounts each of which is an amount required by paragraph 66.3(4)(a) to be deducted in computing the paid-up capital in respect of that class of shares after February, 1986 and before the particular time. 
  
  ### Recovery of costs
  
  66.4 (1) For the purposes of the description of B in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) and the description of L in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) and for the purpose of subparagraph 64(1.2)(a)(ii) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it applies to dispositions occurring before November 13, 1981, the amount determined under this subsection in respect of a taxpayer for a taxation year is the amount, if any, by which  
  (a) the total of all amounts referred to in the descriptions of E to J in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) that are deducted in computing the taxpayer’s cumulative Canadian oil and gas property expense at the end of the year  exceeds the total of 
  (b) all amounts referred to in the descriptions of A to D.1 in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) that are included in computing the taxpayer’s cumulative Canadian oil and gas property expense at the end of the year, and  
  (c) the total determined under subparagraph 66.7(12.1)(c)(i) in respect of the taxpayer for the year. 
  
  ### Deduction for cumulative Canadian oil and gas property expense
  
  (2) A taxpayer may deduct, in computing the taxpayer’s income for a taxation year, such amount as the taxpayer may claim not exceeding the total of 
  (a) the lesser of 
  (i) the total of 
  (A) the taxpayer’s cumulative Canadian oil and gas property expense at the end of the year, and 
  (B) the amount, if any, by which 
  (I) the total determined under subparagraph 66.7(12.1)(c)(i) in respect of the taxpayer for the year exceeds 
  (II) the amount that would, but for paragraph 66.4(1)(c), be determined under subsection 66.4(1) in respect of the taxpayer for the year, and 
  (ii) the amount, if any, by which the total of all amounts each of which is 
  (A) an amount included in the taxpayer’s income for the year by virtue of a disposition in the year of inventory described in section 66.3 that was a share or any interest in or right to — or, for civil law, any right in or to — a share acquired by the taxpayer under circumstances described in paragraph (c) of the definition 
  *Canadian oil and gas property expense* in subsection (5), or  
  (B) an amount included by virtue of paragraph 12(1)(e) in computing the taxpayer’s income for the year to the extent that it relates to inventory described in clause (A) exceeds 
  (C) the total of all amounts deducted as a reserve by virtue of paragraph 20(1)(n) in computing the taxpayer’s income for the year to the extent that the reserve relates to inventory described in clause (A); 
  (b) 10% of the amount, if any, by which the amount determined under subparagraph 66.4(2)(a)(i) exceeds the amount determined under subparagraph 66.4(2)(a)(ii); and 
  (c) the amount determined by the formula is 
  (i) for taxation years that end before 2024, 5%, 
  (ii) for taxation years that begin before 2024 and end after 2023, the amount determined by the formula is the total of all accelerated Canadian oil and gas property expenses incurred by the taxpayer before 2024 and in the taxation year, is the total of all accelerated Canadian oil and gas property expenses incurred by the taxpayer in the taxation year, and is the total of all accelerated Canadian oil and gas property expenses incurred by the taxpayer after 2023 and in the taxation year, and 
  (iii) for taxation years that begin after 2023, 2.5%, is the total of all accelerated Canadian oil and gas property expenses incurred by the taxpayer in the taxation year, and is the amount determined by the formula is the total of the amounts determined for E to J in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the taxation year,  is the total of the amounts determined for E to J in the definition cumulative Canadian oil and gas property expense in subsection (5) at the beginning of the taxation year,  is the total of the amounts determined for A to D.1 in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the taxation year,  is the total of the amounts determined for A to D.1 in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the preceding taxation year, and  is the amount determined for B. 
  
  ### Definitions
  
  (5) In this section,  
  *accelerated Canadian oil and gas property expense*, of a taxpayer, means any cost or expense incurred by the taxpayer during a taxation year, if the cost or expense  
  (a) qualifies as a Canadian oil and gas property expense at the time it is incurred, other than 
  (i) an expense in respect of which the taxpayer is a successor, within the meaning of subsection 66.7(5), and 
  (ii) a cost in respect of a Canadian resource property acquired by the taxpayer, or a partnership in which the taxpayer is a member, from a person or partnership with which the taxpayer does not deal at arm’s length, and 
  (b) is incurred after November 20, 2018 and before 2028; ( frais à l’égard de biens canadiens relatifs au pétrole et au gaz accélérés)   
  *Canadian oil and gas property expense* of a taxpayer means any cost or expense incurred after December 11, 1979 that is  
  (a) the cost to the taxpayer of, including any payment for the preservation of a taxpayer’s rights in respect of, any property described in paragraph (a), (c) or (d) of the definition 
  *Canadian resource property* in subsection 66(15) or any right to or interest in — or, for civil law, any right in or to — the property (other than a right or an interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership), or an amount paid to Her Majesty in right of the Province of Saskatchewan as a net royalty payment pursuant to a net royalty petroleum and natural gas lease that was in effect on March 31, 1977 to the extent that it can reasonably be regarded as a cost of acquiring the lease,  
  (b) subject to section 66.8, the taxpayer’s share of any expense referred to in paragraph (a) incurred by a partnership in a fiscal period thereof at the end of which the taxpayer was a member of the partnership, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is 6 months after the taxpayer’s taxation year in which that period ends, or 
  (c) any cost or expense referred to in paragraph (a) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the cost or expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares, but for greater certainty, shall not include 
  (d) any consideration given by the taxpayer for any share or any interest therein or right thereto, except as provided by paragraph (c), or 
  (e) any expense described in paragraph (c) incurred by any other taxpayer to the extent that the expense was, 
  (i) by virtue of that paragraph, a Canadian oil and gas property expense of that other taxpayer, 
  (ii) by virtue of paragraph (i) of the definition 
  *Canadian exploration expense* in subsection 66.1(6), a Canadian exploration expense of that other taxpayer, or  
  (iii) by virtue of paragraph (g) of the definition 
  *Canadian development expense* in subsection 66.2(5), a Canadian development expense of that other taxpayer,  but any amount of assistance that a taxpayer has received or is entitled to receive in respect of or related to the taxpayer’s Canadian oil and gas property expense shall not reduce the amount of any of the expenses described in any of paragraphs (a) to (c); ( frais à l’égard de biens canadiens relatifs au pétrole et au gaz)   
  *cumulative Canadian oil and gas property expense* of a taxpayer at any time in a taxation year means the amount determined by the formula  is the total of all Canadian oil and gas property expenses made or incurred by the taxpayer before that time, is the total of all amounts determined under subsection 66.4(1) in respect of the taxpayer for taxation years ending before that time, is the total of all amounts referred to in the description of F or G that are established by the taxpayer to have become bad debts before that time, is such part, if any, of the amount determined for I as has been repaid before that time by the taxpayer pursuant to a legal obligation to repay all or any part of that amount, is the total of all specified amounts, determined under paragraph 66.7(12.1)(c) in respect of the taxpayer for taxation years ending before that time, is the total of all amounts deducted in computing the taxpayer’s income for a taxation year ending before that time in respect of the taxpayer’s cumulative Canadian oil and gas property expense, is the total of all amounts each of which is an amount in respect of property described in paragraph (a), (c) or (d) of the definition 
  *Canadian resource property* in subsection 66(15) or any right to or interest in — or, for civil law, any right in or to — such a property, other than such a right or interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership, (in this description referred to as “the particular property”) disposed of by the taxpayer before that time equal to the amount, if any, by which  
  (a) the amount, if any, by which the proceeds of disposition in respect of the particular property that became receivable by the taxpayer before that time exceed any outlays or expenses made or incurred by the taxpayer before that time for the purpose of making the disposition and that were not otherwise deductible for the purposes of this Part exceeds the total of 
  (b) the amount, if any, by which 
  (i) the total of all amounts that would be determined under paragraph 66.7(5)(a), immediately before the time (in this paragraph and paragraph (c) referred to as the “relevant time”) when such proceeds of disposition became receivable, in respect of the taxpayer and an original owner of the particular property (or of any other property acquired by the taxpayer with the particular property in circumstances in which subsection 66.7(5) applied and in respect of which the proceeds of disposition became receivable by the taxpayer at the relevant time) if 
  (A) amounts that became receivable at or after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(5)(a) were read without reference to “10% of”, and 
  (D) no reduction under subsection 80(8) at or after the relevant time were taken into account exceeds the total of 
  (ii) all amounts that would be determined under paragraph 66.7(5)(a) at the relevant time in respect of the taxpayer and an original owner of the particular property (or of that other property described in subparagraph (i)) if 
  (A) amounts that became receivable after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable at or before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(5)(a) were read without reference to “10% of”, and 
  (D) no reduction under subsection 80(8) at or after the relevant time were taken into account, and 
  (iii) such portion of the amount determined under this paragraph as was otherwise applied to reduce the amount otherwise determined under this description, and 
  (c) the amount, if any, by which 
  (i) the total of all amounts that would be determined under paragraph 66.7(4)(a), immediately before the relevant time, in respect of the taxpayer and an original owner of the particular property (or of any other property acquired by the taxpayer with the particular property in circumstances in which subsection 66.7(4) applied and in respect of which the proceeds of disposition became receivable by the taxpayer at the relevant time) if 
  (A) amounts that became receivable at or after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(4)(a) were read without reference to “30% of”, and 
  (D) no reduction under subsection 80(8) at or after the relevant time were taken into account exceeds the total of 
  (ii) all amounts that would be determined under paragraph 66.7(4)(a) at the relevant time in respect of the taxpayer and an original owner of the particular property (or of that other property described in subparagraph (i)) if 
  (A) amounts that became receivable after the relevant time were not taken into account, 
  (B) each designation made under subparagraph 66.7(4)(a)(iii) in respect of an amount that became receivable at or before the relevant time were made before the relevant time, 
  (C) paragraph 66.7(4)(a) were read without reference to “30% of”, 
  (D) amounts described in subparagraph 66.7(4)(a)(ii) that became receivable at the relevant time were not taken into account, and 
  (E) no reduction under subsection 80(8) at or after the relevant time were taken into account, and 
  (iii) such portion of the amount otherwise determined under this paragraph as was otherwise applied to reduce the amount otherwise determined under this description, is the total of all amounts that became receivable by the taxpayer before that time that are to be included in the amount determined under this description by virtue of paragraph 66(12.5)(a), is the total of all amounts each of which is an amount received before that time on account of any amount referred to in the description of C, is the total amount of assistance that the taxpayer has received or is entitled to receive in respect of any Canadian oil and gas property expense incurred after 1980 or that can reasonably be related to any such expense after 1980, is the total of all amounts by which the cumulative Canadian oil and gas property expense of the taxpayer is required because of subsection 80(8) to be reduced at or before that time, and is the total of all amounts that are required to be deducted before that time under paragraph 66.7(12)(d) in computing the taxpayer’s cumulative Canadian oil and gas property expense; ( frais cumulatifs à l’égard de biens canadiens relatifs au pétrole et au gaz)   
  *proceeds of disposition* has the meaning assigned by section 54. (produit de disposition)  
  
  ### Application of ss. 66(15) and 66.1(6)
  
  (5.1) The definitions in subsections 66(15) and 66.1(6) apply to this section. 
  
  ### Share of partner
  
  (6) Except as provided in subsection 66.4(7), where a taxpayer is a member of a partnership, the taxpayer’s share of any amount that would be an amount referred to in the description of in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5), in paragraph (a) of the description of F in that definition or in the description of G or I in that definition in respect of the partnership for a taxation year of the partnership if section 96 were read without reference to paragraph 96(1)(d) shall, for the purposes of this Act, be deemed to be an amount referred to in the description of D in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5), in paragraph (a) of the description of F in that definition or in the description of G or I in that definition, whichever is applicable, in respect of the taxpayer for the taxation year of the taxpayer in which the partnership’s taxation year ends.  
  
  ### Exception
  
  (7) Where a non-resident person is a member of a partnership that is deemed under paragraph 115(4)(b) to have disposed of any Canadian resource property, the person’s share of any amount that would be an amount referred to in the description of D in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5), in paragraph (a) of the description of F in that definition or in the description of G or I in that definition in respect of the partnership for a taxation year of the partnership if section 96 were read without reference to paragraph 96(1)(d) shall, for the purposes of this Act, be deemed to be an amount referred to in the description of D in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5), in paragraph (a) of the description of F in that definition or in the description of G or I in that definition, whichever is applicable, in respect of the person for the taxation year of the person that is deemed under paragraph 115(4)(a) to have ended.  
  
  ### Deduction from income
  
  66.5 (1) In computing its income for a taxation year that ends before 1995, a corporation that has not made a designation for the year under subsection 66(14.1) or (14.2) may deduct such amount as it may claim not exceeding its cumulative offset account at the end of the year. 
  
  ### Definition of cumulative offset account 
  
  (2) In this section, 
  *cumulative offset account* of a corporation at any time means the amount, if any, by which  
  (a) the total of all amounts required to be added under subsections 66(14.1) and (14.2) in computing its cumulative offset account before that time, exceeds 
  (b) the total of all amounts deducted under subsection 66.5(1) in computing its income for taxation years ending before that time. 
  
  ### Change of control
  
  (3) Where at any time after June 5, 1987 control of a corporation has been acquired by a person or group of persons, the amount deductible under subsection 66.5(1) by the corporation in computing its income for a taxation year ending after that time shall not exceed the amount, if any, by which 
  (a) the part of its income for the year that may reasonably be regarded as attributable to production from Canadian resource properties owned by it immediately before that time exceeds 
  (b) the total of all amounts deducted under subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1), (3), (4) and (5) by it in respect of its income for the year in computing its income for the year.  
  
  ### Acquisition from tax-exempt
  
  66.6 Where a corporation acquires, by purchase, amalgamation, merger, winding-up or otherwise, all or substantially all of the Canadian resource properties or foreign resource properties of a person whose taxable income is exempt from tax under this Part, subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1) to 66.7(5) do not apply to the corporation in respect of the acquisition of the properties.  
  
  ### Successor of Canadian exploration and development expenses
  
  66.7 (1) Subject to subsections 66.7(6) and 66.7(7), where after 1971 a corporation (in this subsection referred to as the “successor”) acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) the Canadian exploration and development expenses incurred by the original owner before the original owner disposed of the particular property to the extent that those expenses were not otherwise deducted in computing the income of the successor for the year, were not deducted in computing the income of the successor for a preceding taxation year and were not deductible under subsection 66(1) or deducted under subsection 66(2) or 66(3) by the original owner, or deducted by any predecessor owner of the particular property, in computing income for any taxation year, and 
  (b) the amount, if any, by which 
  (i) the part of the successor’s income for the year that may reasonably be regarded as attributable to 
  (A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds of the disposition have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules, this clause, clause (3)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,  
  (B) its reserve amount for the year in respect of the original owner and each predecessor owner, if any, of the particular property, or 
  (C) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5,  exceeds the total of 
  (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules, this subsection and subsections 66.7(3), 66.7(4) and 66.7(5) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(1)(b)(i) in respect of the particular property, and  
  (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(1)(b)(i). 
  
  ### Successor of foreign exploration and development expenses
  
  (2) Subject to subsections 66.7(6) and 66.7(8), where after 1971 a corporation (in this subsection referred to as the “successor”) acquired a particular foreign resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) the amount, if any, by which 
  (i) the foreign exploration and development expenses incurred by the original owner before the original owner disposed of the particular property to the extent that those expenses were incurred when the original owner was resident in Canada, were not otherwise deducted in computing the successor’s income for the year, were not deducted in computing the successor’s income for a preceding taxation year and were not deductible by the original owner, nor deducted by any predecessor owner of the particular property, in computing income for any taxation year exceeds 
  (ii) the total of all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) the amount, if any, by which the total of 
  (i) the part of the successor’s income for the year that can reasonably be regarded as attributable to 
  (A) the amount included under subsection 59(1) in computing its income for the year that can reasonably be regarded as attributable to the disposition by it of any interest in or right to — or, for civil law, any right in or to — the particular property, or 
  (B) production from the particular property, computed as if no deduction were allowed under sections 65 to 66.5 and this section, and 
  (ii) the lesser of 
  (A) the total of all amounts each of which is the amount designated by the successor for the year in respect of a Canadian resource property owned by the original owner immediately before being acquired with the particular property by the successor or a predecessor owner of the particular property, not exceeding the amount included in the successor’s income for the year, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5, that can reasonably be regarded as being attributable to the production after 1988 from the Canadian resource property, and  
  (B) the amount, if any, by which 10% of the amount described in paragraph 66.7(2)(a) for the year in respect of the original owner exceeds the total of all amounts each of which would, but for this subparagraph, clause 66.7(2)(b)(iii)(B) and subparagraph 66.7(10)(h)(vi), be determined under this paragraph for the year in respect of the particular property or other foreign resource property owned by the original owner immediately before being acquired with the particular property by the successor or a predecessor owner of the particular property exceeds the total of 
  (iii) all other amounts deducted under this subsection for the year that can reasonably be regarded as attributable to 
  (A) the part of its income for the year described in subparagraph 66.7(2)(b)(i) in respect of the particular property, or 
  (B) a part of its income for the year described in clause 66.7(2)(b)(ii)(A) in respect of which an amount is designated by the successor under clause 66.7(2)(b)(ii)(A), and 
  (iv) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(2)(b)(i), and income in respect of which an amount is designated under clause 66.7(2)(b)(ii)(A) shall, for the purposes of clause 29(25)(d)(i)(B) of the Income Tax Application Rules, clauses 66.7(1)(b)(i)(C), 66.7(3)(b)(i)(C), 66.7(4)(b)(i)(B) and 66.7(5)(b)(i)(B) and subparagraph 66.7(10)(g)(iii), be deemed not to be attributable to production from a Canadian resource property.  
  
  ### Country-by-country successor FEDE allocations
  
  (2.1) For greater certainty, the portion of an amount deducted under subsection (2) in computing a taxpayer’s income for a taxation year that can reasonably be considered to be in respect of specified foreign exploration and development expenses of the taxpayer in respect of a country is considered to apply to a source in that country. 
  
  ### Method of allocation
  
  (2.2) For the purpose of subsection (2.1), where a taxpayer has incurred specified foreign exploration and development expenses in respect of two or more countries, an allocation to each of those countries for a taxation year shall be determined in a manner that is 
  (a) reasonable having regard to all the circumstances, including the level and timing of 
  (i) the taxpayer’s specified foreign exploration and development expenses in respect of the country, and 
  (ii) the profits or gains to which those expenses relate; and 
  (b) not inconsistent with the allocation made under subsection (2.1) for the preceding taxation year. 
  
  ### Successor of foreign resource expenses
  
  (2.3) Subject to subsections (6) and (8), where a corporation (in this subsection referred to as the “successor”) acquired a particular foreign resource property in respect of a country (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) 30% of the amount, if any, by which 
  (i) the cumulative foreign resource expense, in respect of the country, of the original owner determined immediately after the disposition of the particular property by the original owner to the extent that it has not been 
  (A) deducted by the original owner or any predecessor owner of the particular property in computing income for any taxation year, 
  (B) otherwise deducted in computing the income of the successor for the year, or 
  (C) deducted by the successor in computing its income for any preceding taxation year exceeds the total of 
  (ii) all amounts each of which is an amount (other than any portion of the amount that can reasonably be considered to result in a reduction of the amount otherwise determined under this paragraph in respect of another original owner of a relevant resource property who is not a predecessor owner of a relevant resource property or who became a predecessor owner of a relevant resource property before the original owner became a predecessor owner of a relevant resource property) that became receivable by a predecessor owner of the particular property, or by the successor in the year or a preceding taxation year, and that 
  (A) was included by the predecessor owner or the successor in computing an amount determined under paragraph (a) of the description of F in the definition 
  *cumulative foreign resource expense* in subsection 66.21(1) at the end of the year, and  
  (B) can reasonably be regarded as attributable to the disposition of a property (in this subparagraph referred to as a “relevant resource property”) that is 
  (I) the particular property, or 
  (II) another foreign resource property in respect of the country that was acquired from the original owner with the particular property by the successor or a predecessor owner of the particular property, and 
  (iii) all amounts each of which is an amount by which the amount described in this paragraph is required by reason of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) the amount, if any, by which the total of 
  (i) the part of the successor’s income for the year that can reasonably be regarded as attributable to production from the particular property, computed as if no deduction were permitted under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5, except that, where the successor acquired the particular property from the original owner at any time in the year (otherwise than by way of an amalgamation or merger or solely by reason of the application of paragraph (10)(c)) and did not deal with the original owner at arm’s length at that time, the amount determined under this subparagraph is deemed to be nil, and  
  (ii) unless the amount determined under subparagraph (i) is nil by reason of the exception provided under that subparagraph, the lesser of 
  (A) the total of all amounts each of which is the amount designated by the successor for the year in respect of a Canadian resource property owned by the original owner immediately before being acquired with the particular property by the successor or a predecessor owner of the particular property, not exceeding the amount included in the successor’s income for the year, computed as if no deduction were permitted under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5, that can reasonably be regarded as being attributable to the production from the Canadian resource property, and  
  (B) the amount, if any, by which 10% of the amount described in paragraph (a) for the year, in respect of the original owner, exceeds the total of all amounts each of which would, but for this subparagraph, clause (2)(b)(iii)(B) and subparagraph (10)(h)(vi), be determined under this paragraph for the year in respect of the particular property or other foreign resource property, in respect of the country, owned by the original owner immediately before being acquired with the particular property by the successor or by a predecessor owner of the particular property exceeds the total of 
  (iii) all other amounts each of which is an amount deducted for the year under this subsection or subsection (2) that can reasonably be regarded as attributable to 
  (A) the part of its income for the year described in subparagraph (i) in respect of the particular property, or 
  (B) a part of its income for the year described in clause (ii)(A) in respect of which an amount is designated by the successor under clause (ii)(A), and 
  (iv) all amounts added by reason of subsection 80(13) in computing the amount determined under subparagraph (i), and income in respect of which an amount is designated under clause (b)(ii)(A) is, for the purposes of clause 29(25)(d)(i)(B) of the Income Tax Application Rules, clauses (1)(b)(i)(C), (3)(b)(i)(C), (4)(b)(i)(B) and (5)(b)(i)(B) and subparagraph (10)(g)(iii), deemed not to be attributable to production from a Canadian resource property.  
  
  ### Successor of Canadian exploration expense
  
  (3) Subject to subsections 66.7(6) and 66.7(7), where after May 6, 1974 a corporation (in this subsection referred to as the “successor”) acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) the amount, if any, by which 
  (i) the total of 
  (A) the cumulative Canadian exploration expense of the original owner determined immediately after the disposition of the particular property by the original owner, and 
  (B) all amounts required to be added under paragraph 66.7(9)(f) to the cumulative Canadian exploration expense of the original owner in respect of a predecessor owner of the particular property, or the successor, as the case may be, at any time after the disposition of the particular property by the original owner and before the end of the year, to the extent that an amount in respect of that total was not 
  (C) deducted or required to be deducted under subsection 66.1(2) or 66.1(3) by the original owner or deducted by any predecessor owner of the particular property in computing income for any taxation year, 
  (D) otherwise deducted in computing the successor’s income for the year, 
  (E) deducted in computing the successor’s income for a preceding taxation year, or 
  (F) designated by the original owner pursuant to subsection 66(14.1) for any taxation year, exceeds 
  (ii) the total of all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) the amount, if any, by which 
  (i) the part of the successor’s income for the year that may reasonably be regarded as attributable to 
  (A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as being attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules, this clause, clause (1)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,  
  (B) its reserve amount for the year in respect of the original owner and each predecessor owner, if any, of the particular property, or 
  (C) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5,  exceeds the total of 
  (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules, this subsection and subsections 66.7(1), 66.7(4) and 66.7(5) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(3)(b)(i) in respect of the particular property, and  
  (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(3)(b)(i). 
  
  ### Successor of Canadian development expense
  
  (4) Subject to subsections 66.7(6) and 66.7(7), where after May 6, 1974 a corporation (in this subsection referred to as the “successor”) acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) 30% of the amount, if any, by which 
  (i) the amount, if any, by which 
  (A) the cumulative Canadian development expense of the original owner determined immediately after the disposition of the particular property by the original owner to the extent that it has not been 
  (I) deducted by the original owner or any predecessor owner of the particular property in computing income for any taxation year, 
  (I.1) otherwise deducted in computing the income of the successor for the year, 
  (II) deducted by the successor in computing its income for any preceding taxation year, or 
  (III) designated by the original owner pursuant to subsection 66(14.2) for any taxation year, 
  (B) any amount required to be deducted under paragraph (9)(e) from the cumulative Canadian development expense of the original owner in respect of a predecessor owner of the particular property or the successor, as the case may be, at any time after the disposition of the particular property by the original owner and before the end of the year, exceeds the total of 
  (ii) all amounts each of which is an amount (other than any portion thereof that can reasonably be considered to result in a reduction of the amount otherwise determined under this paragraph in respect of another original owner of a relevant mining property who is not a predecessor owner of a relevant mining property or who became a predecessor owner of a relevant mining property before the original owner became a predecessor owner of a relevant mining property) that became receivable by a predecessor owner of the particular property or the successor in the year or a preceding taxation year and that 
  (A) was included by the predecessor owner or the successor in computing an amount determined under paragraph (a) of the description of F in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) at the end of the year, and  
  (B) can reasonably be regarded as attributable to the disposition of a property (in this subparagraph referred to as a “relevant mining property”) that is the particular property or another Canadian resource property that was acquired from the original owner with the particular property by the successor or a predecessor owner of the particular property, 
  (iii) all amounts each of which is an amount (other than any portion thereof that can reasonably be considered to result in a reduction of the amount otherwise determined under paragraph 66.7(5)(a) in respect of the original owner or under this paragraph or paragraph 66.7(5)(a) in respect of another original owner of a relevant oil and gas property who is not a predecessor owner of a relevant oil and gas property or who became a predecessor owner of a relevant oil and gas property before the original owner became a predecessor owner of a relevant oil and gas property) that became receivable by a predecessor owner of the particular property or the successor after 1992 and in the year or a preceding taxation year and that 
  (A) is designated in respect of the original owner by the predecessor owner or the successor, as the case may be, in prescribed form filed with the Minister within 6 months after the end of the taxation year in which the amount became receivable, 
  (B) was included by the predecessor owner or the successor in computing an amount determined under paragraph (a) of the description of F in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) at the end of the year, and  
  (C) can reasonably be regarded as attributable to the disposition of a property (in this subparagraph referred to as a “relevant oil and gas property”) that is the particular property or another Canadian resource property that was acquired from the original owner with the particular property by the successor or a predecessor owner of the particular property, and 
  (iv) all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) the amount, if any, by which 
  (i) the part of the successor’s income for the year that can reasonably be regarded as attributable to 
  (A) its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or 
  (B) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5, except that, where the successor acquired the particular property from the original owner at any time in the year (otherwise than by way of an amalgamation or merger or solely because of the application of paragraph 66.7(10)(c)) and did not deal with the original owner at arm’s length at that time, the amount determined under this subparagraph shall be deemed to be nil,  exceeds the total of 
  (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules, this subsection and subsections 66.7(1), 66.7(3) and 66.7(5) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(4)(b)(i) in respect of the particular property, and  
  (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(4)(b)(i). 
  
  ### Successor of Canadian oil and gas property expense
  
  (5) Subject to subsections 66.7(6) and 66.7(7), where after December 11, 1979 a corporation (in this subsection referred to as the “successor”) acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of 
  (a) 10% of the amount, if any, by which 
  (i) the cumulative Canadian oil and gas property expense of the original owner determined immediately after the disposition of the particular property by the original owner to the extent it has not been 
  (A) deducted by the original owner or any predecessor owner of the particular property in computing income for any taxation year, 
  (A.1) otherwise deducted in computing the income of the successor for the year, or 
  (B) deducted by the successor in computing its income for any preceding taxation year exceeds the total of 
  (ii) the total of all amounts each of which is an amount (other than any portion thereof that can reasonably be considered to result in a reduction of the amount otherwise determined under this paragraph or paragraph 66.7(4)(a) in respect of another original owner of a relevant oil and gas property who is not a predecessor owner of a relevant oil and gas property or who became a predecessor owner of a relevant oil and gas property before the original owner became a predecessor owner of a relevant oil and gas property) that became receivable by a predecessor owner of the particular property or the successor in the year or a preceding taxation year and that 
  (A) was included by the predecessor owner or the successor in computing an amount determined under paragraph (a) of the description of F in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) at the end of the year, and  
  (B) can reasonably be regarded as attributable to the disposition of a property (in this subparagraph referred to as a “relevant oil and gas property”) that is the particular property or another Canadian resource property that was acquired from the original owner with the particular property by the successor or a predecessor owner of the particular property, and 
  (iii) the total of all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year, and 
  (b) the amount, if any, by which 
  (i) the part of the successor’s income for the year that can reasonably be regarded as attributable to 
  (A) its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or 
  (B) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules, this section or any of sections 65 to 66.5, except that, where the successor acquired the particular property from the original owner at any time in the year (otherwise than by way of an amalgamation or merger or solely because of the application of paragraph 66.7(10)(c)) and did not deal with the original owner at arm’s length at that time, the amount determined under this subparagraph shall be deemed to be nil,  exceeds the total of 
  (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules, this subsection and subsections 66.7(1), 66.7(3) and 66.7(4) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(5)(b)(i) in respect of the particular property, and  
  (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(5)(b)(i). 
  
  ### Where s. 29(25) of ITAR and ss. (1) to (5) do not apply
  
  (6) Subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1) to 66.7(5) do not apply  
  (a) in respect of a Canadian resource property or a foreign resource property acquired by way of an amalgamation to which subsection 87(1.2) applies or a winding-up to which subsection 88(1.5) applies; or 
  (b) to permit, in respect of the acquisition by a corporation before February 18, 1987 of a Canadian resource property or a foreign resource property, a deduction by the corporation of an amount that the corporation would not have been entitled to deduct under section 29 of the Income Tax Application Rules or section 66, 66.1, 66.2 or 66.4 if those sections, as they read in their application to taxation years ending before February 18, 1987, applied to taxation years ending after February 17, 1987.  
  
  ### Application of s. 29(25) of ITAR and ss. (1), (3), (4) and (5)
  
  (7) Subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1), 66.7(3), 66.7(4) and 66.7(5) apply only to a corporation that has acquired a particular Canadian resource property  
  (a) where it acquired the particular property in a taxation year commencing before 1985 and, at the time it acquired the particular property, the corporation acquired all or substantially all of the property used by the person from whom it acquired the particular property in carrying on in Canada such of the businesses described in paragraphs (a) to (g) of the definition 
  *principal-business corporation* in subsection 66(15) as were carried on by the person;  
  (b) where it acquired the particular property in a taxation year commencing after 1984 and, at the time it acquired the particular property, the corporation acquired all or substantially all of the Canadian resource properties of the person from whom it acquired the particular property; 
  (c) where it acquired the particular property after June 5, 1987 by way of an amalgamation or winding-up and it has filed an election in prescribed form with the Minister on or before the day on or before which the corporation is required to file a return of income pursuant to section 150 for its taxation year in which it acquired the particular property; 
  (d) where it acquired the particular property after November 16, 1978 and in a taxation year ending before February 18, 1987 by any means other than by way of an amalgamation or winding-up and it and the person from whom it acquired the particular property, have filed with the Minister a joint election under and in accordance with any of subsection 29(25) of the Income Tax Application Rules, subsection 29(29) of the Income Tax Application Rules, 1971, Part III of chapter 63 of the Statutes of Canada, 1970-71-72, and subsections 66(6) and (7), 66.1(4) and (5), 66.2(3) and (4) and 66.4(3) and (4) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as all of those subsections read in their application to that year; and  
  (e) where it acquired the particular property in a taxation year ending after February 17, 1987 by any means other than by way of an amalgamation or winding-up and it and the person from whom it acquired the particular property have filed a joint election in prescribed form with the Minister on or before the earlier of the days on or before which either of them is required to file a return of income pursuant to section 150 for its or the person’s taxation year in which the corporation acquired the particular property. 
  
  ### Application of subsections (2) and (2.3)
  
  (8) Subsections (2) and (2.3) apply only to a corporation that has acquired a particular foreign resource property 
  (a) where it acquired the particular property in a taxation year commencing before 1985 and, at the time it acquired the particular property, the corporation acquired all or substantially all of the property used by the person from whom it acquired the particular property in carrying on outside Canada such of the businesses described in paragraphs (a) to (g) of the definition 
  *principal-business corporation* in subsection 66(15) as were carried on by that person;  
  (b) where it acquired the particular property in a taxation year commencing after 1984 and, at the time it acquired the particular property, the corporation acquired all or substantially all of the foreign resource properties of the person from whom it acquired the particular property; 
  (c) where it acquired the particular property after June 5, 1987 by way of an amalgamation or winding-up and it has filed an election in prescribed form with the Minister on or before the day on or before which the corporation is required to file a return of income pursuant to section 150 for its taxation year in which it acquired the particular property; 
  (d) where it acquired the particular property after November 16, 1978 and in a taxation year ending before February 18, 1987 by any means other than by way of an amalgamation or winding-up and it and the person from whom it acquired the particular property, have filed with the Minister a joint election under and in accordance with subsection 66(6) or 66(7) (as modified by subsections 66(8) and 66(9), respectively) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as those subsections read in their application to that year; and  
  (e) where it acquired the particular property in a taxation year ending after February 17, 1987 by any means other than by way of an amalgamation or winding-up and it and the person from whom it acquired the particular property have filed a joint election in prescribed form with the Minister on or before the earlier of the days on or before which either of them is required to file a return of income pursuant to section 150 for its or the person’s taxation year in which the corporation acquired the particular property. 
  
  ### Canadian development expense becoming Canadian exploration expense
  
  (9) Where 
  (a) a corporation acquires a Canadian resource property, 
  (b) subsection 66.7(4) applies in respect of the acquisition, and 
  (c) the cumulative Canadian development expense of an original owner of the property determined under clause 66.7(4)(a)(i)(A) in respect of the corporation includes a Canadian development expense incurred by the original owner in respect of an oil or gas well that would, but for this subsection, be deemed by subsection 66.1(9) to be a Canadian exploration expense incurred in respect of the well by the original owner at any particular time after the acquisition by the corporation and before it disposed of the property, the following rules apply: 
  (d) subsection 66.1(9) does not apply in respect of the Canadian development expense incurred in respect of the well by the original owner, 
  (e) an amount equal to the lesser of 
  (i) the amount that would be deemed by subsection 66.1(9) to be a Canadian exploration expense incurred in respect of the well by the original owner at the particular time if that subsection applied in respect of the expense, and 
  (ii) the cumulative Canadian development expense of the original owner as determined under clause 66.7(4)(a)(i)(A) in respect of the corporation immediately before the particular time shall be deducted at the particular time from the cumulative Canadian development expense of the original owner in respect of the corporation for the purposes of subparagraph 66.7(4)(a)(i), and 
  (f) the amount required by paragraph 66.7(9)(e) to be deducted shall be added at the particular time to the cumulative Canadian exploration expense of the original owner in respect of the corporation for the purpose of paragraph 66.7(3)(a). 
  
  ### Change of control
  
  (10) Where at any time after November 12, 1981 
  (a) control of a corporation has been acquired by a person or group of persons, or 
  (b) a corporation ceased on or before April 26, 1995 to be exempt from tax under this Part on its taxable income, for the purposes of the provisions of the Income Tax Application Rules and this Act (other than subsections 66(12.6), (12.601), (12.602), (12.62) and (12.71)) relating to deductions in respect of drilling and exploration expenses, prospecting, exploration and development expenses, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses (in this subsection referred to as “resource expenses”) incurred by the corporation before that time, the following rules apply:  
  (c) the corporation shall be deemed after that time to be a successor (within the meaning assigned by subsection 29(25) of the Income Tax Application Rules or any of subsections 66.7(1) to 66.7(5)) that had, at that time, acquired all the properties owned by the corporation immediately before that time from an original owner thereof,  
  (c.1) where the corporation did not own a foreign resource property immediately before that time, the corporation is deemed to have owned a foreign resource property immediately before that time, 
  (d) a joint election shall be deemed to have been filed in accordance with subsections 66.7(7) and 66.7(8) in respect of the acquisition, 
  (e) the resource expenses incurred by the corporation before that time shall be deemed to have been incurred by an original owner of the properties and not by the corporation, 
  (f) the original owner is deemed to have been resident in Canada before that time while the corporation was resident in Canada, 
  (g) where the corporation (in this paragraph referred to as the “transferee”) was, immediately before and at that time, 
  (i) a parent corporation (within the meaning assigned by subsection 87(1.4)), or 
  (ii) a subsidiary wholly-owned corporation (within the meaning assigned by subsection 87(1.4)) of a particular corporation (in this paragraph referred to as the “transferor”), if both corporations agree to have this paragraph apply to them in respect of a taxation year of the transferor ending after that time and notify the Minister in writing of the agreement in the return of income under this Part of the transferor for that year, the transferor may, if throughout that year the transferee was such a parent corporation or subsidiary wholly-owned corporation of the transferor, designate in favour of the transferee, in respect of that year, for the purpose of making a deduction under subsection 29(25) of the Income Tax Application Rules or this section in respect of resource expenses incurred by the transferee before that time and when it was such a parent corporation or subsidiary wholly-owned corporation of the transferor, an amount not exceeding such portion of the amount that would be its income for the year, if no deductions were allowed under any of section 29 of the Income Tax Application Rules, this section and sections 65 to 66.5, that may reasonably be regarded as being attributable to  
  (iii) the production from Canadian resource properties owned by the transferor immediately before that time, and 
  (iv) the disposition in the year of any Canadian resource properties owned by the transferor immediately before that time, to the extent that the portion of the amount so designated is not designated under this paragraph in favour of any other taxpayer, and the amount so designated shall be deemed, for the purposes of determining the amount under paragraph 29(25)(d) of the Income Tax Application Rules and paragraphs 66.7(1)(b), 66.7(3)(b), 66.7(4)(b) and 66.7(5)(b),  
  (v) to be income from the sources described in subparagraph 66.7(10)(g)(iii) or 66.7(10)(g)(iv), as the case may be, of the transferee for its taxation year in which that taxation year of the transferor ends, and 
  (vi) not to be income from the sources described in subparagraph 66.7(10)(g)(iii) or 66.7(10)(g)(iv), as the case may be, of the transferor for that year, 
  (h) where the corporation (in this paragraph referred to as the “transferee”) was, immediately before and at that time, 
  (i) a parent corporation (within the meaning assigned by subsection 87(1.4)), or 
  (ii) a subsidiary wholly-owned corporation (within the meaning assigned by subsection 87(1.4)) of a particular corporation (in this paragraph referred to as the “transferor”), if both corporations agree to have this paragraph apply to them in respect of a taxation year of the transferor ending after that time and notify the Minister in writing of the agreement in the return of income under this Part of the transferor for that year, the transferor may, if throughout that year the transferee was such a parent corporation or subsidiary wholly-owned corporation of the transferor, designate in favour of the transferee, in respect of that year, for the purpose of making a deduction under this section in respect of resource expenses incurred by the transferee before that time and when it was such a parent corporation or subsidiary wholly-owned corporation of the transferor, an amount not exceeding such portion of the amount that would be its income for the year, if no deductions were allowed under this section and sections 65 to 66.5, that may reasonably be regarded as being attributable to 
  (iii) the production from foreign resource properties owned by the transferor immediately before that time, and 
  (iv) the disposition of any foreign resource properties owned by the transferor immediately before that time, to the extent that the portion of the amount so designated is not designated under this paragraph in favour of any other taxpayer, and the amount so designated shall be deemed, 
  (v) for the purposes of determining the amounts under paragraphs (2)(b) and (2.3)(b), to be income from the sources described in subparagraph (iii) or (iv), as the case may be, of the transferee for its taxation year in which that taxation year of the transferor ends, and 
  (vi) for the purposes of determining the amounts under paragraphs (2)(b) and (2.3)(b), not to be income from the sources described in subparagraph (iii) or (iv), as the case may be, of the transferor for that year, 
  (i) where, immediately before and at that time, the corporation (in this paragraph referred to as the “transferee”) and another corporation (in this paragraph referred to as the “transferor”) were both subsidiary wholly-owned corporations (within the meaning assigned by subsection 87(1.4)) of a particular parent corporation (within the meaning assigned by subsection 87(1.4)), if the transferee and the transferor agree to have this paragraph apply to them in respect of a taxation year of the transferor ending after that time and notify the Minister in writing of the agreement in the return of income under this Part of the transferor for that year, paragraph 66.7(10)(g) or 66.7(10)(h), or both, as the agreement provides, shall apply for that year to the transferee and transferor as though one were the parent corporation (within the meaning of subsection 87(1.4)) of the other, and 
  (j) where that time is after January 15, 1987 and at that time the corporation was a member of a partnership that owned a Canadian resource property or a foreign resource property at that time 
  (i) for the purpose of paragraph 66.7(10)(c), the corporation shall be deemed to have owned immediately before that time that portion of the property owned by the partnership at that time that is equal to its percentage share of the total of amounts that would be paid to all members of the partnership if it were wound up at that time, and 
  (ii) for the purposes of clause 29(25)(d)(i)(B) of the Income Tax Application Rules, clauses (1)(b)(i)(C) and (2)(b)(i)(B), subparagraph (2.3)(b)(i) and clauses (3)(b)(i)(C), (4)(b)(i)(B) and (5)(b)(i)(B) for a taxation year ending after that time, the lesser of  
  (A) its share of the part of the income of the partnership for the fiscal period of the partnership ending in the year that may reasonably be regarded as being attributable to the production from the property, and 
  (B) an amount that would be determined under clause 66.7(10)(j)(ii)(A) for the year if its share of the income of the partnership for the fiscal period of the partnership ending in the year were determined on the basis of the percentage share referred to in subparagraph 66.7(10)(j)(i), shall be deemed to be income of the corporation for the year that may reasonably be attributable to production from the property. 
  
  ### Amalgamation — partnership property
  
  (10.1) For the purposes of subsections (1) to (5) and the definition 
  *original owner* in subsection 66(15), if at any particular time there has been an amalgamation within the meaning assigned by subsection 87(1), other than an amalgamation to which subsection 87(1.2) applies, of two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) to form one corporate entity (referred to in this subsection as the “new corporation”) and immediately before the particular time a predecessor corporation was a member of a partnership that owned a Canadian resource property or a foreign resource property,  
  (a) the predecessor corporation is deemed 
  (i) to have owned, immediately before the particular time, that portion of each Canadian resource property and of each foreign resource property owned by the partnership at the particular time that is equal to the predecessor corporation’s percentage share of the total of the amounts that would be paid to all members of the partnership if the partnership were wound up immediately before the particular time, and 
  (ii) to have disposed of those portions to the new corporation at the particular time; 
  (b) the new corporation is deemed to have, by way of the amalgamation, acquired those portions at the particular time; and 
  (c) the income of the new corporation for a taxation year that ends after the particular time that can reasonably be attributable to production from those properties is deemed to be the lesser of 
  (i) the new corporation’s share of the part of the income of the partnership for fiscal periods of the partnership that end in the year that can reasonably be regarded as being attributable to production from those properties, and 
  (ii) the amount that would be determined under subparagraph (i) for the year if the new corporation’s share of the income of the partnership for the fiscal periods of the partnership that end in the year were determined on the basis of the percentage share referred to in paragraph (a). 
  
  ### Idem
  
  (11) Where, at any time, 
  (a) control of a taxpayer that is a corporation has been acquired by a person or group of persons, or 
  (b) a taxpayer has disposed of all or substantially all of the taxpayer’s Canadian resource properties or foreign resource properties, and, before that time, the taxpayer or a partnership of which the taxpayer was a member acquired a property that is a Canadian resource property, a foreign resource property or an interest in a partnership and it may reasonably be considered that one of the main purposes of the acquisition was to avoid any limitation provided in subsection 29(25) of the Income Tax Application Rules or any of subsections 66.7(1) to 66.7(5) on the deduction in respect of any expenses incurred by the taxpayer or a corporation referred to as a transferee in paragraph 66.7(10)(g) or 66.7(10)(h), the taxpayer or the partnership, as the case may be, shall be deemed, for the purposes of applying those subsections to or in respect of the taxpayer, not to have acquired the property.  
  
  ### Reduction of Canadian resource expenses
  
  (12) Where in a taxation year an owner of Canadian resource properties disposes of all or substantially all of the original owner’s Canadian resource properties to a particular corporation in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), 66.7(3), 66.7(4) or 66.7(5) applies,  
  (a) the Canadian exploration and development expenses incurred by the original owner before that owner so disposed of the properties shall, for the purposes of this Subdivision, be deemed after the disposition not to have been incurred by the original owner except for the purposes of making a deduction under subsection 66(1) or 66(2) for the year and of determining the amount that may be deducted under subsection 66.7(1) by the particular corporation or by any other corporation that subsequently acquires any of the properties; 
  (b) in determining the cumulative Canadian exploration expense of the original owner at any time after the time referred to in subparagraph 66.7(3)(a)(i), there shall be deducted the amount thereof determined immediately after the disposition; 
  (b.1) for the purposes of paragraph 66.7(3)(a), the cumulative Canadian exploration expenses of the original owner determined immediately after the disposition that was deducted or required to be deducted under subsection 66.1(2) or 66.1(3) in computing the original owner’s income for the year shall be deemed to be equal to the lesser of 
  (i) the amount deducted under paragraph 66.7(12)(b) in respect of the disposition, and 
  (ii) the amount, if any, by which 
  (A) the specified amount determined under paragraph 66.7(12.1)(a) in respect of the original owner for the year exceeds 
  (B) the total of all amounts each of which is an amount determined under this paragraph in respect of any disposition made by the original owner before the disposition and in the year; 
  (b.2) for greater certainty, any amount (other than the amount determined under paragraph 66.7(12)(b.1)) that was deducted or required to be deducted under subsection 66.1(2) or 66.1(3) by the original owner for the year or a subsequent taxation year shall, for the purposes of paragraph 66.7(3)(a), be deemed not to be in respect of the cumulative Canadian exploration expense of the original owner determined immediately after the disposition; 
  (c) in determining the cumulative Canadian development expense of the original owner at any time after the time referred to in clause 66.7(4)(a)(i)(A), there shall be deducted the amount thereof determined immediately after the disposition; 
  (c.1) for the purpose of paragraph 66.7(4)(a), the cumulative Canadian development expense of the original owner determined immediately after the disposition that was deducted under subsection 66.2(2) in computing the original owner’s income for the year shall be deemed to be equal to the lesser of 
  (i) the amount deducted under paragraph 66.7(12)(c) in respect of the disposition, and 
  (ii) the amount, if any, by which 
  (A) the specified amount determined under paragraph 66.7(12.1)(b) in respect of the original owner for the year exceeds 
  (B) the total of all amounts determined under this paragraph in respect of any dispositions made by the original owner before the disposition and in the year; 
  (c.2) for greater certainty, any amount (other than the amount determined under paragraph 66.7(12)(c.1)) that was deducted under subsection 66.2(2) by the original owner for the year or a subsequent taxation year shall, for the purpose of paragraph 66.7(4)(a), be deemed not to be in respect of the cumulative Canadian development expense of the original owner determined immediately after the disposition; 
  (d) in determining the cumulative Canadian oil and gas property expense of the original owner at any time after the time referred to in subparagraph 66.7(5)(a)(i), there shall be deducted the amount thereof determined immediately after the disposition; 
  (d.1) for the purpose of paragraph 66.7(5)(a), the cumulative Canadian oil and gas property expense of the original owner determined immediately after the disposition that was deducted under subsection 66.4(2) in computing the original owner’s income for the year shall be deemed to be equal to the lesser of 
  (i) the amount deducted under paragraph 66.7(12)(d) in respect of the disposition, and 
  (ii) the amount, if any, by which 
  (A) the specified amount determined under paragraph 66.7(12.1)(c) in respect of the original owner for the year exceeds 
  (B) the total of all amounts determined under this paragraph in respect of any dispositions made by the original owner before the disposition and in the year; 
  (d.2) for greater certainty, any amount (other than the amount determined under paragraph 66.7(12)(d.1)) that was deducted under subsection 66.4(2) by the original owner for the year or a subsequent taxation year shall, for the purpose of paragraph 66.7(5)(a), be deemed not to be in respect of the cumulative Canadian oil and gas property expense of the original owner determined immediately after the disposition; and 
  (e) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by the original owner before 1972 on or in respect of exploring or drilling for petroleum or natural gas in Canada and the prospecting, exploration and development expenses incurred by the original owner before 1972 in searching for minerals in Canada shall, for the purposes of section 29 of the Income Tax Application Rules, be deemed after the disposition not to have been incurred by the original owner except for the purposes of making a deduction under that section for the year and of determining the amount that may be deducted under subsection 29(25) of that Act by the particular corporation or any other corporation that subsequently acquires any of the properties.  
  
  ### Specified amount
  
  (12.1) Where in a taxation year an original owner of Canadian resource properties disposes of all or substantially all of the original owner’s Canadian resource properties in circumstances in which subsection 66.7(3), 66.7(4) or 66.7(5) applies, 
  (a) the lesser of 
  (i) the total of all amounts each of which is the amount, if any, by which 
  (A) an amount deducted under paragraph 66.7(12)(b) in respect of a disposition in the year by the original owner exceeds 
  (B) the amount, if any, designated by the original owner in prescribed form filed with the Minister within 6 months after the end of the year in respect of an amount determined under clause 66.7(12.1)(a)(i)(A), and 
  (ii) the total of 
  (A) the amount claimed under subsection 66.1(2) or 66.1(3) by the original owner for the year, and 
  (B) the amount that would, but for paragraph 66.1(1)(c), be determined under subsection 66.1(1) in respect of the original owner for the year is the specified amount in respect of the original owner for the year for the purposes of clause 66.7(12)(b.1)(ii)(A) and of determining the value of E.1 in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6);  
  (b) the lesser of 
  (i) the total of all amounts each of which is the amount, if any, by which 
  (A) an amount deducted under paragraph 66.7(12)(c) in respect of a disposition in the year by the original owner exceeds 
  (B) the amount, if any, designated by the original owner in prescribed form filed with the Minister within 6 months after the end of the year in respect of an amount determined under clause 66.7(12.1)(b)(i)(A), and 
  (ii) the total of 
  (A) the amount claimed under subsection 66.2(2) by the original owner for the year, and 
  (B) the amount that would, but for paragraph 66.2(1)(d), be determined under subsection 66.2(1) in respect of the original owner for the year is the specified amount in respect of the original owner for the year for the purposes of clause 66.7(12)(c.1)(ii)(A) and of determining the value of D.1 in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5); and  
  (c) the lesser of 
  (i) the total of all amounts each of which is the amount, if any, by which 
  (A) an amount deducted under paragraph 66.7(12)(d) in respect of a disposition in the year by the original owner exceeds 
  (B) the amount, if any, designated by the original owner in prescribed form filed with the Minister within 6 months after the end of the year in respect of an amount determined under clause 66.7(12.1)(c)(i)(A), and 
  (ii) the total of 
  (A) the amount claimed under subsection 66.4(2) by the original owner for the year, and 
  (B) the amount that would, but for paragraph 66.4(1)(c), be determined under subsection 66.4(1) in respect of the original owner for the year is the specified amount in respect of the original owner for the year for the purposes of clause 66.7(12)(d.1)(ii)(A) and of determining the value of D.1 in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5).  
  
  ### Reduction of foreign resource expenses
  
  (13) Where after June 5, 1987 an original owner of foreign resource properties disposes of all or substantially all of the original owner’s foreign resource properties to a particular corporation in circumstances in which subsection 66.7(2) applies, the foreign exploration and development expenses incurred by the original owner before that owner so disposed of the properties shall be deemed after the disposition not to have been incurred by the original owner except for the purposes of determining the amounts that may be deducted under that subsection by the particular corporation or any other corporation that subsequently acquires any of the properties. 
  
  ### Reduction of foreign resource expenses
  
  (13.1) Where in a taxation year an original owner of foreign resource properties in respect of a country disposes of all or substantially all of the original owner’s foreign resource properties in circumstances to which subsection (2.3) applies, 
  (a) in determining the cumulative foreign resource expense of the original owner in respect of the country at any time after the time referred to in subparagraph (2.3)(a)(i), there shall be deducted the amount of that cumulative foreign resource expense determined immediately after the disposition; and 
  (b) for the purpose of paragraph (2.3)(a), the cumulative foreign resource expense of the original owner in respect of the country determined immediately after the disposition that was deducted under subsection 66.21(4) in computing the original owner’s income for the year is deemed to be equal to the lesser of 
  (i) the amount deducted under paragraph (a) in respect of the disposition, and 
  (ii) the amount, if any, by which 
  (A) the specified amount determined under subsection (13.2) in respect of the original owner and the country for the year exceeds 
  (B) the total of all amounts determined under this paragraph in respect of another disposition of foreign resource property in respect of the country made by the original owner before the disposition and in the year. 
  
  ### Specified amount — foreign resource expenses
  
  (13.2) Where in a taxation year an original owner of foreign resource properties in respect of a country disposes of all or substantially all of the original owner’s foreign resource properties in circumstances to which subsection (2.3) applies, the specified amount in respect of the country and the original owner for the year for the purposes of clause (13.1)(b)(ii)(A) and of determining the value of D in the definition 
  *cumulative foreign resource expense* in subsection 66.21(1) is the lesser of  
  (a) the total of all amounts each of which is the amount, if any, by which 
  (i) an amount deducted under paragraph (13.1)(a) in respect of a disposition in the year by the original owner of foreign resource property in respect of the country exceeds 
  (ii) the amount, if any, designated by the original owner in the prescribed form filed with the Minister within six months after the end of the year in respect of an amount described under subparagraph (i), and 
  (b) the total of 
  (i) the amount claimed under subsection 66.21(4) by the original owner in respect of the country for the year, and 
  (ii) the amount that would, but for paragraph 66.21(3)(c), be determined under subsection 66.21(3) in respect of the country and the original owner for the year. 
  
  ### Disposal of Canadian resource properties
  
  (14) Where in a taxation year a predecessor owner of Canadian resource properties disposes of Canadian resource properties to a corporation in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), 66.7(3), 66.7(4) or 66.7(5) applies,  
  (a) for the purposes of applying any of those subsections to the predecessor owner in respect of its acquisition of any Canadian resource property owned by it immediately before the disposition, it shall be deemed, after the disposition, never to have acquired any such properties except for the purposes of 
  (i) determining an amount deductible under subsection 66.7(1) or 66.7(3) for the year, 
  (ii) where the predecessor owner and the corporation dealt with each other at arm’s length at the time of the disposition or the disposition was by way of an amalgamation or merger, determining an amount deductible under subsection 66.7(4) or 66.7(5) for the year, and 
  (iii) determining the amount for F in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5), the amounts for paragraphs 66.7(14)(a) and 66.7(14)(b) in the description of L in that definition and the amount for F in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5); and  
  (b) where the corporation or another corporation acquires any of the properties on or after the disposition in circumstances in which subsection 66.7(4) or 66.7(5) applies, amounts that become receivable by the predecessor owner after the disposition in respect of Canadian resource properties retained by it at the time of the disposition shall, for the purposes of applying subsection 66.7(4) or 66.7(5) to the corporation or the other corporation in respect of the acquisition, be deemed not to have become receivable by the predecessor owner. 
  
  ### Disposal of foreign resource properties
  
  (15) Where after June 5, 1987 a predecessor owner of foreign resource properties disposes of all or substantially all of its foreign resource properties to a corporation in circumstances in which subsection 66.7(2) applies, for the purpose of applying that subsection to the predecessor owner in respect of its acquisition of any of those properties (or other foreign resource properties retained by it at the time of the disposition which were acquired by it in circumstances in which subsection 66.7(2) applied), it shall be deemed, after the disposition, never to have acquired the properties. 
  
  ### Disposal of foreign resource properties — subsection (2.3)
  
  (15.1) Where in a taxation year a predecessor owner of foreign resource properties disposes of foreign resource properties to a corporation in circumstances to which subsection (2.3) applies, 
  (a) for the purpose of applying that subsection to the predecessor owner in respect of its acquisition of any foreign resource properties owned by it immediately before the disposition, it is deemed, after the disposition, never to have acquired any such properties except for the purposes of 
  (i) where the predecessor owner and the corporation dealt with each other at arm’s length at the time of the disposition or the disposition was by way of an amalgamation or merger, determining an amount deductible under subsection (2.3) for the year, and 
  (ii) determining the value of F in the definition 
  *cumulative foreign resource expense* in subsection 66.21(1); and  
  (b) where the corporation or another corporation acquires any of the properties on or after the disposition in circumstances to which subsection (2.3) applies, amounts that become receivable by the predecessor owner after the disposition in respect of foreign resource properties retained by it at the time of the disposition are, for the purposes of applying subsection (2.3) to the corporation or the other corporation in respect of the acquisition, deemed not to have become receivable by the predecessor owner. 
  
  ### Non-successor acquisitions
  
  (16) If at any time a Canadian resource property or a foreign resource property is acquired by a person in circumstances in which none of subsections (1) to (5), nor subsection 29(25) of the Income Tax Application Rules, apply, every person who was an original owner or predecessor owner of the property before that time is, for the purpose of applying those subsections to or in respect of the person or any other person who after that time acquires the property, deemed after that time not to be an original owner or predecessor owner of the property before that time.  
  
  ### Restriction on deductions
  
  (17) Where in a particular taxation year and before June 6, 1987 a person disposed of a Canadian resource property or a foreign resource property in circumstances in which any of subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1) to 66.7(5) applies, no deduction in respect of an expense incurred before the property was disposed of may be made under this section or section 66, 66.1, 66.2 or 66.4 by the person in computing the person’s income for a taxation year subsequent to the particular taxation year.  
  
  ### Application of interpretation provisions
  
  (18) The definitions in subsection 66(15) and sections 66.1 to 66.4 apply in this section. 
  
  ### Resource expenses of limited partner
  
  66.8 (1) Where a taxpayer is a limited partner of a partnership at the end of a fiscal period of the partnership, the following rules apply: 
  (a) determine the amount, if any, by which 
  (i) the total of all amounts each of which is the taxpayer’s share of 
  (A) the Canadian oil and gas property expenses (in this subsection referred to as “property expenses”), 
  (B) the Canadian development expenses (in this subsection referred to as “development expenses”), 
  (C) the Canadian exploration expenses (in this subsection referred to as “exploration expenses”), 
  (D) the foreign resource expenses in respect of a country (in this subsection referred to as “country-specific foreign expenses”), or 
  (E) the foreign exploration and development expenses (in this subsection referred to as “global foreign expenses”), incurred by the partnership in the fiscal period determined without reference to this subsection exceeds 
  (ii) the amount, if any, by which 
  (A) the taxpayer’s at-risk amount at the end of the fiscal period in respect of the partnership exceeds 
  (B) the total of 
  (I) the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer in respect of the fiscal period, and 
  (II) the taxpayer’s share of any losses of the partnership for the fiscal period from a farming business; 
  (b) the amount determined under paragraph 66.8(1)(a) shall be applied 
  (i) first to reduce the taxpayer’s share of property expenses, 
  (ii) if any remains unapplied, then to reduce the taxpayer’s share of development expenses, 
  (iii) if any remains unapplied, then to reduce the taxpayer’s share of exploration expenses, 
  (iv) if any remains unapplied, then to reduce (in the order specified by the taxpayer in writing filed with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which the fiscal period ends or, where no such specification is made, in the order determined by the Minister) the taxpayer’s share of country-specific foreign expenses, and 
  (v) if any remains unapplied, then to reduce the taxpayer’s share of global foreign expenses; and incurred by the partnership in the fiscal period; and 
  (c) for the purposes of subparagraph 53(2)(c)(ii), sections 66 to 66.7, subsection 96(2.1) and section 111, the taxpayer’s share of each class of expenses described in subparagraph 66.8(1)(a)(i) incurred by the partnership in the fiscal period shall be deemed to be the amount by which the taxpayer’s share of that class of expenses as determined under subparagraph 66.8(1)(a)(i) exceeds the amount, if any, that was applied under paragraph 66.8(1)(b) to reduce the taxpayer’s share of that class of expenses. 
  
  ### Expenses in following fiscal period
  
  (2) For the purposes of subparagraph 66.8(1)(a)(i), the amount by which a taxpayer’s share of a class of expenses incurred by a partnership is reduced under paragraph 66.8(1)(b) in respect of a fiscal period of the partnership shall be added to the taxpayer’s share, otherwise determined, of that class of expenses incurred by the partnership in the immediately following fiscal period of the partnership. 
  
  ### Interpretation
  
  (3) In this section, 
  (a) the expression 
  *limited partner* of a partnership has the meaning that would be assigned by subsection 96(2.4), if in subsection 96(2.5) each reference to  
  (i) “February 25, 1986” were a reference to “June 17, 1987”, 
  (ii) “February 26, 1986” were a reference to “June 18, 1987”, 
  (iii) “January 1, 1987” were a reference to “January 1, 1988”, 
  (iv) “June 12, 1986” were a reference to “June 18, 1987”, and 
  (v) “prospectus, preliminary prospectus or registration statement” were a reference to “prospectus, preliminary prospectus, registration statement, offering memorandum or notice that is required to be filed before any distribution of securities may commence”; 
  (a.1) the expression 
  *at-risk amount* of a taxpayer in respect of a partnership has the meaning that would be assigned by subsection 96(2.2) if paragraph 96(2.2)(c) read as follows:  
  (c) all amounts each of which is an amount owing at that time to the partnership, or to a person or partnership not dealing at arm’s length with the partnership, by the taxpayer or by a person or partnership not dealing at arm’s length with the taxpayer, other than any amount deducted under subparagraph 53(2)(c)(i.3) in computing the adjusted cost base, or under section 143.2 in computing the cost, to the taxpayer of the taxpayer’s partnership interest at that time, or any amount owing by the taxpayer to a person in respect of which the taxpayer is a subsidiary wholly-owned corporation or where the taxpayer is a trust, to a person that is the sole beneficiary of the taxpayer, and; 
  (b) a reference to a taxpayer who is a member of a particular partnership shall include a reference to another partnership that is a member if the particular partnership; and 
  (c) a taxpayer’s share of Canadian development expenses or Canadian oil and gas property expenses incurred by a partnership in a fiscal period in respect of which the taxpayer has elected in respect of the share under paragraph (f) of the definition 
  *Canadian development expense* in subsection 66.2(5) or paragraph (b) of the definition 
  *Canadian oil and gas property expense* in subsection 66.4(5), as the case may be, shall be deemed to be nil.  
  
  # SUBDIVISION F 
  
  ## Rules Relating to Computation of Income 
  
  ### General limitation re expenses
  
  67 In computing income, no deduction shall be made in respect of an outlay or expense in respect of which any amount is otherwise deductible under this Act, except to the extent that the outlay or expense was reasonable in the circumstances. 
  
  ### Expenses for food, etc.
  
  67.1 (1) Subject to subsection (1.1), for the purposes of this Act, other than sections 62, 63, 118.01 and 118.2, an amount paid or payable in respect of the human consumption of food or beverages or the enjoyment of entertainment is deemed to be 50 per cent of the lesser of 
  (a) the amount actually paid or payable in respect thereof, and 
  (b) an amount in respect thereof that would be reasonable in the circumstances. 
  
  ### Meal expenses for long-haul truck drivers
  
  (1.1) An amount paid or payable in respect of the consumption of food or beverages by a long-haul truck driver during an eligible travel period of the driver is deemed to be the amount determined by multiplying the specified percentage in respect of the amount so paid or payable by the lesser of 
  (a) the amount so paid or payable, and 
  (b) a reasonable amount in the circumstances. 
  
  ### Exceptions
  
  (2) Subsection 67.1(1) does not apply to an amount paid or payable by a person in respect of the consumption of food or beverages or the enjoyment of entertainment where the amount 
  (a) is paid or payable for food, beverages or entertainment provided for, or in expectation of, compensation in the ordinary course of a business carried on by that person of providing the food, beverages or entertainment for compensation; 
  (b) relates to a fund-raising event the primary purpose of which is to benefit a registered charity; 
  (c) is an amount for which the person is compensated and the amount of the compensation is reasonable and specifically identified in writing to the person paying the compensation; 
  (d) is required to be included in computing any taxpayer’s income because of the application of section 6 in respect of food or beverages consumed or entertainment enjoyed by the taxpayer or a person with whom the taxpayer does not deal at arm’s length, or would be so required but for subparagraph 6(6)(a)(ii); 
  (e) is an amount that 
  (i) is not paid or payable in respect of a conference, convention, seminar or similar event, 
  (ii) would, but for subparagraph 6(6)(a)(i), be required to be included in computing any taxpayer’s income for a taxation year because of the application of section 6 in respect of food or beverages consumed or entertainment enjoyed by the taxpayer or a person with whom the taxpayer does not deal at arm’s length, and 
  (iii) is paid or payable in respect of the taxpayer’s duties performed at a work site in Canada that is 
  (A) outside any population centre, as defined by the last Census Dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year, and 
  (B) at least 30 kilometres from the nearest point on the boundary of the nearest such population centre; 
  (e.1) is an amount that 
  (i) is not paid or payable in respect of entertainment or of a conference, convention, seminar or similar event, 
  (ii) would, if this Act were read without reference to subparagraph 6(6)(a)(i), be required to be included in computing a taxpayer’s income for a taxation year because of the application of section 6 in respect of food or beverages consumed by the taxpayer or by a person with whom the taxpayer does not deal at arm’s length, 
  (iii) is paid or payable in respect of the taxpayer’s duties performed at a site in Canada at which the person carries on a construction activity or at a construction work camp referred to in subparagraph (iv) in respect of the site, and 
  (iv) is paid or payable for food or beverages provided at a construction work camp, at which the taxpayer is lodged, that was constructed or installed at or near the site to provide board and lodging to employees while they are engaged in construction services at the site; or 
  (f) is in respect of one of six or fewer special events held in a calendar year at which the food, beverages or entertainment is generally available to all individuals employed by the person at a particular place of business of the person and consumed or enjoyed by those individuals. 
  
  ### Fees for convention, etc.
  
  (3) For the purposes of this section, where a fee paid or payable for a conference, convention, seminar or similar event entitles the participant to food, beverages or entertainment (other than incidental beverages and refreshments made available during the course of meetings or receptions at the event) and a reasonable part of the fee, determined on the basis of the cost of providing the food, beverages and entertainment, is not identified in the account for the fee as compensation for the food, beverages and entertainment, $50 or such other amount as may be prescribed shall be deemed to be the actual amount paid or payable in respect of food, beverages and entertainment for each day of the event on which food, beverages or entertainment is provided and, for the purposes of this Act, the fee for the event shall be deemed to be the actual amount of the fee minus the amount deemed by this subsection to be the actual amount paid or payable for the food, beverages and entertainment. 
  
  ### Interpretation
  
  (4) For the purposes of this section, 
  (a) no amount paid or payable for travel on an airplane, train or bus shall be considered to be in respect of food, beverages or entertainment consumed or enjoyed while travelling thereon; and 
  (b)  
  *entertainment* includes amusement and recreation.  
  
  ### Definitions
  
  (5) The following definitions apply for the purpose of this section.  
  *eligible travel period* in respect of a long-haul truck driver is a period during which the driver is away from the municipality or metropolitan area where the specified place in respect of the driver is located for a period of at least 24 continuous hours for the purpose of driving a long-haul truck that transports goods to, or from, a location that is beyond a radius of 160 kilometres from the specified place. (période de déplacement admissible)   
  *long-haul truck* means a truck or a tractor that is designed for hauling freight and that has a gross vehicle weight rating (as that term is defined in subsection 2(1) of the Motor Vehicle Safety Regulations) that exceeds 11 788 kilograms. (grand routier)   
  *long-haul truck driver* means an individual whose principal business or principal duty of employment is driving a long-haul truck that transports goods. (conducteur de grand routier)   
  *specified percentage* in respect of an amount paid or payable is  
  (a) 60 per cent, if the amount is paid or becomes payable on or after March 19, 2007 and before 2008; 
  (b) 65 per cent, if the amount is paid or becomes payable in 2008; 
  (c) 70 per cent, if the amount is paid or becomes payable in 2009; 
  (d) 75 per cent, if the amount is paid or becomes payable in 2010; and 
  (e) 80 per cent, if the amount is paid or becomes payable after 2010. ( pourcentage déterminé)   
  *specified place* means, in the case of an employee, the employer’s establishment to which the employee ordinarily reports to work is located and, in the case of an individual whose principal business is to drive a long-haul truck to transport goods, the place where the individual resides. (endroit déterminé)  
  
  ### Interest on money borrowed for certain vehicles
  
  67.2 For the purposes of this Act, if an amount is paid or payable for a period by a person in respect of interest on borrowed money used to acquire a passenger vehicle or zero-emission passenger vehicle, or on an amount paid or payable for the acquisition of such a vehicle, then in computing the person’s income for a taxation year the amount of interest so paid or payable is deemed to be the lesser of the actual amount paid or payable and the amount determined by the formula is $250 or such other amount as may be prescribed; and is the number of days in the period in respect of which the interest was paid or payable, as the case may be. 
  
  ### Limitation re cost of leasing passenger vehicle
  
  67.3 Notwithstanding any other section of this Act, where 
  (a) in a taxation year all or part of the actual lease charges in respect of a passenger vehicle are paid or payable, directly or indirectly, by a taxpayer, and 
  (b) in computing the taxpayer’s income for the year an amount may be deducted in respect of those charges, in determining the amount that may be so deducted, the total of those charges shall be deemed not to exceed the lesser of 
  (c) the amount determined by the formula is $600 or such other amount as is prescribed, is the number of days in the period commencing at the beginning of the term of the lease and ending at the earlier of the end of the year and the end of the lease, is the total of all amounts deducted in computing the taxpayer’s income for preceding taxation years in respect of the actual lease charges in respect of the vehicle, is the amount of interest that would be earned on the part of the total of all refundable amounts in respect of the lease that exceeds $1,000 if interest were 
  (i) payable on the refundable amounts at the prescribed rate, and 
  (ii) computed for the period before the end of the year during which the refundable amounts were outstanding, and is the total of all reimbursements that became receivable before the end of the year by the taxpayer in respect of the lease, and 
  (d) the amount determined by the formula is the total of the actual lease charges in respect of the lease incurred in respect of the year or the total of the actual lease charges in respect of the lease paid in the year (depending on the method regularly followed by the taxpayer in computing income), is $20,000 or such other amount as is prescribed, is the greater of $23,529 (or such other amount as is prescribed) and the manufacturer’s list price for the vehicle, is the amount of interest that would be earned on that part of the total of all refundable amounts paid in respect of the lease that exceeds $1,000 if interest were 
  (i) payable on the refundable amounts at the prescribed rate, and 
  (ii) computed for the period in the year during which the refundable amounts are outstanding, and is the total of all reimbursements that became receivable during the year by the taxpayer in respect of the lease. 
  
  ### More than one owner or lessee
  
  67.4 Where a person owns or leases a motor vehicle jointly with one or more other persons, the reference in paragraph 13(7)(g) to the amount of $20,000, in section 67.2 to the amount of $250 and in section 67.3 to the amounts of $600, $20,000 and $23,529 shall be read as a reference to that proportion of each of those amounts or such other amounts as may be prescribed for the purposes thereof that the fair market value of the first-mentioned person’s interest in the vehicle is of the fair market value of the interests in the vehicle of all those persons. 
  
  ### More than one owner
  
  67.41 If a person owns a zero-emission passenger vehicle jointly with one or more other persons, any reference in paragraph 13(7)(i) to the prescribed amount and in section 67.2 to the amount of $250 or such other amount as may be prescribed is to be read as a reference to that proportion of each of those amounts that the fair market value of the first-mentioned person’s interest in the vehicle is of the fair market value of the interests in the vehicle of all those persons. 
  
  ### Non-deductibility of illegal payments
  
  67.5 (1) In computing income, no deduction shall be made in respect of an outlay made or expense incurred for the purpose of doing anything that is an offence under section 3 of the Corruption of Foreign Public Officials Act or under any of sections 119 to 121, 123 to 125, 393 and 426 of the Criminal Code, or an offence under section 465 of the Criminal Code as it relates to an offence described in any of those sections.  
  
  ### Reassessments
  
  (2) Notwithstanding subsections 152(4) to (5), the Minister may make such assessments, reassessments and additional assessments of tax, interest and penalties and such determinations and redeterminations as are necessary to give effect to subsection (1) for any taxation year. 
  
  ### Non-deductibility of fines and penalties
  
  67.6 In computing income, no deduction shall be made in respect of any amount that is a fine or penalty (other than a prescribed fine or penalty) imposed under a law of a country or of a political subdivision of a country (including a state, province or territory) by any person or public body that has authority to impose the fine or penalty. 
  
  ### Allocation of amounts in consideration for property, services or restrictive covenants
  
  68 If an amount received or receivable from a person can reasonably be regarded as being in part the consideration for the disposition of a particular property of a taxpayer, for the provision of particular services by a taxpayer or for a restrictive covenant as defined by subsection 56.4(1) granted by a taxpayer, 
  (a) the part of the amount that can reasonably be regarded as being the consideration for the disposition shall be deemed to be proceeds of disposition of the particular property irrespective of the form or legal effect of the contract or agreement, and the person to whom the property was disposed of shall be deemed to have acquired it for an amount equal to that part; 
  (b) the part of the amount that can reasonably be regarded as being consideration for the provision of particular services shall be deemed to be an amount received or receivable by the taxpayer in respect of those services irrespective of the form or legal effect of the contract or agreement, and that part shall be deemed to be an amount paid or payable to the taxpayer by the person to whom the services were rendered in respect of those services; and 
  (c) the part of the amount that can reasonably be regarded as being consideration for the restrictive covenant is deemed to be an amount received or receivable by the taxpayer in respect of the restrictive covenant irrespective of the form or legal effect of the contract or agreement, and that part is deemed to be an amount paid or payable to the taxpayer by the person to whom the restrictive covenant was granted. 
  
  ### Inadequate considerations
  
  69 (1) Except as expressly otherwise provided in this Act, 
  (a) where a taxpayer has acquired anything from a person with whom the taxpayer was not dealing at arm’s length at an amount in excess of the fair market value thereof at the time the taxpayer so acquired it, the taxpayer shall be deemed to have acquired it at that fair market value; 
  (b) where a taxpayer has disposed of anything 
  (i) to a person with whom the taxpayer was not dealing at arm’s length for no proceeds or for proceeds less than the fair market value thereof at the time the taxpayer so disposed of it, 
  (ii) to any person by way of gift, or 
  (iii) to a trust because of a disposition of a property that does not result in a change in the beneficial ownership of the property; the taxpayer shall be deemed to have received proceeds of disposition therefor equal to that fair market value; and 
  (c) where a taxpayer acquires a property by way of gift, bequest or inheritance or because of a disposition that does not result in a change in the beneficial ownership of the property, the taxpayer is deemed to acquire the property at its fair market value. 
  
  ### Idem, where s. 70(3) applies
  
  (1.1) Where a taxpayer has acquired property that is a right or thing to which subsection 70(3) applies, the following rules apply: 
  (a) paragraph 69(1)(c) is not applicable to that property; and 
  (b) the taxpayer shall be deemed to have acquired the property at a cost equal to the total of 
  (i) such part, if any, of the cost thereof to the taxpayer who has died as had not been deducted by the taxpayer in computing the taxpayer’s income for any year, and 
  (ii) any expenditures made or incurred by the taxpayer to acquire the property. 
  
  ### Idem
  
  (1.2) Where, at any time, 
  (a) a taxpayer disposed of property for proceeds of disposition (determined without reference to this subsection) equal to or greater than the fair market value at that time of the property, and 
  (b) there existed at that time an agreement under which a person with whom the taxpayer was not dealing at arm’s length agreed to pay as rent, royalty or other payment for the use of or the right to use the property an amount less than the amount that would have been reasonable in the circumstances if the taxpayer and the person had been dealing at arm’s length at the time the agreement was entered into, the taxpayer’s proceeds of disposition of the property shall be deemed to be the greater of 
  (c) those proceeds determined without reference to this subsection, and 
  (d) the fair market value of the property at the time of the disposition, determined without reference to the existence of the agreement. 
  (2) and (3)  [Repealed, 1998, c. 19, s. 107]  
  
  ### Shareholder appropriations
  
  (4) Where at any time property of a corporation has been appropriated in any manner whatever to or for the benefit of a shareholder of the corporation for no consideration or for consideration that is less than the property’s fair market value and a sale of the property at its fair market value would have increased the corporation’s income or reduced a loss of the corporation, the corporation shall be deemed to have disposed of the property, and to have received proceeds of disposition therefor equal to its fair market value, at that time. 
  
  ### Idem
  
  (5) Where in a taxation year of a corporation property of the corporation has been appropriated in any manner whatever to, or for the benefit of, a shareholder, on the winding-up of the corporation, the following rules apply: 
  (a) the corporation is deemed, for the purpose of computing its income for the year, to have disposed of the property immediately before the winding-up for proceeds equal to its fair market value at that time; 
  (b) the shareholder shall be deemed to have acquired the property at a cost equal to its fair market value immediately before the winding-up; 
  (c) subsections 52(1) and (2) do not apply for the purposes of determining the cost to the shareholder of the property; and 
  (d) subsections 13(21.2), 18(15) and 40(3.4) and (3.6) do not apply in respect of any property disposed of on the winding-up. 
  (e)  [Repealed, 1998, c. 19, s. 107]  
  (6) to (10)  [Repealed, 2003, c. 28, s. 8]  
  
  ### Deemed proceeds of disposition
  
  (11) Where, at any particular time as part of a series of transactions or events, a taxpayer disposes of property for proceeds of disposition that are less than its fair market value and it can reasonably be considered that one of the main purposes of the series is 
  (a) to obtain the benefit of 
  (i) any deduction (other than a deduction under subsection 110.6(2.1) in respect of a capital gain from a disposition of a share acquired by the taxpayer in an acquisition to which subsection 85(3) or 98(3) applied) in computing income, taxable income, taxable income earned in Canada or tax payable under this Act, or 
  (ii) any balance of undeducted outlays, expenses or other amounts available to a person (other than a person that would be affiliated with the taxpayer immediately before the series began, if section 251.1 were read without reference to the definition 
  *controlled* in subsection 251.1(3)) in respect of a subsequent disposition of the property or property substituted for the property, or  
  (b) to obtain the benefit of an exemption available to any person from tax payable under this Act on any income arising on a subsequent disposition of the property or property substituted for the property, notwithstanding any other provision of this Act, where the subsequent disposition occurs, or arrangements for the subsequent disposition are made, before the day that is 3 years after the particular time, the taxpayer is deemed to have disposed of the property at the particular time for proceeds of disposition equal to its fair market value at the particular time. 
  
  ### Reassessments
  
  (12) Notwithstanding subsections 152(4) to 152(5), the Minister may at any time make any assessments or reassessments of the tax, interest and penalties payable by the taxpayer that are necessary to give effect to subsection 69(11). 
  (12.1) and (12.2)  [Repealed, 1998, c. 19, s. 107]  
  
  ### Amalgamation or merger
  
  (13) Where there is an amalgamation or merger of a corporation with one or more other corporations to form one corporate entity (in this subsection referred to as the “new corporation”), each property of the corporation that becomes property of the new corporation as a result of the amalgamation or merger is deemed, for the purpose of determining whether subsection 69(11) applies to the amalgamation or merger, to have been disposed of by the corporation immediately before the amalgamation or merger for proceeds equal to 
  (a) in the case of a Canadian resource property or a foreign resource property, nil; and 
  (b) in the case of any other property, the cost amount to the corporation of the property immediately before the amalgamation or merger. 
  
  ### New taxpayer
  
  (14) For the purpose of subsection 69(11), where a taxpayer is incorporated or otherwise comes into existence at a particular time during a series of transactions or events, the taxpayer is deemed 
  (a) to have existed at the time that was immediately before the series began; and 
  (b) to have been affiliated at that time with every person with whom the taxpayer is affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) at the particular time. 
  
  ### Death of a taxpayer
  
  70 (1) In computing the income of a taxpayer for the taxation year in which the taxpayer died, 
  (a) an amount of interest, rent, royalty, annuity (other than an amount with respect to an interest in an annuity contract to which paragraph 148(2)(b) applies), remuneration from an office or employment, or other amount payable periodically, that was not paid before the taxpayer’s death, shall be deemed to have accrued in equal daily amounts in the period for or in respect of which the amount was payable, and the value of the portion thereof so deemed to have accrued to the day of death shall be included in computing the taxpayer’s income for the year in which the taxpayer died; and 
  (b) paragraph 12(1)(t) shall be read as follows: 
  “12(1)(t) the amount deducted under subsection 127(5) or 127(6) in computing the taxpayer’s tax payable for the year or a preceding taxation year to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year under this paragraph or is not included in an amount determined under paragraph 13(7.1)(e) or 37(1)(e) or subparagraph 53(2)(c)(vi) or 53(2)(h)(ii) or for I in the definition 
  *undepreciated capital cost* in subsection 13(21) or L in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6);”  
  
  ### Amounts receivable
  
  (2) If a taxpayer who has died had at the time of death rights or things (other than any capital property or any amount included in computing the taxpayer’s income by virtue of subsection (1)), the amount of which when realized or disposed of would have been included in computing the taxpayer’s income, the value of the rights or things at the time of death shall be included in computing the taxpayer’s income for the taxation year in which the taxpayer died, unless the taxpayer’s legal representative has, not later than the later of the day that is one year after the date of death of the taxpayer and the day that is 90 days after the sending of any notice of assessment in respect of the tax of the taxpayer for the year of death, elected otherwise, in which case the legal representative shall file a separate return of income for the year under this Part and pay the tax for the year under this Part as if 
  (a) the taxpayer were another person; 
  (b) that other person’s only income for the year were the value of the rights or things; and 
  (c) subject to sections 114.2 and 118.93, that other person were entitled to the deductions to which the taxpayer was entitled under sections 110, 118 to 118.7 and 118.9 for the year in computing the taxpayer’s taxable income or tax payable under this Part, as the case may be, for the year. 
  
  ### Rights or things transferred to beneficiaries
  
  (3) Where before the time for making an election under subsection 70(2) has expired, a right or thing to which that subsection would otherwise apply has been transferred or distributed to beneficiaries or other persons beneficially interested in the estate or trust, 
  (a) subsection 70(2) is not applicable to that right or thing; and 
  (b) an amount received by one of the beneficiaries or persons on the realization or disposition of the right or thing shall be included in computing the income of the beneficiary or person for the taxation year in which the beneficiary or person received it. 
  
  ### Exception
  
  (3.1) For the purposes of this section, 
  *rights or things* do not include an interest in a life insurance policy (other than an annuity contract of a taxpayer where the payment therefor was deductible in computing the taxpayer’s income because of paragraph 60(l) or was made in circumstances in which subsection 146(21) applied), land included in the inventory of a business, a Canadian resource property or a foreign resource property.  
  
  ### Revocation of election
  
  (4) An election made under subsection 70(2) may be revoked by a notice of revocation signed by the legal representative of the taxpayer and filed with the Minister within the time that an election under that subsection may be made. 
  
  ### Capital property of a deceased taxpayer
  
  (5) Where in a taxation year a taxpayer dies, 
  (a) the taxpayer shall be deemed to have, immediately before the taxpayer’s death, disposed of each capital property of the taxpayer and received proceeds of disposition therefor equal to the fair market value of the property immediately before the death; 
  (b) any person who as a consequence of the taxpayer’s death acquires any property that is deemed by paragraph 70(5)(a) to have been disposed of by the taxpayer shall be deemed to have acquired it at the time of the death at a cost equal to its fair market value immediately before the death; 
  (c) where any depreciable property of the taxpayer of a prescribed class that is deemed by paragraph 70(5)(a) to have been disposed of is acquired by any person as a consequence of the taxpayer’s death (other than where the taxpayer’s proceeds of disposition of the property under paragraph 70(5)(a) are redetermined under subsection 13(21.1)) and the amount that was the capital cost to the taxpayer of the property exceeds the amount determined under paragraph 70(5)(b) to be the cost to the person thereof, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (i) the capital cost to the person of the property shall be deemed to be the amount that was the capital cost to the taxpayer of the property, and 
  (ii) the excess shall be deemed to have been allowed to the person in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the person acquired the property; and 
  (d) where a property of the taxpayer that was deemed by paragraph 70(5)(a) to have been disposed of is acquired by any person as a consequence of the taxpayer’s death and the taxpayer’s proceeds of disposition of the property under paragraph 70(5)(a) are redetermined under subsection 13(21.1), notwithstanding paragraph 70(5)(b), 
  (i) where the property was depreciable property of a prescribed class and the amount that was the capital cost to the taxpayer of the property exceeds the amount so redetermined under subsection 13(21.1), for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (A) its capital cost to the person shall be deemed to be the amount that was its capital cost to the taxpayer, and 
  (B) the excess shall be deemed to have been allowed to the person in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the person acquired the property, and 
  (ii) where the property is land (other than land to which subparagraph 70(5)(d)(i) applies), its cost to the person shall be deemed to be the amount that was the taxpayer’s proceeds of disposition of the land as redetermined under subsection 13(21.1). 
  
  ### Transfer or distribution — Class 14.1
  
  (5.1) Notwithstanding subsection (6), if property included in Class 14.1 of Schedule II to the Income Tax Regulations of the taxpayer in respect of a business carried on by the taxpayer immediately before the taxpayer’s death that is a property to which subsection (5) would otherwise apply is, as a consequence of the death, transferred or distributed (otherwise than by way of a distribution of property by a trust that claimed a deduction under paragraph 20(1)(a) or (b) in respect of the property or in circumstances to which subsection 24(2) applies) to any person (in this subsection referred to as the 
  *beneficiary*), the following rules apply:  
  (a) paragraphs (5)(a) and (b) do not apply in respect of the property; 
  (b) the taxpayer is deemed to have, immediately before the taxpayer’s death, disposed of the property and received proceeds of disposition equal to the lesser of the capital cost and the cost amount to the taxpayer of the property immediately before the death; 
  (c) the beneficiary is deemed to have acquired the property at the time of the death at a cost equal to those proceeds; and 
  (d) paragraph (5)(c) applies as if the references to “paragraph (a)” were read as references to “paragraph (5.1)(b)” and the reference to “paragraph (b)” were read as reference to “paragraph (5.1)(c)”. 
  
  ### Resource property and land inventory
  
  (5.2) If in a taxation year a taxpayer dies, 
  (a) the taxpayer is deemed 
  (i) to have disposed, at the time that is immediately before the taxpayer’s death, of each 
  (A) Canadian resource property of the taxpayer, 
  (B) foreign resource property of the taxpayer, and 
  (C) property that was land included in the inventory of a business of the taxpayer, and 
  (ii) subject to paragraph (c), to have received at that time proceeds of disposition for each such property equal to its fair market value at that time; 
  (b) any person who, as a consequence of the taxpayer’s death, acquires a property that is deemed by paragraph (a) to have been disposed of by the taxpayer is, subject to paragraph (c), deemed to have acquired the property at the time of the death at a cost equal to its fair market value at the time that is immediately before the death; and 
  (c) where the taxpayer was resident in Canada at the time that is immediately before the taxpayer’s death, a particular property described in clause (a)(i)(A), (B) or (C) is, on or after the death and as a consequence of the death, transferred or distributed to a spouse or common-law partner of the taxpayer described in paragraph (6)(a) or a trust described in paragraph (6)(b), and it can be shown within the period that ends 36 months after the death (or, where written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances) that the particular property has, within that period, vested indefeasibly in the spouse, common-law partner or trust, as the case may be, 
  (i) the taxpayer is deemed to have received, at the time that is immediately before the taxpayer’s death, proceeds of disposition of the particular property equal to 
  (A) if the particular property is Canadian resource property of the taxpayer or foreign resource property of the taxpayer, the amount specified by the taxpayer’s legal representative in the taxpayer’s return of income filed under paragraph 150(1)(b), not exceeding its fair market value at that time, and 
  (B) if the particular property was land included in the inventory of a business of the taxpayer, its cost amount to the taxpayer at that time, and 
  (ii) the spouse, common-law partner or trust, as the case may be, is deemed to have acquired at the time of the death the particular property at a cost equal to the amount determined under subparagraph (i) in respect of the disposition of it under paragraph (a). 
  
  ### Fair market value
  
  (5.3) For the purposes of subsections (5) and 104(4) and section 128.1, the fair market value at any time of any property deemed to have been disposed of at that time as a consequence of a particular individual’s death or as a consequence of the particular individual becoming or ceasing to be resident in Canada shall be determined as though the fair market value at that time of any life insurance policy, under which the particular individual (or any other individual not dealing at arm’s length with the particular individual at that time or at the time the policy was issued) was a person whose life was insured, were the cash surrender value (as defined in subsection 148(9)) of the policy immediately before the particular individual died or became or ceased to be resident in Canada, as the case may be. 
  
  ### Fair market value
  
  (5.31) For the purposes of subsections (5) and 104(4), the fair market value at any time of any property deemed to have been disposed of at that time as a consequence of a particular individual’s death is to be determined as though the fair market value at that time of any annuity contract were the total of all amounts each of which is the amount of a premium paid on or before that time under the contract if 
  (a) the contract is, in respect of an LIA policy, a contract referred to in subparagraph (b)(ii) of the definition 
  *LIA policy* in subsection 248(1); and  
  (b) the particular individual is the individual, in respect of the LIA policy, referred to in that subparagraph. 
  
  ### NISA on death
  
  (5.4) Where a taxpayer who dies has at the time of death a net income stabilization account, all amounts held for or on behalf of the taxpayer in the taxpayer’s NISA Fund No. 2 shall be deemed to have been paid out of that fund to the taxpayer immediately before that time. 
  
  ### Where transfer or distribution to spouse or spouse trust
  
  (6) Where any property of a taxpayer who was resident in Canada immediately before the taxpayer’s death that is a property to which subsection 70(5) would otherwise apply is, as a consequence of the death, transferred or distributed to 
  (a) the taxpayer’s spouse or common-law partner who was resident in Canada immediately before the taxpayer’s death, or 
  (b) a trust, created by the taxpayer’s will, that was resident in Canada immediately after the time the property vested indefeasibly in the trust and under which 
  (i) the taxpayer’s spouse or common-law partner is entitled to receive all of the income of the trust that arises before the spouse’s or common-law partner’s death, and 
  (ii) no person except the spouse or common-law partner may, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust, if it can be shown, within the period ending 36 months after the death of the taxpayer or, where written application therefor has been made to the Minister by the taxpayer’s legal representative within that period, within such longer period as the Minister considers reasonable in the circumstances, that the property has become vested indefeasibly in the spouse or common-law partner or trust, as the case may be, the following rules apply: 
  (c) paragraphs 70(5)(a) and 70(5)(b) do not apply in respect of the property, 
  (d) subject to paragraph 70(6)(d.1), the taxpayer shall be deemed to have, immediately before the taxpayer’s death, disposed of the property and received proceeds of disposition therefor equal to 
  (i) where the property was depreciable property of a prescribed class, the lesser of the capital cost and the cost amount to the taxpayer of the property immediately before the death, and 
  (ii) in any other case, its adjusted cost base to the taxpayer immediately before the death, and the spouse or common-law partner or trust, as the case may be, shall be deemed to have acquired the property at the time of the death at a cost equal to those proceeds, 
  (d.1) where the property is an interest in a partnership (other than an interest in a partnership to which subsection 100(3) applies), 
  (i) the taxpayer shall, except for the purposes of paragraph 98(5)(g), be deemed not to have disposed of the property as a consequence of the taxpayer’s death, 
  (ii) the spouse or common-law partner or the trust, as the case may be, shall be deemed to have acquired the property at the time of the death at a cost equal to its cost to the taxpayer, and 
  (iii) each amount added or deducted in computing the adjusted cost base to the taxpayer of the property shall be deemed to be required by subsection 53(1) or 53(2) to be added or deducted, as the case may be, in computing the adjusted cost base to the spouse or common-law partner or the trust, as the case may be, of the property; and 
  (e) where the property was depreciable property of the taxpayer of a prescribed class, paragraph (5)(c) applies as if the references therein to “paragraph 70(6)(a)” and to “paragraph 70(6)(b)” were read as references to “paragraph 70(6)(d)”. 
  
  ### Transfer or distribution of NISA to spouse or trust
  
  (6.1) Where a property that is a net income stabilization account of a taxpayer is, on or after the taxpayer’s death and as a consequence thereof, transferred or distributed to 
  (a) the taxpayer’s spouse or common-law partner, or 
  (b) a trust, created by the taxpayer’s will, under which 
  (i) the taxpayer’s spouse or common-law partner is entitled to receive all of the income of the trust that arises before the spouse’s or common-law partner’s death, and 
  (ii) no person except the spouse or common-law partner may, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust, subsections 70(5.4) and 73(5) do not apply in respect of the taxpayer’s NISA Fund No. 2 if it can be shown, within the period ending 36 months after the death of the taxpayer or, where written application therefor has been made to the Minister by the taxpayer’s legal representative within that period, within such longer period as the Minister considers reasonable in the circumstances, that the property has vested indefeasibly in the spouse or common-law partner or trust, as the case may be. 
  
  ### Election
  
  (6.2) Subsection (5.1), (6) or (6.1) does not apply to any property of a deceased taxpayer in respect of which the taxpayer’s legal representative elects, in the taxpayer’s return of income under this Part (other than a return of income filed under subsection (2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) for the year in which the taxpayer died, to have subsection (5) or (5.4), as the case may be, apply. 
  
  ### Special rules applicable in respect of trust for benefit of spouse
  
  (7) Where a trust created by a taxpayer’s will would, but for the payment of, or provision for payment of, any particular testamentary debts in respect of the taxpayer, be a trust to which subsection 70(6) or 70(6.1) applies, 
  (a) for the purpose of determining the day on or before which a return (in this subsection referred to as the “taxpayer’s return”) of the taxpayer’s income for the taxation year in which the taxpayer died is required to be filed by the taxpayer’s legal representatives, subsection 150(1) shall be read without reference to paragraph 150(1)(b) and as if paragraph 150(1)(d) read as follows: 
  “150(1)(d) in the case of any other person, by the person’s legal representative within 18 months after the person’s death; or;” and 
  (b) where the taxpayer’s legal representative so elects in the taxpayer’s return (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) and lists therein one or more properties (other than a net income stabilization account) that were, on or after the taxpayer’s death and as a consequence thereof, transferred or distributed to the trust, the total fair market value of which properties immediately after the taxpayer’s death was not less than the total of the non-qualifying debts in respect of the taxpayer, 
  (i) subsection 70(6) does not apply in respect of the properties so listed, and 
  (ii) notwithstanding the payment of, or provision for payment of, any such particular testamentary debts, the trust shall be deemed to be a trust described in subsection 70(6), except that, where the fair market value, immediately after the taxpayer’s death, of all of the properties so listed exceeds the total of the non-qualifying debts in respect of the taxpayer (the amount of which excess is referred to in this subsection as the “listed value excess”) and the taxpayer’s legal representative designates in the taxpayer’s return one property so listed (other than money) that is capital property other than depreciable property, 
  (iii) the amount of the taxpayer’s capital gain or capital loss, as the case may be, from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer is that proportion of that capital gain or capital loss otherwise determined that 
  (A) the amount, if any, by which the fair market value of that property immediately after the taxpayer’s death exceeds the listed value excess, is of 
  (B) the fair market value of that property immediately after the taxpayer’s death, and 
  (iv) the cost to the trust of that property is 
  (A) where the taxpayer has a capital gain from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer, the total of 
  (I) its adjusted cost base to the taxpayer immediately before the taxpayer’s death, and 
  (II) the amount determined under subparagraph 70(7)(b)(iii) to be the taxpayer’s capital gain from the disposition of that property, or 
  (B) where the taxpayer has a capital loss from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer, the amount by which 
  (I) its adjusted cost base to the taxpayer immediately before the taxpayer’s death exceeds 
  (II) the amount determined under subparagraph 70(7)(b)(iii) to be the taxpayer’s capital loss from the disposition of that property. 
  
  ### Meaning of certain expressions in s. (7)
  
  (8) In subsection 70(7), 
  (a) the 
  *fair market value* at any time of any property subject to a mortgage or hypothec is the amount, if any, by which the fair market value at that time of the property otherwise determined exceeds the amount outstanding at that time of the debt secured by the mortgage or hypothec, as the case may be;  
  (b)  
  *non-qualifying debt* in respect of a taxpayer who has died and by whose will any trust has been created that would, but for the payment of, or provision for payment of, any particular testamentary debts in respect of the taxpayer, be a trust described in subsection 70(6), means any such particular testamentary debt in respect of the taxpayer other than  
  (i) any estate, legacy, succession or inheritance duty payable, in consequence of the taxpayer’s death, in respect of any property of, or interest in, the trust, or 
  (ii) any debt secured by a mortgage or hypothec on property owned by the taxpayer immediately before the taxpayer’s death; and 
  (c)  
  *testamentary debt*, in respect of a taxpayer who has died, means  
  (i) any debt owing by the taxpayer, or any other obligation of the taxpayer to pay an amount, that was outstanding immediately before the taxpayer’s death, and 
  (ii) any amount payable (other than any amount payable to any person as a beneficiary of the taxpayer’s estate) by the taxpayer’s estate in consequence of the taxpayer’s death, including any income or profits tax payable by or in respect of the taxpayer for the taxation year in which the taxpayer died or for any previous taxation year, and any estate, legacy, succession or inheritance duty payable in consequence of the taxpayer’s death. 
  
  ### When subsection (9.01) applies
  
  (9) Subsection (9.01) applies to a taxpayer and a child of the taxpayer in respect of land in Canada or depreciable property in Canada of a prescribed class of the taxpayer in respect of which subsection (5) would, if this Act were read without reference to this subsection, apply if 
  (a) the property was, before the death of the taxpayer, used principally in a farming or fishing business carried on in Canada in which the taxpayer, the spouse or common-law partner of the taxpayer or a child or parent of the taxpayer was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot); 
  (b) the child of the taxpayer was resident in Canada immediately before the day on which the taxpayer died; and 
  (c) as a consequence of the death of the taxpayer, the property is transferred to and becomes vested indefeasibly in the child within the period ending 36 months after the death of the taxpayer or, if written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances. 
  
  ### Transfer of farming and fishing property to child
  
  (9.01) If, because of subsection (9), this subsection applies to the taxpayer and a child of the taxpayer in respect of a property of the taxpayer that has been transferred to the child as a consequence of the death of the taxpayer, the following rules apply: 
  (a) where the taxpayer’s legal representative does not elect in the taxpayer’s return of income under this Part for the year in which the taxpayer died, to have paragraph (b) apply to the taxpayer and the child in respect of the property, 
  (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, 
  (ii) the taxpayer is deemed to have 
  (A) disposed of the property immediately before the taxpayer’s death, and 
  (B) received, at the time of the disposition of the property, proceeds of disposition in respect of that disposition of the property equal to 
  (I) where the property was depreciable property of a prescribed class, the lesser of 
  1 the capital cost to the taxpayer of the property, and 
  2 the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the taxpayer that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not, at or before that time, been disposed of, and 
  (II) where the property is land (other than land to which subclause (I) applies), the adjusted cost base to the taxpayer of the property immediately before the time of the disposition of the property, 
  (iii) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under subparagraph (ii), and 
  (iv) where the property was depreciable property of a prescribed class, paragraphs (5)(c) and (d) apply to the taxpayer and the child in respect of the property as if the references in those paragraphs to “paragraph (a)” and “paragraph (b)” were read as “subparagraph (9.01)(a)(ii)” and “subparagraph (9.01)(a)(iii)”, respectively; and 
  (b) where the taxpayer’s legal representative elects, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, to have this paragraph apply to the taxpayer in respect of the property, 
  (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, 
  (ii) the taxpayer is deemed to have 
  (A) disposed of the property immediately before the taxpayer’s death, and 
  (B) received, at the time of the disposition of the property, proceeds of disposition in respect of that disposition of the property equal to 
  (I) where the property was depreciable property of a prescribed class, the amount that the legal representative designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the time of the disposition of the property, and 
  2 the lesser of the capital cost to the taxpayer of the property and the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the taxpayer that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not, at or before that time, been disposed of, and 
  (II) where the property is land (other than land to which subclause (I) applies), the amount that the legal representative designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the time of the disposition of the property, and 
  2 the adjusted cost base to the taxpayer of the property immediately before the time of the disposition of the property, 
  (iii) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under subparagraph (ii), 
  (iv) where the property was depreciable property of a prescribed class, paragraphs (5)(c) and (d) apply to the taxpayer in respect of the property as if the references in those paragraphs to “paragraph (a)” and “paragraph (b)” were read as “subparagraph (9.01)(b)(ii)” and “subparagraph (9.01)(b)(iii)”, respectively, 
  (v) except for the purpose of this subparagraph, 
  (A) where the amount designated by the taxpayer’s legal representative under subclause (ii)(B)(I), exceeds the greater of the amounts determined under sub-subclauses (ii)(B)(I)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (B) where the amount designated by the taxpayer’s legal representative under subclause (ii)(B)(II) exceeds the greater of the amounts determined under sub-subclauses (ii)(B)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (vi) except for the purpose of this subparagraph, 
  (A) where the amount designated by the taxpayer’s legal representative under subclause (ii)(B)(I) is less than the lesser of the amounts determined under sub-subclauses (ii)(B)(I)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts, and 
  (B) where the amount designated by the taxpayer’s legal representative under subclause (ii)(B)(II) is less than the lesser of the amounts determined under sub-subclauses (ii)(B)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts. 
  
  ### When subsection (9.11) applies
  
  (9.1) Subsection (9.11) applies to a trust and a child of the settlor of the trust in respect of a property in respect of which subsection 104(4) or (5) would, if this Act were read without reference to this subsection, apply to the trust as a consequence of the death of the beneficiary under the trust who was a spouse or a common-law partner of the settlor if 
  (a) the property (or property for which the property was substituted) was transferred to the trust by the settlor; 
  (b) subsection (6), subsection 73(1) (as that subsection applied to transfers before 2000) or subparagraph 73(1.01)(c)(i) applied to the settlor and the trust in respect of the transfer referred to in paragraph (a); 
  (c) the property is, immediately before the beneficiary’s death, land or a depreciable property of a prescribed class of the trust that was used in a farming or fishing business carried on in Canada; 
  (d) the child of the settlor is, immediately before the beneficiary’s death, resident in Canada; and 
  (e) as a consequence of the beneficiary’s death, the property is transferred to and becomes vested indefeasibly in the child of the settlor within the period ending 36 months after that beneficiary’s death or, if written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances. 
  
  ### Transfer of farming and fishing property from trust to settlor’s children
  
  (9.11) If, because of subsection (9.1), this subsection applies to the trust and a child of the settlor of the trust in respect of a property of the trust that has been distributed to the child as a consequence of the death of the beneficiary under the trust who was the spouse or common-law partner of the settlor, the following rules apply: 
  (a) where the trust does not elect, in its return of income under this Part for the taxation year in which the beneficiary died, to have paragraph (b) apply to the trust in respect of the property, 
  (i) subsections 104(4) and (5) and section 69 do not apply to the trust and the child in respect of the property, 
  (ii) the trust is deemed to have 
  (A) disposed of the property immediately before the beneficiary’s death, and 
  (B) received, at the time of the disposition, proceeds of disposition in respect of that disposition equal to 
  (I) where the property was depreciable property of a prescribed class, the lesser of 
  1 the capital cost to the trust of the property, and 
  2 the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the trust that the capital cost to the trust of the property is of the capital cost to the trust of all property of that class that had not, at or before that time, been disposed of, and 
  (II) where the property is land (other than land to which subclause (I) applies), the adjusted cost base to the trust of the property immediately before the time of the disposition of the property, and 
  (iii) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the trust’s proceeds of disposition in respect of the disposition of the property determined under subparagraph (ii); 
  (b) where the trust elects, in the trust’s return of income under this Part for the taxation year in which the beneficiary died, to have this paragraph apply to the trust in respect of the property, 
  (i) subsections 104(4) and (5) do not apply to the trust in respect of the property, 
  (ii) the trust is deemed to have 
  (A) disposed of the property immediately before the beneficiary’s death, and 
  (B) received, at the time of the disposition of the property, proceeds of disposition in respect of the disposition of the property equal to 
  (I) where the property was depreciable property of a prescribed class, the amount that the trust designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the time of the disposition of the property, and 
  2 the lesser of the capital cost to the trust of the property and the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the trust that the capital cost to the trust of the property is of the capital cost to the trust of all property of that class that had not, at or before that time, been disposed of, and 
  (II) where the property is land (other than land to which subclause (I) applies), the amount that the trust designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the time of the disposition of the property, and 
  2 the adjusted cost base to the trust of the property immediately before the time of the disposition of the property, 
  (iii) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the trust’s proceeds of disposition in respect of the disposition of the property determined under subparagraph (ii), 
  (iv) except for the purpose of this subparagraph, 
  (A) where the amount designated by the trust under subclause (ii)(B)(I) exceeds the greater of the amounts determined under sub-subclauses (ii)(B)(I)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (B) where the amount designated by the trust under subclause (ii)(B)(II) exceeds the greater of the amounts determined under sub-subclauses (ii)(B)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (v) except for the purpose of this subparagraph, 
  (A) where the amount designated by the trust under subclause (ii)(B)(I) is less than the lesser of the amounts determined under sub-subclauses (ii)(B)(I)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts, and 
  (B) where the amount designated by the trust under subclause (ii)(B)(II), is less than the lesser of the amounts determined under sub-subclauses (ii)(B)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts; 
  (c) where paragraph (a) or (b) (each of which is referred to in this subsection as the “relevant provision”) applied to the trust in respect of a property that was depreciable property of a prescribed class (other than where the trust’s proceeds of disposition of the property under the relevant provision are redetermined under subsection 13(21.1)), 
  (i) the capital cost to the child of the property, immediately after the time of the disposition, is deemed to be the amount that was the capital cost to the trust of the property, immediately before the time of the disposition, and 
  (ii) the amount, if any, by which the capital cost to the trust of the property, immediately before the time of the disposition, exceeds the amount determined under the relevant provision to be the cost of the property to the child, immediately after the time of the disposition, is, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), deemed to have been allowed to the child in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the child acquired the property; and 
  (d) where the relevant provision applied to the trust in respect of a property and the trust’s proceeds of disposition in respect of the disposition of the property determined under the relevant provision are redetermined under subsection 13(21.1), notwithstanding the relevant provision, 
  (i) where the capital cost to the trust of the property, immediately before the time of the disposition, exceeds the amount redetermined under subsection 13(21.1), for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (A) the capital cost to the child of the property, immediately after the time of the disposition, is deemed to be the amount that was the capital cost to the trust of the property, immediately before the time of the disposition, and 
  (B) the amount, if any, by which the capital cost to the trust of the property, immediately before the time of the disposition, exceeds the amount redetermined under subsection 13(21.1) is deemed to have been allowed to the child in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the child acquired the property, and 
  (ii) where the property is land, the cost to the child of the property is deemed to be the amount that was the trust’s proceeds of disposition as redetermined under subsection 13(21.1). 
  
  ### When subsection (9.21) applies
  
  (9.2) Subsection (9.21) applies to a taxpayer and a child of the taxpayer in respect of a property of the taxpayer in respect of which subsection (5) would, if this Act were read without reference to this subsection, apply to the taxpayer and the child if 
  (a) the property was, immediately before the death of the taxpayer, a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer; 
  (b) the child of the taxpayer was resident in Canada immediately before the day on which taxpayer died; and 
  (c) as a consequence of the death of the taxpayer, the property is transferred to and becomes vested indefeasibly in the child within the period ending 36 months after the death of the taxpayer or, if written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances. 
  
  ### Transfer of family farm and fishing corporations and partnerships
  
  (9.21) If, because of subsection (9.2), this subsection applies to the taxpayer and a child of the taxpayer in respect of a property of the taxpayer that has been transferred to the child as a consequence of the death of the taxpayer, the following rules apply: 
  (a) where the taxpayer’s legal representative does not elect, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, to have paragraph (b) apply to the taxpayer in respect of the property, 
  (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, 
  (ii) where the property is, immediately before the death of the taxpayer, a share of the capital stock of a family farm or fishing corporation of the taxpayer, 
  (A) the taxpayer is deemed to have 
  (I) disposed of the property immediately before the taxpayer’s death, and 
  (II) received proceeds of disposition in respect of that disposition equal to the adjusted cost base to the taxpayer, immediately before the time of that disposition, of the property, and 
  (B) the child is, immediately after the time of the disposition, deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of that disposition determined under clause (A), and 
  (iii) where the property is, immediately before the death of the taxpayer, a partnership interest described in paragraph (9.2)(a) (other than a partnership interest to which subsection 100(3) applies), 
  (A) the taxpayer is, except for the purpose of paragraph 98(5)(g), deemed not to have disposed of the property as a consequence of the taxpayer’s death, 
  (B) the child is deemed to have acquired the property at the time of the taxpayer’s death at a cost equal to the cost to the taxpayer of the interest immediately before the time that is immediately before the time of the taxpayer’s death, and 
  (C) each amount required by subsection 53(1) or (2) to be added or deducted in computing the adjusted cost base to the taxpayer, immediately before the time of the taxpayer’s death, of the property is deemed to be an amount required by subsection 53(1) or (2) to be added or deducted in computing, at any time at or after the time of the taxpayer’s death, the adjusted cost base to the child of the property; and 
  (b) where the taxpayer’s legal representative elects, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, to have this paragraph apply to the taxpayer in respect of the property, 
  (i) paragraphs (5)(a) and (b) and section 69 do not apply to the taxpayer and the child in respect of the property, 
  (ii) subject to subparagraph (iii), where the property is, immediately before the taxpayer’s death, a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer, 
  (A) the taxpayer is deemed to have 
  (I) disposed of the property immediately before the taxpayer’s death, and 
  (II) received, at the time of the disposition of the property, proceeds of disposition in respect of the disposition of the property equal to the amount that the taxpayer’s legal representative designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the taxpayer’s death, and 
  2 the adjusted cost base to the taxpayer of the property immediately before the time of the disposition, 
  (B) the child is, immediately after the time of the disposition, deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under clause (A), 
  (C) except for the purpose of this clause, where the amount designated by the taxpayer’s legal representative under subclause (A)(II) exceeds the greater of the amounts determined under sub-subclauses (A)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (D) except for the purpose of this clause, where the amount designated by the taxpayer’s legal representative under subclause (A)(II) is less than the lesser of the amounts determined under sub-subclauses (A)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts, and 
  (iii) where the property is, immediately before the death of the taxpayer, a partnership interest described in paragraph (9.2)(a) (other than a partnership interest to which subsection 100(3) applies), and the taxpayer’s legal representative further elects, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, to have this subparagraph apply to the taxpayer in respect of the property, 
  (A) the taxpayer is, except for the purpose of paragraph 98(5)(g), deemed not to have disposed of the property as a consequence of the taxpayer’s death, 
  (B) the child is deemed to have acquired the property at the time of the taxpayer’s death at a cost equal to the cost to the taxpayer of the interest immediately before the time that is immediately before the death of the taxpayer, and 
  (C) each amount required by subsection 53(1) or (2) to be added or deducted in computing the adjusted cost base to the taxpayer, immediately before the time of the taxpayer’s death, of the property is deemed to be an amount required by subsection 53(1) or (2) to be added or deducted in computing, at any time at or after the taxpayer’s death, the adjusted cost base to the child of the property. 
  
  ### When subsection (9.31) applies
  
  (9.3) Subsection (9.31) applies to a trust and a child of the settlor of the trust in respect of a property in respect of which subsection 104(4) would, if this Act were read without reference to this subsection, apply to the trust as a consequence of the death of the beneficiary under the trust who was a spouse or a common-law partner of the settlor of the trust if 
  (a) the property (or property for which the property was substituted) was transferred to the trust by the settlor and was, immediately before that transfer, a share of the capital stock of a family farm or fishing corporation of the settlor or an interest in a family farm or fishing partnership of the settlor; 
  (b) subsection (6), subsection 73(1) (as that subsection applied to transfers before 2000) or subparagraph 73(1.01)(c)(i) applied to the settlor and the trust in respect of the transfer referred to in paragraph (a); 
  (c) the property is, immediately before the beneficiary’s death, 
  (i) a share of the capital stock of a Canadian corporation that would, immediately before that beneficiary’s death, be a share of the capital stock of a family farm or fishing corporation of the settlor, if the settlor owned the share at that time and paragraph (a) of the definition 
  *share of the capital stock of a family farm or fishing corporation* in subsection (10) were read without the words “in which the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot)”, or  
  (ii)  [Repealed, 2014, c. 39, s. 13]  
  (iii) a partnership interest in a partnership that carried on in Canada a farming or fishing business in which it used all or substantially all of the property; 
  (d) the child of the settlor was, immediately before that beneficiary’s death, resident in Canada; and 
  (e) as a consequence of that beneficiary’s death, the property is transferred to and becomes vested indefeasibly in the child within the period ending 36 months after that beneficiary’s death or, if written application has been made to the Minister by the taxpayer’s legal representative within that period, within any longer period that the Minister considers reasonable in the circumstances. 
  
  ### Transfer of family farm or fishing corporation or family farm or fishing partnership from trust to children of settlor
  
  (9.31) If, because of subsection (9.3), this subsection applies to the trust and a child of the settlor of the trust in respect of a property of the trust that has been distributed to the child as a consequence of the death of the beneficiary under the trust who was a spouse or common-law partner of the settlor of the trust, the following rules apply: 
  (a) where the trust does not elect, in its return of income under this Part for the taxation year in which the beneficiary died, to have paragraph (b) apply to the trust in respect of the property 
  (i) section 69 and subsection 104(4) do not apply to the trust and the child in respect of the property, 
  (ii) where the property is, immediately before the beneficiary’s death, a share described in subparagraph (9.3)(c)(i), 
  (A) the trust is deemed to have 
  (I) disposed of the property immediately before the beneficiary’s death, and 
  (II) received proceeds of disposition in respect of that disposition equal to the adjusted cost base to the trust of the property immediately before the time of that disposition, and 
  (B) the child is, immediately after the time of the disposition, deemed to have acquired the property at a cost equal to the trust’s proceeds of disposition in respect of that disposition of the property determined under clause (A), and 
  (iii) where the property is, immediately before the beneficiary’s death, a partnership interest described in subparagraph (9.3)(c)(iii) (other than a partnership interest to which subsection 100(3) applies), 
  (A) the trust is, except for the purpose of paragraph 98(5)(g), deemed not to have disposed of the property as a consequence of the beneficiary’s death, 
  (B) the child is deemed to have acquired the property, at the time of the beneficiary’s death, at a cost equal to the cost to the trust of the interest immediately before the time that is immediately before the time of the beneficiary’s death, and 
  (C) each amount required by subsection 53(1) or (2) to be added or deducted in computing the adjusted cost base to the trust, immediately before the beneficiary’s death, of the property is deemed to be an amount required by subsection 53(1) or (2) to be added or deducted in computing, at or after the time of the beneficiary’s death, the adjusted cost base to the child of the property; and 
  (b) where the trust elects, in its return of income under this Part for the taxation year in which the beneficiary died, to have this paragraph apply to the trust in respect of the property 
  (i) subsection 104(4) does not apply to the trust in respect of the property and section 69 does not apply to the trust or the child in respect of the transfer of the property, 
  (ii) subject to subparagraph (iii), where the property is, immediately before the beneficiary’s death, a share described in subparagraph (9.3)(c)(i) or a partnership interest described in subparagraph (9.3)(c)(iii), 
  (A) the trust is deemed to have 
  (I) disposed of the property immediately before the beneficiary’s death, and 
  (II) received, at the time of the disposition of property, proceeds of disposition in respect of the disposition of the property equal to the amount that the trust designates, which must not be greater than the greater of nor less than the lesser of 
  1 the fair market value of the property immediately before the beneficiary’s death, and 
  2 the adjusted cost base to the trust of the property immediately before the beneficiary’s death, and 
  (B) the child is, immediately after the time of the disposition of the property, deemed to have acquired the property at a cost equal to the trust’s proceeds of disposition in respect of that disposition of the property determined under clause (A), 
  (iii) where the property is, immediately before that beneficiary’s death, a partnership interest described in subparagraph (9.3)(c)(iii) (other than a partnership interest to which subsection 100(3) applies), and the trust further elects, in its return of income under this Part for the taxation year in which the beneficiary died, to have this subparagraph apply to the trust in respect of the property, 
  (A) the trust is, except for the purpose of paragraph 98(5)(g), deemed not to have disposed of the property as a consequence of the beneficiary’s death, 
  (B) the child is deemed to have acquired the property, at the time of the beneficiary’s death, at a cost equal to the cost to the trust of the property immediately before the time that is immediately before the beneficiary’s death, and 
  (C) each amount required by subsection 53(1) or (2) to be added or deducted in computing, immediately before the beneficiary’s death, the adjusted cost base to the trust of the property is deemed to be an amount required by subsection 53(1) or (2) to be added or deducted in computing, at or after the time of the beneficiary’s death, the adjusted cost base to the child of the property, 
  (iv) except for the purpose of this subparagraph, where the amount designated by the trust under subclause (ii)(A)(II) exceeds the greater of the amounts determined under sub-subclauses (ii)(A)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the greater of those amounts, and 
  (v) except for the purpose of this subparagraph, where the amount designated by the trust under subclause (ii)(A)(II) is less than the lesser of the amounts determined under sub-subclauses (ii)(A)(II)1 and 2 in respect of the property, the amount designated is deemed to be equal to the lesser of those amounts. 
  
  ### Transfer to a parent
  
  (9.6) Subsection (9.01) or (9.21), as the case may be, applies in respect of a transfer of a property as if the references in those subsections to “child” were read as references to “parent” if 
  (a) the property was acquired by a taxpayer in circumstances where any of subsections (9.01), (9.11), (9.21), (9.31) and 73(3.1) and (4.1) applied in respect of the acquisition; 
  (b) as a consequence of the death of the taxpayer the property is transferred to a parent of the taxpayer; and 
  (c) the taxpayer’s legal representative has elected, in the taxpayer’s return of income under this Part for the taxation year in which the taxpayer died, that this subsection apply in respect of the transfer. 
  
  ### Leased farm or fishing property
  
  (9.8) For the purposes of subsections (9) and 73(3) and paragraph (d) of the definition 
  *qualified farm or fishing property* in subsection 110.6(1), a property of an individual is, at a particular time, deemed to be used by the individual in a farming or fishing business carried on in Canada if, at that particular time, the property is being used, principally in the course of carrying on a farming or fishing business in Canada, by  
  (a) a corporation, a share of the capital stock of which is a share of the capital stock of a family farm or fishing corporation of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual; or 
  (b) a partnership, a partnership interest in which is an interest in a family farm or fishing partnership of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual. 
  
  ### Definitions
  
  (10) In this section,  
  *child* of a taxpayer includes  
  (a) a child of the taxpayer’s child, 
  (b) a child of the taxpayer’s child’s child, 
  (b.1) a person who was a child of the taxpayer immediately before the death of the person’s spouse or common-law partner, and 
  (c) a person who, at any time before the person attained the age of 19 years, was wholly dependent on the taxpayer for support and of whom the taxpayer had, at that time, in law or in fact, the custody and control; ( enfant)   
  *interest in a family farm or fishing partnership*, of an individual at any time, means a partnership interest owned by the individual at that time if, at that time, all or substantially all of the fair market value of the property of the partnership was attributable to  
  (a) property that has been used principally in the course of carrying on a farming or fishing business in Canada in which the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot), by 
  (i) the partnership, 
  (ii) a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, 
  (iii) a partnership, a partnership interest in which was an interest in a family farm or fishing partnership of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, or 
  (iv) the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, 
  (b) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to property described in paragraph (d), 
  (c) partnership interests or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to property described in paragraph (d), or 
  (d) properties described in any of paragraphs (a) to (c); ( participation dans une société de personnes agricole ou de pêche familiale)   
  *interest in a family farm partnership* [Repealed, 2014, c. 39, s. 13]   
  *interest in a family fishing partnership* [Repealed, 2014, c. 39, s. 13]   
  *share of the capital stock of a family farm corporation* [Repealed, 2014, c. 39, s. 13]   
  *share of the capital stock of a family farm or fishing corporation*, of an individual at any time, means a share of the capital stock of a corporation owned by the individual at that time if, at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to  
  (a) property that has been used principally in the course of carrying on a farming or fishing business in Canada in which the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot), by 
  (i) the corporation, 
  (ii) a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, 
  (iii) a corporation controlled by a corporation described in subparagraph (i) or (ii), 
  (iv) a partnership, a partnership interest in which was an interest in a family farm or fishing partnership of the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, or 
  (v) the individual, the individual’s spouse or common-law partner, a child of the individual or a parent of the individual, 
  (b) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to property described in paragraph (d), 
  (c) partnership interests or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to property described in paragraph (d), or 
  (d) properties described in any of paragraphs (a) to (c). ( action du capital-actions d’une société agricole ou de pêche familiale)   
  *share of the capital stock of a family fishing corporation* [Repealed, 2014, c. 39, s. 13]  
  
  ### Application of s. 138(12)
  
  (11) The definitions in subsection 138(12) apply to this section. 
  
  ### Value of NISA
  
  (12) For the purpose of the definition 
  *share of the capital stock of a family farm or fishing corporation* in subsection (10), the fair market value of a net income stabilization account is deemed to be nil.  
  
  ### Capital cost of certain depreciable property
  
  (13) For the purposes of this section and, where a provision of this section (other than this subsection) applies, for the purposes of sections 13 and 20 (but not for the purposes of any regulation made for the purpose of paragraph 20(1)(a)), 
  (a) the capital cost to a taxpayer of depreciable property of a prescribed class disposed of immediately before the taxpayer’s death, or 
  (b) the capital cost to a trust, to which subsection 70(9.1) applies, of depreciable property of a prescribed class disposed of immediately before the death of the spouse or common-law partner described in that subsection, shall, in respect of property that was not disposed of by the taxpayer or the trust before that time, be the amount that it would be if subsection 13(7) were read without reference to 
  (c) the expression “the lesser of” in paragraph 13(7)(b) and clause (d)(i)(A) thereof, and 
  (d) subparagraph 13(7)(b)(ii), subclause 13(7)(d)(i)(A)(II), clause 13(7)(d)(i)(B) and paragraph (e) thereof. 
  
  ### Order of disposal of depreciable property
  
  (14) Where 2 or more depreciable properties of a prescribed class are disposed of at the same time as a consequence of a taxpayer’s death, this section and paragraph (a) of the definition 
  *cost amount* in subsection 248(1) apply as if each property so disposed of were separately disposed of in the order designated by the taxpayer’s legal representative or, in the case of a trust described in subsection 70(9.1), by the trust and, where the taxpayer’s legal representative or the trust, as the case may be, does not designate an order, in the order designated by the Minister.  
  
  ### Reserves, etc., for year of death
  
  72 (1) Where in a taxation year a taxpayer has died, 
  (a) paragraph 20(1)(n) does not apply to allow, in computing the income of the taxpayer for the year from a business, the deduction of any amount as a reserve in respect of property sold in the course of the business; 
  (b) no amount is deductible under subsection 32(1) as a reserve in respect of unearned commissions in computing the taxpayer’s income for the year; 
  (c) no amount may be claimed under subparagraph 40(1)(a)(iii), paragraph 40(1.01)(c) or subparagraph 44(1)(e)(iii) in computing any gain of the taxpayer for the year; 
  (d) subsection 64(1) does not apply to allow, in computing the income of the taxpayer for the year, the deduction of any amount as a reserve in respect of the disposition of any property; and 
  (e) subsection 64(1.1) does not apply to allow, in computing the income of the taxpayer for the year, the deduction of any amount as a reserve in respect of the disposition of any property. 
  
  ### Election by legal representative and transferee re reserves
  
  (2) Where property of a taxpayer that is a right to receive any amount has, on or after the death of the taxpayer and as a consequence thereof, been transferred or distributed to the taxpayer’s spouse or common-law partner described in paragraph 70(6)(a) or to a trust described in paragraph 70(6)(b) (in this subsection referred to as the “transferee”), if the taxpayer was resident in Canada immediately before the taxpayer’s death and the taxpayer’s legal representative and the transferee have executed jointly an election in respect of the property in prescribed form, 
  (a) any amount in respect of the property that would, but for paragraph 72(1)(a), (b), (d) or (e), as the case may be, have been deductible as a reserve in computing the taxpayer’s income for the taxation year in which the taxpayer died shall, 
  (i) notwithstanding subsection 72(1), be deducted in computing the taxpayer’s income for the taxation year in which the taxpayer died, 
  (ii) be included in computing the transferee’s income for the transferee’s first taxation year ending after the death of the taxpayer, and 
  (iii) be deemed to be 
  (A) an amount that has been included in computing the transferee’s income from a business for a previous year in respect of property sold in the course of the business, 
  (B) an amount that has been included in computing the transferee’s income for a previous year as a commission in respect of an insurance contract, other than a life insurance contract, 
  (C) an amount that by virtue of subsection 59(1) has been included in computing the transferee’s income for a preceding taxation year, or 
  (D) for the purposes of subsection 64(1.1), an amount that by virtue of paragraph 59(3.2)(c) has been included in computing the transferee’s income for a preceding taxation year and to be an amount deducted by the transferee pursuant to paragraph 64(1.1)(a) in computing the transferee’s income for the transferee’s last taxation year ending before the death, as the case may be; 
  (b) any amount in respect of the property that could, but for paragraph 72(1)(c), have been claimed under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in computing the amount of any gain of the taxpayer for the year shall, 
  (i) notwithstanding paragraph 72(1)(c), be deemed to have been so claimed, and 
  (ii) for the purpose of computing the transferee’s income for the transferee’s first taxation year ending after the death of the taxpayer and any subsequent taxation year, be deemed to have been 
  (A) proceeds of the disposition of capital property disposed of by the transferee in that first taxation year, and 
  (B) the amount determined under subparagraph 40(1)(a)(i) or 44(1)(e)(i), as the case may be, in respect of the capital property referred to in clause (A); and 
  (c) notwithstanding paragraphs 72(2)(a) (b), where any property had been disposed of by the taxpayer, in computing the income of the transferee for any taxation year ending after the death of the taxpayer, 
  (i) the amount of the transferee’s deduction under paragraph 20(1)(n) as a reserve in respect of the property sold in the course of business, 
  (ii) the amount of the transferee’s claim under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in respect of the disposition of the property, and 
  (iii) the amount of the transferee’s deduction under section 64 as a reserve in respect of the disposition of the property shall be computed as if the transferee were the taxpayer who had disposed of the property and as if the property were disposed of by the transferee at the time it was disposed of by the taxpayer. 
  
  ### Inter vivos transfers by individuals
  
  73 (1) For the purposes of this Part, where at any time any particular capital property of an individual (other than a trust) has been transferred in circumstances to which subsection (1.01) applies and both the individual and the transferee are resident in Canada at that time, unless the individual elects in the individual’s return of income under this Part for the taxation year in which the property was transferred that the provisions of this subsection not apply, the particular property is deemed 
  (a) to have been disposed of at that time by the individual for proceeds equal to, 
  (i) where the particular property is depreciable property of a prescribed class, that proportion of the undepreciated capital cost to the individual immediately before that time of all property of that class that the fair market value immediately before that time of the particular property is of the fair market value immediately before that time of all of that property of that class, and 
  (ii) in any other case, the adjusted cost base to the individual of the particular property immediately before that time; and 
  (b) to have been acquired at that time by the transferee for an amount equal to those proceeds. 
  
  ### Qualifying transfers
  
  (1.01) Subject to subsection (1.02), property is transferred by an individual in circumstances to which this subsection applies where it is transferred to 
  (a) the individual’s spouse or common-law partner; 
  (b) a former spouse or common-law partner of the individual in settlement of rights arising out of their marriage or common-law partnership; or 
  (c) a trust created by the individual under which 
  (i) the individual’s spouse or common-law partner is entitled to receive all of the income of the trust that arises before the spouse’s or common-law partner’s death and no person except the spouse or common-law partner may, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust, 
  (ii) the individual is entitled to receive all of the income of the trust that arises before the individual’s death and no person except the individual may, before the individual’s death, receive or otherwise obtain the use of any of the income or capital of the trust, or 
  (iii) either 
  (A) the individual or the individual’s spouse is, in combination with the other, entitled to receive all of the income of the trust that arises before the later of the death of the individual and the death of the spouse and no other person may, before the later of those deaths, receive or otherwise obtain the use of any of the income or capital of the trust, or 
  (B) the individual or the individual’s common-law partner is, in combination with the other, entitled to receive all of the income of the trust that arises before the later of the death of the individual and the death of the common-law partner and no other person may, before the later of those deaths, receive or otherwise obtain the use of any of the income or capital of the trust. 
  
  ### Exception for transfers
  
  (1.02) Subsection (1.01) applies to a transfer of property by an individual to a trust the terms of which satisfy the conditions in subparagraph (1.01)(c)(ii) or (iii) only where 
  (a) the trust was created after 1999; 
  (b) either 
  (i) the individual had attained 65 years of age at the time the trust was created, or 
  (ii) the transfer does not result in a change in beneficial ownership of the property and there is immediately after the transfer no absolute or contingent right of a person (other than the individual) or partnership as a beneficiary (determined with reference to subsection 104(1.1)) under the trust; and 
  (c) in the case of a trust the terms of which satisfy the conditions in subparagraph (1.01)(c)(ii), the trust does not make an election under subparagraph 104(4)(a)(ii.1). 
  
  ### Interpretation
  
  (1.1) For greater certainty, a property is, for the purposes of subsections (1) and (1.01), deemed to be property of the individual referred to in subsection (1) that has been transferred to a particular transferee where, 
  (a) under the laws of a province or because of a decree, order or judgment of a competent tribunal made in accordance with those laws, the property 
  (i) is acquired or is deemed to have been acquired by the particular transferee, 
  (ii) is deemed or declared to be property of, or is awarded to, the particular transferee, or 
  (iii) has vested in the particular transferee; and 
  (b) the property was or would, but for those laws, have been a capital property of the individual referred to in subsection (1). 
  
  ### Capital cost and amount deemed allowed to spouse, etc., or trust
  
  (2) If a transferee is deemed by subsection (1) to have acquired any particular depreciable property of a prescribed class of a taxpayer for an amount determined under paragraph (1)(b) and the capital cost to the taxpayer of the particular property exceeds the amount determined under that paragraph, in applying sections 13 and 20 and any regulations made under paragraph 20(1)(a) 
  (a) the capital cost to the transferee of the particular property is deemed to be the amount that was the capital cost to the taxpayer of the particular property; and 
  (b) the excess is deemed to have been allowed to the transferee in respect of the particular property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition of the particular property. 
  
  ### When subsection (3.1) applies
  
  (3) Subsection (3.1) applies to a taxpayer and a child of the taxpayer in respect of property that has been transferred, at any time, by the taxpayer to the child, where 
  (a) the property was, before the transfer, land in Canada or depreciable property in Canada of a prescribed class, of the taxpayer; 
  (b) the child of the taxpayer was resident in Canada immediately before the transfer; and 
  (c) the property has been used principally in a farming or fishing business in which the taxpayer, the taxpayer’s spouse or common-law partner, a child of the taxpayer or a parent of the taxpayer was actively engaged on a regular and continuous basis (or, in the case of property used in the operation of a woodlot, was engaged to the extent required by a prescribed forest management plan in respect of that woodlot). 
  
  ###  Inter vivos transfer of farm or fishing property to child 
  
  (3.1) If, because of subsection (3), this subsection applies to the taxpayer and a child of the taxpayer in respect of a property transferred by the taxpayer to the child of the taxpayer, the following rules apply: 
  (a) where, immediately before the transfer, the property was depreciable property of a prescribed class, the taxpayer is deemed to have disposed of the property, at the time of the transfer, for proceeds of disposition equal to 
  (i) in any case to which neither subparagraph (ii) nor (iii) applies, the taxpayer’s proceeds of disposition otherwise determined, 
  (ii) the greater of the amounts referred to in clauses (A) and (B), if the taxpayer’s proceeds of disposition otherwise determined exceed the greater of 
  (A) the fair market value of the property immediately before the time of the transfer, and 
  (B) the lesser of 
  (I) the capital cost to the taxpayer of the property, and 
  (II) the amount, determined immediately before the time of the disposition of the property, that is that proportion of the undepreciated capital cost of property of that class to the taxpayer that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not, at or before that time, been disposed of, or 
  (iii) if the taxpayer’s proceeds of disposition otherwise determined are less than the lesser of the amounts referred to in clauses (ii)(A) and (B), the lesser of those amounts; 
  (b) where the property transferred was land, the taxpayer is deemed to have disposed of the property at the time of the transfer for proceeds of disposition equal to, 
  (i) in any case to which neither subparagraph (ii) nor (iii) applies, the taxpayer’s proceeds of disposition otherwise determined, 
  (ii) the greater of the amounts referred to in clauses (A) and (B), if the taxpayer’s proceeds of disposition otherwise determined exceed the greater of 
  (A) the fair market value of the land immediately before the time of the transfer, and 
  (B) the adjusted cost base to the taxpayer of the land immediately before the time of the transfer, or 
  (iii) if the taxpayer’s proceeds of disposition otherwise determined are less than the lesser of the amounts referred to in clauses (ii)(A) and (B), the lesser of those amounts; 
  (c)  [Repealed, 2016, c. 12, s. 21]  
  (d) subsection 69(1) does not apply to the taxpayer and the child in respect of the property; 
  (e) the child is deemed to have acquired the property at a cost equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under 
  (i) where the property is depreciable property of the taxpayer, paragraph (a), and 
  (ii) where the property is land of the taxpayer, paragraph (b); and 
  (f) and (g)  [Repealed, 2016, c. 12, s. 21]  
  (h) where the property is depreciable property of a prescribed class of the taxpayer and the capital cost to the taxpayer of the property exceeds the cost to the child of the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), 
  (i) the capital cost to the child of the property is deemed to be the amount that was the capital cost to the taxpayer of the property immediately before the transfer, and 
  (ii) the excess is deemed to have been allowed to the child in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years that ended before the child acquired the property. 
  
  ### When subsection (4.1) applies
  
  (4) Subsection (4.1) applies to a taxpayer and a child of the taxpayer in respect of property that has been transferred, at any time, to the child if 
  (a) the child was resident in Canada immediately before the transfer; and 
  (b) the property was, immediately before the transfer, a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer (as defined in subsection 70(10)). 
  
  ###  Inter vivos transfer of family farm or fishing corporations and partnerships 
  
  (4.1) If, because of subsection (4), this subsection applies to the taxpayer and the taxpayer’s child in respect of the transfer of the property by the taxpayer to the child, 
  (a) subject to paragraph (c), where the property was, immediately before the transfer, a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer, the taxpayer is deemed to have disposed of the property at the time of the transfer for proceeds of disposition equal to, 
  (i) in any case to which neither subparagraph (ii) nor (iii) applies, the taxpayer’s proceeds of disposition otherwise determined, 
  (ii) the greater of the amounts referred to in clauses (A) and (B), if the taxpayer’s proceeds of disposition otherwise determined exceed the greater of 
  (A) the fair market value of the property immediately before the time of the transfer, and 
  (B) the adjusted cost base to the taxpayer of the property immediately before the time of the transfer, or 
  (iii) if the taxpayer’s proceeds of disposition otherwise determined are less than the lesser of the amounts referred to in clauses (ii)(A) and (B), the lesser of those amounts; 
  (b) subject to paragraph (c), where the property is, immediately before the transfer, a share of the capital stock of a family farm or fishing corporation of the taxpayer or an interest in a family farm or fishing partnership of the taxpayer, the child is deemed to have acquired the property for an amount equal to the taxpayer’s proceeds of disposition in respect of the disposition of the property determined under paragraph (a); 
  (c) where the property is, immediately before the transfer, an interest in a family farm or fishing partnership of the taxpayer (other than a partnership interest to which subsection 100(3) applies), the taxpayer receives no consideration in respect of the transfer of the property and the taxpayer elects, in the taxpayer’s return of income under this Part for the taxation year which includes the time of the transfer, to have this paragraph apply in respect of the transfer of the property, 
  (i) the taxpayer is, except for the purpose of paragraph 98(5)(g), deemed not to have disposed of the property at the time of the transfer, 
  (ii) the child is deemed to have acquired the property at the time of the transfer at a cost equal to the cost to the taxpayer of the interest immediately before the transfer, and 
  (iii) each amount required by subsection 53(1) or (2) to be added or deducted in computing the adjusted cost base to the taxpayer, immediately before the transfer, of the property is deemed to be an amount required by subsection 53(1) or (2) to be added or deducted in computing at any time at or after the time of the transfer, the adjusted cost base to the child of the property; and 
  (d) subsection 69(1) does not apply to the taxpayer and the child in respect of the property. 
  
  ### Disposition of a NISA
  
  (5) Where at any time a taxpayer disposes of an interest in the taxpayer’s NISA Fund No. 2, an amount equal to the balance in the fund so disposed of shall be deemed to have been paid out of the fund at that time to the taxpayer except that, 
  (a) where the interest is disposed of to the taxpayer’s spouse or common-law partner, former spouse or common-law partner or an individual referred to in paragraph 73(1)(d) (as it applies to transfers of property that occurred before 1993) in settlement of rights arising out of their marriage or common-law partnership, on or after the breakdown of the marriage or common-law partnership, that amount shall not be deemed to have been paid to the taxpayer if 
  (i) the disposition is made under a decree, order or judgment of a competent tribunal or, in the case of a spouse or common-law partner or former spouse or common-law partner, a written separation agreement, and 
  (ii) the taxpayer elects in the taxpayer’s return of income under this Part for the taxation year in which the property was disposed of to have this paragraph apply to the disposition; and 
  (b) where the interest is disposed of to a taxable Canadian corporation in a transaction in respect of which an election is made under section 85, an amount equal to the proceeds of disposition in respect of that interest shall be deemed to be paid, at that time, to the taxpayer out of the taxpayer’s NISA Fund No. 2. 
  
  ### Application of s. 70(10)
  
  (6) The definitions in subsection 70(10) apply to this section. 
  
  ### Transfers and loans to spouse or common-law partner
  
  74.1 (1) If an individual has transferred or lent property (otherwise than by an assignment of any portion of a retirement pension under section 65.1 of the Canada Pension Plan or a comparable provision of a provincial pension plan as defined in section 3 of that Act), either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person who is the individual’s spouse or common-law partner or who has since become the individual’s spouse or common-law partner, any income or loss, as the case may be, of that person for a taxation year from the property or from property substituted therefor, that relates to the period in the year throughout which the individual is resident in Canada and that person is the individual’s spouse or common-law partner, is deemed to be income or a loss, as the case may be, of the individual for the year and not of that person.  
  
  ### Transfers and loans to minors
  
  (2) If an individual has transferred or lent property, either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person who was under 18 years of age (other than an amount received in respect of that person either as a consequence of the operation of subsection 122.61(1) or under section 4 of the Universal Child Care Benefit Act) and who  
  (a) does not deal with the individual at arm’s length, or 
  (b) is the niece or nephew of the individual, any income or loss, as the case may be, of that person for a taxation year from the property or from property substituted for that property, that relates to the period in the taxation year throughout which the individual is resident in Canada, is deemed to be income or a loss, as the case may be, of the individual and not of that person unless that person has, before the end of the taxation year, attained the age of 18 years. 
  
  ### Repayment of existing indebtedness
  
  (3) For the purposes of subsections 74.1(1) and (2), where, at any time, an individual has lent or transferred property (in this subsection referred to as the “lent or transferred property”) either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person, and the lent or transferred property or property substituted therefor is used 
  (a) to repay, in whole or in part, borrowed money with which other property was acquired, or 
  (b) to reduce an amount payable for other property, there shall be included in computing the income from the lent or transferred property, or from property substituted therefor, that is so used, that proportion of the income or loss, as the case may be, derived after that time from the other property or from property substituted therefor that the fair market value at that time of the lent or transferred property, or property substituted therefor, that is so used is of the cost to that person of the other property at the time of its acquisition, but for greater certainty nothing in this subsection shall affect the application of subsections 74.1(1) and (2) to any income or loss derived from the other property or from property substituted therefor. 
  
  ### Gain or loss deemed that of lender or transferor
  
  74.2 (1) Where an individual has lent or transferred property (in this section referred to as “lent or transferred property”), either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person (in this subsection referred to as the “recipient”) who is the individual’s spouse or common-law partner or who has since become the individual’s spouse or common-law partner, the following rules apply for the purposes of computing the income of the individual and the recipient for a taxation year: 
  (a) the amount, if any, by which 
  (i) the total of the recipient’s taxable capital gains for the year from dispositions of property (other than listed personal property) that is lent or transferred property or property substituted therefor occurring in the period (in this subsection referred to as the “attribution period”) throughout which the individual is resident in Canada and the recipient is the individual’s spouse or common-law partner exceeds 
  (ii) the total of the recipient’s allowable capital losses for the year from dispositions occurring in the attribution period of property (other than listed personal property) that is lent or transferred property or property substituted therefor shall be deemed to be a taxable capital gain of the individual for the year from the disposition of property other than listed personal property; 
  (b) the amount, if any, by which the total determined under subparagraph 74.2(1)(a)(ii) exceeds the total determined under subparagraph 74.2(1)(a)(i) shall be deemed to be an allowable capital loss of the individual for the year from the disposition of property other than listed personal property; 
  (c) the amount, if any, by which 
  (i) the amount that the total of the recipient’s gains for the year from dispositions occurring in the attribution period of listed personal property that is lent or transferred property or property substituted therefor would be if the recipient had at no time owned listed personal property other than listed personal property that was lent or transferred property or property substituted therefor exceeds 
  (ii) the amount that the total of the recipient’s losses for the year from dispositions of listed personal property that is lent or transferred property or property substituted therefor would be if the recipient had at no time owned listed personal property other than listed personal property that was lent or transferred property or property substituted therefor, shall be deemed to be a gain of the individual for the year from the disposition of listed personal property; 
  (d) the amount, if any, by which the total determined under subparagraph 74.2(1)(c)(ii) exceeds the total determined under subparagraph 74.2(1)(c)(i) shall be deemed to be a loss of the individual for the year from the disposition of listed personal property; and 
  (e) any taxable capital gain or allowable capital loss or any gain or loss taken into account in computing an amount described in paragraph 74.2(1)(a), 74.2(1)(b), 74.2(1)(c) or 74.2(1)(d) shall, except for the purposes of those paragraphs and to the extent that the amount so described is deemed by virtue of this subsection to be a taxable capital gain or an allowable capital loss or a gain or loss of the individual, be deemed not to be a taxable capital gain or an allowable capital loss or a gain or loss, as the case may be, of the recipient. 
  
  ### Deemed gain or loss
  
  (2) Where an amount is deemed by subsection 74.2(1) or 75(2) or section 75.1 of this Act, or subsection 74(2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, to be a taxable capital gain or an allowable capital loss of an individual for a taxation year,  
  (a) for the purposes of sections 3 and 111, as they apply for the purposes of section 110.6, such portion of the gain or loss as may reasonably be considered to relate to the disposition of a property by another person in the year shall be deemed to arise from the disposition of that property by the individual in the year; and 
  (b) for the purposes of section 110.6, that property shall be deemed to have been disposed of by the individual on the day on which it was disposed of by the other person. 
  
  ### Election for subsection (1) to apply
  
  (3) Subsection (1) does not apply to a disposition at any particular time (in this subsection referred to as the “emigration disposition”) under paragraph 128.1(4)(b), by a taxpayer who is a recipient referred to in subsection (1), unless the recipient and the individual referred to in that subsection, in their returns of income for the taxation year that includes the first time, after the particular time, at which the recipient disposes of the property, jointly elect that subsection (1) apply to the emigration disposition. 
  
  ### Application of subsection (3)
  
  (4) For the purpose of applying subsection (3) and notwithstanding subsections 152(4) to (5), any assessment of tax payable under this Act by the recipient or the individual referred to in subsection (1) shall be made that is necessary to take an election under subsection (3) into account except that no such assessment shall affect the computation of 
  (a) interest payable under this Act to or by a taxpayer in respect of any period that is before the taxpayer’s filing-due date for the taxation year that includes the first time, after the particular time referred to in subsection (3), at which the recipient disposes of the property referred to in that subsection; or 
  (b) any penalty payable under this Act. 
  
  ### Transfers or loans to a trust
  
  74.3 (1) Where an individual has lent or transferred property (in this section referred to as “lent or transferred property”), either directly or indirectly, by means of a trust or by any other means whatever, to a trust in which another individual who is at any time a designated person in respect of the individual is beneficially interested at any time, the following rules apply: 
  (a) for the purposes of section 74.1, the income of the designated person for a taxation year from the lent or transferred property shall be deemed to be an amount equal to the lesser of 
  (i) the amount in respect of the trust that was included by virtue of paragraph 12(1)(m) in computing the income for the year of the designated person, and 
  (ii) that proportion of the amount that would be the income of the trust for the year from the lent or transferred property or from property substituted therefor if no deduction were made under subsection 104(6) or (12) that 
  (A) the amount determined under subparagraph 74.3(1)(a)(i) in respect of the designated person for the year is of 
  (B) the total of all amounts each of which is an amount determined under subparagraph 74.3(1)(a)(i) for the year in respect of the designated person or any other person who is throughout the year a designated person in respect of the individual; and 
  (b) for the purposes of section 74.2, an amount equal to the lesser of 
  (i) the amount that was designated under subsection 104(21) in respect of the designated person in the trust’s return of income for the year, and 
  (ii) the amount, if any, by which 
  (A) the total of all amounts each of which is a taxable capital gain for the year from the disposition by the trust of the lent or transferred property or property substituted therefor exceeds 
  (B) the total of all amounts each of which is an allowable capital loss for the year from the disposition by the trust of the lent or transferred property or property substituted therefor, shall be deemed to be a taxable capital gain of the designated person for the year from the disposition of property (other than listed personal property) that is lent or transferred property. 
  
  ### Definition of 
  *designated person* 
  
  (2) In this section, 
  *designated person*, in respect of an individual, has the meaning assigned by subsection 74.5(5).  
  
  ### Definitions
  
  74.4 (1) In this section,  
  *designated person*, in respect of an individual, has the meaning assigned by subsection 74.5(5); (personne désignée)   
  *excluded consideration*, at any time, means consideration received by an individual that is  
  (a) indebtedness, 
  (b) a share of the capital stock of a corporation, or 
  (c) a right to receive indebtedness or a share of the capital stock of a corporation. ( contrepartie exclue)  
  
  ### Transfers and loans to corporations
  
  (2) Where an individual has transferred or lent property, either directly or indirectly, by means of a trust or by any other means whatever, to a corporation and one of the main purposes of the transfer or loan may reasonably be considered to be to reduce the income of the individual and to benefit, either directly or indirectly, by means of a trust or by any other means whatever, a person who is a designated person in respect of the individual, in computing the income of the individual for any taxation year that includes a period after the loan or transfer throughout which 
  (a) the person is a designated person in respect of the individual and would have been a specified shareholder of the corporation if the definition 
  *specified shareholder* in subsection 248(1) were read without reference to paragraphs (a) and (d) of that definition and if the reference therein to “any other corporation that is related to the corporation” were read as a reference to “any other corporation (other than a small business corporation) that is related to the corporation”,  
  (b) the individual was resident in Canada, and 
  (c) the corporation was not a small business corporation, the individual shall be deemed to have received as interest in the year the amount, if any, by which 
  (d) the amount that would be interest on the outstanding amount of the loan or transfer of the property for such periods in the year if the interest were computed thereon at the prescribed rate of interest for such periods exceeds the total of 
  (e) any interest received in the year by the individual in respect of the transfer or loan (other than amounts deemed by this subsection to be interest), 
  (f) all amounts included in the individual’s income for the taxation year pursuant to subsection 82(1) or 90(1) in respect of taxable dividends received (other than dividends deemed by section 84 to have been received) by the individual in the year on shares that were received from the corporation as consideration for the transfer or as repayment for the loan that were excluded consideration at the time the dividends were received or on shares substituted therefor that were excluded consideration at that time, and 
  (g) where the designated person is a specified individual in relation to the year, the amount required to be included in computing the designated person’s income for the year in respect of all taxable dividends received by the designated person that 
  (i) can reasonably be considered to be part of the benefit sought to be conferred, and 
  (ii) are included in computing the designated person’s split income for any taxation year. 
  
  ### Outstanding amount
  
  (3) For the purposes of subsection 74.4(2), the outstanding amount of a transferred property or loan at a particular time is 
  (a) in the case of a transfer of property to a corporation, the amount, if any, by which the fair market value of the property at the time of the transfer exceeds the total of 
  (i) the fair market value, at the time of the transfer, of the consideration (other than consideration that is excluded consideration at the particular time) received by the transferor for the property, and 
  (ii) the fair market value, at the time of receipt, of any consideration (other than consideration that is excluded consideration at the particular time) received by the transferor at or before the particular time from the corporation or from a person with whom the transferor deals at arm’s length, in exchange for excluded consideration previously received by the transferor as consideration for the property or for excluded consideration substituted for such consideration; 
  (b) in the case of a loan of money or property to a corporation, the amount, if any, by which 
  (i) the principal amount of the loan of money at the time the loan was made, or 
  (ii) the fair market value of the property lent at the time the loan was made, as the case may be, exceeds the fair market value, at the time the repayment is received by the lender, of any repayment of the loan (other than a repayment that is excluded consideration at the particular time). 
  
  ### Benefit not granted to a designated person
  
  (4) For the purposes of subsection 74.4(2), one of the main purposes of a transfer or loan by an individual to a corporation shall not be considered to be to benefit, either directly or indirectly, a designated person in respect of the individual, where 
  (a) the only interest that the designated person has in the corporation is a beneficial interest in shares of the corporation held by a trust; 
  (b) by the terms of the trust, the designated person may not receive or otherwise obtain the use of any of the income or capital of the trust while being a designated person in respect of the individual; and 
  (c) the designated person has not received or otherwise obtained the use of any of the income or capital of the trust, and no deduction has been made by the trust in computing its income under subsection 104(6) or (12) in respect of amounts paid or payable to, or included in the income of, that person while being a designated person in respect of the individual. 
  
  ### Transfers for fair market consideration
  
  74.5 (1) Notwithstanding any other provision of this Act, subsections 74.1(1) and (2) and section 74.2 do not apply to any income, gain or loss derived in a particular taxation year from transferred property or from property substituted therefor if 
  (a) at the time of the transfer the fair market value of the transferred property did not exceed the fair market value of the property received by the transferor as consideration for the transferred property; 
  (b) where the consideration received by the transferor included indebtedness, 
  (i) interest was charged on the indebtedness at a rate equal to or greater than the lesser of 
  (A) the prescribed rate that was in effect at the time the indebtedness was incurred, and 
  (B) the rate that would, having regard to all the circumstances, have been agreed on, at the time the indebtedness was incurred, between parties dealing with each other at arm’s length, 
  (ii) the amount of interest that was payable in respect of the particular year in respect of the indebtedness was paid not later than 30 days after the end of the particular year, and 
  (iii) the amount of interest that was payable in respect of each taxation year preceding the particular year in respect of the indebtedness was paid not later than 30 days after the end of each such taxation year; and 
  (c) where the property was transferred to or for the benefit of the transferor’s spouse or common-law partner, the transferor elected in the transferor’s return of income under this Part for the taxation year in which the property was transferred not to have the provisions of subsection 73(1) apply. 
  
  ### Loans for value
  
  (2) Notwithstanding any other provision of this Act, subsections 74.1(1) and (2) and section 74.2 do not apply to any income, gain or loss derived in a particular taxation year from lent property or from property substituted therefor if 
  (a) interest was charged on the loan at a rate equal to or greater than the lesser of 
  (i) the prescribed rate that was in effect at the time the loan was made, and 
  (ii) the rate that would, having regard to all the circumstances, have been agreed on, at the time the loan was made, between parties dealing with each other at arm’s length; 
  (b) the amount of interest that was payable in respect of the particular year in respect of the loan was paid not later than 30 days after the end of the particular year; and 
  (c) the amount of interest that was payable in respect of each taxation year preceding the particular year in respect of the loan was paid not later than 30 days after the end of each such taxation year. 
  
  ### Spouses or common-law partners living apart
  
  (3) Notwithstanding subsection 74.1(1) and section 74.2, where an individual has lent or transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person who is the individual’s spouse or common-law partner or who has since become the individual’s spouse or common-law partner, 
  (a) subsection 74.1(1) does not apply with respect to any income or loss from the property, or property substituted therefor, that relates to the period throughout which the individual is living separate and apart from that person by reason of a breakdown of their marriage or common-law partnership; and 
  (b) section 74.2 does not apply to a disposition of the property, or property substituted therefor, occurring at any time while the individual is living separate and apart from that person because of a breakdown of their marriage or common-law partnership, if an election completed jointly with that person not to have that section apply is filed with the individual’s return of income under this Part for the taxation year that includes that time or for any preceding taxation year. 
  
  ### Idem
  
  (4) No amount shall be included in computing the income of an individual under subsection 74.4(2) in respect of a designated person in respect of the individual who is the spouse or common-law partner of the individual for any period throughout which the individual is living separate and apart from the designated person by reason of a breakdown of their marriage or common-law partnership. 
  
  ### Definition of 
  *designated person* 
  
  (5) For the purposes of this section, 
  *designated person*, in respect of an individual, means a person  
  (a) who is the spouse or common-law partner of the individual; or 
  (b) who is under 18 years of age and who 
  (i) does not deal with the individual at arm’s length, or 
  (ii) is the niece or nephew of the individual. 
  
  ### Back to back loans and transfers
  
  (6) Where an individual has lent or transferred property 
  (a) to another person and that property, or property substituted therefor, is lent or transferred by any person (in this subsection referred to as a “third party”) directly or indirectly to or for the benefit of a specified person with respect to the individual, or 
  (b) to another person on condition that property be lent or transferred by any person (in this subsection referred to as a “third party”) directly or indirectly to or for the benefit of a specified person with respect to the individual, the following rules apply: 
  (c) for the purposes of sections 74.1, 74.2, 74.3 and 74.4, the property lent or transferred by the third party shall be deemed to have been lent or transferred, as the case may be, by the individual to or for the benefit of the specified person, and 
  (d) for the purposes of subsection 74.5(1), the consideration received by the third party for the transfer of the property shall be deemed to have been received by the individual. 
  
  ### Guarantees
  
  (7) Where an individual is obligated, either absolutely or contingently, to effect any undertaking including any guarantee, covenant or agreement given to ensure the repayment, in whole or in part, of a loan made by any person (in this subsection referred to as the “third party”) directly or indirectly to or for the benefit of a specified person with respect to the individual or the payment, in whole or in part, of any interest payable in respect of the loan, the following rules apply: 
  (a) for the purposes of sections 74.1, 74.2, 74.3 and 74.4, the property lent by the third party shall be deemed to have been lent by the individual to or for the benefit of the specified person; and 
  (b) for the purposes of paragraphs 74.5(2)(b) and (c), the amount of interest that is paid in respect of the loan shall be deemed not to include any amount paid by the individual to the third party as interest on the loan. 
  
  ### Definition of 
  *specified person* 
  
  (8) For the purposes of subsections 74.5(6) and (7), 
  *specified person*, with respect to an individual, means  
  (a) a designated person in respect of the individual; or 
  (b) a corporation, other than a small business corporation, of which a designated person in respect of the individual would have been a specified shareholder if the definition 
  *specified shareholder* in subsection 248(1) were read without reference to paragraphs (a) and (d) of that definition.  
  
  ### Transfers or loans to a trust
  
  (9) Where a taxpayer has lent or transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to a trust in which another taxpayer is beneficially interested, the taxpayer shall, for the purposes of this section and sections 74.1 to 74.4, be deemed to have lent or transferred the property, as the case may be, to or for the benefit of the other taxpayer. 
  (10)  [Repealed, 1994, c. 7, Sch. VIII, s. 30]  
  
  ### Artificial transactions
  
  (11) Notwithstanding any other provision of this Act, sections 74.1 to 74.4 do not apply to a transfer or loan of property where it may reasonably be concluded that one of the main reasons for the transfer or loan was to reduce the amount of tax that would, but for this subsection, be payable under this Part on the income and gains derived from the property or from property substituted therefor. 
  
  ### Where ss. 74.1 to 74.3 do not apply
  
  (12) Sections 74.1, 74.2 and 74.3 do not apply in respect of a transfer by an individual of property 
  (a) as a payment of a premium under a registered retirement savings plan under which the individual’s spouse or common-law partner is, immediately after the transfer, the annuitant (within the meaning of subsection 146(1)) to the extent that the premium is deductible in computing the income of the individual for a taxation year; 
  (a.1)  [Repealed, 2011, c. 24, s. 17]  
  (a.2) as a payment of a contribution under a registered disability savings plan; 
  (b) as or on account of an amount paid by the individual to another individual who is the individual’s spouse or common-law partner or a person who was under 18 years of age in a taxation year and who 
  (i) does not deal with the individual at arm’s length, or 
  (ii) is the niece or nephew of the individual, that is deductible in computing the individual’s income for the year and is required to be included in computing the income of the other individual; 
  (c) to the individual’s spouse or common-law partner, 
  (i) while the property, or property substituted for it, is held under a TFSA of which the spouse or common-law partner is the holder, and 
  (ii) to the extent that the spouse or common-law partner does not, at the time of the contribution of the property under the TFSA, have an excess TFSA amount (as defined in subsection 207.01(1)); or 
  (d) as a payment of a contribution under a FHSA. 
  
  ### Exception from attribution rules
  
  (13) Subsections 74.1(1) and (2), 74.3(1) and 75(2) of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, do not apply to any amount that is included in computing a specified individual’s split income for a taxation year.  
  
  ### Trusts
  
  75 (2) If a trust, that is resident in Canada and that was created in any manner whatever since 1934, holds property on condition 
  (a) that it or property substituted therefor may 
  (i) revert to the person from whom the property or property for which it was substituted was directly or indirectly received (in this subsection referred to as “the person”), or 
  (ii) pass to persons to be determined by the person at a time subsequent to the creation of the trust, or 
  (b) that, during the existence of the person, the property shall not be disposed of except with the person’s consent or in accordance with the person’s direction, any income or loss from the property or from property substituted for the property, and any taxable capital gain or allowable capital loss from the disposition of the property or of property substituted for the property, shall, during the existence of the person while the person is resident in Canada, be deemed to be income or a loss, as the case may be, or a taxable capital gain or allowable capital loss, as the case may be, of the person. 
  
  ### Exceptions
  
  (3) Subsection 75(2) does not apply to property held in a taxation year 
  (a) by a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan, a retirement compensation arrangement or a TFSA; 
  (b) by an employee life and health trust, an employee trust, a private foundation that is a registered charity, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described by paragraph (a.1) of the definition 
  *trust* in subsection 108(1), or a trust described by paragraph 149(1)(y);  
  (c) by a qualifying environmental trust; or 
  (c.1) to (c.3)  [Repealed, 2013, c. 40, s. 35]  
  (d) by a trust if 
  (i) the trust acquired the property, or other property for which the property is a substitute, from a particular individual, 
  (ii) the particular individual acquired the property or the other property, as the case may be, in respect of another individual as a consequence of the operation of subsection 122.61(1) or under section 4 of the Universal Child Care Benefit Act, and  
  (iii) the trust has no beneficiaries (as defined in subsection 108(1)) who may for any reason receive directly from the trust any of the income or capital of the trust other than individuals in respect of whom the particular individual acquired property as a consequence of the operation of a provision described in subparagraph (ii).  
  
  ### Gain or loss deemed that of transferor
  
  75.1 (1) Where 
  (a) subsection 73(3) or (4) applied to the transfer of property (in this subsection referred to as “transferred property”) by a taxpayer to a child of the taxpayer, 
  (b) the transfer was made at less than the fair market value of the transferred property immediately before the time of the transfer, and 
  (c) in a taxation year, the transferee disposed of the transferred property and did not, before the end of that year, attain the age of 18 years, the following rules apply: 
  (d) the amount, if any, by which 
  (i) the total of the transferee’s taxable capital gains for the year from dispositions of transferred property exceeds 
  (ii) the total of the transferee’s allowable capital losses for the year from dispositions of transferred property, shall during the lifetime of the transferor while the transferor is resident in Canada, be deemed to be a taxable capital gain of the transferor for the year from the disposition of property, 
  (e) the amount, if any, by which the total determined under subparagraph 75.1(1)(d)(ii) exceeds the total determined under subparagraph 75.1(1)(d)(i) shall, during the lifetime of the transferor while the transferor is resident in Canada, be deemed to be an allowable capital loss of the transferor for the year from the disposition of property, and 
  (f) any taxable capital gain or allowable capital loss taken into account in computing an amount described in paragraph 75.1(1)(d) or the amount described in paragraph 75.1(1)(e) shall, except for the purposes of those paragraphs, to the extent that the amount so described is deemed by virtue of this subsection to be a taxable capital gain or an allowable capital loss of the transferor, be deemed not to be a taxable capital gain or an allowable capital loss, as the case may be, of the transferee. 
  
  ### Definition of 
  *child* 
  
  (2) For the purposes of this section, 
  *child* of a taxpayer includes a child of the taxpayer’s child and a child of the taxpayer’s child’s child.  
  
  ### Rules applicable with respect to “qualifying trust annuity”
  
  75.2 If an amount paid to acquire a qualifying trust annuity with respect to a taxpayer was deductible under paragraph 60(l) in computing the taxpayer’s income, 
  (a) any amount that is paid out of or under the annuity at any particular time after 2005 and before the death of the taxpayer is deemed to have been received out of or under the annuity at the particular time by the taxpayer, and not to have been received by any other taxpayer; and 
  (b) if the taxpayer dies after 2005 
  (i) an amount equal to the fair market value of the annuity at the time of the taxpayer’s death is deemed to have been received, immediately before the taxpayer’s death, by the taxpayer out of or under the annuity, and 
  (ii) for the purpose of subsection 70(5), the annuity is to be disregarded in determining the fair market value (immediately before the taxpayer’s death) of the taxpayer’s interest in the trust that is the annuitant under the annuity. 
  
  ### Security in satisfaction of income debt
  
  76 (1) Where a person receives a security or other right or a certificate of indebtedness or other evidence of indebtedness wholly or partially as payment of, in lieu of payment of or in satisfaction of, a debt that is then payable, the amount of which debt would be included in computing the person’s income if it were paid, the value of the security, right or indebtedness or the applicable portion thereof shall, notwithstanding the form or legal effect of the transaction, be included in computing the person’s income for the taxation year in which it is received. 
  
  ### Idem
  
  (2) Where a security or other right or a certificate of indebtedness or other evidence of indebtedness is received by a person wholly or partially as payment of, in lieu of payment of or in satisfaction of, a debt before the debt is payable, but is not itself payable or redeemable before the day on which the debt is payable, it shall, for the purpose of subsection 76(1), be deemed to be received by the person holding it at that time when the debt becomes payable. 
  
  ### Section enacted for greater certainty
  
  (3) This section is enacted for greater certainty and shall not be construed as limiting the generality of the other provisions of this Part by which amounts are required to be included in computing income. 
  
  ### Debt deemed not to be income debt
  
  (4) Where a cash purchase ticket or other form of settlement prescribed pursuant to the Canada Grain Act or by the Minister is issued to a taxpayer in respect of grain delivered in a taxation year of a taxpayer to a primary elevator or process elevator and the ticket or other form of settlement entitles the holder thereof to payment by the operator of the elevator of the purchase price, without interest, stated in the ticket for the grain at a date that is after the end of that taxation year, the amount of the purchase price stated in the ticket or other form of settlement shall, notwithstanding any other provision of this section, be included in computing the income of the taxpayer to whom the ticket or other form of settlement was issued for the taxpayer’s taxation year immediately following the taxation year in which the grain was delivered and not for the taxation year in which the grain was delivered.  
  
  ### Definitions of certain expressions
  
  (5) In subsection (4), the expressions 
  *cash purchase ticket*, 
  *operator*, 
  *primary elevator* and 
  *process elevator* have the meanings assigned by the Canada Grain Act, and 
  *grain* means wheat, oats, barley, rye, flaxseed, rapeseed and canola produced in Canada.  
  
  ### Non-resident moving debt from Canadian business
  
  76.1 (1) If at any time a debt obligation of a non-resident taxpayer that is denominated in a foreign currency ceases to be an obligation of the taxpayer in respect of a business or part of a business carried on by the taxpayer in Canada immediately before that time (other than an obligation in respect of which the taxpayer ceased to be indebted at that time), for the purpose of determining the amount of any income, loss, capital gain or capital loss due to the fluctuation in the value of the foreign currency relative to Canadian currency, the taxpayer is deemed to have settled the debt obligation immediately before that time at the amount outstanding on account of its principal amount. 
  
  ### Non-resident assuming debt
  
  (2) If at any time a debt obligation of a non-resident taxpayer that is denominated in a foreign currency becomes an obligation of the taxpayer in respect of a business or part of a business that the taxpayer carries on in Canada after that time (other than an obligation in respect of which the taxpayer became indebted at that time), the amount of any income, loss, capital gain or capital loss in respect of the obligation due to the fluctuation in the value of the foreign currency relative to Canadian currency shall be determined based on the amount of the obligation in Canadian currency at that time. 
  77  [Repealed, 1995, c. 21, s. 52]  
  
  ### Unpaid amounts
  
  78 (1) Where an amount in respect of a deductible outlay or expense that was owing by a taxpayer to a person with whom the taxpayer was not dealing at arm’s length at the time the outlay or expense was incurred and at the end of the second taxation year following the taxation year in which the outlay or expense was incurred, is unpaid at the end of that second taxation year, either 
  (a) the amount so unpaid shall be included in computing the taxpayer’s income for the third taxation year following the taxation year in which the outlay or expense was incurred, or 
  (b) where the taxpayer and that person have filed an agreement in prescribed form on or before the day on or before which the taxpayer is required by section 150 to file the taxpayer’s return of income for the third succeeding taxation year, for the purposes of this Act the following rules apply: 
  (i) the amount so unpaid shall be deemed to have been paid by the taxpayer and received by that person on the first day of that third taxation year, and section 153, except subsection 153(3), is applicable to the extent that it would apply if that amount were being paid to that person by the taxpayer, and 
  (ii) that person shall be deemed to have made a loan to the taxpayer on the first day of that third taxation year in an amount equal to the amount so unpaid minus the amount, if any, deducted or withheld therefrom by the taxpayer on account of that person’s tax for that third taxation year. 
  
  ### Idem
  
  (2) Where an amount in respect of a deductible outlay or expense that was owing by a taxpayer that is a corporation to a person with whom the taxpayer was not dealing at arm’s length is unpaid at the time when the taxpayer is wound up, and the taxpayer is wound up before the end of the second taxation year following the taxation year in which the outlay or expense was incurred, the amount so unpaid shall be included in computing the taxpayer’s income for the taxation year in which it was wound up. 
  
  ### Late filing
  
  (3) Where, in respect of an amount described in subsection 78(1) that was owing by a taxpayer to a person, an agreement in a form prescribed for the purposes of this section is filed after the day on or before which the agreement is required to be filed for the purposes of paragraph 78(1)(b), both paragraphs 78(1)(a) and (b) apply in respect of the said amount, except that paragraph 78(1)(a) shall be read and construed as requiring 25% only of the said amount to be included in computing the taxpayer’s income. 
  
  ### Unpaid remuneration and other amounts
  
  (4) Where an amount in respect of a taxpayer’s expense that is a superannuation or pension benefit, a retiring allowance, salary, wages or other remuneration (other than reasonable vacation or holiday pay or a deferred amount under a salary deferral arrangement) in respect of an office or employment is unpaid on the day that is 180 days after the end of the taxation year in which the expense was incurred, for the purposes of this Act other than this subsection, the amount shall be deemed not to have been incurred as an expense in the year and shall be deemed to be incurred as an expense in the taxation year in which the amount is paid. 
  
  ### Where s. (1) does not apply
  
  (5) Subsection 78(1) does not apply in any case where subsection (4) applies. 
  
  ### Definitions
  
  79 (1) In this section,  
  *creditor* of a particular person includes a person to whom the particular person is obligated to pay an amount under a mortgage, hypothecary claim or similar obligation and, where property was sold to the particular person under a conditional sales agreement, the seller of the property (or any assignee with respect to the agreement) is deemed to be a creditor of the particular person in respect of that property; (créancier)   
  *debt* includes an obligation to pay an amount under a mortgage, hypothecary claim or similar obligation or under a conditional sales agreement; (dette)   
  *person* includes a partnership; (personne)   
  *property* does not include  
  (a) money, or 
  (b) indebtedness owed by or guaranteed by the government of a country, or a province, state, or other political subdivision of that country; ( bien)   
  *specified amount* at any time of a debt owed or assumed by a person means  
  (a) the unpaid principal amount of the debt at that time, and 
  (b) unpaid interest accrued to that time on the debt. ( montant déterminé)  
  
  ### Surrender of property
  
  (2) For the purposes of this section, a property is surrendered at any time by a person to another person where the beneficial ownership of the property is acquired or reacquired at that time from the person by the other person and the acquisition or reacquisition of the property was in consequence of the person’s failure to pay all or part of one or more specified amounts of debts owed by the person to the other person immediately before that time. 
  
  ### Proceeds of disposition for debtor
  
  (3) Where a particular property is surrendered at any time by a person (in this subsection referred to as the “debtor”) to a creditor of the debtor, the debtor’s proceeds of disposition of the particular property shall be deemed to be the amount determined by the formula is the total of all specified amounts of debts of the debtor that are in respect of properties surrendered at that time by the debtor to the creditor and that are owing immediately before that time to the creditor; is the total of all amounts each of which is a specified amount of a debt that is owed by the debtor immediately before that time to a person (other than the creditor), to the extent that the amount ceases to be owing by the debtor as a consequence of properties being surrendered at that time by the debtor to the creditor; is the total of all amounts each of which is a specified amount of a particular debt that is owed by the debtor immediately before that time to a person (other than a specified amount included in the amount determined for A or B as a consequence of properties being surrendered at that time by the debtor to the creditor), where 
  (a) any property surrendered at that time by the debtor to the creditor was security for 
  (i) the particular debt, and 
  (ii) another debt that is owed by the debtor immediately before that time to the creditor, and 
  (b) the other debt is subordinate to the particular debt in respect of that property; is 
  (a) where a specified amount of a debt owed by the debtor immediately before that time to a person (other than the creditor) ceases, as a consequence of the surrender at that time of properties by the debtor to the creditor, to be secured by all properties owned by the debtor immediately before that time, the lesser of 
  (i) the amount, if any, by which the total of all such specified amounts exceeds the portion of that total included in any of the amounts determined for B or C as a consequence of properties being surrendered at that time by the debtor to the creditor, and 
  (ii) the amount, if any, by which the total cost amount to the debtor of all properties surrendered at that time by the debtor to the creditor exceeds the total amount that would, but for this description and the description of F, be determined under this subsection as a consequence of the surrender, and 
  (b) in any other case, nil; is 
  (a) where the particular property is surrendered at that time by the debtor in circumstances in which paragraph 69(1)(b) would, but for this subsection, apply and the fair market value of all properties surrendered at that time by the debtor to the creditor exceeds the amount that would, but for this description and the description of F, be determined under this subsection as a consequence of the surrender, that excess, and 
  (b) in any other case, nil; is the total of all amounts each of which is the lesser of 
  (a) the portion of a particular specified amount of a particular debt included in the amount determined for A, B, C or D in computing the debtor’s proceeds of disposition of the particular property, and 
  (b) the total of 
  (i) all amounts included under paragraph 6(1)(a) or subsection 15(1) in computing the income of any person because the particular debt was settled, or deemed by subsection 80.01(8) to have been settled, at or before the end of the taxation year that includes that time, 
  (ii) all amounts renounced under subsection 66(10), (10.1), (10.2) or (10.3) by the debtor in respect of the particular debt, 
  (iii) all amounts each of which is a forgiven amount (within the meaning assigned by subsection 80(1)) in respect of the debt at a previous time that the particular debt was deemed by subsection 80.01(8) to have been settled, 
  (iv) where the particular debt is an excluded obligation (within the meaning assigned by subsection 80(1)), the particular specified amount, and 
  (v) the lesser of 
  (A) the unpaid interest accrued to that time on the particular debt, and 
  (B) the total of 
  (I) the amount, if any, by which the total of all amounts included because of section 80.4 in computing the debtor’s income for the taxation year that includes that time or for a preceding taxation year in respect of interest on the particular debt exceeds the total of all amounts paid before that time on account of interest on the particular debt, and 
  (II) such portion of that unpaid interest as would, if it were paid, be included in the amount determined under paragraph 28(1)(e) in respect of the debtor; is the fair market value at that time of the particular property; and is the fair market value at that time of all properties surrendered by the debtor to the creditor at that time. 
  
  ### Subsequent payment by debtor
  
  (4) An amount paid at any time by a person as, on account of or in satisfaction of, a specified amount of a debt that can reasonably be considered to have been included in the amount determined for A, C or D in subsection 79(3) in respect of a property surrendered before that time by the person shall be deemed to be a repayment of assistance, at that time in respect of the property, to which 
  (a) subsection 39(13) applies, where the property was capital property (other than depreciable property) of the person immediately before its surrender; 
  (b) paragraph 20(1)(hh.1) applies, where the cost of the property to the person was an eligible capital expenditure at the time the property was acquired; 
  (c) the description of E in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6), the description of D in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) or the description of D in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5), as the case may be, applies, where the cost of the property to the person was a Canadian exploration expense, a Canadian development expense or a Canadian oil and gas property expense; or  
  (d) paragraph 20(1)(hh) applies, in any other case. 
  
  ### Subsequent application with respect to employee or shareholder debt
  
  (5) Any amount included under paragraph 6(1)(a) or subsection 15(1) in computing a person’s income for a taxation year that can reasonably be considered to have been included in the amount determined for A, C or D in subsection 79(3) as a consequence of properties being surrendered before the year by the person shall be deemed to be a repayment by the person, immediately before the end of the year, of assistance to which subsection 79(4) applies. 
  
  ### Surrender of property not payment or repayment by debtor
  
  (6) Where a specified amount of a debt is included in the amount determined at any time for A, B, C or D in subsection 79(3) in respect of a property surrendered at that time by a person to a creditor of the person, for the purpose of computing the person’s income, no amount shall be considered to have been paid or repaid by the person as a consequence of the acquisition or reacquisition of the surrendered property by the creditor. 
  
  ### Foreign exchange
  
  (7) Where a debt is denominated in a currency (other than Canadian currency), any amount determined for A, B, C or D in subsection 79(3) in respect of the debt shall be determined with reference to the relative value of that currency and Canadian currency at the time the debt was issued. 
  
  ### Definitions
  
  79.1 (1) In this section,  
  *creditor* has the meaning assigned by subsection 79(1); (créancier)   
  *debt* has the meaning assigned by subsection 79(1); (dette)   
  *person* has the meaning assigned by subsection 79(1); (personne)   
  *property* has the meaning assigned by subsection 79(1); (bien)   
  *specified amount* has the meaning assigned by subsection 79(1); (montant déterminé)   
  *specified cost* to a person of a debt owing to the person means  
  (a) where the debt is capital property of the person, the adjusted cost base to the person of the debt, and 
  (b) in any other case, the amount, if any, by which 
  (i) the cost amount to the person of the debt exceeds 
  (ii) such portion of that cost amount as would be deductible in computing the person’s income (otherwise than in respect of the principal amount of the debt) if the debt were established by the person to have become a bad debt or to have become uncollectable. ( coût déterminé)  
  
  ### Seizure of property
  
  (2) Subject to subsection (2.1) and for the purpose of this section, a property is seized at any time by a person in respect of a debt where 
  (a) the beneficial ownership of the property is acquired or reacquired at that time by the person; and 
  (b) the acquisition or reacquisition of the property is in consequence of another person’s failure to pay to the person all or part of the specified amount of the debt. 
  
  ### Exception
  
  (2.1) For the purpose of this section, foreign resource property is deemed not to be seized at any time from 
  (a) an individual or a corporation, if the individual or corporation is non-resident at that time; or 
  (b) a partnership (other than a partnership each member of which is resident in Canada at that time). 
  
  ### Creditor’s capital gains reserves
  
  (3) Where a property is seized at any time in a particular taxation year by a creditor in respect of a debt, for the purpose of computing the income of the creditor for the particular year, the amount claimed by the creditor under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in computing the creditor’s gain for the preceding taxation year from any disposition before the particular year of the property shall be deemed to be the amount, if any, by which the amount so claimed exceeds the total of all amounts each of which is an amount determined under paragraph 79.1(6)(a) or 79.1(6)(b) in respect of the seizure. 
  
  ### Creditor’s inventory reserves
  
  (4) Where a property is seized at any time in a particular taxation year by a creditor in respect of a debt, for the purpose of computing the income of the creditor for the particular year, the amount deducted under paragraph 20(1)(n) in computing the income of the creditor for the preceding taxation year in respect of any disposition of the property before the particular year shall be deemed to be the amount, if any, by which the amount so deducted exceeds the total of all amounts each of which is an amount determined under paragraph 79.1(6)(a) or 79.1(6)(b) in respect of the seizure. 
  
  ### Adjustment where disposition and reacquisition of capital property in same year
  
  (5) Where a property is seized at any time in a taxation year by a creditor in respect of one or more debts and the property was capital property of the creditor that was disposed of by the creditor at a previous time in the year, the proceeds of disposition of the property to the creditor at the previous time shall be deemed to be the lesser of the amount of the proceeds (determined without reference to this subsection) and the amount that is the greater of 
  (a) the amount, if any, by which the amount of such proceeds (determined without reference to this subsection) exceeds such portion of the proceeds as is represented by the specified amounts of those debts immediately before that time, and 
  (b) the cost amount to the creditor of the property immediately before the previous time. 
  
  ### Cost of seized properties for creditor
  
  (6) Where a particular property is seized at any time in a taxation year by a creditor in respect of one or more debts, the cost to the creditor of the particular property shall be deemed to be the amount, if any, by which the total of 
  (a) that proportion of the total specified costs immediately before that time to the creditor of those debts that 
  (i) the fair market value of the particular property immediately before that time is of 
  (ii) the fair market value of all properties immediately before that time that were seized by the creditor at that time in respect of those debts, and 
  (b) all amounts each of which is an outlay or expense made or incurred, or a specified amount at that time of a debt that is assumed, by the creditor at or before that time to protect the creditor’s interest, or for civil law the creditor’s right, in the particular property, except to the extent the outlay or expense 
  (i) was included in the cost to the creditor of property other than the particular property, 
  (ii) was included before that time in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts of the creditor, or 
  (iii) was deductible in computing the creditor’s income for the year or a preceding taxation year exceeds 
  (c) the amount, if any, claimed or deducted under paragraph 20(1)(n) or subparagraph 40(1)(a)(iii) or 44(1)(e)(iii), as the case may be, in respect of the particular property in computing the creditor’s income or capital gain for the preceding taxation year or the amount by which the proceeds of disposition of the creditor of the particular property are reduced because of subsection 79.1(5) in respect of a disposition of the particular property by the creditor occurring before that time and in the year. 
  
  ### Treatment of debt
  
  (7) Where a property is seized at any time in a taxation year by a creditor in respect of a particular debt, 
  (a) the creditor shall be deemed to have disposed of the particular debt at that time; 
  (b) the amount received on account of the particular debt as a consequence of the seizure shall be deemed 
  (i) to be received at that time, and 
  (ii) to be equal to 
  (A) where the particular debt is capital property, the adjusted cost base to the creditor of the particular debt, and 
  (B) in any other case, the cost amount to the creditor of the particular debt; 
  (c) where any portion of the particular debt is outstanding immediately after that time, the creditor shall be deemed to have reacquired that portion immediately after that time at a cost equal to 
  (i) where the particular debt is capital property, nil, and 
  (ii) in any other case, the amount, if any, by which 
  (A) the cost amount to the creditor of the particular debt exceeds 
  (B) the specified cost to the creditor of the particular debt; and 
  (d) where no portion of the particular debt is outstanding immediately after that time and the particular debt is not capital property, the creditor may deduct as a bad debt in computing the creditor’s income for the year the amount described in subparagraph 79.1(7)(c)(ii) in respect of the seizure. 
  
  ### Claims for debts
  
  (8) Where a property is seized at any time in a taxation year by a creditor in respect of a debt, no amount in respect of the debt 
  (a) is deductible in computing the creditor’s income for the year or a subsequent taxation year as a bad, doubtful or impaired debt; or 
  (b) shall be included after that time in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts of the creditor as a bad, doubtful or impaired debt. 
  
  ### Definitions
  
  80 (1) In this section,  
  *commercial debt obligation* issued by a debtor means a debt obligation issued by the debtor  
  (a) where interest was paid or payable by the debtor in respect of it pursuant to a legal obligation, or 
  (b) if interest had been paid or payable by the debtor in respect of it pursuant to a legal obligation, an amount in respect of the interest was or would have been deductible in computing the debtor’s income, taxable income or taxable income earned in Canada, as the case may be, if this Act were read without reference to paragraph 18(1)(g), subsections 18(2), (3.1) and (4) and section 21; ( créance commerciale)   
  *commercial obligation* issued by a debtor means  
  (a) a commercial debt obligation issued by the debtor, or 
  (b) a distress preferred share issued by the debtor; ( dette commerciale)   
  *debtor* includes any corporation that has issued a distress preferred share and any partnership; (débiteur)   
  *directed person* at any time in respect of a debtor means  
  (a) a taxable Canadian corporation or an eligible Canadian partnership by which the debtor is controlled at that time, or 
  (b) a taxable Canadian corporation or an eligible Canadian partnership that is controlled at that time by 
  (i) the debtor, 
  (ii) the debtor and one or more persons related to the debtor, or 
  (iii) a person or group of persons by which the debtor is controlled at that time; ( personne désignée)   
  *distress preferred share* issued by a corporation means, at any time, a share issued after February 21, 1994 (other than a share issued pursuant to an agreement in writing entered into on or before that date) by the corporation that is a share described in paragraph (e) of the definition 
  *term preferred share* in subsection 248(1) that would be a term preferred share at that time if that definition were read without reference to paragraphs (e) and (f); (action privilégiée de renflouement)   
  *eligible Canadian partnership* at any time means a Canadian partnership none of the members of which is, at that time,  
  (a) a non-resident owned investment corporation, 
  (b) a person exempt, because of subsection 149(1), from tax under this Part on all or part of the person’s taxable income, 
  (c) a partnership, other than an eligible Canadian partnership, or 
  (d) a trust, other than a trust in which no non-resident person and no person described in paragraph (a), (b) or (c) is beneficially interested; ( société de personnes canadienne admissible)   
  *excluded obligation* means an obligation issued by a debtor where  
  (a) the proceeds from the issue of the obligation 
  (i) were included in computing the debtor’s income or, but for the expression “other than a prescribed amount” in paragraph 12(1)(x), would have been so included, 
  (ii) were deducted in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts, or 
  (iii) were deducted in computing the capital cost or cost amount to the debtor of any property of the debtor, 
  (b) an amount paid by the debtor in satisfaction of the entire principal amount of the obligation would be included in the amount determined under paragraph 28(1)(e) or section 30 in respect of the debtor, 
  (c) section 78 applies to the obligation, or 
  (d) the principal amount of the obligation would, if this Act were read without reference to sections 79 and 80 and the obligation were settled without any amount being paid in satisfaction of its principal amount, be included in computing the debtor’s income because of the settlement of the obligation; ( dette exclue)   
  *excluded property* means property of a non-resident debtor that is treaty-protected property or that is not taxable Canadian property; (bien exclu)   
  *excluded security* issued by a corporation to a person as consideration for the settlement of a debt means  
  (a) a distress preferred share issued by the corporation to the person, or 
  (b) a share issued by the corporation to the person under the terms of the debt, where the debt was a bond, debenture or note listed on a designated stock exchange in Canada and the terms for the conversion to the share were not established or substantially modified after the later of February 22, 1994 and the time that the bond, debenture or note was issued; ( valeur mobilière exclue)   
  *forgiven amount* at any time in respect of a commercial obligation issued by a debtor is the amount determined by the formula  is the lesser of the amount for which the obligation was issued and the principal amount of the obligation, and is the total of 
  (a) the amount, if any, paid at that time in satisfaction of the principal amount of the obligation, 
  (b) the amount, if any, included under paragraph 6(1)(a) or subsection 15(1) in computing the income of any person because of the settlement of the obligation at that time, 
  (c) the amount, if any, deducted at that time under paragraph 18(9.3)(f) in computing the forgiven amount in respect of the obligation, 
  (d) the capital gain, if any, of the debtor resulting from the application of subsection 39(3) to the purchase at that time of the obligation by the debtor, 
  (e) such portion of the principal amount of the obligation as relates to an amount renounced under subsection 66(10), 66(10.1), 66(10.2) or 66(10.3) by the debtor, 
  (f) any portion of the principal amount of the obligation that is included in the amount determined for A, B, C or in subsection 79(3) in respect of the debtor for the taxation year of the debtor that includes that time or for a preceding taxation year, 
  (g) the total of all amounts each of which is a forgiven amount at a previous time that the obligation was deemed by subsection 80.01(8) or 80.01(9) to have been settled, 
  (h) such portion of the principal amount of the obligation as can reasonably be considered to have been included under section 80.4 in computing the debtor’s income for a taxation year that includes that time or for a preceding taxation year, 
  (i) where the debtor is a bankrupt at that time, the principal amount of the obligation, 
  (j) such portion of the principal amount of the obligation as represents the principal amount of an excluded obligation, 
  (k) where the debtor is a partnership and the obligation was, since the later of the creation of the partnership or the issue of the obligation, always payable to a member of the partnership actively engaged, on a regular, continuous and substantial basis, in those activities of the partnership that are other than the financing of the partnership business, the principal amount of the obligation, and 
  (l) the amount, if any, given at or before that time by the debtor to another person as consideration for the assumption by the other person of the obligation; ( montant remis)   
  *person* includes a partnership; (personne)   
  *relevant loss balance*, at a particular time for a commercial obligation and in respect of a debtor’s non-capital loss, farm loss, restricted farm loss or net capital loss, as the case may be, for a particular taxation year, is  
  (a) subject to paragraph (b), the amount of such loss that would be deductible in computing the debtor’s taxable income or taxable income earned in Canada, as the case may be, for the taxation year that includes that time if 
  (i) the debtor had sufficient incomes from all sources and sufficient taxable capital gains, 
  (ii) subsections (3) and (4) did not apply to reduce such loss at or after that time, and 
  (iii) paragraph 111(4)(a) and subsection 111(5) did not apply to the debtor, and 
  (b) nil if the debtor is a taxpayer that was at a previous time subject to a loss restriction event and the particular year ended before the previous time, unless 
  (i) the obligation was issued by the debtor before, and not in contemplation of, the loss restriction event, or 
  (ii) all or substantially all of the proceeds from the issue of the obligation were used to satisfy the principal amount of another obligation to which subparagraph (i) or this subparagraph would apply if the other obligation were still outstanding; ( solde de pertes applicable)   
  *successor pool* at any time for a commercial obligation and in respect of an amount determined in relation to a debtor means the portion of that amount that would be deductible under subsection 66.7(2), (2.3), (3), (4) or (5), as the case may be, in computing the debtor’s income for the taxation year that includes that time, if  
  (a) the debtor had sufficient incomes from all sources, 
  (b) subsection (8) did not apply to reduce the amount so determined at that time, 
  (c) the year ended immediately after that time, and 
  (d) paragraphs 66.7(2.3)(a), (4)(a) and (5)(a) were read without reference to the expressions “30% of”, “30% of” and “10% of”, respectively, except that the successor pool at that time for the obligation is deemed to be nil unless 
  (e) the obligation was issued by the debtor before, and not in contemplation of, the event described in paragraph (8)(a) that gives rise to the deductibility under subsection 66.7(2), (2.3), (3), (4) or (5), as the case may be, of all or part of that amount in computing the debtor’s income, or 
  (f) all or substantially all of the proceeds from the issue of the obligation were used to satisfy the principal amount of another obligation to which paragraph (e) or this paragraph would apply if the other obligation were still outstanding; ( compte de société remplaçante)   
  *unrecognized loss*, at a particular time, in respect of an obligation issued by a debtor, from the disposition of a property, is the amount that would, but for subparagraph 40(2)(g)(ii), be a capital loss from the disposition by the debtor at or before the particular time of a debt or other right to receive an amount, except that if the debtor is a taxpayer that is subject to a loss restriction event before the particular time and after the time of the disposition, the unrecognized loss at the particular time in respect of the obligation is nil unless  
  (a) the obligation was issued by the debtor before, and not in contemplation of, the loss restriction event, or 
  (b) all or substantially all of the proceeds from the issue of the obligation were used to satisfy the principal amount of another obligation to which paragraph 80(1)(a) or this paragraph would apply if the other obligation were still outstanding. ( perte non constatée)  
  
  ### Application of debt forgiveness rules
  
  (2) For the purposes of this section, 
  (a) an obligation issued by a debtor is settled at any time where the obligation is settled or extinguished at that time (otherwise than by way of a bequest or inheritance or as consideration for the issue of a share described in paragraph (b) of the definition 
  *excluded security* in subsection 80(1));  
  (b) an amount of interest payable by a debtor in respect of an obligation issued by the debtor shall be deemed to be an obligation issued by the debtor that 
  (i) has a principal amount, and 
  (ii) was issued by the debtor for an amount, equal to the portion of the amount of such interest that was deductible or would, but for subsection 18(2) or 18(3.1) or section 21, have been deductible in computing the debtor’s income for a taxation year; 
  (c) subsections (3) to (5) and (8) to (13) apply in numerical order to the forgiven amount in respect of a commercial obligation; 
  (d) the applicable fraction of the unapplied portion of a forgiven amount at any time in respect of an obligation issued by the debtor is in respect of a loss for any other taxation year, the fraction required to be used under section 38 for that year; 
  (e) where an applicable fraction (as determined under paragraph 80(2)(d)) of the unapplied portion of a forgiven amount is applied under subsection 80(4) to reduce at any time a loss for a taxation year, the portion of the forgiven amount so applied shall, except for the purpose of reducing the loss, be deemed to be the quotient obtained when the amount of the reduction is divided by the applicable fraction; 
  (f)  [Repealed, 2016, c. 12, s. 23]  
  (g) where a corporation issues a share (other than an excluded security) to a person as consideration for the settlement of a debt issued by the corporation and payable to the person, the amount paid in satisfaction of the debt because of the issue of the share is deemed to be equal to the fair market value of the share at the time it was issued; 
  (g.1) where a debt issued by a corporation and payable to a person is settled at any time, the amount, if any, that can reasonably be considered to be the increase, as a consequence of the settlement of the debt, in the fair market value of shares of the capital stock of the corporation owned by the person (other than any shares acquired by the person as consideration for the settlement of the debt) is deemed to be an amount paid at that time in satisfaction of the debt; 
  (h) where any part of the consideration given by a debtor to another person for the settlement at any time of a particular commercial debt obligation issued by the debtor and payable to the other person consists of a new commercial debt obligation issued by the debtor to the other person 
  (i) an amount equal to the principal amount of the new obligation shall be deemed to be paid by the debtor at that time, because of the issue of the new obligation, in satisfaction of the principal amount of the particular obligation, and 
  (ii) the new obligation shall be deemed to have been issued for an amount equal to the amount, if any, by which 
  (A) the principal amount of the new obligation exceeds 
  (B) the amount, if any, by which the principal amount of the new obligation exceeds the amount for which the particular obligation was issued; 
  (i) where 2 or more commercial obligations issued by a debtor are settled at the same time, those obligations shall be treated as if they were settled at different times in the order designated by the debtor in a prescribed form filed with the debtor’s return of income under this Part for the debtor’s taxation year that includes that time or, if the debtor does not so designate any such order, in the order designated by the Minister; 
  (j) for the purpose of determining, at any time, whether 2 persons are related to each other or whether any person is controlled by any other person, it shall be assumed that 
  (i) each partnership and each trust is a corporation having a capital stock of a single class of voting shares divided into 100 issued shares, 
  (ii) each member of a partnership and each beneficiary under a trust owned at that time the number of issued shares of that class that is equal to the proportion of 100 that 
  (A) the fair market value at that time of the member’s interest in the partnership or the beneficiary’s interest in the trust, as the case may be is of 
  (B) the fair market value at that time of all members’ interests in the partnership or all beneficiaries’ interests in the trust, as the case may be, and 
  (iii) where a beneficiary’s share of the income or capital of a trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, the fair market value at any time of the beneficiary’s interest in the trust is equal to 
  (A) where the beneficiary is not entitled to receive or otherwise obtain the use of any of the income or capital of the trust before the death after that time of one or more other beneficiaries under the trust, nil, and 
  (B) in any other case, the total fair market value at that time of all beneficiaries’ interests under the trust; 
  (k) where an obligation is denominated in a currency (other than Canadian currency), the forgiven amount at any time in respect of the obligation shall be determined with reference to the relative value of that currency and Canadian currency at the time the obligation was issued; 
  (l) where an amount is paid in satisfaction of the principal amount of a particular commercial obligation issued by a debtor and, as a consequence of the payment, the debtor is legally obliged to pay that amount to another person, the obligation to pay that amount to the other person shall be deemed to be a commercial obligation that was issued by the debtor at the same time and in the same circumstances as the particular obligation; 
  (m) for greater certainty, the amount that can be applied under this section to reduce another amount may not exceed that other amount; 
  (n) except for the purposes of this paragraph, where 
  (i) a commercial debt obligation issued by a debtor is settled at any time, 
  (ii) the debtor is at that time a member of a partnership, and 
  (iii) the obligation was, under the agreement governing the obligation, treated immediately before that time as a debt owed by the partnership, the obligation shall be considered to have been issued by the partnership and not by the debtor; 
  (o) notwithstanding paragraph (n), if a commercial debt obligation, for which a particular person is liable with one or more other persons, is settled at any time in respect of the particular person but not in respect of all of the other persons, the portion of the obligation that can reasonably be considered to be the particular person’s share of the obligation shall be considered to have been issued by the particular person and settled at that time and not at any subsequent time; 
  (p) a commercial debt obligation issued by an individual that is outstanding at the time of the individual’s death and settled at a subsequent time shall, if the estate of the individual was liable for the obligation immediately before the subsequent time, be deemed to have been issued by the estate at the same time and in the same circumstances as the obligation was issued by the individual; and 
  (q) where a commercial debt obligation issued by an individual would, but for this paragraph, be settled at any time in the period ending 6 months after the death of an individual (or within such longer period as is acceptable to the Minister and the estate of the individual) and the estate of the individual was liable immediately before that time for the obligation 
  (i) the obligation shall be deemed to have been settled at the beginning of the day on which the individual died and not at that time, 
  (ii) any amount paid at that time by the estate in satisfaction of the principal amount of the obligation shall be deemed to have been paid at the beginning of the day on which the individual died, 
  (iii) any amount given by the estate at or before that time to another person as consideration for assumption by the other person of the obligation shall be deemed to have been given at the beginning of the day on which the individual died, and 
  (iv) paragraph 80(2)(b) shall not apply in respect of the settlement to interest that accrues within that period, except that this paragraph does not apply in circumstances in which any amount is because of the settlement included under paragraph 6(1)(a) or subsection 15(1) in computing the income of any person or in which section 79 applies in respect of the obligation. 
  
  ### Reductions of non-capital losses
  
  (3) Where a commercial obligation issued by a debtor is settled at any time, the forgiven amount at that time in respect of the obligation shall be applied to reduce at that time, in the following order, 
  (a) the debtor’s non-capital loss for each taxation year that ended before that time to the extent that the amount so applied 
  (i) does not exceed the amount (in subsection 80(4) referred to as the debtor’s “ordinary non-capital loss at that time for the year”) that would be the relevant loss balance at that time for the obligation and in respect of the debtor’s non-capital loss for the year if the description of E in the definition 
  *non-capital loss* in subsection 111(8) were read without reference to the expression “the taxpayer’s allowable business investment loss for the year”, and  
  (ii) does not, because of this subsection, reduce the debtor’s non-capital loss for a preceding taxation year; 
  (b) the debtor’s farm loss for each taxation year that ended before that time, to the extent that the amount so applied 
  (i) does not exceed the amount that is the relevant loss balance at that time for the obligation and in respect of the debtor’s farm loss for the year, and 
  (ii) does not, because of this subsection, reduce the debtor’s farm loss for a preceding taxation year; and 
  (c) the debtor’s restricted farm loss for each taxation year that ended before that time, to the extent that the amount so applied 
  (i) does not exceed the amount that is the relevant loss balance at that time for the obligation and in respect of the debtor’s restricted farm loss for the year, and 
  (ii) does not, because of this subsection, reduce the debtor’s restricted farm loss for a preceding taxation year. 
  
  ### Reductions of capital losses
  
  (4) Where a commercial obligation issued by a debtor is settled at any time, the applicable fraction of the remaining unapplied portion of a forgiven amount at that time in respect of the obligation shall be applied to reduce at that time, in the following order, 
  (a) the debtor’s non-capital loss for each taxation year that ended before that time to the extent that the amount so applied 
  (i) does not exceed the amount, if any, by which 
  (A) the relevant loss balance at that time for the obligation and in respect of the debtor’s non-capital loss for the year exceeds 
  (B) the debtor’s ordinary non-capital loss (within the meaning assigned by subparagraph 80(3)(a)(i)) at that time for the year, and 
  (ii) does not, because of this subsection, reduce the debtor’s non-capital loss for a preceding taxation year; and 
  (b) the debtor’s net capital loss for each taxation year that ended before that time, to the extent that the amount so applied 
  (i) does not exceed the relevant loss balance at that time for the obligation and in respect of the debtor’s net capital loss for the year, and 
  (ii) does not, because of this subsection, reduce the debtor’s net capital loss for a preceding taxation year. 
  
  ### Reductions with respect to depreciable property
  
  (5) Where a commercial obligation issued by a debtor is settled at any time, the remaining unapplied portion of the forgiven amount at that time in respect of the obligation shall be applied, in such manner as is designated by the debtor in a prescribed form filed with the debtor’s return of income under this Part for the taxation year that includes that time, to reduce immediately after that time the following amounts: 
  (a) the capital cost to the debtor of a depreciable property that is owned by the debtor immediately after that time; and 
  (b) the undepreciated capital cost to the debtor of depreciable property of a prescribed class immediately after that time. 
  
  ### Restriction with respect to depreciable property
  
  (6) Where a commercial obligation issued by a debtor is settled at any time, 
  (a) an amount may be applied under subsection 80(5) to reduce, immediately after that time, the capital cost to the debtor of a depreciable property of a prescribed class only to the extent that 
  (i) the undepreciated capital cost to the debtor of depreciable property of that class at that time exceeds 
  (ii) the total of all other reductions immediately after that time to that undepreciated capital cost; and 
  (b) an amount may be applied under subsection 80(5) to reduce, immediately after that time, the capital cost to the debtor of a depreciable property (other than a depreciable property of a prescribed class) only to the extent that 
  (i) the capital cost to the debtor of the property at that time exceeds 
  (ii) the amount that was allowed to the debtor before that time under Part XVII of the Income Tax Regulations in respect of the property.  
  (7)  [Repealed, 2016, c. 12, s. 23]  
  
  ### Reductions of resource expenditures
  
  (8) Where a commercial obligation issued by a debtor is settled at any time, the remaining unapplied portion of the forgiven amount at that time in respect of the obligation shall be applied (to the extent designated in a prescribed form filed with the debtor’s return of income under this Part for the taxation year that includes that time) to reduce immediately after that time the following amounts: 
  (a) where the debtor is a corporation resident in Canada throughout that year, each particular amount that would be determined in respect of the debtor under paragraph 66.7(2)(a), (2.3)(a), (3)(a), (4)(a) or (5)(a) if paragraphs 66.7(2.3)(a), (4)(a) and (5)(a) were read without reference to the expressions “30% of”, “30% of” and “10% of”, respectively, as a consequence of the acquisition of control of the debtor by a person or group of persons, the debtor ceasing to be exempt from tax under this Part on its taxable income or the acquisition of properties by the debtor by way of an amalgamation or merger, where the amount so applied does not exceed the successor pool immediately after that time for the obligation and in respect of the particular amount; 
  (b) the cumulative Canadian exploration expense (within the meaning assigned by subsection 66.1(6)) of the debtor; 
  (c) the cumulative Canadian development expense (within the meaning assigned by subsection 66.2(5)) of the debtor; 
  (d) the cumulative Canadian oil and gas property expense (within the meaning assigned by subsection 66.4(5)) of the debtor; 
  (e) the total determined under paragraph 66(4)(a) in respect of the debtor, where 
  (i) the debtor is resident in Canada throughout that year, and 
  (ii) the amount so applied does not exceed such portion of the total of the debtor’s foreign exploration and development expenses (within the meaning assigned by subsection 66(15)) as were incurred by the debtor before that time and would be deductible under subsection 66(4) in computing the debtor’s income for that year if the debtor had sufficient income described in subparagraph 66(4)(b)(ii) and if that year ended at that time; and 
  (f) the cumulative foreign resource expense (within the meaning assigned by subsection 66.21(1)) of the debtor in respect of a country. 
  
  ### Reductions of adjusted cost bases of capital properties
  
  (9) If a commercial obligation issued by a debtor is settled at any time and amounts have been designated under subsections (5) and (8) to the maximum extent permitted in respect of the settlement, subject to subsection (18) 
  (a) the remaining unapplied portion of the forgiven amount at that time in respect of the obligation shall be applied (to the extent designated in a prescribed form filed with the debtor’s return of income under this Part for the taxation year that includes that time) to reduce immediately after that time the adjusted cost bases to the debtor of capital properties (other than shares of the capital stock of corporations of which the debtor is a specified shareholder at that time, debts issued by corporations of which the debtor is a specified shareholder at that time, interests in partnerships that are related to the debtor at that time, depreciable property that is not of a prescribed class, personal-use properties and excluded properties) that are owned by the debtor immediately after that time; 
  (b) an amount may be applied under this subsection to reduce, immediately after that time, the capital cost to the debtor of a depreciable property of a prescribed class only to the extent that 
  (i) the capital cost immediately after that time to the debtor of the property (determined without reference to the settlement of the obligation at that time) exceeds 
  (ii) its capital cost immediately after that time to the debtor for the purposes of paragraphs 8(1)(j) and 8(1)(p), sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a) (determined without reference to the settlement of the obligation at that time); and 
  (c) for the purposes of paragraphs 8(1)(j) and 8(1)(p), sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), no amount shall be considered to have been applied under this subsection. 
  
  ### Reduction of adjusted cost bases of certain shares and debts
  
  (10) If a commercial obligation issued by a debtor is settled at any time in a taxation year and amounts have been designated by the debtor under subsections (5), (8) and (9) to the maximum extent permitted in respect of the settlement, subject to subsection (18) the remaining unapplied portion of that forgiven amount shall be applied (to the extent that it is designated in a prescribed form filed with the debtor’s return of income under this Part for the year) to reduce immediately after that time the adjusted cost bases to the debtor of capital properties, owned by the debtor immediately after that time, that are shares of the capital stock of corporations of which the debtor is a specified shareholder at that time and debts issued by corporations of which the debtor is a specified shareholder at that time (other than shares of the capital stock of corporations related to the debtor at that time, debts issued by corporations related to the debtor at that time and excluded properties). 
  
  ### Reduction of adjusted cost bases of certain shares, debts and partnership interests
  
  (11) If a commercial obligation issued by a debtor is settled at any time in a taxation year and amounts have been designated by the debtor under subsections (5), (8), (9) and (10) to the maximum extent permitted in respect of the settlement, subject to subsection (18) the remaining unapplied portion of that forgiven amount shall be applied (to the extent that it is designated in a prescribed form filed with the debtor’s return of income under this Part for the year) to reduce immediately after that time the adjusted cost bases to the debtor of 
  (a) shares and debts that are capital properties (other than excluded properties and properties the adjusted cost bases of which are reduced at that time under subsection 80(9) or 80(10)) of the debtor immediately after that time; and 
  (b) interests in partnerships that are related to the debtor at that time that are capital properties (other than excluded properties) of the debtor immediately after that time. 
  
  ### Capital gain where current year capital loss
  
  (12) If a commercial obligation issued by a debtor (other than a partnership) is settled at any time in a taxation year and amounts have been designated by the debtor under subsections (5), (8) and (9) to the maximum extent permitted in respect of the settlement, 
  (a) the debtor shall be deemed to have a capital gain for the year from the disposition of capital property (or, where the debtor is non-resident at the end of the year, taxable Canadian property), equal to the lesser of 
  (i) the remaining unapplied portion of the forgiven amount at that time in respect of the obligation, and 
  (ii) the amount, if any, by which the total of 
  (A) all of the debtor’s capital losses from the dispositions of properties (other than listed personal properties and excluded properties), and 
  (B) twice the amount that would, because of subsection 88(1.2), be deductible under paragraph 111(1)(b) in computing the debtor’s taxable income for the year, if the debtor had sufficient income and taxable capital gains for the year, exceeds the total of 
  (C) all of the debtor’s capital gains for the year from the dispositions of such properties (determined without reference to this subsection), and 
  (D) all amounts each of which is an amount deemed by this subsection to be a capital gain of the debtor for the year as a consequence of the application of this subsection to other commercial obligations settled before that time; and 
  (b) the forgiven amount at that time in respect of the obligation shall be considered to have been applied under this subsection to the extent of the amount deemed by this subsection to be a capital gain of the debtor for the year as a consequence of the application of this subsection to the settlement of the obligation at that time. 
  
  ### Income inclusion
  
  (13) Where a commercial obligation issued by a debtor is settled at any time in a taxation year, there shall be added, in computing the debtor’s income for the year from the source in connection with which the obligation was issued, the amount determined by the formula is the remaining unapplied portion of the forgiven amount at that time in respect of the obligation, is the lesser of 
  (a) the total of all amounts designated under subsection 80(11) by the debtor in respect of the settlement of the obligation at that time, and 
  (b) the residual balance at that time in respect of the settlement of the obligation, is the total of all amounts each of which is an amount specified in an agreement filed under section 80.04 in respect of the settlement of the obligation at that time, is 
  (a) if the debtor has designated amounts under subsections (5), (8), (9) and (10) to the maximum extent permitted in respect of the settlement, the amount, if any, by which 
  (i) the total of all amounts each of which is an unrecognized loss at that time, in respect of the obligation, from the disposition of a property exceeds 
  (ii) twice the total of all amounts each of which is an amount by which the amount determined before that time under this subsection in respect of a settlement of an obligation issued by the debtor has been reduced because of an amount determined under this paragraph, and 
  (b) in any other case, nil, and is 
  (a) where the debtor is a partnership, 1, and 
  (b) in any other case, 1/2. 
  
  ### Residual balance
  
  (14) For the purpose of subsection 80(13), the residual balance at any time in a taxation year in respect of the settlement of a particular commercial obligation issued by a debtor is the amount, if any, by which 
  (a) the gross tax attributes of directed persons at that time in respect of the debtor exceeds the total of 
  (b) the value of A in subsection 80(13) in respect of the settlement of the particular obligation at that time, 
  (c) all amounts each of which is 
  (i) the amount, if any, by which the value of A in subsection 80(13) in respect of a settlement before that time and in the year of a commercial obligation issued by the debtor exceeds the value of C in that subsection in respect of the settlement, 
  (ii) the value of A in subsection 80(13) in respect of a settlement of a commercial obligation that is deemed by paragraph 80.04(4)(e) to have been issued by a directed person in respect of the debtor because of the filing of an agreement under section 80.04 in respect of a settlement before that time and in the year of a commercial obligation issued by the debtor, or 
  (iii) the amount specified in an agreement (other than an agreement with a directed person in respect of the debtor) filed under section 80.04 in respect of the settlement before that time and in the year of a commercial obligation issued by the debtor, and 
  (d) all amounts each of which is an amount in respect of a settlement at a particular time before that time and in the year of a commercial obligation issued by the debtor equal to the least of 
  (i) the total of all amounts designated under subsection 80(11) in respect of the settlement, 
  (ii) the residual balance of the debtor at the particular time, and 
  (iii) the amount, if any, by which the sum of the values of A and B in subsection 80(13) in respect of the settlement exceeds the value of C in that subsection in respect of the settlement. 
  
  ### Gross tax attributes
  
  (14.1) The gross tax attributes of directed persons at any time in respect of a debtor means the total of all amounts each of which is an amount that would be applied under any of subsections 80(3) to 80(10) and 80(12) in respect of a settlement of a separate commercial obligation (in this subsection referred to as a “notional obligation”) issued by directed persons at that time in respect of the debtor if the following assumptions were made: 
  (a) a notional obligation was issued immediately before that time by each of those directed persons and was settled at that time; 
  (b) the forgiven amount at that time in respect of each of those notional obligations was equal to the total of all amounts each of which is a forgiven amount at or before that time and in the year in respect of a commercial obligation issued by the debtor; 
  (c) amounts were designated under subsections (5), (8), (9) and (10) by each of those directed persons to the maximum extent permitted in respect of the settlement of each of those notional obligations; and 
  (d) no amounts were designated under subsection 80(11) by any of those directed persons in respect of the settlement of any of the notional obligations. 
  
  ### Members of partnerships
  
  (15) Where a commercial debt obligation issued by a partnership (in this subsection referred to as the “partnership obligation”) is settled at any time in a fiscal period of the partnership that ends in a taxation year of a member of the partnership, 
  (a) the member may deduct, in computing the member’s income for the year, such amount as the member claims not exceeding the relevant limit in respect of the partnership obligation; 
  (b) for the purpose of paragraph (a), the relevant limit in respect of the partnership obligation is the amount that would be included in computing the member’s income for the year as a consequence of the application of subsection (13) and section 96 to the settlement of the partnership obligation if the partnership had designated amounts under subsections (5), (8), (9) and (10) to the maximum extent permitted in respect of each obligation settled in that fiscal period and if income arising from the application of subsection (13) were from a source of income separate from any other sources of partnership income; and 
  (c) for the purposes of this section and section 80.04, 
  (i) the member shall be deemed to have issued a commercial debt obligation that was settled at the end of that fiscal period, 
  (ii) the amount deducted under paragraph 80(15)(a) in respect of the partnership obligation in computing the member’s income shall be treated as if it were the forgiven amount at the end of that fiscal period in respect of the obligation referred to in subparagraph 80(15)(c)(i), 
  (iii) subject to subparagraph 80(15)(c)(iv), the obligation referred to in subparagraph 80(15)(c)(i) shall be deemed to have been issued at the same time at which, and in the same circumstances in which, the partnership obligation was issued, 
  (iv) if the member is a taxpayer that was subject to a loss restriction event at a particular time that is before the end of that fiscal period and before the taxpayer became a member of the partnership, and the partnership obligation was issued before the particular time, 
  (A) subject to the application of this subparagraph to the taxpayer after the particular time and before the end of that fiscal period, the obligation referred to in subparagraph (i) is deemed to have been issued by the member after the particular time, and 
  (B) subparagraph (b)(ii) of the definition 
  *relevant loss balance* in subsection (1), paragraph (f) of the definition 
  *successor pool* in that subsection and paragraph (b) of the definition 
  *unrecognized loss* in that subsection do not apply in respect of the loss restriction event, and  
  (v) the source in connection with which the obligation referred to in subparagraph 80(15)(c)(i) was issued shall be deemed to be the source in connection with which the partnership obligation was issued. 
  
  ### Designations by Minister
  
  (16) Where a commercial obligation issued by a debtor is settled at any time in a taxation year and, as a consequence of the settlement an amount would, but for this subsection, be deducted under section 61.2 or 61.3 in computing the debtor’s income for the year and the debtor has not designated amounts under subsections 80(5) to 80(11) to the maximum extent possible in respect of the settlement, 
  (a) the Minister may designate amounts under subsections 80(5) to 80(11) to the extent that the debtor would have been permitted to designate those amounts; and 
  (b) the amounts designated by the Minister shall, except for the purpose of this subsection, be deemed to have been designated by the debtor as required by subsections 80(5) to 80(11). 
  (17)  [Repealed, 1998, c. 19, s. 111]  
  
  ### Partnership designations
  
  (18) Where a commercial obligation issued by a partnership is settled at any time after December 20, 1994, the amount designated under subsection 80(9), 80(10) or 80(11) in respect of the settlement by the partnership to reduce the adjusted cost base of a capital property acquired shall not exceed the amount, if any, by which the adjusted cost base at that time to the partnership of the property exceeds the fair market value at that time of the property. 
  
  ### Definitions
  
  80.01 (1) In this section,  
  *commercial debt obligation* has the meaning assigned by subsection 80(1); (créance commerciale)   
  *commercial obligation* has the meaning assigned by subsection 80(1); (dette commerciale)   
  *debtor* has the meaning assigned by subsection 80(1); (débiteur)   
  *distress preferred share* has the meaning assigned by subsection 80(1); (action privilégiée de renflouement)   
  *forgiven amount* has the meaning assigned by subsection 80(1) except that, where an amount would be included in computing a person’s income under paragraph 6(1)(a) or subsection 15(1) as a consequence of the settlement of an obligation if the obligation were settled without any payment being made in satisfaction of its principal amount, 
  *forgiven amount* in respect of that obligation has the meaning assigned by subsection 6(15.1) or 15(1.21), as the case may be; (montant remis)   
  *person* has the meaning assigned by subsection 80(1); (personne)   
  *specified cost* at any time to a person of an obligation means,  
  (a) where the obligation is capital property of the person at that time, the adjusted cost base at that time to the person of the obligation, and 
  (b) in any other case, the cost amount to the person of the obligation. ( coût déterminé)  
  
  ### Application
  
  (2) For the purposes of this section, 
  (a) paragraphs 80(2)(a), 80(2)(b), 80(2)(j), 80(2)(l) and 80(2)(n) apply; and 
  (b) a person has a significant interest in a corporation at any time if the person owned at that time 
  (i) shares of the capital stock of the corporation that would give the person 25% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, or 
  (ii) shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all the issued shares of the capital stock of the corporation and, for the purposes of this paragraph, a person shall be deemed to own at any time each share of the capital stock of a corporation that is owned, otherwise than because of this paragraph, at that time by another person with whom the person does not deal at arm’s length. 
  
  ### Deemed settlement on amalgamation
  
  (3) Where a commercial obligation or another obligation (in this subsection referred to as the “indebtedness”) of a debtor that is a corporation to pay an amount to another corporation (in this subsection referred to as the “creditor”) is settled on an amalgamation of the debtor and the creditor, the indebtedness shall be deemed to have been settled immediately before the time that is immediately before the amalgamation by a payment made by the debtor and received by the creditor of an amount equal to the amount that would have been the creditor’s cost amount of the indebtedness at that time if 
  (a) the definition 
  *cost amount* in subsection 248(1) were read without reference to paragraph (e) of that definition; and  
  (b) that cost amount included amounts added in computing the creditor’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent those amounts have not been deducted in computing the creditor’s income as bad debts in respect of that unpaid interest. 
  
  ### Deemed settlement on winding-up
  
  (4) Where there is a winding-up of a subsidiary to which the rules in subsection 88(1) apply and 
  (a) a debt or other obligation (in this subsection referred to as the “subsidiary’s obligation”) of the subsidiary to pay an amount to the parent, or 
  (b) a debt or other obligation (in this subsection referred to as the “parent’s obligation”) of the parent to pay an amount to the subsidiary is, as a consequence of the winding-up, settled at a particular time without any payment of an amount or by the payment of an amount that is less than the principal amount of the subsidiary’s obligation or the parent’s obligation, as the case may be, 
  (c) where that payment is less than the amount that would have been the cost amount to the parent or subsidiary of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if the definition 
  *cost amount* in subsection 248(1) were read without reference to paragraph (e) of that definition and the parent so elects in a prescribed form on or before the day on or before which the parent is required to file a return of income pursuant to section 150 for the taxation year that includes the particular time, the amount paid at that time in satisfaction of the principal amount of the subsidiary’s obligation or the parent’s obligation shall be deemed to be equal to the amount that would be the cost amount to the parent or the subsidiary, as the case may be, of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if  
  (i) the definition 
  *cost amount* in subsection 248(1) were read without reference to paragraph (e) of that definition, and  
  (ii) that cost amount included amounts added in computing the parent’s income or the subsidiary’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the parent or the subsidiary has not deducted any amounts as bad debts in respect of that unpaid interest, and 
  (d) for the purposes of applying section 80 to the subsidiary’s obligation, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the subsidiary’s obligation is settled as a consequence of the distribution, the subsidiary’s obligation shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time. 
  
  ### Deemed settlement on winding-up
  
  (5) Where there is a winding-up of a subsidiary to which the rules in subsection 88(1) apply and, as a consequence of the winding-up, a distress preferred share issued by the subsidiary and owned by the parent (or a distress preferred share issued by the parent and owned by the subsidiary) is settled at any time without any payment of an amount or by the payment of an amount that is less than the principal amount of the share, 
  (a) where the payment was less than the adjusted cost base of the share to the parent or the subsidiary, as the case may be, immediately before that time, for the purposes of applying the provisions of this Act to the issuer of the share, the amount paid at that time in satisfaction of the principal amount of the share shall be deemed to be equal to its adjusted cost base to the parent or to the subsidiary, as the case may be; and 
  (b) for the purposes of applying section 80 to the share, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the share is settled as a consequence of the distribution, the share shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time. 
  
  ### Deemed settlement on SIFT trust wind-up event
  
  (5.1) If a trust that is a SIFT wind-up entity is the only beneficiary under another trust (in this subsection referred to as the “subsidiary trust”), and a capital property that is a debt or other obligation (in this subsection referred to as the “subsidiary trust’s obligation”) of the subsidiary trust to pay an amount to the SIFT wind-up entity is, as a consequence of a distribution from the subsidiary trust that is a SIFT trust wind-up event, settled at a particular time without any payment of an amount or by the payment of an amount that is less than the principal amount of the subsidiary trust’s obligation 
  (a) paragraph (b) applies if 
  (i) the payment is less than the amount that would have been the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time, and 
  (ii) the SIFT wind-up entity elects, in prescribed form on or before the SIFT wind-up entity’s filing-due date for the taxation year that includes the particular time, to have paragraph (b) apply; 
  (b) if this paragraph applies, the amount paid at the particular time in satisfaction of the principal amount of the subsidiary trust’s obligation is deemed to be equal to the amount that would be the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time if that adjusted cost base included amounts added in computing the SIFT wind-up entity’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the SIFT wind-up entity has not deducted any amounts as bad debts in respect of that unpaid interest; and 
  (c) for the purposes of applying section 80 to the subsidiary trust’s obligation, the subsidiary trust’s obligation is deemed to have been settled immediately before the time that is immediately before the distribution. 
  
  ### Specified obligation in relation to debt parking
  
  (6) For the purpose of subsection (7), an obligation issued by a debtor is, at a particular time, a specified obligation of the debtor where 
  (a) at any previous time (other than a time before the last time, if any, the obligation became a parked obligation before the particular time), 
  (i) a person who owned the obligation 
  (A) dealt at arm’s length with the debtor, and 
  (B) where the debtor is a corporation, did not have a significant interest in the debtor, or 
  (ii) the obligation was acquired by the holder of the obligation from another person who was, at the time of that acquisition, not related to the holder or related to the holder only because of paragraph 251(5)(b); or 
  (b) the obligation is deemed by subsection 50(1) to be reacquired at the particular time. 
  
  ### Parked obligation
  
  (7) For the purposes of this subsection and subsections (6), (8) and (10), 
  (a) an obligation issued by a debtor is a “parked obligation” at any time where at that time 
  (i) the obligation is a specified obligation of the debtor, and 
  (ii) the holder of the obligation 
  (A) does not deal at arm’s length with the debtor, or 
  (B) where the debtor is a corporation and the holder acquired the obligation after July 12, 1994 (otherwise than pursuant to an agreement in writing entered into on or before July 12, 1994), has a significant interest in the debtor; and 
  (b) an obligation that is, at any time, acquired or reacquired in circumstances to which subparagraph (6)(a)(ii) or paragraph (6)(b) applies shall, if the obligation is a parked obligation immediately after that time, be deemed to have become a parked obligation at that time. 
  
  ### Deemed settlement after debt parking
  
  (8) Where at any particular time after February 21, 1994 a commercial debt obligation that was issued by a debtor becomes a parked obligation (otherwise than pursuant to an agreement in writing entered into before February 22, 1994) and the specified cost at the particular time to the holder of the obligation is less than 80% of the principal amount of the obligation, for the purpose of applying the provisions of this Act to the debtor 
  (a) the obligation shall be deemed to have been settled at the particular time; and 
  (b) the forgiven amount at the particular time in respect of the obligation shall be determined as if the debtor had paid an amount at the particular time in satisfaction of the principal amount of the obligation equal to that specified cost. 
  
  ### Statute-barred debt
  
  (9) Where at any particular time after February 21, 1994 a commercial debt obligation issued by a debtor that is payable to a person (other than a person with whom the debtor is related at the particular time) becomes unenforceable in a court of competent jurisdiction because of a statutory limitation period and the obligation would, but for this subsection, not have been settled or extinguished at the particular time, for the purpose of applying the provisions of this Act to the debtor, the obligation shall be deemed to have been settled at the particular time. 
  
  ### Subsequent payments in satisfaction of debt
  
  (10) Where a commercial debt obligation issued by a debtor is first deemed by subsection (8) or (9) to have been settled at a particular time, at a subsequent time a payment is made by the debtor of an amount in satisfaction of the principal amount of the obligation and it cannot reasonably be considered that one of the reasons the obligation became a parked obligation or became unenforceable, as the case may be, before the subsequent time was to have this subsection apply to the payment, in computing the debtor’s income for the taxation year (in this subsection referred to as the “subsequent year”) that includes the subsequent time from the source in connection with which the obligation was issued, there may be deducted the amount determined by the formula is the amount of the payment, is the amount, if any, by which 
  (a) the principal amount of the obligation exceeds the total of 
  (b) all amounts each of which is a forgiven amount at any time 
  (i) in the period that began at the particular time and ended immediately before the subsequent time, and 
  (ii) at which a particular portion of the obligation is deemed by subsection (8) or (9) to be settled in respect of the particular portion, and 
  (c) all amounts paid in satisfaction of the principal amount of the obligation in the period that began at the particular time and ended immediately before the subsequent time, and is the amount, if any, by which the total of 
  (a) all amounts deducted under section 61.3 in computing the debtor’s income for the subsequent year or a preceding taxation year, 
  (b) all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was exempt from tax under this Part on its taxable income, and 
  (c) all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was non-resident (other than any of those amounts added in computing the debtor’s taxable income or taxable income earned in Canada) exceeds the total of 
  (d) the amount, if any, deducted because of paragraph 37(1)(f.1) in determining the balance determined under subsection 37(1) in respect of the debtor immediately after the subsequent year, and 
  (e) all amounts by which the amount deductible under this subsection in respect of a payment made by the debtor before the subsequent time in computing the debtor’s income for the subsequent year or a preceding year has been reduced because of this description. 
  
  ### Foreign currency gains and losses
  
  (11) Where an obligation issued by a debtor is denominated in a currency (other than the Canadian currency) and the obligation is deemed by subsection (8) or (9) to have been settled, those subsections do not apply for the purpose of determining any gain or loss of the debtor on the settlement that is attributable to a fluctuation in the value of the currency relative to the value of Canadian currency. 
  
  ### Definitions
  
  80.02 (1) In this section, 
  *commercial debt obligation*, 
  *commercial obligation*, 
  *distress preferred share* and 
  *person* have the meanings assigned by subsection 80(1).  
  
  ### General rules for distress preferred shares
  
  (2) For the purpose of applying the provisions of this Act to an issuer of a distress preferred share, 
  (a) the principal amount, at any time, of the share shall be deemed to be the amount (determined at that time) for which the share was issued; 
  (b) the amount for which the share was issued shall, at any time, be deemed to be the amount, if any, by which the total of 
  (i) the amount for which the share was issued, determined without reference to this paragraph, and 
  (ii) all amounts by which the paid-up capital in respect of the share increased after the share was issued and before that time exceeds 
  (iii) the total of all amounts each of which is an amount paid before that time on a reduction of the paid-up capital in respect of the share, except to the extent that the amount is deemed by section 84 to have been paid as a dividend; 
  (c) the share shall be deemed to be settled at such time as it is redeemed, acquired or cancelled by the issuer; and 
  (d) a payment in satisfaction of the principal amount of the share is any payment made on a reduction of the paid-up capital in respect of the share to the extent that the payment would be proceeds of disposition of the share within the meaning that would be assigned by the definition 
  *proceeds of disposition* in section 54 if that definition were read without reference to paragraph (j).  
  
  ### Substitution of distress preferred share for debt
  
  (3) Where any part of the consideration given by a corporation to another person for the settlement or extinguishment at any time of a commercial debt obligation that was issued by the corporation and owned immediately before that time by the other person consists of a distress preferred share issued by the corporation to the other person, 
  (a) for the purposes of section 80, the amount paid at that time in satisfaction of the principal amount of the obligation because of the issue of that share shall be deemed to be equal to the lesser of 
  (i) the principal amount of the obligation, and 
  (ii) the amount by which the paid-up capital in respect of the class of shares that include that share increases because of the issue of that share; and 
  (b) for the purpose of subparagraph (2)(b)(i), the amount for which the share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time. 
  
  ### Substitution of commercial debt obligation for distress preferred share
  
  (4) Where any part of the consideration given by a corporation to another person for the settlement at any time of a distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of a commercial debt obligation issued by the corporation to the other person, for the purposes of section 80 
  (a) the amount paid at that time in satisfaction of the principal amount of the share because of the issue of that obligation shall be deemed to be equal to the principal amount of the obligation; and 
  (b) the amount for which the obligation was issued shall be deemed to be equal to its principal amount. 
  
  ### Substitution of distress preferred share for other distress preferred share
  
  (5) Where any part of the consideration given by a corporation to another person for the settlement at any time of a particular distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of another distress preferred share issued by the corporation to the other person, for the purposes of section 80 
  (a) the amount paid at that time in satisfaction of the principal amount of the particular share because of the issue of the other share shall be deemed to be equal to the amount by which the paid-up capital in respect of the class of shares that includes the other share increases because of the issue of the other share; and 
  (b) for the purpose of subparagraph (2)(b)(i), the amount for which the other share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time. 
  
  ### Substitution of non-commercial obligation for distress preferred share
  
  (6) Where any part of the consideration given by a corporation to another person for the settlement at any time of a distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of another share (other than a distress preferred share) or an obligation (other than a commercial obligation) issued by the corporation to the other person, for the purposes of section 80, the amount paid at that time in satisfaction of the principal amount of the distress preferred share because of the issue of the other share or obligation shall be deemed to be equal to the fair market value of the other share or obligation, as the case may be, at that time. 
  
  ### Deemed settlement on expiry of term
  
  (7) Where at any time a distress preferred share becomes a share that is not a distress preferred share, for the purposes of section 80 
  (a) the share shall be deemed to have been settled immediately before that time; and 
  (b) a payment equal to the fair market value of the share at that time shall be deemed to have been made immediately before that time in satisfaction of the principal amount of the share. 
  
  ### Definitions
  
  80.03 (1) In this section, 
  *commercial debt obligation*, 
  *commercial obligation*, 
  *distress preferred share*, 
  *forgiven amount* and 
  *person* have the meanings assigned by subsection 80(1).  
  
  ### Deferred recognition of debtor’s gain on settlement of debt
  
  (2) Where at any time in a taxation year a person (in this subsection referred to as the “transferor”) surrenders a particular capital property (other than a distress preferred share) that is a share, a capital interest in a trust or an interest in a partnership, the person shall be deemed to have a capital gain from the disposition at that time of another capital property (or, where the particular property is a taxable Canadian property, another taxable Canadian property) equal to the amount, if any, by which 
  (a) the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the transferor of the particular property immediately before that time exceeds the total of 
  (b) the amount that would be the transferor’s capital gain for the year from the disposition of the particular property if this Act were read without reference to subsection 100(2), and 
  (c) where, at the end of the year, the transferor is resident in Canada or is a non-resident person who carries on business in Canada through a fixed place of business, the amount designated under subsection (7) by the transferor in respect of the disposition, at that time or immediately after that time, of the particular property. 
  
  ### Surrender of capital property
  
  (3) For the purpose of subsection (2), a person shall be considered to have surrendered a property at any time only where 
  (a) in the case of a share of the capital stock of a particular corporation, 
  (i) the person is a corporation that disposed of the share at that time and the proceeds of disposition of the share are determined under paragraph 88(1)(b), or 
  (ii) the person is a corporation that owned the share at that time and, immediately after that time, amalgamates or merges with the particular corporation; 
  (b) in the case of a capital interest in a trust, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 107(2)(c); and 
  (c) in the case of an interest in a partnership, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 98(3)(a) or (5)(a). 
  (4) to (6)  [Repealed, 1998, c. 19, s. 112]  
  
  ### Alternative treatment
  
  (7) Where at any time in a taxation year a person disposes of a property, for the purposes of subsection (2) and section 80 
  (a) the person may designate an amount in a prescribed form filed with the person’s return of income under this Part for the year; and 
  (b) where an amount is designated by the person under paragraph (a) in respect of the disposition, 
  (i) the person shall be deemed to have issued a commercial debt obligation at that time that is settled immediately after that time, 
  (ii) the lesser of the amount so designated and the amount that would, but for this subsection, be a capital gain determined in respect of the disposition because of subsection (2) shall be treated as if it were the forgiven amount at the time of the settlement in respect of the obligation referred to in subparagraph (i), 
  (iii) the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business, if any, carried on by the person at the end of the year, and 
  (iv) where the person does not carry on a business at the end of the year, the person shall be deemed to carry on an active business at the end of the year and the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business deemed by this subparagraph to be carried on. 
  
  ### Lifetime capital gains exemption
  
  (8) If, as a consequence of the disposition at any time by an individual of a property that is a qualified farm or fishing property of the individual or a qualified small business corporation share of the individual (as defined in subsection 110.6(1)), the individual is deemed by subsection (2) to have a capital gain at that time from the disposition of another property, for the purposes of sections 3, 74.3 and 111, as they apply for the purposes of section 110.6, the other property is deemed to be a qualified farm or fishing property of the individual or a qualified small business corporation share of the individual, as the case may be. 
  
  ### Definitions
  
  80.04 (1) In this section, 
  *commercial debt obligation*, 
  *commercial obligation*, 
  *debtor*, 
  *directed person*, 
  *eligible Canadian partnership*, 
  *forgiven amount* and 
  *person* have the meanings assigned by subsection 80(1).  
  
  ### Eligible transferee
  
  (2) For the purpose of this section, an 
  *eligible transferee* of a debtor at any time is a directed person at that time in respect of the debtor or a taxable Canadian corporation or eligible Canadian partnership related (otherwise than because of a right referred to in paragraph 251(5)(b)) at that time to the debtor.  
  
  ### Application
  
  (3) Paragraphs 80(2)(a), 80(2)(b), 80(2)(j), 80(2)(l) and 80(2)(n) apply for the purpose of this section. 
  
  ### Agreement respecting transfer of forgiven amount
  
  (4) Where 
  (a) a particular commercial obligation (other than an obligation deemed by paragraph (e) to have been issued) issued by a debtor is settled at a particular time, 
  (b) amounts have been designated by the debtor under subsections 80(5) to 80(10) to the maximum extent permitted in respect of the settlement of the particular obligation at the particular time, 
  (c) the debtor and an eligible transferee of the debtor at the particular time file under this section an agreement between them in respect of that settlement, and 
  (d) an amount is specified in that agreement the following rules apply: 
  (e) except for the purposes of subsection 80(11), the transferee shall be deemed to have issued a commercial debt obligation that was settled at the particular time, 
  (f) the specified amount shall be deemed to be the forgiven amount at the particular time in respect of the obligation referred to in paragraph (e), 
  (g) subject to paragraph (h), the obligation referred to in paragraph (e) shall be deemed to have been issued at the same time (in paragraph (h) referred to as the “time of issue”) at which, and in the same circumstances in which, the particular obligation was issued, 
  (h) if the transferee is a taxpayer that is subject to a loss restriction event after the time of issue and the transferee and the debtor were, if the transferee is a corporation, not related to each other  —  or, if the transferee is a trust, not affiliated with each other  —  immediately before the loss restriction event, 
  (i) the obligation referred to in paragraph (e) is deemed to have been issued after the loss restriction event, and 
  (ii) subparagraph (b)(ii) of the definition 
  *relevant loss balance* in subsection 80(1), paragraph (f) of the definition 
  *successor pool* in that subsection and paragraph (b) of the definition 
  *unrecognized loss* in that subsection do not apply in respect of the loss restriction event,  
  (i) the source in connection with which the obligation referred to in paragraph (e) was issued shall be deemed to be the source in connection with which the particular obligation was issued, and 
  (j) for the purposes of sections 61.3 and 61.4, the amount included under subsection 80(13) in computing the income of the eligible transferee in respect of the settlement of the obligation referred to in paragraph (e) or deducted under paragraph 80(15)(a) in respect of such income shall be deemed to be nil. 
  
  ### Consideration for agreement
  
  (5) For the purposes of this Part, where property is acquired at any time by an eligible transferee as consideration for entering into an agreement with a debtor that is filed under this section 
  (a) where the property was owned by the debtor immediately before that time, 
  (i) the debtor shall be deemed to have disposed of the property at that time for proceeds equal to the fair market value of the property at that time, and 
  (ii) no amount may be deducted in computing the debtor’s income as a consequence of the transfer of the property, except any amount arising as a consequence of the application of subparagraph (i); 
  (b) the cost at which the property was acquired by the eligible transferee at that time shall be deemed to be equal to the fair market value of the property at that time; and 
  (c) the eligible transferee shall not be required to add an amount in computing income solely because of the acquisition at that time of the property; 
  (d)  [Repealed, 1998, c. 19, s. 113(1)]  
  
  ### No benefit conferred
  
  (5.1) For the purposes of this Part, where a debtor and an eligible transferee enter into an agreement that is filed under this section, no benefit shall be considered to have been conferred on the debtor as a consequence of the agreement. 
  
  ### Manner of filing agreement
  
  (6) Subject to subsection (7), a particular agreement between a debtor and an eligible transferee in respect of an obligation issued by the debtor that was settled at any time shall be deemed not to have been filed under this section 
  (a) where it is not filed with the Minister in a prescribed form 
  (i) on or before the later of 
  (A) the day on or before which the debtor’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time (or would be required to be filed if tax under this Part were payable by the debtor for the year), and 
  (B) the day on or before which the transferee’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time, or 
  (ii) on or before the later of 
  (A) the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and 
  (B) if the debtor is an individual (other than a trust) or a graduated rate estate, the day that is one year after the taxpayer’s filing-due date for the year; 
  (b) where it is not accompanied by, 
  (i) where the debtor is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, 
  (ii) where the debtor is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made, 
  (iii) where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and 
  (iv) where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or 
  (c) if an agreement amending the particular agreement has been filed in accordance with this section, except where subsection (8) applies to the particular agreement. 
  
  ### Filing by partnership
  
  (7) For the purpose of subsection (6), where an obligation is settled at any time in a fiscal period of a partnership, it shall be assumed that 
  (a) the partnership is required to file a return of income under this Part for the fiscal period on or before the latest day on or before which any member of the partnership during the fiscal period is required to file a return of income under this Part for the taxation year in which that fiscal period ends (or would be required to file such a return of income if tax under this Part were payable by the member for that year); and 
  (b) the partnership may serve a notice of objection described in subparagraph (6)(a)(ii) within each period within which any member of the partnership during the fiscal period may serve a notice of objection to tax payable under this Part for a taxation year in which that fiscal period ends. 
  
  ### Related corporations
  
  (8) Where at any time a corporation becomes related to another corporation and it can reasonably be considered that the main purpose of the corporation becoming related to the other corporation is to enable the corporations to file an agreement under this section, the amount specified in the agreement shall be deemed to be nil for the purpose of the description of C in subsection 80(13). 
  
  ### Assessment of taxpayers in respect of agreement
  
  (9) The Minister shall, notwithstanding subsections 152(4) to 152(5), assess or reassess the tax, interest and penalties payable under this Act by any taxpayer in order to take into account an agreement filed under this section. 
  
  ### Liability of debtor
  
  (10) Without affecting the liability of any person under any other provision of this Act, where a debtor and an eligible transferee file an agreement between them under this section in respect of an obligation issued by the debtor that was settled at any time, the debtor is, to the extent of 30% of the amount specified in the agreement, liable to pay 
  (a) where the transferee is a corporation, all taxes payable under this Act by it for taxation years that end in the period that begins at that time and ends 4 calendar years after that time; 
  (b) where the transferee is a partnership, the total of all amounts each of which is the tax payable under this Act by a person for a taxation year 
  (i) that begins or ends in that period, and 
  (ii) that includes the end of a fiscal period of the partnership during which the person was a member of the partnership; and 
  (c) interest and penalties in respect of such taxes. 
  
  ### Joint and several, or solidary, liability
  
  (11) If taxes, interest and penalties are payable under this Act by a person for a taxation year and those taxes, interest and penalties are payable by a debtor because of subsection (10), the debtor and the person are jointly and severally, or solidarily, liable to pay those amounts. 
  
  ### Assessments in respect of liability
  
  (12) Where a debtor and an eligible transferee file an agreement between them under this section in respect of an obligation issued by the debtor that was settled at a particular time, 
  (a) where the debtor is an individual or a corporation, the Minister may at any subsequent time assess the debtor in respect of taxes, interest and penalties for which the debtor is liable because of subsection (10); and 
  (b) where the debtor is a partnership, the Minister may at any subsequent time assess any person who has been a member of the partnership in respect of taxes, interest and penalties for which the partnership is liable because of subsection (10), to the extent that those amounts relate to taxation years of the transferee (or, where the transferee is another partnership, members of the other partnership) that end at or after 
  (i) where the person was not a member of the partnership at the particular time, the first subsequent time the person becomes a member of the partnership, and 
  (ii) in any other case, the particular time. 
  
  ### Application of Division I
  
  (13) The provisions of Division I apply to an assessment under subsection (12) as though it had been made under section 152. 
  
  ### Partnership members
  
  (14) For the purposes of paragraphs (10)(b) and (12)(b) and this subsection, where at any time a member of a particular partnership is another partnership, each member of the other partnership shall be deemed to be a member of the particular partnership at that time. 
  
  ### Expropriation assets acquired as compensation for, or as consideration for sale of, foreign property taken by or sold to foreign issuer
  
  80.1 (1) Where in a taxation year ending coincidentally with or after December 31, 1971 a taxpayer resident in Canada has acquired any bonds, debentures, mortgages, hypothecary claims, notes or similar obligations (in this section referred to as “expropriation assets”) issued by the government of a country other than Canada or issued by a person resident in a country other than Canada and guaranteed by the government of that country, 
  (a) as compensation for 
  (i) shares owned by the taxpayer of the capital stock of a foreign affiliate of the taxpayer that carried on business in that country, or 
  (ii) all or substantially all of the property used by the taxpayer in carrying on business in that country, (which shares or property, as the case may be, are referred to in this section as “foreign property”), taken, after June 18, 1971, from the taxpayer by the issuer under the authority of a law of that country, or 
  (b) as consideration for the sale of foreign property sold, after June 18, 1971, by the taxpayer to the issuer, if 
  (i) the sale was, by a law of that country, expressly required to be made, or 
  (ii) the sale was made after notice or other manifestation of an intention to take the foreign property, if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the expropriation assets so acquired by the taxpayer, the following rule applies, namely, an amount in respect of each such expropriation asset, equal to 
  (c) the principal amount of the asset, or 
  (d) where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated, shall be deemed to be 
  (e) the cost to the taxpayer of the asset, and 
  (f) for the purpose of computing the taxpayer’s proceeds of disposition of the foreign property so taken or sold, the amount received by the taxpayer by virtue of the taxpayer’s acquisition of the asset, except that in no case may the taxpayer designate an amount in respect of any expropriation asset so that the taxpayer’s proceeds of disposition of the foreign property so taken or sold (computed having regard to the provisions of paragraph 80.1(1)(f)) are less than the cost amount to the taxpayer of the foreign property immediately before it was so taken or sold. 
  
  ### Election re interest received or to be received on expropriation assets acquired by taxpayer
  
  (2) Where a taxpayer has elected in prescribed form and within prescribed time in respect of all amounts (each of which is referred to in this section as an “interest amount”) received or to be received by the taxpayer as or on account of interest on all expropriation assets acquired by the taxpayer as compensation for, or as consideration for the sale of, foreign property taken by or sold to any particular issuer as described in subsection 80.1(1), the following rules apply in respect of each such asset so acquired by the taxpayer: 
  (a) in computing the taxpayer’s income for a taxation year from the asset, there may be deducted, in respect of each interest amount received by the taxpayer in the year on the asset, the lesser of the interest amount and the total of 
  (i) the amount required by paragraph 80.1(2)(b) to be added, by virtue of the receipt by the taxpayer of the interest amount, in computing the adjusted cost base to the taxpayer of the asset, and 
  (ii) the greater of 
  (A) the adjusted cost base to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and 
  (B) the adjusted principal amount to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and there shall be included, in respect of each amount (in this paragraph referred to as a “capital amount”) received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of, 
  (iii) any proceeds of disposition of the asset, or 
  (iv) the principal amount of the asset, the amount, if any, by which the capital amount exceeds the greater of the adjusted cost base to the taxpayer of the asset immediately before the capital amount was received by the taxpayer and its adjusted principal amount to the taxpayer at that time; 
  (b) in computing, at any particular time, the adjusted cost base to the taxpayer of the asset, there shall be added, in respect of each interest amount received by the taxpayer on the asset before the particular time, an amount equal to the lesser of 
  (i) any income or profits tax paid by the taxpayer to the government of a country other than Canada in respect of the interest amount, and 
  (ii) that proportion of the tax referred to in subparagraph 80.1(2)(b)(i) that the adjusted cost base to the taxpayer of the asset immediately before the interest amount was received by the taxpayer is of the amount, if any, by which the interest amount exceeds the tax referred to in that subparagraph, and there shall be deducted 
  (iii) each interest amount received by the taxpayer on the asset before the particular time, and 
  (iv) each amount received by the taxpayer before the particular time on account of the principal amount of the asset; 
  (c) the receipt by the taxpayer of an amount described in subparagraph 80.1(2)(b)(iv) in respect of the asset shall be deemed not to be a partial disposition thereof; and 
  (d) for the purposes of section 126, notwithstanding the definition 
  *non-business-income tax* in subsection 126(7), the 
  *non-business-income tax* paid by a taxpayer does not include any tax, or any portion thereof, the amount of which is required by paragraph 80.1(2)(b) to be added in computing the adjusted cost base to the taxpayer of the asset.  
  
  ### Where interest amount and capital amount received at same time
  
  (3) For the purposes of subsection 80.1(2), where an interest amount on an expropriation asset and a capital amount with respect to that asset are received by a taxpayer at the same time, the interest amount shall be deemed to have been received by the taxpayer immediately before the capital amount. 
  
  ### Assets acquired from foreign affiliate of taxpayer as dividend in kind or as benefit to shareholder
  
  (4) Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate as a dividend payable in kind, or as a benefit received from the foreign affiliate that would otherwise be required by subsection 15(1) to be included in computing the income of the taxpayer, if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all assets so acquired by the taxpayer from the foreign affiliate, the following rules apply in respect of each asset so acquired by the taxpayer: 
  (a) an amount equal to 
  (i) the principal amount of the asset, or 
  (ii) where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated, shall be deemed to be, 
  (iii) notwithstanding subsection 52(2), the cost to the taxpayer of the asset, and 
  (iv) the amount of the dividend or benefit, as the case may be, received by the taxpayer by virtue of the acquisition by the taxpayer of the asset; 
  (b) where the asset was so acquired as such a benefit and the taxpayer has designated in the election a class of shares as described in this paragraph in respect of the asset, the amount of the benefit shall be deemed 
  (i) to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and 
  (ii) not to be an amount required by subsection 15(1) to be included in computing the taxpayer’s income; 
  (c) in computing the taxable income of the taxpayer for the taxation year in which the taxpayer acquired the asset, there may be deducted from the taxpayer’s income for the year the amount, if any, by which the amount received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset exceeds the total of amounts deductible in respect of the dividend under sections 91 and 113 in computing the taxpayer’s income or taxable income, as the case may be, for the year; 
  (d) there shall be deducted in computing the adjusted cost base to the taxpayer of each share of the capital stock of the foreign affiliate that is a share of a class in respect of which an amount was received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset, the quotient obtained by dividing the amount, if any, deducted by the taxpayer under paragraph (c) in respect of the dividend by the number of shares of that class owned by the taxpayer immediately before that amount was received by the taxpayer as a dividend; 
  (e) any capital loss of the taxpayer from the disposition, after the time when the asset was so acquired by the taxpayer, of a share of the capital stock of the foreign affiliate shall be deemed to be nil; and 
  (f) where the taxpayer has so elected in prescribed form and within prescribed time, subsection (2) applies as if the asset were an expropriation asset acquired by the taxpayer as compensation for foreign property taken by a particular issuer as described in subsection (1). 
  
  ### Assets acquired from foreign affiliate of taxpayer as consideration for settlement, etc., of debt
  
  (5) Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate as consideration for the settlement or extinguishment of a capital property of the taxpayer that was a debt payable by the foreign affiliate to the taxpayer or any other obligation of the foreign affiliate to pay an amount to the taxpayer (which debt or other obligation is referred to in this subsection as the “obligation”), if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the assets so acquired by the taxpayer from the foreign affiliate, the following rules apply in respect of each such asset so acquired by the taxpayer: 
  (a) paragraph 80.1(4)(a) applies in respect of the asset as if subparagraph 80.1(4)(a)(iv) were read as follows: 
  “(iv) the taxpayer’s proceeds of the disposition of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset;”; 
  (b) where the taxpayer has designated in the taxpayer’s election a class of shares as described in this paragraph in respect of the asset, 
  (i) the amount, if any, by which the cost to the taxpayer of the asset (computed having regard to paragraph (a) and paragraph (4)(a)) exceeds the amount of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset shall be deemed to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and 
  (ii) the taxpayer’s gain, if any, from the disposition of the obligation shall be deemed to be nil; 
  (c) the taxpayer’s loss, if any, from the disposition of the obligation shall be deemed to be nil; and 
  (d) paragraphs (4)(c) to (f) apply in respect of the asset. 
  
  ### Assets acquired from foreign affiliate of taxpayer on winding-up, etc.
  
  (6) Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate, 
  (a) on the winding-up, discontinuance or reorganization of the business of the foreign affiliate, or 
  (b) as consideration for the redemption, cancellation or acquisition by the foreign affiliate of shares of its capital stock, if the taxpayer has so elected, in prescribed form and within prescribed time, 
  (c) in respect of all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (1) applies in respect of each such asset, or 
  (d) in respect of all amounts received or to be received by the taxpayer as or on account of interest on all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (2) applies in respect of each such asset, as if the assets were expropriation assets acquired by the taxpayer as consideration for the sale of foreign property that consisted of shares of the capital stock of the foreign affiliate owned by the taxpayer immediately before the assets were so acquired and that was sold to a particular issuer as described in subsection (1). 
  
  ### Definition of 
  *adjusted principal amount* 
  
  (7) In this section, 
  *adjusted principal amount* to a taxpayer of an expropriation asset at any particular time means the amount, if any, by which  
  (a) the total of the principal amount of the asset and, in respect of each interest amount received by the taxpayer on the asset before the particular time, the lesser of the tax referred to in subparagraph (2)(b)(i) in respect of that interest amount and the proportion determined under subparagraph (2)(b)(ii) in respect thereof, exceeds 
  (b) the total of each amount received by the taxpayer before the particular time as an interest amount on the asset and each amount received by the taxpayer before the particular time as, on account or in lieu of payment of, or in satisfaction of, the principal amount of the asset. 
  
  ### Currency in which adjusted principal amount to be computed or expressed
  
  (8) For the purposes of this section, the adjusted principal amount, at any particular time, of an expropriation asset or of any asset assumed for the purposes of this section to be an expropriation asset shall be computed in the currency in which the principal amount of the asset is, under the terms thereof, payable, except that for greater certainty, for the purposes of paragraph (2)(a), the adjusted principal amount at any particular time of such an asset is its adjusted principal amount at that time computed as provided in this subsection but expressed in Canadian currency. 
  
  ### Election in respect of two or more expropriation assets acquired by taxpayer
  
  (9) For the purposes of Subdivision C and subsection (2), and in applying subsections (7) and (8) for those purposes, where two or more expropriation assets that were 
  (a) issued by the government of a country other than Canada, or 
  (b) issued by a person resident in a country other than Canada and guaranteed by the government of that country at the same time, or as compensation for, or consideration for the sale of, the same foreign property, have been acquired by a taxpayer and the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the expropriation assets that were so issued or guaranteed by the government of that country and acquired by the taxpayer before the making of the election, all of those expropriation assets shall be considered to be a single expropriation asset that was issued or guaranteed by the government of that country and acquired by the taxpayer. 
  
  ### Application
  
  80.2 (1) Subsections (2) to (13) apply if 
  (a) in a taxation year, a taxpayer, under the terms of a contract, pays to a person (referred to in this section as the “recipient”) an amount (referred to in this section as the “specified amount”) that may reasonably be considered to be received by the recipient as a reimbursement of, or a contribution or an allowance in respect of, an amount (referred to in this section as the “original amount”) 
  (i) that was described by paragraph 18(1)(m) and was paid or payable by the recipient, or 
  (ii) that was, in respect of the recipient, an amount described by paragraph 12(1)(o); 
  (b) the original amount is paid or became payable or receivable in a taxation year or fiscal period of the recipient that begins before 2007; and 
  (c) the taxpayer is resident in Canada or carries on business in Canada when the specified amount is paid. 
  
  ### Rules relating to time of payment
  
  (2) If the specified amount is paid in a taxation year of the taxpayer that begins before 2008, the eligible portion of the specified amount, referred to in subsection (11), is deemed to be a payment described by paragraph 18(1)(m). If, however, the specified amount is paid in a taxation year of the taxpayer that begins after 2007, the specified amount is deemed, for the purpose of applying this section to the taxpayer, to be nil. 
  
  ### Applying paragraph 18(1)(m)
  
  (3) For the purpose of applying paragraph 18(1)(m) for the taxpayer’s taxation year in which the specified amount was paid, the amount to which that paragraph applies is to be determined for that taxation year 
  (a) if the taxpayer was in existence at the time the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), as if the specified amount were paid by the taxpayer at that time; and 
  (b) in any other case, as if 
  (i) the taxpayer were in existence and had a calendar taxation year at the time the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), and 
  (ii) the specified amount were paid by the taxpayer at that time. 
  
  ### Exception for certain partnership reimbursements
  
  (4) Subsection (3) does not apply to a specified amount paid by a taxpayer if 
  (a) the recipient is a partnership; 
  (b) the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), in a particular fiscal period of the partnership; 
  (c) the taxpayer is a member of the partnership at the end of the particular fiscal period; and 
  (d) the taxpayer paid the specified amount before the end of the taxation year of the taxpayer in which that particular fiscal period ends. 
  
  ### Specified amount deemed to be paid at end of taxation year
  
  (5) A specified amount paid by the taxpayer to a partnership is deemed to have been paid on the last day of a particular taxation year of the taxpayer, and not at the time it was paid, if 
  (a) the taxpayer paid an amount to the partnership in the particular taxation year (referred to in this subsection as the “initial payment”); 
  (b) the initial payment was paid before September 17, 2004; 
  (c) the initial payment is an amount to which subsection (3) did not apply because of subsection (4); 
  (d) the taxpayer’s share of the original amount in respect of the initial payment is greater than the initial payment; 
  (e) the specified amount is equal to or less than the difference between the taxpayer’s share of the original amount in respect of the initial payment and the initial payment; 
  (f) the taxpayer elects in the taxpayer’s return of income for the taxpayer’s taxation year that includes the time at which the specified amount would, if this Act were read without reference to this subsection, have been paid, to have this subsection apply to the specified amount; and 
  (g) the specified amount is paid before 2006. 
  
  ### Inclusion in recipient’s income
  
  (6) The recipient shall include in computing the recipient’s income for the taxation year or fiscal period in which the original amount was paid or became payable or receivable, the amount, if any, by which the eligible portion of the specified amount exceeds the portion of the original amount that was included in computing the income of the recipient for the taxation year or fiscal period because of paragraph 12(1)(o) or that was not deductible in computing the income of the recipient for the taxation year or fiscal period because of paragraph 18(1)(m). 
  
  ### Interpretation — portion of the original amount
  
  (7) For the purpose of subsection (6), the portion of the original amount that was included in computing the income of the recipient or that was not deductible in computing the income of the recipient is the amount that would be included in computing the income of the recipient under paragraph 12(1)(o) or that would not be deductible in computing the income of the recipient under paragraph 18(1)(m), if the original amount were equal to the eligible portion of the specified amount. 
  
  ### Inclusion in recipient’s income
  
  (8) The recipient shall include, in computing the recipient’s income for its taxation year or fiscal period in which the original amount was paid or became payable or receivable, the amount, if any, by which the specified amount exceeds the eligible portion of the specified amount. 
  
  ### Deduction by taxpayer
  
  (9) Subject to paragraphs 18(1)(a) and (b), the taxpayer may deduct in computing the taxpayer’s income for the taxpayer’s taxation year in which the specified amount was paid, the amount, if any, by which the specified amount exceeds the eligible portion of the specified amount. 
  
  ### Specified amount deemed not to be payable or receivable
  
  (10) Except for the purposes of this section and subparagraph 53(1)(e)(iv.1), 
  (a) the taxpayer is deemed not to have paid, and not to have been obligated to pay, the specified amount; and 
  (b) the recipient is deemed not to have received, and not to have been entitled to receive, the specified amount. 
  
  ### Eligible portion of a specified amount
  
  (11) The eligible portion of a specified amount is 
  (a) an amount equal to the specified amount if 
  (i) the specified amount was paid before September 17, 2004, 
  (ii) the original amount is a tax imposed under a provincial law on the production of 
  (A) petroleum, natural gas or related hydrocarbons from a natural accumulation of petroleum or natural gas (other than a mineral resource) located in Canada, or from an oil or gas well located in Canada if the petroleum, natural gas or related hydrocarbons are not, before extraction, owned by the Crown in right of Canada or a province, or 
  (B) metals, minerals or coal from a mineral resource located in Canada if the metals, minerals or coal are not, before extraction, owned by the Crown in right of Canada or a province, 
  (iii) the specified amount does not exceed the taxpayer’s share of the original amount, or 
  (iv) the original amount is a prescribed amount; and 
  (b) the taxpayer’s share of the original amount, in any other case. 
  
  ### Taxpayer’s share of original amount
  
  (12) A taxpayer’s share of an original amount in respect of a specified amount paid by the taxpayer to a recipient in respect of a property is the amount that may reasonably be considered to be the taxpayer’s share of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property, which share may not exceed the total of 
  (a) that proportion of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property that the taxpayer’s share of production from the property payable to the taxpayer as a royalty, which royalty is computed without reference to the costs of exploration or production, is of the total production from the property, and 
  (b) that proportion of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property (other than those amounts which the recipient has received or is entitled to receive as a reimbursement, contribution or allowance in respect of a royalty described in paragraph (a)) that the taxpayer’s share of the income from the property is of the total income from the property. 
  
  ### Reduction in original amount for Part XII of the regulations
  
  (13) For the purpose of applying Part XII of the Income Tax Regulations, an original amount in respect of which a specified amount is received is deemed, for the taxation year in which the original amount was paid or became payable or receivable, not to include an amount equal to the eligible portion of the specified amount.  
  
  ### Definitions
  
  80.3 (1) In this section,  
  *breeding animals* means deer, elk and other similar grazing ungulates, bovine cattle, bison, goats, sheep and horses that are over 12 months of age and are kept for breeding; (animaux reproducteurs)   
  *breeding bees* means bees that are not used principally to pollinate plants in greenhouses and larvae of those bees; (abeilles reproductrices)   
  *breeding bee stock*, of a taxpayer at any time, means a reasonable estimate of the quantity of a taxpayer’s breeding bees held at that time in the course of carrying on a farming business using a unit of measurement that is accepted as an industry standard; (stock d’abeilles reproductrices)   
  *breeding herd* of a taxpayer at any time means the number determined by the formula  is the total number of the taxpayer’s breeding animals held in the course of carrying on a farming business at that time, is the total number of the taxpayer’s breeding animals held in the business at that time that are female bovine cattle that have not given birth to calves, and is the lesser of the number determined as the value of B and one-half the total number of the taxpayer’s breeding animals held in the business at that time that are female bovine cattle that have given birth to calves. ( troupeau reproducteur)  
  
  ### Income deferral from the destruction of livestock
  
  (2) Where a particular amount in respect of the forced destruction of livestock under statutory authority in a taxation year of a taxpayer is included in computing the income of the taxpayer for the year from a farming business, there may be deducted in computing that income such amount as the taxpayer claims not exceeding the particular amount. 
  
  ### Inclusion of deferred amount
  
  (3) The amount deducted under subsection (2) in computing the income of a taxpayer from a farming business for a taxation year shall be deemed to be income of the taxpayer from the business for the taxpayer’s immediately following taxation year. 
  
  ### Income deferral for regions of drought, flood or excessive moisture
  
  (4) If in a taxation year a taxpayer carries on a farming business in a region that is at any time in the year a prescribed drought region or a prescribed region of flood or excessive moisture and the taxpayer’s breeding herd at the end of the year in respect of the business does not exceed 85% of the taxpayer’s breeding herd at the beginning of the year in respect of the business, there may be deducted in computing the taxpayer’s income from the business for the year the amount that the taxpayer claims, not exceeding the amount, if any, determined by the formula is the amount by which 
  (a) the total of all amounts included in computing the taxpayer’s income for the year from the business in respect of the sale of breeding animals in the year exceeds 
  (b) the total of all amounts deducted under paragraph 20(1)(n) in computing the taxpayer’s income from the business for the year in respect of an amount referred to in paragraph (a) of this description; is the total of all amounts deducted in computing the taxpayer’s income from the business for the year in respect of the acquisition of breeding animals; and is 
  (a) 30% where the taxpayer’s breeding herd at the end of the year in respect of the business exceeds 70% of the taxpayer’s breeding herd at the beginning of the year in respect of the business, and 
  (b) 90% where the taxpayer’s breeding herd at the end of the year in respect of the business does not exceed 70% of the taxpayer’s breeding herd at the beginning of the year in respect of the business. 
  
  ### Income deferral
  
  (4.1) If in a taxation year a taxpayer carries on a farming business in a region that is at any time in the year a prescribed drought region or a prescribed region of flood or excessive moisture and the taxpayer’s breeding bee stock at the end of the year in respect of the business does not exceed 85% of the taxpayer’s breeding bee stock at the beginning of the year in respect of the business, there may be deducted in computing the taxpayer’s income from the business for the year the amount that the taxpayer claims, not exceeding the amount, if any, determined by the formula is the amount by which 
  (a) the total of all amounts included in computing the taxpayer’s income from the business for the year in respect of the sale of breeding bees in the year exceeds 
  (b) the total of all amounts deducted under paragraph 20(1)(n) in computing the taxpayer’s income from the business for the year in respect of an amount referred to in paragraph (a); is the total of all amounts deducted in computing the taxpayer’s income from the business for the year in respect of the acquisition of breeding bees; and is 
  (a) 30% if the taxpayer’s breeding bee stock in respect of the business at the end of the year exceeds 70% of the taxpayer’s breeding bee stock in respect of the business at the beginning of the year, and 
  (b) 90% if the taxpayer’s breeding bee stock in respect of the business at the end of the year does not exceed 70% of the taxpayer’s breeding bee stock in respect of the business at the beginning of the year. 
  
  ### Inclusion of deferred amount
  
  (5) An amount deducted under subsection (4) or (4.1) in computing the income of a taxpayer for a particular taxation year from a farming business carried on in a region prescribed under those subsections may, to the extent that the taxpayer so elects, be included in computing the taxpayer’s income from the business for a taxation year ending after the particular taxation year, and is, except to the extent that the amount has been included under this subsection in computing the taxpayer’s income from the business for a preceding taxation year after the particular year, deemed to be income of the taxpayer from the business for the taxation year of the taxpayer that is the earliest of 
  (a) the first taxation year beginning after the end of the period or series of continuous periods, as the case may be, for which the region is prescribed under those subsections, 
  (b) the first taxation year, following the particular taxation year, at the end of which the taxpayer is 
  (i) non-resident, and 
  (ii) not carrying on business through a fixed place of business in Canada, and 
  (c) the taxation year in which the taxpayer dies. 
  
  ### Subsections (2), (4) and (4.1) not applicable
  
  (6) Subsections (2), (4) and (4.1) do not apply to a taxpayer in respect of a farming business for a taxation year 
  (a) in which the taxpayer died; or 
  (b) where at the end of the year the taxpayer is non-resident and not carrying on the business through a fixed place of business in Canada. 
  
  ### Measuring breeding bee stock
  
  (7) In applying subsection (4.1) in respect of a taxation year, the unit of measurement used for estimating the quantity of a taxpayer’s breeding bee stock held in the course of carrying on a farming business at the end of the year is to be the same as that used for the beginning of the year. 
  
  ### Loans
  
  80.4 (1) Where a person or partnership receives a loan or otherwise incurs a debt because of or as a consequence of a previous, the current or an intended office or employment of an individual, or because of the services performed or to be performed by a corporation carrying on a personal services business, the individual or corporation, as the case may be, shall be deemed to have received a benefit in a taxation year equal to the amount, if any, by which the total of 
  (a) all interest on all such loans and debts computed at the prescribed rate on each such loan and debt for the period in the year during which it was outstanding, and 
  (b) the total of all amounts each of which is an amount of interest that was paid or payable in respect of the year on such a loan or debt by 
  (i) a person or partnership (in this paragraph referred to as the “employer”) that employed or intended to employ the individual, 
  (ii) a person (other than the debtor) related to the employer, or 
  (iii) a person or partnership to or for whom or which the services were or were to be provided or performed by the corporation or a person (other than the debtor) who does not deal at arm’s length with that person or any member of that partnership, exceeds the total of 
  (c) the amount of interest for the year paid on all such loans and debts not later than 30 days after the end of the year, and 
  (d) any portion of the total determined in respect of the year under paragraph 80.4(1)(b) that is reimbursed in the year or within 30 days after the end of the year by the debtor to the person or entity who made the payment referred to in that paragraph. 
  
  ### Interpretation
  
  (1.1) A loan or debt is deemed to have been received or incurred because of an individual’s office or employment, or because of services performed by a corporation that carries on a personal services business, as the case may be, if it is reasonable to conclude that, but for an individual’s previous, current or intended office or employment, or the services performed or to be performed by the corporation, 
  (a) the terms of the loan or debt would have been different; or 
  (b) the loan would not have been received or the debt would not have been incurred. 
  
  ### Idem
  
  (2) Where a person (other than a corporation resident in Canada) or a partnership (other than a partnership each member of which is a corporation resident in Canada) was 
  (a) a shareholder of a corporation, 
  (b) connected with a shareholder of a corporation, or 
  (c) a member of a partnership, or a beneficiary of a trust, that was a shareholder of a corporation, and by virtue of that shareholding that person or partnership received a loan from, or otherwise incurred a debt to, that corporation, any other corporation related thereto or a partnership of which that corporation or any corporation related thereto was a member, the person or partnership shall be deemed to have received a benefit in a taxation year equal to the amount, if any, by which 
  (d) all interest on all such loans and debts computed at the prescribed rate on each such loan and debt for the period in the year during which it was outstanding exceeds 
  (e) the total of 
  (i) the amount of interest for the year paid on all such loans and debts (other than loans deemed to have been made under subsection 15(2.17)) not later than 30 days after the end of the year, and 
  (ii) the specified interest amounts, for the year, in respect of all such loans that are deemed to have been made under subsection 15(2.17). 
  
  ### Where ss. (1) and (2) do not apply
  
  (3) Subsections 80.4(1) and (2) do not apply in respect of any loan or debt, or any part thereof, 
  (a) on which the rate of interest was equal to or greater than the rate that would, having regard to all the circumstances (including the terms and conditions of the loan or debt), have been agreed on, at the time the loan was received or the debt was incurred, between parties dealing with each other at arm’s length if 
  (i) none of the parties received the loan or incurred the debt by virtue of an office or employment or by virtue of the shareholding of a person or partnership, and 
  (ii) the ordinary business of the creditor included the lending of money, except where an amount is paid or payable in any taxation year to the creditor in respect of interest on the loan or debt by a party other than the debtor; or 
  (b) that was included in computing the income of a person or partnership under this Part. 
  
  ### Interest on loans for home purchase or relocation
  
  (4) For the purpose of computing the benefit under subsection (1) in a taxation year in respect of a home purchase loan or a home relocation loan, the amount of interest determined under paragraph (1)(a) shall not exceed the amount of interest that would have been determined thereunder if it had been computed at the prescribed rate in effect at the time the loan was received or the debt was incurred, as the case may be. 
  
  ### Idem
  
  (5) Where an individual has, before November 13, 1981, 
  (a) received a housing loan, or 
  (b) made arrangements in writing in respect of a home purchase loan that would, if the loan were made before 1982, have been a housing loan, for the purpose of computing the amount of interest referred to in paragraph 80.4(1)(a) on the loan, the amount of the loan may be reduced 
  (c) for the 1982 taxation year, by the amount, if any, by which $40,000 exceeds the total of 
  (i) all amounts claimed as a reduction under this subsection for the year by the individual’s spouse or common-law partner with whom the individual resided in the year, and 
  (ii) all amounts claimed as a reduction under this subsection for the year by the individual on all other loans, and 
  (d) for the 1983 taxation year, by the amount, if any, by which $20,000 exceeds the total of 
  (i) all amounts claimed as a reduction under this subsection for the year by the individual’s spouse or common-law partner with whom the individual resided in the year, and 
  (ii) all amounts claimed as a reduction under this subsection for the year by the individual on all other loans. 
  
  ### Deemed new home purchase loans
  
  (6) For the purposes of this section, other than paragraph 80.4(3)(a) and subsection 80.4(5), where a home purchase loan or a home relocation loan of an individual has a term for repayment exceeding five years, the balance outstanding on the loan on the date that is five years from the day the loan was received or was last deemed by this subsection to have been received shall be deemed to be a new home purchase loan received by the individual on that date. 
  
  ### Definitions
  
  (7) In this section,  
  *home purchase loan* means that portion of any loan received or debt otherwise incurred by an individual in the circumstances described in subsection 80.4(1) that is used to acquire, or to repay a loan or debt that was received or incurred to acquire, a dwelling, or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit a dwelling owned by the corporation, where the dwelling is for the habitation of  
  (a) the individual by virtue of whose office or employment the loan is received or the debt is incurred, 
  (b) a specified shareholder of the corporation by virtue of whose services the loan is received or the debt is incurred, or 
  (c) a person related to a person described in paragraph (a) or (b), or that is used to repay a home purchase loan; ( prêt consenti pour l’achat d’une maison)   
  *prescribed rate* of interest means  
  (a) 6% per annum before 1978, 
  (b) 8% per annum for 1978, and 
  (c) for any year, or part thereof, after 1978, such rate of interest as is prescribed therefor except that, for the purpose of computing the benefit under subsection 80.4(1) in a taxation year on a home purchase loan received after November 12, 1981 and before 1982, the prescribed rate of interest at the time the loan was received shall be deemed to be 16% per annum; ( taux prescrit)   
  *specified interest amount*, for a year, in respect of a loan (referred to in this definition as the deemed loan) deemed to have been made under subsection 15(2.17) by an ultimate funder (as defined in subsection 15(2.192)), means the amount determined by the formula  is the amount of interest for the year paid not later than 30 days after the end of the year on all debts — owing by one or more funders (as defined in subsection 15(2.192), but excluding any funders that are ultimate funders as defined in subsection 15(2.192)) under one or more funding arrangements (as defined in subsection 15(2.192)) to the ultimate funder — that gave rise to the deemed loan;  is the average amount outstanding for the year in respect of the deemed loan; and is the total of all amounts each of which is the average amount outstanding in the year as or on account of an amount owing under a debt described in A. ( montant d’intérêts déterminé)  
  
  ### Meaning of connected
  
  (8) For the purposes of subsection (2), a person or partnership is connected with a shareholder of a corporation if that person or partnership does not deal at arm’s length with, or is affiliated with, the shareholder, unless, in the case of a person, that person is 
  (a) a foreign affiliate of the corporation; or 
  (b) a foreign affiliate of a person resident in Canada with which the corporation does not deal at arm’s length. 
  
  ### Deemed interest
  
  80.5 Where a benefit is deemed by section 80.4 to have been received in a taxation year by 
  (a) an individual or corporation under subsection 80.4(1), or 
  (b) a person or partnership under subsection 80.4(2), the amount of the benefit shall, for the purposes of subparagraph 8(1)(j)(i) and paragraph 20(1)(c), be deemed to be interest paid in, and payable in respect of, the year by the debtor pursuant to a legal obligation to pay interest on borrowed money. 
  
  ### Synthetic disposition
  
  80.6 (1) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is one year or more, the taxpayer is deemed 
  (a) to have disposed of the property immediately before the beginning of the synthetic disposition period for proceeds equal to its fair market value at the beginning of the synthetic disposition period; and 
  (b) to have reacquired the property at the beginning of the synthetic disposition period at a cost equal to that fair market value. 
  
  ### Exception
  
  (2) Subsection (1) does not apply in respect of a property owned by a taxpayer if 
  (a) the disposition referred to in subsection (1) would not result in the realization of a capital gain or income; 
  (b) the property is a mark-to-market property (as defined in subsection 142.2(1)) of the taxpayer; 
  (c) the synthetic disposition arrangement referred to in subsection (1) is a lease of tangible property or, for civil law, corporeal property; 
  (d) the arrangement is an exchange of property to which subsection 51(1) applies; or 
  (e) the property is disposed of as part of the arrangement, within one year after the day on which the synthetic disposition period of the arrangement begins. 
  
  # SUBDIVISION G 
  
  ## Amounts Not Included in Computing Income 
  
  ### Amounts not included in income
  
  81 (1) There shall not be included in computing the income of a taxpayer for a taxation year, 
  
  ### Statutory exemptions
  
  (a) an amount that is declared to be exempt from income tax by any other enactment of Parliament, other than an amount received or receivable by an individual that is exempt by virtue of a provision contained in a tax convention or agreement with another country that has the force of law in Canada; 
  
  ### War Savings Certificate
  
  (b) an amount received under a War Savings Certificate issued by His Majesty in right of Canada or under a similar savings certificate issued by His Majesty in right of Newfoundland before April 1, 1949; 
  
  ### Ship or aircraft of non-residents
  
  (c) the income for the year of a non-resident person earned in Canada from international shipping or from the operation of aircraft in international traffic, if the country in which the person is resident grants substantially similar relief for the year to persons resident in Canada; 
  
  ### Service pension, allowance or compensation
  
  (d) a pension payment, an allowance or compensation that is received under or is subject to the Pension Act,the Civilian War-related Benefits Act or the War Veterans Allowance Act, an amount received under the Gallantry Awards Order or compensation received under the regulations made under section 9 of the Aeronautics Act ;  
  
  ### Canadian Forces members and veterans amounts
  
  (d.1) the total of all amounts received or enjoyed by the taxpayer or the taxpayer’s spouse or common-law partner or survivor (as defined in subsection 146.2(1)) in the year on account of  
  (i) a Canadian Forces income support benefit payable to the taxpayer under Part 2 of the Veterans Well-being Act,  
  (ii) pain and suffering compensation, additional pain and suffering compensation or a critical injury benefit, disability award, death benefit, clothing allowance or detention benefit payable to the taxpayer under Part 3 of the Veterans Well-being Act,  
  (iii) a caregiver recognition benefit payable to the taxpayer under Part 3.1 of the Veterans Well-being Act,  
  (iv) an amount payable to the taxpayer under subsection 132(1) of the Veterans Well-being Act,  
  (v) a benefit provided under the Veterans Health Care Regulations,  
  (vi) a benefit provided in respect of Rehabilitation Services and Vocational Assistance under Part 2 of the Veterans Well-being Act,  
  (vii) a benefit provided to a member of the Canadian Forces under the Compensation and Benefit Instructions for the Canadian Forces that is 
  (A) a home modifications benefit, 
  (B) a home modifications move benefit, 
  (C) a vehicle modifications benefit, 
  (D) a home assistance benefit, 
  (E) an attendant care benefit, 
  (F) a caregiver benefit, 
  (G) a spousal education upgrade benefit, 
  (H) a funeral and burial expenses benefit, or 
  (I) a next of kin travel benefit, or 
  (viii) a benefit provided by the Department of National Defence as an education expense reimbursement for ill and injured members; 
  
  ### War pensions
  
  (e) a pension payment received on account of disability or death arising out of a war from a country that was an ally of Canada at the time of the war, if that country grants substantially similar relief for the year to a person receiving a pension referred to in paragraph 81(1)(d); 
  
  ### Halifax disaster pensions, grants or allowances
  
  (f) a pension payment, a grant or an allowance in respect of death or injury sustained in the explosion in Halifax in 1917 and received from the Halifax Relief Commission the incorporation of which was confirmed by An Act respecting the Halifax Relief Commission, chapter 24 of the Statutes of Canada, 1918, or received pursuant to the Halifax Relief Commission Pension Continuation Act, chapter 88 of the Statutes of Canada, 1974-75-76;  
  
  ### Compensation by Federal Republic of Germany
  
  (g) a payment made by the Federal Republic of Germany or by a public body performing a function of government within that country as compensation to a victim of National Socialist persecution, where no tax is payable in respect of that payment under a law of the Federal Republic of Germany that imposes an income tax; 
  
  ### Income from personal injury award property
  
  (g.1) the income for the year from any property acquired by or on behalf of a person as an award of, or pursuant to an action for, damages in respect of physical or mental injury to that person, or from any property substituted therefor and any taxable capital gain for the year from the disposition of any such property, 
  (i) where the income was income from the property, if the income was earned in respect of a period before the end of the taxation year in which the person attained the age of 21 years, and 
  (ii) in any other case, if the person was less than 21 years of age during any part of the year; 
  
  ### Income from income exempt under para. (g.1)
  
  (g.2) any income for the year from any income that is by virtue of this paragraph or paragraph 81(1)(g.1) not required to be included in computing the taxpayer’s income (other than any income attributable to any period after the end of the taxation year in which the person on whose behalf the income was earned attained the age of 21 years); 
  
  ### Certain government funded trusts
  
  (g.3) the amount that, but for this paragraph, would be the income of the taxpayer for the year if 
  (i) the taxpayer is the trust established under 
  (A) the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada and Her Majesty in right of each of the provinces, 
  (B) the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada, 
  (C) the Indian Residential Schools Settlement Agreement entered into by Her Majesty in right of Canada on May 8, 2006, 
  (D) the Settlement Agreement entered into by Her Majesty in Right of Canada on September 15, 2021 in respect of the class action relating to long-term drinking water quality for impacted First Nations, or 
  (E) the Settlement Agreement entered into by His Majesty in right of Canada on January 18, 2023 in respect of the class action relating to the attendance of day scholars at residential schools, and 
  (ii) the only contributions made to the taxpayer before the end of the year are those provided for under the relevant Agreement described in subparagraph (i); 
  
  ### Relief for increased heating expenses
  
  (g.4) an amount received pursuant to the Order Authorizing Ex Gratia Payments for Increased Heating Expenses; 
  
  ### Energy cost relief
  
  (g.5) an amount received pursuant to Part 1 of the Energy Costs Assistance Measures Act ;  
  
  ### Ontario Electricity Support Program
  
  (g.6) an amount of rate assistance received under section 79.2 of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sch B, as amended from time to time;  
  
  ### Social assistance
  
  (h) where the taxpayer is an individual (other than a trust), a social assistance payment (other than a prescribed payment) ordinarily made on the basis of a means, needs or income test under a program provided for by an Act of Parliament, a law of a province or a law of an Indigenous governing body (as defined in section 2 of the Children’s Special Allowances Act), to the extent that it is received directly or indirectly by the taxpayer for the benefit of another individual (other than the taxpayer’s spouse or common-law partner or a person who is related to the taxpayer or to the taxpayer’s spouse or common-law partner), if  
  (i) no family allowance under the Family Allowances Act or any similar allowance under a law of a province that provides for payment of an allowance similar to the family allowance provided under that Act is payable in respect of the other individual for the period in respect of which the social assistance payment is made, and  
  (ii) the other individual resides in the taxpayer’s principal place of residence, or the taxpayer’s principal place of residence is maintained for use as the residence of that other individual, throughout the period referred to in subparagraph 81(1)(h)(i); 
  
  ### Social assistance for informal care programs
  
  (h.1) if the taxpayer is an individual (other than a trust), a social assistance payment ordinarily made on the basis of a means, needs or income test provided for under a program of the Government of Canada, the government of a province or of an Indigenous governing body (as defined in section 2 of the Children’s Special Allowances Act), to the extent that it is received directly or indirectly by the taxpayer for the benefit of a particular individual, if  
  (i) payments to recipients under the program are made for the care and upbringing, on a temporary basis, of another individual in need of protection, 
  (ii) the particular individual is a child of the taxpayer because of paragraph 252(1)(b) (or would be a child of the taxpayer because of that paragraph if the taxpayer did not receive payments under the program), and 
  (iii) no special allowance under the Children’s Special Allowances Act is payable in respect of the particular individual for the period in respect of which the social assistance payment is made;  
  
  ### R.C.M.P. pension or compensation
  
  (i) a pension payment or compensation received under section 5, 31 or 45 of the Royal Canadian Mounted Police Pension Continuation Act, chapter R-10 of the Revised Statutes of Canada, 1970, or section 32 or 33 of the Royal Canadian Mounted Police Superannuation Act, in respect of an injury, disability or death;  
  
  ### Memorial grant
  
  (j) an amount received under the Memorial Grant Program for First Responders established under the authority of the Department of Public Safety and Emergency Preparedness Act in respect of individuals who die in the course of, or as a result of, their duties or as a result of an occupational illness or psychological impairment;  
  
  ### Employees profit sharing plan
  
  (k) a payment or part of a payment from an employees profit sharing plan that section 144 provides is not to be included; 
  
  ### Prospecting
  
  (l) an amount in respect of the receipt of a share that section 35 provides is not to be included; 
  
  ### Interest on certain obligations
  
  (m) interest that accrued to, became receivable or was received by, a corporation resident in Canada (in this paragraph referred to as the “parent corporation”) on a bond, debenture, bill, note, mortgage or similar obligation received by it as consideration for the disposition by it, before June 18, 1971, of 
  (i) a business carried on by it in a country other than Canada, or 
  (ii) all of the shares of a corporation that carried on a business in a country other than Canada, and such of the debts and other obligations of that corporation as were, immediately before the disposition, owing to the parent corporation, if 
  (iii) the business was of a public utility or public service nature, 
  (iv) the business or the property described in subparagraph 81(1)(m)(ii), as the case may be, was disposed of to a person or persons resident in that country, and 
  (v) the obligation received by the parent corporation was issued by or guaranteed by the government of that country or any agent thereof; 
  
  ### Governor General
  
  (n) income from the office of Governor General of Canada, other than salary under the Governor General’s Act ;  
  (o) and (p)  [Repealed, 1998, c. 19, s. 14(1)]  
  
  ### Provincial indemnities
  
  (q) an amount paid to an individual as an indemnity under a prescribed provision of the law of a province; 
  
  ### Foreign retirement arrangements
  
  (r) an amount that is credited or added to a deposit or account governed by a foreign retirement arrangement as interest or other income in respect of the deposit or account, where the amount would, but for this paragraph, be included in the taxpayer’s income solely because of that crediting or adding; 
  
  ### Salary deferral leave plans
  
  (s) an amount paid to the taxpayer in the year under an arrangement described in paragraph 6801(a) of the Income Tax Regulations to the extent that the amount may reasonably be considered to be attributable to amounts that  
  (i) were included in the taxpayer’s income for a preceding taxation year and were income, interest or other additional amounts, described in subparagraph 6801(a)(iv) of the Income Tax Regulations, and  
  (ii) were re-contributed by the taxpayer under the arrangement in a preceding taxation year; or 
  
  ### Dental benefits
  
  (t) an amount received under the Dental Benefit Act.  
  (2) and (3)  [Repealed, 2017, c. 20, s. 6]  
  
  ### Travel expenses
  
  (3.1) There shall not be included in computing an individual’s income for a taxation year an amount (not in excess of a reasonable amount) received by the individual from an employer with whom the individual was dealing at arm’s length as an allowance for, or reimbursement of, travel expenses incurred by the individual in the year in respect of the individual’s part-time employment in the year with the employer (other than expenses incurred in the performance of the duties of the individual’s part-time employment) if 
  (a) throughout the period in which the expenses were incurred, 
  (i) the individual had other employment or was carrying on a business, or 
  (ii) where the employer is a designated educational institution (within the meaning assigned by subsection 118.6(1)), the duties of the individual’s part-time employment were the provision in Canada of a service to the employer in the individual’s capacity as a professor or teacher; and 
  (b) the duties of the individual’s part-time employment were performed at a location not less than 80 kilometres from, 
  (i) where subparagraph (a)(i) applies, both the individual’s ordinary place of residence and the place of the other employment or business referred to in that subparagraph, and 
  (ii) where subparagraph (a)(ii) applies, the individual’s ordinary place of residence. 
  
  ### Payments for volunteer services
  
  (4) Where 
  (a) an individual was employed or otherwise engaged in a taxation year by a government, municipality or public authority (in this subsection referred to as “the employer”) and received in the year from the employer one or more amounts for the performance, as a volunteer, of the individual’s duties as 
  (i) an ambulance technician, 
  (ii) a firefighter, or 
  (iii) a person who assists in the search or rescue of individuals or in other emergency situations, and 
  (b) if the Minister so demands, the employer has certified in writing that 
  (i) the individual was in the year a person described in paragraph (a), and 
  (ii) the individual was at no time in the year employed or otherwise engaged by the employer, otherwise than as a volunteer, in connection with the performance of any of the duties referred to in paragraph (a) or of similar duties, there shall not be included in computing the individual’s income derived from the performance of those duties the lesser of $1,000 and the total of those amounts, unless the individual makes a claim under section 118.06 or 118.07 for the year. 
  
  ### Election
  
  (5) Where a taxpayer or a person described in paragraph 81(1)(g.1) has acquired capital property under the circumstances described in that paragraph, the taxpayer or the person may, in the return of income of the taxpayer for the taxation year in which the taxpayer attains the age of 21 years, elect to treat any such capital property held by the taxpayer or person as having been disposed of on the day immediately preceding the day on which the taxpayer attained the age of 21 years for proceeds of disposition equal to the fair market value of the property on that day and the person or taxpayer making the election shall be deemed to have reacquired that property immediately thereafter at a cost equal to those proceeds. 
  
  # SUBDIVISION H 
  
  ## Corporations Resident in Canada and their Shareholders 
  
  ### Taxable dividends received
  
  82 (1) In computing the income of a taxpayer for a taxation year, there shall be included the total of the following amounts: 
  (a) the amount, if any, by which 
  (i) the total of all amounts, other than eligible dividends and amounts described in paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, taxable dividends, exceeds 
  (ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as a taxable dividend (other than an eligible dividend); 
  (a.1) the amount, if any, by which 
  (i) the total of all amounts, other than amounts included in computing the income of the taxpayer because of paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, eligible dividends, exceeds 
  (ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as an eligible dividend; 
  (b) if the taxpayer is an individual, other than a trust that is a registered charity, the total of 
  (i) the product of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year multiplied by 
  (A) for the 2018 taxation year, 16%, and 
  (B) for taxation years after 2018, 15%, and 
  (ii) the product of the amount determined under paragraph (a.1) in respect of the taxpayer for the taxation year multiplied by 
  (A) for taxation years that end after 2005 and before 2010, 45%, 
  (B) for the 2010 taxation year, 44%, 
  (C) for the 2011 taxation year, 41%, and 
  (D) for taxation years that end after 2011, 38%; 
  (c) all taxable dividends received by the taxpayer in the taxation year, from corporations resident in Canada, under dividend rental arrangements of the taxpayer; 
  (d) all taxable dividends (other than taxable dividends described in paragraph (c)) received by the taxpayer in the taxation year from corporations resident in Canada that are not taxable Canadian corporations; and 
  (e) if the taxpayer is a trust, all amounts each of which is all or part of a taxable dividend (other than a taxable dividend described in paragraph (c) or (d)) that was received by the trust in the taxation year on a share of the capital stock of a taxable Canadian corporation and that can reasonably be considered to have been included in computing the income of a beneficiary under the trust who was non-resident at the end of the taxation year. 
  
  ### Limitation as to paragraph (1)(c)
  
  (1.1) An amount shall be included in the amounts described in paragraph (1)(c) in respect of a taxable dividend received at any time as part of a dividend rental arrangement only if that dividend was received on a share acquired before that time and after April, 1989. 
  
  ### Certain dividends received by taxpayer
  
  (2) Where by reason of subsection 56(4) or 56(4.1) or sections 74.1 to 75 of this Act or section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, there is included in computing a taxpayer’s income for a taxation year a dividend received by another person, for the purposes of this Act, the dividend shall be deemed to have been received by the taxpayer.  
  
  ### Dividends received by spouse or common-law partner
  
  (3) Where the amount that would, but for this subsection, be deductible under subsection 118(1) by reason of paragraph 118(1)(a) in computing a taxpayer’s tax payable under this Part for a taxation year that is less than the amount that would be so deductible if no amount were required by subsection (1) to be included in computing the income for the year of the taxpayer’s spouse or common-law partner and the taxpayer so elects in the taxpayer’s return of income for the year under this Part, all amounts described in paragraph (1)(a) or (a.1) received in the year from taxable Canadian corporations by the taxpayer’s spouse or common-law partner are deemed to have been so received by that taxpayer and not by the spouse or common-law partner. 
  
  ### Qualifying dividends
  
  83 (1) Where a qualifying dividend has been paid by a public corporation to shareholders of a series of tax-deferred preferred shares of a class of the capital stock of the corporation that were outstanding on March 31, 1977, the following rules apply: 
  (a) no part of the qualifying dividend shall be included in computing the income of any shareholder of the corporation by virtue of this Subdivision; and 
  (b) in computing the adjusted cost base to any shareholder of the corporation of any tax-deferred preferred share of the corporation owned by the shareholder, there shall be deducted in respect of the qualifying dividend an amount as provided by subparagraph 53(2)(a)(i). 
  
  ### Capital dividend
  
  (2) Where at any particular time after 1971 a dividend becomes payable by a private corporation to shareholders of any class of shares of its capital stock and the corporation so elects in respect of the full amount of the dividend, in prescribed manner and prescribed form and at or before the particular time or the first day on which any part of the dividend was paid if that day is earlier than the particular time, the following rules apply: 
  (a) the dividend shall be deemed to be a capital dividend to the extent of the corporation’s capital dividend account immediately before the particular time; and 
  (b) no part of the dividend shall be included in computing the income of any shareholder of the corporation. 
  
  ### Idem
  
  (2.1) Notwithstanding subsection 83(2), where a dividend that, but for this subsection, would be a capital dividend is paid on a share of the capital stock of a corporation and the share (or another share for which the share was substituted) was acquired by its holder in a transaction or as part of a series of transactions one of the main purposes of which was to receive the dividend, 
  (a) the dividend shall, for the purposes of this Act (other than for the purposes of Part III and computing the capital dividend account of the corporation), be deemed to be received by the shareholder and paid by the corporation as a taxable dividend and not as a capital dividend; and 
  (b) paragraph 83(2)(b) does not apply in respect of the dividend. 
  
  ### Where s. (2.1) does not apply
  
  (2.2) Subsection 83(2.1) does not apply in respect of a particular dividend, in respect of which an election is made under subsection 83(2), paid on a share of the capital stock of a particular corporation to an individual where it is reasonable to consider that all or substantially all of the capital dividend account of the particular corporation immediately before the particular dividend became payable consisted of amounts other than any amount 
  (a) added to that capital dividend account under paragraph (b) of the definition 
  *capital dividend account* in subsection 89(1) in respect of a dividend received on a share of the capital stock of another corporation, which share (or another share for which the share was substituted) was acquired by the particular corporation in a transaction or as part of a series of transactions one of the main purposes of which was that the particular corporation receive the dividend, but not in respect of a dividend where it is reasonable to consider that the purpose of paying the dividend was to distribute an amount that was received by the other corporation and included in computing the other corporation’s capital dividend account by reason of paragraph (d) of that definition;  
  (b) added to that capital dividend account under paragraph 87(2)(z.1) as a result of an amalgamation or winding-up or a series of transactions including the amalgamation or winding-up that would not have been so added had the amalgamation or winding-up occurred or the series of transactions been commenced after 4:00 p.m. Eastern Daylight Saving Time, September 25, 1987; 
  (c) added to that capital dividend account at a time when the particular corporation was controlled, directly or indirectly, in any manner whatever, by one or more non-resident persons; or 
  (d) in respect of a capital gain from a disposition of a property by the particular corporation or another corporation that may reasonably be considered as having accrued while the property (or another property for which it was substituted) was a property of a corporation that was controlled, directly or indirectly, in any manner whatever, by one or more non-resident persons. 
  
  ### Idem
  
  (2.3) Subsection 83(2.1) does not apply in respect of a dividend, in respect of which an election is made under subsection 83(2), paid on a share of the capital stock of a corporation where it is reasonable to consider that the purpose of paying the dividend was to distribute an amount that was received by the corporation and included in computing its capital dividend account by reason of paragraph (d) of the definition 
  *capital dividend account* in subsection 89(1).  
  
  ### Idem
  
  (2.4) Subsection 83(2.1) does not apply in respect of a particular dividend, in respect of which an election is made under subsection 83(2), paid on a share of the capital stock of a particular corporation to a corporation (in this subsection referred to as the “related corporation”) related (otherwise than by reason of a right referred to in paragraph 251(5)(b)) to the particular corporation where it is reasonable to consider that all or substantially all of the capital dividend account of the particular corporation immediately before the particular dividend became payable consisted of amounts other than any amount 
  (a) added to that capital dividend account under paragraph (b) of the definition 
  *capital dividend account* in subsection 89(1) in respect of a dividend received on a share of the capital stock of another corporation if it is reasonable to consider that any portion of the capital dividend account of that other corporation immediately before that dividend became payable consisted of amounts added to that account under paragraph 87(2)(z.1) or paragraph (b) of that definition as a result of a transaction or a series of transactions that would not have been so added had the transaction occurred or the series of transactions been commenced after 4:00 p.m. Eastern Daylight Saving Time, September 25, 1987;  
  (b) that represented the capital dividend account of a corporation before it became related to the related corporation; 
  (c) added to the capital dividend account of the particular corporation at a time when that corporation was controlled, directly or indirectly, in any manner whatever, by one or more non-resident persons; 
  (d) in respect of a capital gain from a disposition of a property by the particular corporation or another corporation that may reasonably be considered as having accrued while the property (or another property for which it was substituted) was a property of a corporation that was controlled, directly or indirectly, in any manner whatever, by one or more non-resident persons; or 
  (e) in respect of a capital gain from a disposition of a property (or another property for which it was substituted) that may reasonably be considered as having accrued while the property or the other property was a property of a person that was not related to the related corporation. 
  
  ### Late filed elections
  
  (3) Where at any particular time after 1974 a dividend has become payable by a corporation to shareholders of any class of shares of its capital stock, and subsection 83(1) or (2) would have applied to the dividend except that the election referred to therein was not made on or before the day on or before which the election was required by that subsection to be made, the election shall be deemed to have been made at the particular time or on the first day on which any part of the dividend was paid, whichever is the earlier, if 
  (a) the election is made in prescribed manner and prescribed form; 
  (b) an estimate of the penalty in respect of that election is paid by the corporation when that election is made; and 
  (c) the directors or other person or persons legally entitled to administer the affairs of the corporation have, before the time the election is made, authorized the election to be made. 
  
  ### Request for election
  
  (3.1) The Minister may at any time, by written request served personally or by registered mail, request that an election referred to in subsection 83(3) be made by a taxpayer, and where the taxpayer on whom such a request is served does not comply therewith within 90 days of service thereof on the taxpayer, subsection 83(3) does not apply to such an election made by the taxpayer. 
  
  ### Penalty for late filed election
  
  (4) For the purposes of this section, the penalty in respect of an election referred to in paragraph 83(3)(a) is an amount equal to the lesser of 
  (a) 1% per annum of the amount of the dividend referred to in the election for each month or part of a month during the period commencing with the time that the dividend became payable, or the first day on which any part of the dividend was paid if that day is earlier, and ending with the day on which that election was made, and 
  (b) the product obtained when $500 is multiplied by the proportion that the number of months or parts of months during the period referred to in paragraph 83(4)(a) bears to 12. 
  
  ### Unpaid balance of penalty
  
  (5) The Minister shall, with all due dispatch, examine each election referred to in paragraph 83(3)(a), assess the penalty payable and send a notice of assessment to the corporation and the corporation shall pay, forthwith to the Receiver General, the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Definition of 
  *qualifying dividend* 
  
  (6) For the purposes of subsection 83(1), 
  *qualifying dividend* means a dividend on shares of a series of a class of the capital stock of a public corporation that is prescribed to be a tax-deferred preferred series that became payable by the corporation after 1978 and not later than  
  (a) where the terms as at March 31, 1977 of the shares of that series entitled the holder of such a share to exchange it after a particular date for a share or shares of another series or class of preferred shares of the capital stock of the corporation, that particular date, 
  (b) where the terms as at March 31, 1977 of the shares of that series required the corporation to offer to purchase at a time not later than a particular date all of the shares of that series from all of the holders of those shares, that particular date, and 
  (c) in any other case, October 1, 1991, whichever is applicable in respect of that series of shares, except that a dividend on shares of such a series that would otherwise be a qualifying dividend shall be deemed not to be a qualifying dividend if 
  (d) at the time that the dividend became payable, the terms of the shares of that series differ from the terms as at March 31, 1977 of the shares of that series, or 
  (e) after March 31, 1977 the corporation issued additional shares of that series. 
  
  ### Amalgamation where there are tax-deferred preferred shares
  
  (7) For the purposes of this section, where, after March 31, 1977, there has been an amalgamation within the meaning of section 87 and one or more of the predecessor corporations had a series of shares outstanding on March 31, 1977 that was prescribed to be a tax-deferred preferred series, the following rules apply: 
  (a) the series of shares of the capital stock of the predecessor corporation that was prescribed to be a tax-deferred preferred series shall be deemed to have been continued in existence in the form of the new shares; and 
  (b) the new corporation shall be deemed to be the same corporation as, and a continuation of, each such predecessor corporation. 
  
  ### Deemed dividend
  
  84 (1) Where a corporation resident in Canada has at any time after 1971 increased the paid-up capital in respect of the shares of any particular class of its capital stock, otherwise than by 
  (a) payment of a stock dividend, 
  (b) a transaction by which 
  (i) the value of its assets less its liabilities has been increased, or 
  (ii) its liabilities less the value of its assets have been decreased, by an amount not less than the amount of the increase in the paid-up capital in respect of the shares of the particular class, 
  (c) a transaction by which the paid-up capital in respect of the shares of all other classes of its capital stock has been reduced by an amount not less than the amount of the increase in the paid-up capital in respect of the shares of the particular class, 
  (c.1) if the corporation is an insurance corporation, any action by which it converts contributed surplus related to its insurance business (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of the shares of its capital stock,  
  (c.2) if the corporation is a bank, any action by which it converts any of its contributed surplus that arose on the issuance of shares of its capital stock (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of shares of its capital stock, or  
  (c.3) if the corporation is neither an insurance corporation nor a bank, any action by which it converts into paid-up capital in respect of a class of shares of its capital stock any of its contributed surplus that arose after March 31, 1977 (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies)  
  (i) on the issuance of shares of that class or shares of another class for which the shares of that class were substituted (other than an issuance to which section 51, 66.3, 84.1, 85, 85.1, 86 or 87 or subsection 192(4.1) or 194(4.1) applied), 
  (ii) on the acquisition of property by the corporation from a person who at the time of the acquisition held any of the issued shares of that class or shares of another class for which shares of that class were substituted for no consideration or for consideration that did not include shares of the capital stock of the corporation, or 
  (iii) as a result of any action by which the paid-up capital in respect of that class of shares or in respect of shares of another class for which shares of that class were substituted was reduced by the corporation, to the extent of the reduction in paid-up capital that resulted from the action, the corporation shall be deemed to have paid at that time a dividend on the issued shares of the particular class equal to the amount, if any, by which the amount of the increase in the paid-up capital exceeds the total of 
  (d) the amount, if any, of the increase referred to in subparagraph 84(1)(b)(i) or the decrease referred to in subparagraph 84(1)(b)(ii), as the case may be, 
  (e) the amount, if any, of the reduction referred to in paragraph 84(1)(c), and 
  (f) the amount, if any, of the increase in the paid-up capital that resulted from a conversion referred to in paragraph 84(1)(c.1), (c.2) or (c.3), and a dividend shall be deemed to have been received at that time by each person who held any of the issued shares of the particular class immediately after that time equal to that proportion of the dividend so deemed to have been paid by the corporation that the number of the shares of the particular class held by the person immediately after that time is of the number of the issued shares of that class outstanding immediately after that time. 
  
  ### Distribution on winding-up, etc.
  
  (2) Where funds or property of a corporation resident in Canada have at any time after March 31, 1977 been distributed or otherwise appropriated in any manner whatever to or for the benefit of the shareholders of any class of shares in its capital stock, on the winding-up, discontinuance or reorganization of its business, the corporation shall be deemed to have paid at that time a dividend on the shares of that class equal to the amount, if any, by which 
  (a) the amount or value of the funds or property distributed or appropriated, as the case may be, exceeds 
  (b) the amount, if any, by which the paid-up capital in respect of the shares of that class is reduced on the distribution or appropriation, as the case may be, and a dividend shall be deemed to have been received at that time by each person who held any of the issued shares at that time equal to that proportion of the amount of the excess that the number of the shares of that class held by the person immediately before that time is of the number of the issued shares of that class outstanding immediately before that time. 
  
  ### Redemption, etc.
  
  (3) Where at any time after December 31, 1977 a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever (otherwise than by way of a transaction described in subsection 84(2)) any of the shares of any class of its capital stock, 
  (a) the corporation shall be deemed to have paid at that time a dividend on a separate class of shares comprising the shares so redeemed, acquired or cancelled equal to the amount, if any, by which the amount paid by the corporation on the redemption, acquisition or cancellation, as the case may be, of those shares exceeds the paid-up capital in respect of those shares immediately before that time; and 
  (b) a dividend shall be deemed to have been received at that time by each person who held any of the shares of that separate class at that time equal to that portion of the amount of the excess determined under paragraph 84(3)(a) that the number of those shares held by the person immediately before that time is of the total number of shares of that separate class that the corporation has redeemed, acquired or cancelled, at that time. 
  
  ### Reduction of paid-up capital
  
  (4) Where at any time after March 31, 1977 a corporation resident in Canada has reduced the paid-up capital in respect of any class of shares of its capital stock otherwise than by way of a redemption, acquisition or cancellation of any shares of that class or a transaction described in subsection 84(2) or (4.1), 
  (a) the corporation shall be deemed to have paid at that time a dividend on shares of that class equal to the amount, if any, by which the amount paid by it on the reduction of the paid-up capital, exceeds the amount by which the paid-up capital in respect of that class of shares of the corporation has been so reduced; and 
  (b) a dividend shall be deemed to have been received at that time by each person who held any of the issued shares at that time equal to that proportion of the amount of the excess referred to in paragraph 84(4)(a) that the number of the shares of that class held by the person immediately before that time is of the number of the issued shares of that class outstanding immediately before that time. 
  
  ### Deemed dividend on reduction of paid-up capital
  
  (4.1) Any amount paid by a public corporation on the reduction of the paid-up capital in respect of any class of shares of its capital stock, otherwise than by way of a redemption, acquisition or cancellation of any shares of that class or by way of a transaction described in subsection (2) or section 86, is deemed to have been paid by the corporation and received by the person to whom it was paid, as a dividend, unless 
  (a) the amount may reasonably be considered to be derived from proceeds of disposition realized by the public corporation, or by a person or partnership in which the public corporation had a direct or indirect interest at the time that the proceeds were realized, from a transaction that occurred 
  (i) outside the ordinary course of the business of the corporation, or of the person or partnership that realized the proceeds, and 
  (ii) within the period that commenced 24 months before the payment; and 
  (b) no amount that may reasonably be considered to be derived from those proceeds was paid by the public corporation on a previous reduction of the paid-up capital in respect of any class of shares of its capital stock. 
  
  ### Deemed dividend on term preferred share
  
  (4.2) Where, at any time after November 16, 1978, the paid-up capital in respect of a term preferred share owned by a shareholder that is 
  (a) a specified financial institution, or 
  (b) a partnership or trust of which a specified financial institution or a person related to such an institution was a member or a beneficiary, was reduced otherwise than by way of a redemption, acquisition or cancellation of the share or of a transaction described in subsection 84(2) or (4.1), the amount received by the shareholder on the reduction of the paid-up capital in respect of the share shall be deemed to be a dividend received by the shareholder at that time unless the share was not acquired in the ordinary course of the business carried on by the shareholder. 
  
  ### Deemed dividend on guaranteed share
  
  (4.3) Where at any time after 1987 the paid-up capital in respect of a share of the capital stock of a particular corporation owned 
  (a) by a shareholder that is another corporation to which subsection 112(2.2) or (2.4) would, if the particular corporation were a taxable Canadian corporation, apply to deny the deduction under subsection 112(1) or (2) or 138(6) of a dividend received on the share, or 
  (b) by a partnership or trust of which the other corporation is a member or beneficiary, as the case may be, was reduced otherwise than by way of a redemption, acquisition or cancellation of the share or of a transaction described in subsection 84(2) or (4.1), the amount received by the shareholder on the reduction of the paid-up capital in respect of the share shall be deemed to be a dividend received by the shareholder at that time. 
  
  ### Amount distributed or paid where a share
  
  (5) Where 
  (a) the amount of property distributed by a corporation or otherwise appropriated to or for the benefit of its shareholders as described in paragraph 84(2)(a), or 
  (b) the amount paid by a corporation as described in paragraph 84(3)(a) or (4)(a), includes a share of the capital stock of the corporation, for the purposes of subsections 84(2) to (4) the following rules apply: 
  (c) in computing the amount referred to in paragraph 84(5)(a) at any time, the share shall be valued at an amount equal to its paid-up capital at that time, and 
  (d) in computing the amount referred to in paragraph 84(5)(b) at any time, the share shall be valued at an amount equal to the amount by which the paid-up capital in respect of the class of shares to which it belongs has increased by virtue of its issue. 
  
  ### Where s. (2) or (3) does not apply
  
  (6) Subsection 84(2) or (3), as the case may be, is not applicable 
  (a) in respect of any transaction or event, to the extent that subsection 84(1) is applicable in respect of that transaction or event; and 
  (b) in respect of any purchase by a corporation of any of its shares in the open market, if the corporation acquired those shares in the manner in which shares would normally be purchased by any member of the public in the open market. 
  
  ### When dividend payable
  
  (7) A dividend that is deemed by this section or section 84.1, 128.1 or 212.1 to have been paid at a particular time is deemed, for the purposes of this Subdivision and sections 131 and 133, to have become payable at that time. 
  
  ### Where s. (3) does not apply
  
  (8) Subsection 84(3) does not apply to deem a dividend to have been received by a shareholder of a public corporation where the shareholder is an individual resident in Canada who deals at arm’s length with the corporation and the shares redeemed, acquired or cancelled are prescribed shares of the capital stock of the corporation. 
  
  ### Shares disposed of on redemptions, etc.
  
  (9) For greater certainty it is declared that where a shareholder of a corporation has disposed of a share of the capital stock of the corporation as a result of the redemption, acquisition or cancellation of the share by the corporation, the shareholder shall, for the purposes of this Act, be deemed to have disposed of the share to the corporation. 
  
  ### Reduction of contributed surplus
  
  (10) For the purpose of paragraph 84(1)(c.3), there shall be deducted in determining at any time a corporation’s contributed surplus that arose after March 31, 1977 in any manner described in that paragraph the lesser of 
  (a) the amount, if any, by which the amount of a dividend paid by the corporation at or before that time and after March 31, 1977 and when it was a public corporation exceeded its retained earnings immediately before the payment of the dividend, and 
  (b) the amount of its contributed surplus immediately before the payment of the dividend referred to in paragraph 84(10)(a) that arose after March 31, 1977. 
  
  ### Computation of contributed surplus
  
  (11) For the purpose of subparagraph 84(1)(c.3)(ii), where the property acquired by the corporation (in this subsection referred to as the “acquiring corporation”) consists of shares (in this subsection referred to as the “subject shares”) of any class of the capital stock of another corporation resident in Canada (in this subsection referred to as the “subject corporation”) and, immediately after the acquisition of the subject shares, the subject corporation would be connected (within the meaning that would be assigned by subsection 186(4) if the references in that subsection to “payer corporation” and “particular corporation” were read as “subject corporation” and “acquiring corporation”, respectively) with the acquiring corporation, the contributed surplus of the acquiring corporation that arose on the acquisition of the subject shares shall be deemed to be the lesser of 
  (a) the amount added to the contributed surplus of the acquiring corporation on the acquisition of the subject shares, and 
  (b) the amount, if any, by which the paid-up capital in respect of the subject shares at the time of the acquisition exceeded the fair market value of any consideration given by the acquiring corporation for the subject shares. 
  
  ### Non-arm’s length sale of shares
  
  84.1 (1) Where after May 22, 1985 a taxpayer resident in Canada (other than a corporation) disposes of shares that are capital property of the taxpayer (in this section referred to as the “subject shares”) of any class of the capital stock of a corporation resident in Canada (in this section referred to as the “subject corporation”) to another corporation (in this section referred to as the “purchaser corporation”) with which the taxpayer does not deal at arm’s length and, immediately after the disposition, the subject corporation would be connected (within the meaning assigned by subsection 186(4) if the references therein to “payer corporation” and to “particular corporation” were read as “subject corporation” and “purchaser corporation” respectively) with the purchaser corporation, 
  (a) where shares (in this section referred to as the “new shares”) of the purchaser corporation have been issued as consideration for the subject shares, in computing the paid-up capital, at any particular time after the issue of the new shares, in respect of any particular class of shares of the capital stock of the purchaser corporation, there shall be deducted an amount determined by the formula is the increase, if any, determined without reference to this section as it applies to the acquisition of the subject shares, in the paid-up capital in respect of all shares of the capital stock of the purchaser corporation as a result of the issue of the new shares, is the amount, if any, by which the greater of 
  (i) the paid-up capital, immediately before the disposition, in respect of the subject shares, and 
  (ii) subject to paragraphs 84.1(2)(a) and 84.1(2)(a.1), the adjusted cost base to the taxpayer, immediately before the disposition, of the subject shares, exceeds the fair market value, immediately after the disposition, of any consideration (other than the new shares) received by the taxpayer from the purchaser corporation for the subject shares, and is the increase, if any, determined without reference to this section as it applies to the acquisition of the subject shares, in the paid-up capital in respect of the particular class of shares as a result of the issue of the new shares; and 
  (b) for the purposes of this Act, a dividend shall be deemed to be paid to the taxpayer by the purchaser corporation and received by the taxpayer from the purchaser corporation at the time of the disposition in an amount determined by the formula is the increase, if any, determined without reference to this section as it applies to the acquisition of the subject shares, in the paid-up capital in respect of all shares of the capital stock of the purchaser corporation as a result of the issue of the new shares, is the fair market value, immediately after the disposition, of any consideration (other than the new shares) received by the taxpayer from the purchaser corporation for the subject shares, is the greater of 
  (i) the paid-up capital, immediately before the disposition, in respect of the subject shares, and 
  (ii) subject to paragraphs 84.1(2)(a) and 84.1(2)(a.1), the adjusted cost base to the taxpayer, immediately before the disposition, of the subject shares, and is the total of all amounts each of which is an amount required to be deducted by the purchaser corporation under paragraph 84.1(1)(a) in computing the paid-up capital in respect of any class of shares of its capital stock by virtue of the acquisition of the subject shares. 
  
  ### Idem
  
  (2) For the purposes of this section, 
  (a) where a share disposed of by a taxpayer was acquired by the taxpayer before 1972, the adjusted cost base to the taxpayer of the share at any time shall be deemed to be the total of 
  (i) the amount that would be its adjusted cost base to the taxpayer if the Income Tax Application Rules were read without reference to subsections 26(3) and (7) of that Act, and  
  (ii) the total of all amounts each of which is an amount received by the taxpayer after 1971 and before that time as a dividend on the share and in respect of which the corporation that paid the dividend has made an election under subsection 83(1); 
  (a.1) where a share disposed of by a taxpayer was acquired by the taxpayer after 1971 from a person with whom the taxpayer was not dealing at arm’s length, was a share substituted for such a share or was a share substituted for a share owned by the taxpayer at the end of 1971, the adjusted cost base to the taxpayer of the share at any time shall be deemed to be the amount, if any, by which its adjusted cost base to the taxpayer, otherwise determined, exceeds the total of 
  (i) where the share or a share for which the share was substituted was owned at the end of 1971 by the taxpayer or a person with whom the taxpayer did not deal at arm’s length, the amount in respect of that share equal to the amount, if any, by which 
  (A) the fair market value of the share or the share for which it was substituted, as the case may be, on valuation day (within the meaning assigned by section 24 of the Income Tax Application Rules)  exceeds the total of 
  (B) the actual cost (within the meaning assigned by subsection 26(13) of that Act) of the share or the share for which it was substituted, as the case may be, on January 1, 1972, to the taxpayer or the person with whom the taxpayer did not deal at arm’s length, and 
  (C) the total of all amounts each of which is an amount received by the taxpayer or the person with whom the taxpayer did not deal at arm’s length after 1971 and before that time as a dividend on the share or the share for which it was substituted and in respect of which the corporation that paid the dividend has made an election under subsection 83(1), and 
  (ii) the total of all amounts each of which is an amount determined after 1984 under subparagraph 40(1)(a)(i) in respect of a previous disposition of the share or a share for which the share was substituted (or such lesser amount as is established by the taxpayer to be the amount in respect of which a deduction under section 110.6 was claimed) by the taxpayer or an individual with whom the taxpayer did not deal at arm’s length; 
  (a.2)  [Repealed, 1998, c. 19, s. 115(1)]  
  (b) in respect of any disposition described in subsection 84.1(1) by a taxpayer of shares of the capital stock of a subject corporation to a purchaser corporation, the taxpayer shall, for greater certainty, be deemed not to deal at arm’s length with the purchaser corporation if the taxpayer 
  (i) was, immediately before the disposition, one of a group of fewer than 6 persons that controlled the subject corporation, and 
  (ii) was, immediately after the disposition, one of a group of fewer than 6 persons that controlled the purchaser corporation, each member of which was a member of the group referred to in subparagraph 84.1(2)(b)(i); 
  (c)  [Repealed, 1998, c. 19, s. 115(2)]  
  (d) a trust and a beneficiary of the trust or a person related to a beneficiary of the trust shall be deemed not to deal with each other at arm’s length; and 
  (e) if the subject shares are qualified small business corporation shares or shares of the capital stock of a family farm or fishing corporation within the meaning of subsection 110.6(1), the taxpayer and the purchaser corporation are deemed to be dealing at arm’s length if the purchaser corporation is controlled by one or more children or grandchildren of the taxpayer who are 18 years of age or older and if the purchaser corporation does not dispose of the subject shares within 60 months of their purchase.  
  
  ### Rules for par. 84.1(2)(a.1)
  
  (2.01) For the purpose of paragraph 84.1(2)(a.1), 
  (a) where at any time a corporation issues a share of its capital stock to a taxpayer, the taxpayer and the corporation are deemed not to be dealing with each other at arm’s length at that time; 
  (b) where a taxpayer is deemed by paragraph 110.6(19)(a) to have reacquired a share, the taxpayer is deemed to have acquired the share at the beginning of February 23, 1994 from a person with whom the taxpayer was not dealing at arm’s length; and 
  (c) where a share owned by a particular person, or a share substituted for that share, has by one or more transactions or events between persons not dealing at arm’s length become vested in another person, the particular person and the other person are deemed at all times not to be dealing at arm’s length with each other whether or not the particular person and the other person coexisted. 
  
  ### Idem
  
  (2.1) For the purposes of subparagraph 84.1(2)(a.1)(ii), where the taxpayer or an individual with whom the taxpayer did not deal at arm’s length (in this subsection referred to as the “transferor”) disposes of a share in a taxation year and claims an amount under subparagraph 40(1)(a)(iii) in computing the gain for the year from the disposition, the amount in respect of which a deduction under section 110.6 was claimed in respect of the transferor’s gain from the disposition shall be deemed to be equal to the lesser of 
  (a) the total of 
  (i) the amount claimed under subparagraph 40(1)(a)(iii) by the transferor for the year in respect of the disposition, and 
  (ii) twice the amount deducted under section 110.6 in computing the taxable income of the transferor for the year in respect of the taxable capital gain from the disposition, and 
  (b) twice the maximum amount that could have been deducted under section 110.6 in computing the taxable income of the transferor for the year in respect of the taxable capital gain from the disposition if 
  (i) no amount had been claimed by the transferor under subparagraph 40(1)(a)(iii) in computing the gain for the year from the disposition, and 
  (ii) all amounts deducted under section 110.6 in computing the taxable income of the transferor for the year in respect of taxable capital gains from dispositions of property to which this subsection does not apply were deducted before determining the maximum amount that could have been deducted under section 110.6 in respect of the taxable capital gain from the disposition, and for the purposes of subparagraph 84.1(2.1)(b)(ii), 1/2 of the total of all amounts determined under this subsection for the year in respect of other property disposed of before the disposition of the share shall be deemed to have been deducted under section 110.6 in computing the taxable income of the transferor for the year in respect of the taxable capital gain from the disposition of property to which this subsection does not apply, and, for the purposes of this subsection, where more than one share to which this subsection applies is disposed of in the year, each such share shall be deemed to have been separately disposed of in the order designated by the taxpayer in the taxpayer’s return of income under this Part for the year. 
  
  ### Rules for par. 84.1(2)(b)
  
  (2.2) For the purpose of paragraph 84.1(2)(b), 
  (a) in determining whether or not a taxpayer referred to in that paragraph was a member of a group of fewer than 6 persons that controlled a corporation at any time, any shares of the capital stock of that corporation owned at that time by 
  (i) the taxpayer’s child (as defined in subsection 70(10)), who is under 18 years of age, or the taxpayer’s spouse or common-law partner, 
  (ii) a trust of which the taxpayer, a person described in subparagraph 84.1(2.2)(a)(i) or a corporation described in subparagraph 84.1(2.2)(a)(iii), is a beneficiary, or 
  (iii) a corporation controlled by the taxpayer, by a person described in subparagraph 84.1(2.2)(a)(i) or 84.1(2.2)(a)(ii) or by any combination of those persons or trusts are deemed to be owned at that time by the taxpayer and not by the person who actually owned the shares at that time; 
  (b) a group of persons in respect of a corporation means any 2 or more persons each of whom owns shares of the capital stock of the corporation; 
  (c) a corporation that is controlled by one or more members of a particular group of persons in respect of that corporation is considered to be controlled by that group of persons; and 
  (d) a corporation may be controlled by a person or a particular group of persons even though the corporation is also controlled or deemed to be controlled by another person or group of persons. 
  
  ### Rules for paragraph 84.1(2)(e)
  
  (2.3) For the purposes of paragraph (2)(e), 
  (a) if, otherwise than by reason of death, the purchaser corporation disposes of the subject shares within 60 months of their purchase: 
  (i) paragraph (2)(e) is deemed never to have applied, 
  (ii) the taxpayer is deemed, for the purposes of this section, to have disposed of the subject shares to the person who acquired them from the purchaser corporation, and 
  (iii) the period of 60 months applicable to the operation that is deemed to have taken place under subparagraph (ii) is deemed to have begun when the taxpayer disposed of the subject shares to the purchaser corporation; 
  (b) the deduction referred to in subsection 110.6(2) or (2.1) is, for a particular taxation year, the amount, if any, by which that deduction exceeds the amount determined by the formula: is the amount that would, but for this subsection, be the capital gains deduction referred to in subsection 110.6(2) or (2.1) for the particular taxation year; and is the amount determined by the formula is 
  (a) if, in both the particular taxation year and the preceding taxation year, the corporation is not associated with any corporation, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the preceding taxation year, 
  (b) if, in the particular taxation year, the corporation is not associated with any corporation but was associated with one or more corporations in the preceding taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year, or 
  (c) if, in the particular taxation year, the corporation is associated with one or more particular corporations, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation or of any of the particular corporations for its last taxation year that ended in the preceding calendar year; and 
  (c) the taxpayer must provide the Minister with an independent assessment of the fair market value of the subject shares and an affidavit signed by the taxpayer and by a third party attesting to the disposal of the shares. 
  
  ### Addition to paid-up capital
  
  (3) In computing the paid-up capital at any time after May 22, 1985 in respect of any class of shares of the capital stock of a corporation, there shall be added an amount equal to the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the class paid after May 22, 1985 and before that time by the corporation exceeds 
  (ii) the total of such dividends that would be determined under subparagraph 84.1(3)(a)(i) if this Act were read without reference to paragraph 84.1(1)(a), and 
  (b) the total of all amounts required by paragraph 84.1(1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after May 22, 1985 and before that time. 
  
  ### Computation of paid-up capital in respect of particular class of shares
  
  84.2 (1) In computing the paid-up capital in respect of any particular class of shares of the capital stock of a corporation at any particular time after March 31, 1977, 
  (a) there shall be deducted that proportion of the amount, if any, by which the paid-up capital in respect of all of the issued shares of the capital stock of the corporation on April 1, 1977, determined without reference to this section, exceeds the greater of 
  (i) the amount that the paid-up capital limit of the corporation would have been on March 31, 1977 if paragraph 89(1)(d) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read at that date, were read without reference to clause 89(1)(d)(iv.1)(F) of that Act and without reference to all subparagraphs of paragraph 89(1)(d) of that Act except subparagraphs 89(1)(d)(iv.1) and (vii) of that Act, and  
  (ii) the paid-up capital limit of the corporation on March 31, 1977, that the paid-up capital on April 1, 1977, determined without reference to this section, in respect of the particular class of shares is of the paid-up capital on April 1, 1977, determined without reference to this section, in respect of all of the issued and outstanding shares of the capital stock of the corporation; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3) or 84(4) to be a dividend on shares of the particular class paid by the corporation after March 31, 1977 and before the particular time exceeds 
  (B) the total that would be determined under clause 84.2(1)(b)(i)(A) if this Act were read without reference to paragraph 84.2(1)(a), and 
  (ii) the amount required by paragraph 84.2(1)(a) to be deducted in computing the paid-up capital of shares of the particular class. 
  
  ### Debt deficiency
  
  (2) In computing, after March 31, 1977, the adjusted cost base to an individual of a debt that was owing to the individual by a corporation on March 31, 1977, there shall be deducted the amount of any dividend that would have been deemed to have been received by the individual on that day if the corporation had paid the debt in full on that day. 
  
  ### Idem
  
  (3) Where, after March 31, 1977 and before 1979, any debt referred to in subsection 84.2(2) owing by a corporation and held by an individual on March 31, 1977 and continuously after that date until conversion, is converted into shares of a particular class of the capital stock of the corporation, 
  (a) subsection 84.2(2) shall not apply in respect of the debt; and 
  (b) in computing the paid-up capital in respect of the shares of the particular class at any particular time after the conversion, 
  (i) there shall be deducted the amount by which the adjusted cost base to the taxpayer of the debt would, but for paragraph 84.2(3)(a), have been reduced by virtue of subsection 84.2(2), and 
  (ii) there shall be added an amount equal to the lesser of 
  (A) the amount, if any, by which 
  (I) the total of all amounts deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the particular class paid by the corporation after the conversion and before the particular time, exceeds 
  (II) the total that would be determined under subclause 84.2(3)(b)(ii)(A)(I) if this Act were read without reference to subparagraph 84.2(3)(b)(i), and 
  (B) the amount required by subparagraph 84.2(3)(b)(i) to be deducted in computing the paid-up capital of shares of the particular class. 
  
  ### Transfer of property to corporation by shareholders
  
  85 (1) Where a taxpayer has, in a taxation year, disposed of any of the taxpayer’s property that was eligible property to a taxable Canadian corporation for consideration that includes shares of the capital stock of the corporation, if the taxpayer and the corporation have jointly elected in prescribed form and in accordance with subsection 85(6), the following rules apply: 
  (a) the amount that the taxpayer and the corporation have agreed on in their election in respect of the property shall be deemed to be the taxpayer’s proceeds of disposition of the property and the corporation’s cost of the property; 
  (b) subject to paragraph 85(1)(c), where the amount that the taxpayer and the corporation have agreed on in their election in respect of the property is less than the fair market value, at the time of the disposition, of the consideration therefor (other than any shares of the capital stock of the corporation or a right to receive any such shares) received by the taxpayer, the amount so agreed on shall, irrespective of the amount actually so agreed on by them, be deemed to be an amount equal to that fair market value; 
  (c) where the amount that the taxpayer and the corporation have agreed on in their election in respect of the property is greater than the fair market value, at the time of the disposition, of the property so disposed of, the amount so agreed on shall, irrespective of the amount actually so agreed on, be deemed to be an amount equal to that fair market value; 
  (c.1) where the property was inventory, capital property (other than depreciable property of a prescribed class), a NISA Fund No. 2 or a property that is eligible property because of paragraph 85(1.1)(g) or 85(1.1)(g.1), and the amount that the taxpayer and corporation have agreed on in their election in respect of the property is less than the lesser of 
  (i) the fair market value of the property at the time of the disposition, and 
  (ii) the cost amount to the taxpayer of the property at the time of the disposition, the amount so agreed on shall, irrespective of the amount actually so agreed on by them, be deemed to be an amount equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and 85(1)(c.1)(ii); 
  (c.2) subject to paragraphs 85(1)(b) and 85(1)(c) and notwithstanding paragraph 85(1)(c.1), where the taxpayer carries on a farming business the income from which is computed in accordance with the cash method and the property was inventory owned in connection with that business immediately before the particular time the property was disposed of to the corporation, 
  (i) the amount that the taxpayer and the corporation agreed on in their election in respect of inventory purchased by the taxpayer shall be deemed to be equal to the amount determined by the formula is the amount that would be included because of paragraph 28(1)(c) in computing the taxpayer’s income for the taxpayer’s last taxation year beginning before the particular time if that year had ended immediately before the particular time, is the value (determined in accordance with subsection 28(1.2)) to the taxpayer immediately before the particular time of the purchased inventory in respect of which the election is made, is the value (determined in accordance with subsection 28(1.2)) of all of the inventory purchased by the taxpayer that was owned by the taxpayer in connection with that business immediately before the particular time, and is such additional amount as the taxpayer and the corporation designate in respect of the property, 
  (ii) for the purpose of subparagraph 28(1)(a)(i), the disposition of the property and the receipt of proceeds of disposition therefor shall be deemed to have occurred at the particular time and in the course of carrying on the business, and 
  (iii) where the property is owned by the corporation in connection with a farming business and the income from that business is computed in accordance with the cash method, for the purposes of section 28, 
  (A) an amount equal to the cost to the corporation of the property shall be deemed to have been paid by the corporation, and 
  (B) the corporation shall be deemed to have purchased the property for an amount equal to that cost, at the particular time and in the course of carrying on that business; 
  (d) to (d.12)  [Repealed, 2016, c. 12, s. 26]  
  (e) where the property was depreciable property of a prescribed class of the taxpayer and the amount that, but for this paragraph, would be the proceeds of disposition thereof is less than the least of 
  (i) the undepreciated capital cost to the taxpayer of all property of that class immediately before the disposition, 
  (ii) the cost to the taxpayer of the property, and 
  (iii) the fair market value of the property at the time of the disposition, the amount agreed on by the taxpayer and the corporation in their election in respect of the property shall, irrespective of the amount actually so agreed on by them, be deemed to be the least of the amounts described in subparagraphs 85(1)(e)(i) to 85(1)(e)(iii); 
  (e.1) where two or more properties, each of which is a property described in paragraph (e), are disposed of at the same time, paragraph (e) applies as if each property so disposed of had been separately disposed of in the order designated by the taxpayer before the time referred to in subsection (6) for the filing of an election in respect of those properties or, if the taxpayer does not so designate any such order, in the order designated by the Minister; 
  (e.2) where the fair market value of the property immediately before the disposition exceeds the greater of 
  (i) the fair market value, immediately after the disposition, of the consideration received by the taxpayer for the property disposed of by the taxpayer, and 
  (ii) the amount that the taxpayer and the corporation have agreed on in their election in respect of the property, determined without reference to this paragraph, and it is reasonable to regard any part of the excess as a benefit that the taxpayer desired to have conferred on a person related to the taxpayer (other than a corporation that was a wholly owned corporation of the taxpayer immediately after the disposition), the amount that the taxpayer and the corporation agreed on in their election in respect of the property shall, regardless of the amount actually so agreed on by them, be deemed (except for the purposes of paragraphs 85(1)(g) and 85(1)(h)) to be an amount equal to the total of the amount referred to in subparagraph 85(1)(e.2)(ii) and that part of the excess; 
  (e.3) where, under any of paragraphs (c.1) and (e), the amount that the taxpayer and the corporation have agreed on in their election in respect of the property (in this paragraph referred to as the 
  *elected amount*) would be deemed to be an amount that is greater or less than the amount that would be deemed, subject to paragraph (c), to be the elected amount under paragraph (b), the elected amount is deemed to be the greater of  
  (i) the amount deemed by paragraph (c.1) or (e), as the case may be, to be the elected amount, and 
  (ii) the amount deemed by paragraph 85(1)(b) to be the elected amount; 
  (e.4) where 
  (i) the property is depreciable property of a prescribed class of the taxpayer and is a passenger vehicle the cost to the taxpayer of which was more than $20,000 or such other amount as may be prescribed, and 
  (ii) the taxpayer and the corporation do not deal at arm’s length, the amount that the taxpayer and the corporation have agreed on in their election in respect of the property shall be deemed to be an amount equal to the undepreciated capital cost to the taxpayer of the class immediately before the disposition, except that, for the purposes of subsection 6(2), the cost to the corporation of the vehicle shall be deemed to be an amount equal to its fair market value immediately before the disposition; 
  (e.5) if the property is depreciable property of a prescribed class of the taxpayer that is a zero-emission passenger vehicle to which paragraph 13(7)(i) applies and the taxpayer and the corporation do not deal at arm’s length, 
  (i) the amount that the taxpayer and the corporation have agreed on in their election in respect of the vehicle is deemed to be an amount equal to the cost amount to the taxpayer of the vehicle immediately before the disposition, and 
  (ii) for the purposes of subsection 6(2), the cost to the corporation of the vehicle is deemed to be an amount equal to its fair market value immediately before the disposition; 
  (f) the cost to the taxpayer of any particular property (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the taxpayer as consideration for the disposition shall be deemed to be an amount equal to the lesser of 
  (i) the fair market value of the particular property at the time of the disposition, and 
  (ii) that proportion of the fair market value, at the time of the disposition, of the property disposed of by the taxpayer to the corporation that 
  (A) the amount determined under subparagraph 85(1)(f)(i) is of 
  (B) the fair market value, at the time of the disposition, of all properties (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the taxpayer as consideration for the disposition; 
  (g) the cost to the taxpayer of any preferred shares of any class of the capital stock of the corporation receivable by the taxpayer as consideration for the disposition shall be deemed to be the lesser of the fair market value of those shares immediately after the disposition and that proportion of the amount, if any, by which the proceeds of the disposition exceed the fair market value of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the taxpayer for the disposition, that 
  (i) the fair market value, immediately after the disposition, of those preferred shares of that class, is of 
  (ii) the fair market value, immediately after the disposition, of all preferred shares of the capital stock of the corporation receivable by the taxpayer as consideration for the disposition; 
  (h) the cost to the taxpayer of any common shares of any class of the capital stock of the corporation receivable by the taxpayer as consideration for the disposition shall be deemed to be that proportion of the amount, if any, by which the proceeds of the disposition exceed the total of the fair market value, at the time of the disposition, of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the taxpayer for the disposition and the cost to the taxpayer of all preferred shares of the capital stock of the corporation receivable by the taxpayer as consideration for the disposition, that 
  (i) the fair market value, immediately after the disposition, of those common shares of that class, is of 
  (ii) the fair market value, immediately after the disposition, of all common shares of the capital stock of the corporation receivable by the taxpayer as consideration for the disposition; and 
  (i) where the property so disposed of is taxable Canadian property of the taxpayer, all of the shares of the capital stock of the Canadian corporation received by the taxpayer as consideration for the property are deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer. 
  
  ### Definition of 
  *eligible property* 
  
  (1.1) For the purposes of subsection 85(1), 
  *eligible property* means  
  (a) a capital property (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident person); 
  (b) a capital property that is real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident insurer if that property and the property received as consideration for that property are designated insurance property for the year; 
  (c) a Canadian resource property; 
  (d) a foreign resource property; 
  (e)  [Repealed, 2016, c. 12, s. 26]  
  (f) an inventory (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable); 
  (g) a property that is a security or debt obligation used by the taxpayer in the year in, or held by it in the year in the course of, carrying on the business of insurance or lending money, other than 
  (i) a capital property, 
  (ii) inventory, or 
  (iii) where the taxpayer is a financial institution in the year, a mark-to-market property for the year; 
  (g.1) where the taxpayer is a financial institution in the year, a specified debt obligation (other than a mark-to-market property of the taxpayer for the year); 
  (h) a capital property that is real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident person (other than a non-resident insurer) and used in the year in a business carried on in Canada by that person; or 
  (i) a NISA Fund No. 2, if that property is owned by an individual. 
  
  ### Exception
  
  (1.11) Notwithstanding subsection (1.1), a foreign resource property, or an interest in a partnership that derives all or part of its value from one or more foreign resource properties, is not an eligible property of a taxpayer in respect of a disposition by the taxpayer to a corporation where 
  (a) the taxpayer and the corporation do not deal with each other at arm’s length; and 
  (b) it is reasonable to conclude that one of the purposes of the disposition, or a series of transactions or events of which the disposition is a part, is to increase the extent to which any person may claim a deduction under section 126. 
  
  ### Eligible derivatives
  
  (1.12) Notwithstanding subsection (1.1), an eligible derivative (as defined in subsection 10.1(5)) of a taxpayer to which subsection 10.1(6) applies is not an eligible property of the taxpayer in respect of a disposition by the taxpayer to a corporation.  
  
  ### Application of subsection (1)
  
  (1.2) Subsection 85(1) does not apply to a disposition by a taxpayer to a corporation of a property referred to in paragraph 85(1.1)(h) unless 
  (a) immediately after the disposition, the corporation is controlled by the taxpayer, a person or persons related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the taxpayer or the taxpayer and a person or persons so related to the taxpayer; 
  (b) the disposition is part of a transaction or series of transactions in which all or substantially all of the property used in the business referred to in paragraph 85(1.1)(h) is disposed of by the taxpayer to the corporation; and 
  (c) the disposition is not part of a series of transactions that result in control of the corporation being acquired by a person or group of persons after the time that is immediately after the disposition. 
  
  ### Meaning of 
  *wholly owned corporation* 
  
  (1.3) For the purposes of this subsection and paragraph 85(1)(e.2), 
  *wholly owned corporation* of a taxpayer means a corporation all the issued and outstanding shares of the capital stock of which (except directors’ qualifying shares) belong to  
  (a) the taxpayer; 
  (b) a corporation that is a wholly owned corporation of the taxpayer; or 
  (c) any combination of persons described in paragraph 85(1.3)(a) or 85(1.3)(b). 
  
  ### Definitions
  
  (1.4) For the purpose of subsection 85(1.1), 
  *financial institution*, 
  *mark-to-market property* and 
  *specified debt obligation* have the meanings assigned by subsection 142.2(1).  
  
  ### Transfer of property to corporation from partnership
  
  (2) Where 
  (a) a partnership has disposed, to a taxable Canadian corporation for consideration that includes shares of the corporation’s capital stock, of any partnership property (other than an eligible derivative, as defined in subsection 10.1(5), of the partnership if subsection 10.1(6) applies to the partnership) that was  
  (i) a capital property (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, if the partnership was not a Canadian partnership at the time of the disposition), 
  (ii) a property described in any of paragraphs 85(1.1)(c) to 85(1.1)(f), or 
  (iii) a property that would be described in paragraph 85(1.1)(g) or 85(1.1)(g.1) if the references in those paragraphs to “taxpayer” were read as “partnership”, and 
  (b) the corporation and all the members of the partnership have jointly so elected, in prescribed form and within the time referred to in subsection 85(6), paragraphs 85(1)(a) to 85(1)(i) are applicable, with such modifications as the circumstances require, in respect of the disposition as if the partnership were a taxpayer resident in Canada who had disposed of the property to the corporation. 
  
  ### Computing paid-up capital
  
  (2.1) Where subsection 85(1) or 85(2) applies to a disposition of property (other than a disposition of property to which section 84.1 or 212.1 applies) to a corporation by a person or partnership (in this subsection referred to as the “taxpayer”), 
  (a) in computing the paid-up capital in respect of any particular class of shares of the capital stock of the corporation at the time of, and at any time after, the issue of shares of the capital stock of the corporation in consideration for the disposition of the property, there shall be deducted an amount determined by the formula is the increase, if any, determined without reference to this section as it applies to the disposition of the property, in the paid-up capital in respect of all the shares of the capital stock of the corporation as a result of the acquisition by the corporation of the property, is the amount, if any, by which the corporation’s cost of the property, immediately after the acquisition, determined under subsection 85(1) or 85(2), as the case may be, exceeds the fair market value, immediately after the acquisition, of any consideration (other than shares of the capital stock of the corporation) received by the taxpayer from the corporation for the property, and is the increase, if any, determined without reference to this section as it applies to the disposition of the property, in the paid-up capital in respect of the particular class of shares as a result of the acquisition by the corporation of the property; and 
  (b) in computing the paid-up capital, at any time after November 21, 1985, in respect of any class of shares of the capital stock of a corporation, there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid after November 21, 1985 and before that time by the corporation exceeds 
  (B) the total of such dividends that would be determined under clause 85(2.1)(b)(i)(A) if this Act were read without reference to paragraph 85(2.1)(a), and 
  (ii) the total of all amounts required by paragraph 85(2.1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after November 21, 1985 and before that time. 
  
  ### Where partnership wound up
  
  (3) Where, 
  (a) in respect of any disposition of partnership property of a partnership to a corporation, subsection 85(2) applies, 
  (b) the affairs of the partnership were wound up within 60 days after the disposition, and 
  (c) immediately before the winding-up there was no partnership property other than money or property received from the corporation as consideration for the disposition, the following rules apply: 
  (d) the cost to any member of the partnership of any property (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be the fair market value of the property at the time of the winding-up, 
  (e) the cost to any member of the partnership of any preferred shares of any class of the capital stock of the corporation receivable by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be 
  (i) where any common shares of the capital stock of the corporation were also receivable by the member as consideration for the disposition of the interest, the lesser of 
  (A) the fair market value, immediately after the winding-up, of the preferred shares of that class so receivable by the member, and 
  (B) that proportion of the amount, if any, by which the adjusted cost base to the member of the member’s partnership interest immediately before the winding-up exceeds the total of the fair market value, at the time of the winding-up, of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member for the disposition of the interest, that 
  (I) the fair market value, immediately after the winding-up, of the preferred shares of that class so receivable by the member, is of 
  (II) the fair market value, immediately after the winding-up, of all preferred shares of the capital stock of the corporation receivable by the member as consideration for the disposition, and 
  (ii) in any other case, the amount determined under clause 85(3)(e)(i)(B), 
  (f) the cost to any member of the partnership of any common shares of any class of the capital stock of the corporation receivable by the member as consideration for the disposition of the member’s partnership interest on the winding-up shall be deemed to be that proportion of the amount, if any, by which the adjusted cost base to the member of the member’s partnership interest immediately before the winding-up exceeds the total of the fair market value, at the time of the winding-up, of the consideration (other than shares of the capital stock of the corporation or a right to receive any such shares) received by the member for the disposition of the interest and the cost to the member of all preferred shares of the capital stock of the corporation receivable by the member as consideration for the disposition of the interest, that 
  (i) the fair market value, immediately after the winding-up, of the common shares of that class so receivable by the member, is of 
  (ii) the fair market value, immediately after the winding-up, of all common shares of the capital stock of the corporation so receivable by the member as consideration for the disposition, 
  (g) the proceeds of disposition of the partnership interest of any member of the partnership shall be deemed to be the cost to the member of all shares and property receivable or received by the member as consideration for the disposition of the interest plus the amount of any money received by the member as consideration for the disposition, and 
  (h) where the partnership has distributed partnership property referred to in paragraph 85(3)(c) to a member of the partnership, the partnership shall be deemed to have disposed of that property for proceeds equal to the cost amount to the partnership of the property immediately before its distribution. 
  (4)  [Repealed, 1998, c. 19, s. 116]  
  
  ### Rules on transfers of depreciable property
  
  (5) Where subsection 85(1) or 85(2) has applied to a disposition at any time of depreciable property to a person (in this subsection referred to as the “transferee”) and the capital cost to the transferor of the property exceeds the transferor’s proceeds of disposition of the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (a) the capital cost to the transferee of the property is deemed to be the amount that was its capital cost to the transferor; and 
  (b) the excess is deemed to have been deducted by the transferee under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that time. 
  
  ### Acquisition of certain tools — capital cost and deemed depreciation
  
  (5.1) If subsection (1) has applied in respect of the acquisition at any particular time of any depreciable property by a corporation from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the “individual’s original cost”) exceeds the individ­ual’s proceeds of disposition of the property, 
  (a) the capital cost to the corporation of the property is deemed to be equal to the individual’s original cost; and 
  (b) the amount by which the individual’s original cost exceeds the individual’s proceeds of disposition in respect of the property is deemed to have been deducted by the corporation under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that particular time. 
  
  ### Time for election
  
  (6) Any election under subsection 85(1) or 85(2) shall be made on or before the day that is the earliest of the days on or before which any taxpayer making the election is required to file a return of income pursuant to section 150 for the taxation year in which the transaction to which the election relates occurred. 
  
  ### Late filed election
  
  (7) Where the election referred to in subsection 85(6) was not made on or before the day on or before which the election was required by that subsection to be made and that day is after May 6, 1974, the election shall be deemed to have been made on that day if, on or before the day that is 3 years after that day, 
  (a) the election is made in prescribed form; and 
  (b) an estimate of the penalty in respect of that election is paid by the taxpayer or the partnership, as the case may be, when that election is made. 
  
  ### Special cases
  
  (7.1) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable 
  (a) to permit an election under subsection 85(1) or 85(2) to be made after the day that is 3 years after the day on or before which the election was required by subsection 85(6) to be made, or 
  (b) to permit an election made under subsection 85(1) or 85(2) to be amended, the election or amended election shall be deemed to have been made on the day on or before which the election was so required to be made if 
  (c) the election or amended election is made in prescribed form, and 
  (d) an estimate of the penalty in respect of the election or amended election is paid by the taxpayer or partnership, as the case may be, when the election or amended election is made, and where this subsection applies to the amendment of an election, that election shall be deemed not to have been effective. 
  
  ### Penalty for late filed election
  
  (8) For the purposes of this section, the penalty in respect of an election or an amended election referred to in paragraph 85(7)(a) or 85(7.1)(c) is an amount equal to the lesser of 
  (a) 1/4 of 1% of the amount, if any, by which 
  (i) the fair market value of the property in respect of which that election or amended election was made, at the time the property was disposed of, exceeds 
  (ii) the amount agreed on in the election or amended election by the taxpayer or partnership, as the case may be, and the corporation, for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 85(6) to be made and ending on the day the election or amended election is made, and 
  (b) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in paragraph 85(8)(a). 
  
  ### Unpaid balance of penalty
  
  (9) The Minister shall, with all due dispatch, examine each election and amended election referred to in paragraph 85(7)(a) or 85(7.1)(c), assess the penalty payable and send a notice of assessment to the taxpayer or partnership, as the case may be, and the taxpayer or partnership, as the case may be, shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Share for share exchange
  
  85.1 (1) Where shares of any particular class of the capital stock of a Canadian corporation (in this section referred to as the “purchaser”) are issued to a taxpayer (in this section referred to as the “vendor”) by the purchaser in exchange for a capital property of the vendor that is shares of any particular class of the capital stock (in this section referred to as the “exchanged shares”) of another corporation that is a taxable Canadian corporation (in this section referred to as the “acquired corporation”), subject to subsection 85.1(2), 
  (a) except where the vendor has, in the vendor’s return of income for the taxation year in which the exchange occurred, included in computing the vendor’s income for that year any portion of the gain or loss, otherwise determined, from the disposition of the exchanged shares, the vendor shall be deemed 
  (i) to have disposed of the exchanged shares for proceeds of disposition equal to the adjusted cost base to the vendor of those shares immediately before the exchange, and 
  (ii) to have acquired the shares of the purchaser at a cost to the vendor equal to the adjusted cost base to the vendor of the exchanged shares immediately before the exchange, and where the exchanged shares were taxable Canadian property of the vendor, the shares of the purchaser so acquired by the vendor are deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the vendor; and 
  (b) the cost to the purchaser of each exchanged share, at any time up to and including the time the purchaser disposed of the share, shall be deemed to be the lesser of 
  (i) its fair market value immediately before the exchange, and 
  (ii) its paid-up capital immediately before the exchange. 
  
  ### Where s. (1) does not apply
  
  (2) Subsection 85.1(1) does not apply where 
  (a) the vendor and purchaser were, immediately before the exchange, not dealing with each other at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b) that is a right of the purchaser to acquire the exchanged shares); 
  (b) the vendor or persons with whom the vendor did not deal at arm’s length, or the vendor together with persons with whom the vendor did not deal at arm’s length, 
  (i) controlled the purchaser, or 
  (ii) beneficially owned shares of the capital stock of the purchaser having a fair market value of more than 50% of the fair market value of all of the outstanding shares of the capital stock of the purchaser, immediately after the exchange; 
  (c) the vendor and the purchaser have filed an election under subsection 85(1) or 85(2) with respect to the exchanged shares; 
  (d) consideration other than shares of the particular class of the capital stock of the purchaser was received by the vendor for the exchanged shares, notwithstanding that the vendor may have disposed of shares of the capital stock of the acquired corporation (other than the exchanged shares) to the purchaser for consideration other than shares of one class of the capital stock of the purchaser; or 
  (e) the vendor 
  (i) is a foreign affiliate of a taxpayer resident in Canada at the end of the taxation year of the vendor in which the exchange occurred, and 
  (ii) has included any portion of the gain or loss, otherwise determined, from the disposition of the exchanged shares in computing its foreign accrual property income for the taxation year of the vendor in which the exchange occurred. 
  
  ### Computation of paid-up capital
  
  (2.1) Where, at any time, a purchaser has issued shares of its capital stock as a result of an exchange to which subsection 85.1(1) applied, in computing the paid-up capital in respect of any particular class of shares of its capital stock at any particular time after that time 
  (a) there shall be deducted that proportion of the amount, if any, by which 
  (i) the increase, if any, as a result of the issue, in the paid-up capital in respect of all the shares of the capital stock of the purchaser, computed without reference to this subsection as it applies to the issue, exceeds 
  (ii) the paid-up capital in respect of all the exchanged shares received as a result of the exchange that 
  (iii) the increase, if any, as a result of the issue, in the paid-up capital in respect of the particular class of shares, computed without reference to this subsection as it applies to the issue, is of 
  (iv) the amount, if any, determined in subparagraph 85.1(2.1)(a)(i) in respect of the issue; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid by the purchaser before the particular time exceeds 
  (B) the total that would be determined under clause 85.1(2.1)(b)(i)(A) if this Act were read without reference to paragraph 85.1(2.1)(a), and 
  (ii) the total of all amounts required by paragraph 85.1(2.1)(a) to be deducted in respect of that particular class of shares before the particular time. 
  
  ### Issuance deemed made to vendor
  
  (2.2) For the purposes of subsection (1), if a purchaser issues shares of a class of its capital stock (in this subsection referred to as “purchaser shares”) to a trust under a court-approved plan or scheme of arrangement in consideration for which a vendor disposes of exchanged shares that trade on a designated stock exchange to the purchaser solely for purchaser shares that are widely traded on a designated stock exchange immediately after and as part of completion of the plan or scheme of arrangement, the issuance to the trust is deemed to be an issuance to the vendor. 
  
  ### Disposition of shares of foreign affiliate
  
  (3) Where a taxpayer has disposed of capital property that was shares of the capital stock of a foreign affiliate of the taxpayer to any corporation that was, immediately following the disposition, a foreign affiliate of the taxpayer (in this subsection referred to as the “acquiring affiliate”) for consideration including shares of the capital stock of the acquiring affiliate, 
  (a) the cost to the taxpayer of any property (other than shares of the capital stock of the acquiring affiliate) receivable by the taxpayer as consideration for the disposition shall be deemed to be the fair market value of the property at the time of the disposition; 
  (b) the cost to the taxpayer of any shares of any class of the capital stock of the acquiring affiliate receivable by the taxpayer as consideration for the disposition shall be deemed to be that proportion of the amount, if any, by which the total of the adjusted cost bases to the taxpayer, immediately before the disposition, of the shares disposed of exceeds the fair market value at that time of the consideration receivable for the disposition (other than shares of the capital stock of the acquiring affiliate) that 
  (i) the fair market value, immediately after the disposition, of those shares of the acquiring affiliate of that class is of 
  (ii) the fair market value, immediately after the disposition, of all shares of the capital stock of the acquiring affiliate receivable by the taxpayer as consideration for the disposition; 
  (c) the taxpayer’s proceeds of disposition of the shares shall be deemed to be an amount equal to the cost to the taxpayer of all shares and other property receivable by the taxpayer from the acquiring affiliate as consideration for the disposition; and 
  (d) the cost to the acquiring affiliate of the shares acquired from the taxpayer shall be deemed to be an amount equal to the taxpayer’s proceeds of disposition referred to in paragraph 85.1(3)(c). 
  
  ### Exception
  
  (4) Subsection (3) does not apply in respect of a disposition at any time by a taxpayer of a share of the capital stock of a particular foreign affiliate of the taxpayer to another foreign affiliate of the taxpayer if 
  (a) both 
  (i) all or substantially all of the property of the particular affiliate was, immediately before that time, excluded property (within the meaning assigned by subsection 95(1)) of the particular affiliate, and 
  (ii) the disposition is part of a transaction or event or a series of transactions or events for the purpose of disposing of the share to a person or partnership that, immediately after the transaction, event or series, was a person or partnership (other than a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest (within the meaning assigned by paragraph 95(2)(m)) at the time of the transaction or event or throughout the series, as the case may be) with whom the taxpayer was dealing at arm’s length; or 
  (b) the adjusted cost base to the taxpayer of the share at that time is greater than the amount that would, in the absence of subsection (3), be the taxpayer’s proceeds of disposition of the share in respect of the disposition. 
  
  ### Foreign share for foreign share exchange
  
  (5) Subject to subsections (3) and (6) and 95(2), where a corporation resident in a country other than Canada (in this section referred to as the “foreign purchaser”) issues shares of its capital stock (in this section referred to as the “issued foreign shares”) to a vendor in exchange for shares of the capital stock of another corporation resident in a country other than Canada (in this section referred to as the “exchanged foreign shares”) that were immediately before the exchange capital property of the vendor, except where the vendor has, in the vendor’s return of income for the taxation year in which the exchange occurred, included in computing the vendor’s income for that year any portion of the gain or loss, otherwise determined, from the disposition of the exchanged foreign shares, the vendor is deemed 
  (a) to have disposed of the exchanged foreign shares for proceeds of disposition equal to the adjusted cost base to the vendor of those shares immediately before the exchange, and 
  (b) to have acquired the issued foreign shares at a cost to the vendor equal to the adjusted cost base to the vendor of the exchanged foreign shares immediately before the exchange, and where the exchanged foreign shares were taxable Canadian property of the vendor, the issued foreign shares so acquired by the vendor are deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the vendor. 
  
  ### Where subsection (5) does not apply
  
  (6) Subsection (5) does not apply where 
  (a) the vendor and foreign purchaser were, immediately before the exchange, not dealing with each other at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b) that is a right of the foreign purchaser to acquire the exchanged foreign shares); 
  (b) immediately after the exchange the vendor, persons with whom the vendor did not deal at arm’s length or the vendor together with persons with whom the vendor did not deal at arm’s length 
  (i) controlled the foreign purchaser, or 
  (ii) beneficially owned shares of the capital stock of the foreign purchaser having a fair market value of more than 50% of the fair market value of all of the outstanding shares of the capital stock of the foreign purchaser; 
  (c) consideration other than issued foreign shares was received by the vendor for the exchanged foreign shares, notwithstanding that the vendor may have disposed of shares of the capital stock of the other corporation referred to in subsection (5) (other than the exchanged foreign shares) to the foreign purchaser for consideration other than shares of the capital stock of the foreign purchaser; 
  (d) the vendor 
  (i) is a foreign affiliate of a taxpayer resident in Canada at the end of the taxation year of the vendor in which the exchange occurred, and 
  (ii) has included any portion of the gain or loss, otherwise determined, from the disposition of the exchanged foreign shares in computing its foreign accrual property income for the taxation year of the vendor in which the exchange occurred; or 
  (e) the vendor is a foreign affiliate of a taxpayer resident in Canada at the end of the taxation year of the vendor in which the exchange occurred and the exchanged foreign shares are excluded property (within the meaning assigned by subsection 95(1)) of the vendor. 
  
  ### Issuance deemed made to vendor
  
  (6.1) For the purposes of subsection (5), if a foreign purchaser issues shares of a class of its capital stock (in this subsection referred to as 
  *foreign purchaser shares*) to a trust under a court-approved plan or scheme of arrangement in consideration for which a vendor disposes of exchanged foreign shares that trade on a designated stock exchange to the purchaser solely for foreign purchaser shares that are widely traded on a designated stock exchange immediately after and as part of completion of the plan or scheme of arrangement, the issuance to the trust is deemed to be an issuance to the vendor.  
  
  ### Application of subsection (8)
  
  (7) Subsection (8) applies in respect of the disposition before 2013 by a taxpayer of SIFT wind-up entity equity (referred to in subsection (8) as the “particular unit”) to a taxable Canadian corporation if 
  (a) the disposition occurs during a period (referred to in this subsection and subsection (8) as the “exchange period”) of no more than 60 days at the end of which all of the equity in the SIFT wind-up entity is owned by the corporation; 
  (b) the taxpayer receives no consideration for the disposition other than a share (referred to in this subsection and subsection (8) as the “exchange share”) of the capital stock of the corporation that is issued during the exchange period to the taxpayer by the corporation; 
  (c) neither of subsections 85(1) and (2) applies to the disposition; and 
  (d) all of the exchange shares issued to holders of equity in the SIFT wind-up entity are shares of a single class of the capital stock of the corporation. 
  
  ### Rollover on SIFT unit for share exchange
  
  (8) If this subsection applies in respect of a disposition by a taxpayer of a particular unit of a SIFT wind-up entity to a corporation for consideration that is an exchange share, the following rules apply: 
  (a) the taxpayer’s proceeds of disposition of the particular unit, and cost of the exchange share, are deemed to be equal to the cost amount to the taxpayer of the particular unit immediately before the disposition; 
  (b) if the particular unit was immediately before the disposition taxable Canadian property of the taxpayer, the exchange share is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer; 
  (c) if the exchange share’s fair market value immediately after the disposition exceeds the particular unit’s fair market value at the time of the disposition, the excess is deemed to be an amount that section 15 requires to be included in computing the taxpayer’s income for the taxpayer’s taxation year in which the disposition occurs; 
  (d) if the particular unit’s fair market value at the time of the disposition exceeds the exchange share’s fair market value immediately after the disposition, and it is reasonable to regard any part of the excess as a benefit that the taxpayer desired to have conferred on a person, or partnership, with whom the taxpayer does not deal at arm’s length, the excess is deemed to be an amount that section 15 requires to be included in computing the taxpayer’s income for the taxpayer’s taxation year in which the disposition occurs; 
  (e) the cost to the corporation of the particular unit is deemed to be the lesser of 
  (i) the fair market value of the particular unit immediately before the disposition, and 
  (ii) the amount determined for B in the formula in paragraph (f) in respect of the particular unit; and 
  (f) in computing the paid-up capital in respect of each class of shares of the capital stock of the corporation at any time after the disposition there shall be deducted the amount determined by the formula is the increase, if any, as a result of the disposition, in the paid-up capital in respect of all the shares of the capital stock of the corporation, computed without reference to this paragraph as it applies to the disposition, is the amount determined by the formula is 
  (i) unless subparagraph (ii) applies, the total of all amounts each of which is 
  (A) if the SIFT wind-up entity is a trust, the fair market value of property received by the SIFT wind-up entity on the issuance of the particular unit, or 
  (B) if the SIFT wind-up entity is a partnership, 
  (I) an amount that has at any time been added, in computing the adjusted cost base to any taxpayer of the particular unit on or before the disposition, because of subparagraph 53(1)(e)(iv) or (x), or 
  (II) an amount that would at any time have been added, in computing the adjusted cost base to any taxpayer of the particular unit on or before the disposition, because of subparagraph 53(1)(e)(i) if subsection 96(1) were read without reference to its paragraph (d) and the partnership deducted all amounts otherwise deductible because of that paragraph, and 
  (ii) if the SIFT wind-up entity has on or after the end of the exchange period issued a unit, nil, and is the total of all amounts each of which 
  (i) if the SIFT wind-up entity is a trust, has become payable by the SIFT wind-up entity, in respect of the particular unit, to any holder of the unit on or before the disposition, other than an amount that has become payable out of its income (determined without reference to subsection 104(6)) or capital gains, and 
  (ii) if the SIFT wind-up entity is a partnership, 
  (A) has at any time been deducted, in computing the adjusted cost base to any taxpayer of the particular unit on or before the disposition, because of subparagraph 53(2)(c)(iv) or (v), or 
  (B) would have at any time been deducted, in computing the adjusted cost base to any taxpayer of the particular unit on or before the disposition, because of subparagraph 53(2)(c)(i) if subsection 96(1) were read without reference to its paragraph (d) and the partnership deducted all amounts otherwise deductible because of that paragraph, and is the increase, if any, as a result of the disposition, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition. 
  
  ### Exchange of shares by a shareholder in course of reorganization of capital
  
  86 (1) Where, at a particular time after May 6, 1974, in the course of a reorganization of the capital of a corporation, a taxpayer has disposed of capital property that was all the shares of any particular class of the capital stock of the corporation that were owned by the taxpayer at the particular time (in this section referred to as the “old shares”), and property is receivable from the corporation therefor that includes other shares of the capital stock of the corporation (in this section referred to as the “new shares”), the following rules apply: 
  (a) the cost to the taxpayer of any property (other than new shares) receivable by the taxpayer for the old shares shall be deemed to be its fair market value at the time of the disposition; 
  (b) the cost to the taxpayer of any new shares of any class of the capital stock of the corporation receivable by the taxpayer for the old shares shall be deemed to be that proportion of the amount, if any, by which the total of the adjusted cost bases to the taxpayer, immediately before the disposition, of the old shares exceeds the fair market value at that time of the consideration receivable for the old shares (other than new shares) that 
  (i) the fair market value, immediately after the disposition, of those new shares of that class, is of 
  (ii) the fair market value, immediately after the disposition, of all new shares of the capital stock of the corporation receivable by the taxpayer for the old shares; and 
  (c) the taxpayer shall be deemed to have disposed of the old shares for proceeds of disposition equal to the cost to the taxpayer of all new shares and other property receivable by the taxpayer for the old shares. 
  
  ### Idem
  
  (2) Notwithstanding paragraphs 86(1)(b) and 86(1)(c), where a taxpayer has disposed of old shares in circumstances described in subsection 86(1) and the fair market value of the old shares immediately before the disposition exceeds the total of 
  (a) the cost to the taxpayer of the property (other than new shares) receivable by the taxpayer for the old shares as determined under paragraph 86(1)(a), and 
  (b) the fair market value of the new shares, immediately after the disposition, and it is reasonable to regard any portion of the excess (in this subsection referred to as the “gift portion”) as a benefit that the taxpayer desired to have conferred on a person related to the taxpayer, the following rules apply: 
  (c) the taxpayer shall be deemed to have disposed of the old shares for proceeds of disposition equal to the lesser of 
  (i) the total of the cost to the taxpayer of the property as determined under paragraph 86(1)(a) and the gift portion and 
  (ii) the fair market value of the old shares immediately before the disposition, 
  (d) the taxpayer’s capital loss from the disposition of the old shares shall be deemed to be nil, and 
  (e) the cost to the taxpayer of any new shares of any class of the capital stock of the corporation receivable by the taxpayer for the old shares shall be deemed to be that proportion of the amount, if any, by which the total of the adjusted cost bases to the taxpayer, immediately before the disposition, of the old shares exceeds the total determined under subparagraph 86(2)(c)(i) that 
  (i) the fair market value, immediately after the disposition, of the new shares of that class, is of 
  (ii) the fair market value, immediately after the disposition, of all new shares of the capital stock of the corporation receivable by the taxpayer for the old shares. 
  
  ### Computation of paid-up capital
  
  (2.1) Where subsection 86(1) applies to a disposition of shares of the capital stock of a corporation (in this subsection referred to as the “exchange”), in computing the paid-up capital in respect of a particular class of shares of the capital stock of the corporation at any particular time that is the time of, or any time after, the exchange, 
  (a) there shall be deducted the amount determined by the formula is the total of all amounts each of which is the increase, if any, as a result of the exchange, in the paid-up capital in respect of a class of shares of the capital stock of the corporation, computed without reference to this subsection as it applies to the exchange, is the amount, if any, by which the paid-up capital in respect of the old shares exceeds the fair market value of the consideration (other than shares of the capital stock of the corporation) given by the corporation for the old shares on the exchange, and is the increase, if any, as a result of the exchange, in the paid-up capital in respect of the particular class of shares, computed without reference to this subsection as it applies to the exchange; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid by the corporation before the particular time exceeds 
  (B) the total that would be determined under clause 86(2.1)(b)(i)(A) if this Act were read without reference to paragraph 86(2.1)(a), and 
  (ii) the total of all amounts required by paragraph 86(2.1)(a) to be deducted in respect of that particular class of shares before the particular time. 
  
  ### Application
  
  (3) Subsections 86(1) and 86(2) do not apply in any case where subsection 85(1) or 85(2) applies. 
  
  ### Computation of adjusted cost base
  
  (4) Where a taxpayer has disposed of old shares in circumstances described in subsection 86(1), 
  (a) there shall be deducted after the disposition in computing the adjusted cost base to the taxpayer of each new share the amount determined by the formula is the amount, if any, by which 
  (i) the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the taxpayer of the old shares immediately before the disposition exceeds 
  (ii) the amount that would be the taxpayer’s capital gain for the taxation year that includes the time of the disposition from the disposition of the old shares if paragraph 40(1)(a) were read without reference to subparagraph (iii) of that paragraph, is the fair market value of the new share at the time it was acquired by the taxpayer in consideration for the disposition of the old shares, and is the total of all amounts each of which is the fair market value of a new share at the time it was acquired by the taxpayer in consideration for the disposition of the old shares; and 
  (b) the amount determined under paragraph 86(4)(a) in respect of the acquisition shall be added in computing the adjusted cost base to the taxpayer of the new share after the disposition. 
  
  ## Foreign Spin-offs 
  
  ### Eligible distribution not included in income
  
  86.1 (1) Notwithstanding any other provision of this Part, 
  (a) the amount of an eligible distribution received by a taxpayer shall not be included in computing the income of the taxpayer; and 
  (b) subsection 52(2) does not apply to the eligible distribution received by the taxpayer. 
  
  ### Eligible distribution
  
  (2) For the purpose of this section, a distribution by a particular corporation that is received by a taxpayer is an eligible distribution if 
  (a) the distribution is with respect to all of the taxpayer’s common shares of the capital stock of the particular corporation (in this section referred to as the “original shares”); 
  (b) the distribution consists solely of common shares of the capital stock of another corporation that were owned by the particular corporation immediately before their distribution to the taxpayer (in this section referred to as the “spin-off shares”); 
  (c) in the case of a distribution that is not prescribed, 
  (i) at the time of the distribution, both corporations are resident in the United States and were never resident in Canada, 
  (ii) at the time of the distribution, the shares of the class that includes the original shares are widely held and 
  (A) are actively traded on a designated stock exchange in the United States, or 
  (B) are required, under the Securities Exchange Act of 1934 of the United States, as amended from time to time, to be registered with the Securities and Exchange Commission of the United States and are so registered, and  
  (iii) under the provisions of the Internal Revenue Code of 1986 of the United States, as amended from time to time, that apply to the distribution, the shareholders of the particular corporation who are resident in the United States are not taxable in respect of the distribution;  
  (d) in the case of a distribution that is prescribed, 
  (i) at the time of the distribution, both corporations are resident in the same country, other than the United States, with which Canada has a tax treaty (in this section referred to as the “foreign country”) and were never resident in Canada, 
  (ii) at the time of the distribution, the shares of the class that includes the original shares are widely held and actively traded on a designated stock exchange, 
  (iii) under the law of the foreign country, those shareholders of the particular corporation who are resident in that country are not taxable in respect of the distribution, and 
  (iv) the distribution is prescribed subject to such terms and conditions as are considered appropriate in the circumstances; 
  (e) before the end of the sixth month following the day on which the particular corporation first distributes a spin-off share in respect of the distribution, the particular corporation provides to the Minister information satisfactory to the Minister establishing 
  (i) that, at the time of the distribution, the shares of the class that includes the original shares are shares described in subparagraph (c)(ii) or (d)(ii), 
  (ii) that the particular corporation and the other corporation referred to in paragraph (b) were never resident in Canada, 
  (iii) the date of the distribution, 
  (iv) the type and fair market value of each property distributed to residents of Canada, 
  (v) the name and address of each resident of Canada that received property with respect to the distribution, 
  (vi) in the case of a distribution that is not prescribed, that the distribution is not taxable under the provisions of the Internal Revenue Code of 1986 of the United States, as amended from time to time, that apply to the distribution,  
  (vii) in the case of a distribution that is prescribed, that the distribution is not taxable under the law of the foreign country, and 
  (viii) such other matters that are required, in prescribed form; and 
  (f) the taxpayer elects in writing filed with the taxpayer’s return of income for the taxation year in which the distribution occurs that this section apply to the distribution and provides information satisfactory to the Minister 
  (i) of the number, cost amount (determined without reference to this section) and fair market value of the taxpayer’s original shares immediately before the distribution, 
  (ii) of the number, and fair market value, of the taxpayer’s original shares and the spin-off shares immediately after the distribution of the spin-off shares to the taxpayer, 
  (iii) except where the election is filed with the taxpayer’s return of income for the year in which the distribution occurs, concerning the amount of the distribution, the manner in which the distribution was reported by the taxpayer and the details of any subsequent disposition of original shares or spin-off shares for the purpose of determining any gains or losses from those dispositions, and 
  (iv) of such other matters that are required, in prescribed form. 
  
  ### Cost adjustments
  
  (3) Where a spin-off share is distributed by a corporation to a taxpayer pursuant to an eligible distribution with respect to an original share of the taxpayer, 
  (a) there shall be deducted for the purpose of computing the cost amount to the taxpayer of the original share at any time the amount determined by the formula is the cost amount, determined without reference to this section, to the taxpayer of the original share at the time that is immediately before the distribution or, if the original share is disposed of by the taxpayer, before the distribution, at the time that is immediately before its disposition, is the fair market value of the spin-off share immediately after its distribution to the taxpayer, and is the total of 
  (i) the fair market value of the original share immediately after the distribution of the spin-off share to the taxpayer, and 
  (ii) the fair market value of the spin-off share immediately after its distribution to the taxpayer; and 
  (b) the cost to the taxpayer of the spin-off share is the amount by which the cost amount of the taxpayer’s original share was reduced as a result of paragraph (a). 
  
  ### Inventory
  
  (4) For the purpose of calculating the value of the property described in an inventory of a taxpayer’s business, 
  (a) an eligible distribution to the taxpayer of a spin-off share that is included in the inventory is deemed not to be an acquisition of property in the fiscal period of the business in which the distribution occurs; and 
  (b) for greater certainty, the value of the spin-off share is to be included in computing the value of the inventory at the end of that fiscal period. 
  
  ### Reassessments
  
  (5) Notwithstanding subsections 152(4) to (5), the Minister may make at any time such assessments, reassessments, determinations and redeterminations that are necessary where information is obtained that the conditions in subparagraph (2)(c)(iii) or (d)(iii) are not, or are no longer, satisfied. 
  
  ### Amalgamations
  
  87 (1) In this section, an amalgamation means a merger of two or more corporations each of which was, immediately before the merger, a taxable Canadian corporation (each of which corporations is referred to in this section as a “predecessor corporation”) to form one corporate entity (in this section referred to as the “new corporation”) in such a manner that 
  (a) all of the property (except amounts receivable from any predecessor corporation or shares of the capital stock of any predecessor corporation) of the predecessor corporations immediately before the merger becomes property of the new corporation by virtue of the merger, 
  (b) all of the liabilities (except amounts payable to any predecessor corporation) of the predecessor corporations immediately before the merger become liabilities of the new corporation by virtue of the merger, and 
  (c) all of the shareholders (except any predecessor corporation), who owned shares of the capital stock of any predecessor corporation immediately before the merger, receive shares of the capital stock of the new corporation because of the merger, otherwise than as a result of the acquisition of property of one corporation by another corporation, pursuant to the purchase of that property by the other corporation or as a result of the distribution of that property to the other corporation on the winding-up of the corporation. 
  
  ### Shares deemed to have been received by virtue of merger
  
  (1.1) For the purposes of paragraph 87(1)(c) and the Income Tax Application Rules, where there is a merger of  
  (a) a corporation and one or more of its subsidiary wholly-owned corporations, or 
  (b) two or more corporations each of which is a subsidiary wholly-owned corporation of the same corporation any shares of the capital stock of a predecessor corporation owned by a shareholder (except any predecessor corporation) immediately before the merger that were not cancelled on the merger shall be deemed to be shares of the capital stock of the new corporation received by the shareholder by virtue of the merger as consideration for the disposition of the shares of the capital stock of the predecessor corporations. 
  
  ### New corporation continuation of a predecessor
  
  (1.2) Where there has been an amalgamation of corporations described in paragraph (1.1)(a) or of two or more corporations each of which is a subsidiary wholly-owned corporation of the same person, the new corporation is, for the purposes of section 29 of the Income Tax Application Rules, subsection 59(3.3) and sections 66, 66.1, 66.2, 66.21, 66.4 and 66.7, deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this subsection does not affect the determination of any predecessor corporation’s fiscal period, taxable income or tax payable.  
  
  ### Definition of subsidiary wholly-owned corporation 
  
  (1.4) Notwithstanding subsection 248(1), for the purposes of this subsection and subsections 87(1.1), 87(1.2) and 87(2.11), 
  *subsidiary wholly-owned corporation* of a person (in this subsection referred to as the “parent”) means a corporation all the issued and outstanding shares of the capital stock of which belong to  
  (a) the parent; 
  (b) a corporation that is a subsidiary wholly-owned corporation of the parent; or 
  (c) any combination of persons each of which is a person described in paragraph 87(1.4)(a) or 87(1.4)(b). 
  
  ### Definitions
  
  (1.5) For the purpose of this section, financial institution, mark-to-market property and specified debt obligation have the meanings assigned by subsection 142.2(1).  
  
  ### Rules applicable
  
  (2) Where there has been an amalgamation of two or more corporations after 1971 the following rules apply 
  
  ### Taxation year
  
  (a) for the purposes of this Act, the corporate entity formed as a result of the amalgamation shall be deemed to be a new corporation the first taxation year of which shall be deemed to have commenced at the time of the amalgamation, and a taxation year of a predecessor corporation that would otherwise have ended after the amalgamation shall be deemed to have ended immediately before the amalgamation; 
  
  ### Inventory
  
  (b) for the purpose of computing the income of the new corporation, where the property described in the inventory, if any, of the new corporation at the beginning of its first taxation year includes property that was described in the inventory of a predecessor corporation at the end of the taxation year of the predecessor corporation that ended immediately before the amalgamation (which taxation year of a predecessor corporation is referred to in this section as its “last taxation year”), the property so included shall be deemed to have been acquired by the new corporation at the beginning of its first taxation year for an amount determined in accordance with section 10 as the value thereof for the purpose of computing the income of the predecessor corporation for its last taxation year, except that where the income of the predecessor corporation for its last taxation year from a farming business was computed in accordance with the cash method, the amount so determined in respect of inventory owned in connection with that business shall be deemed to be the total of all amounts each of which is an amount included because of paragraph 28(1)(b) or 28(1)(c) in computing that income for that year and, where the income of the new corporation from a farming business is computed in accordance with the cash method, for the purpose of section 28, 
  (i) an amount equal to that total shall be deemed to have been paid by the new corporation, and 
  (ii) the new corporation shall be deemed to have purchased the property for an amount equal to that total, in its first taxation year and in the course of carrying on that business; 
  
  ### Method adopted for computing income
  
  (c) in computing the income of the new corporation for a taxation year from a business or property 
  (i) there shall be included any amount received or receivable (depending on the method followed by the new corporation in computing its income for that year) by it in that year that would, if it had been received or receivable (depending on the method followed by the predecessor corporation in computing its income for its last taxation year) by the predecessor corporation in its last taxation year, have been included in computing the income of the predecessor corporation for that year, and 
  (ii) there may be deducted any amount paid or payable (depending on the method followed by the new corporation in computing its income for that year) by it in that year that would, if it had been paid or payable (depending on the method followed by the predecessor corporation in computing its income for its last taxation year) by the predecessor corporation in its last taxation year, have been deductible in computing the income of the predecessor corporation for that year; 
  
  ### Depreciable property
  
  (d) for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), 
  (i) where depreciable property of a prescribed class has been acquired by the new corporation from a predecessor corporation, the capital cost of the property to the new corporation shall be deemed to be the amount that was the capital cost of the property to the predecessor corporation, and 
  (ii) in determining the undepreciated capital cost to the new corporation of depreciable property of a prescribed class at any time, 
  (A) there shall be added to the capital cost to the new corporation of depreciable property of the class acquired before that time the cost amount, immediately before the amalgamation, to a predecessor corporation of each property included in that class by the new corporation, 
  (B) there shall be subtracted from the capital cost to the new corporation of depreciable property of that class acquired before that time the capital cost to the new corporation of property of that class acquired by virtue of the amalgamation, 
  (C) a reference in subparagraph 13(5)(b)(ii) to amounts that would have been deducted in respect of property in computing a taxpayer’s income shall be construed as including a reference to amounts that would have been deducted in respect of that property in computing a predecessor corporation’s income, and 
  (D) where depreciable property that is deemed by subsection 37(6) to be a separate prescribed class has been acquired by the new corporation from a predecessor corporation, the property shall continue to be deemed to be of that same separate prescribed class; 
  
  ### Depreciable property acquired from predecessor corporation
  
  (d.1) for the purposes of this Act, where depreciable property (other than property of a prescribed class) has been acquired by the new corporation from a predecessor corporation, the new corporation shall be deemed to have acquired the property before 1972 at an actual cost equal to the actual cost of the property to the predecessor corporation, and the new corporation shall be deemed to have been allowed the total of all amounts allowed to the predecessor corporation in respect of the property, under regulations made under paragraph 20(1)(a), in computing the income of the predecessor corporation; 
  
  ### Capital property
  
  (e) subject to paragraph 87(2)(e.4) and subsection 142.6(5), where a capital property (other than depreciable property or an interest in a partnership) has been acquired by the new corporation from a predecessor corporation, the cost of the property to the new corporation shall be deemed to be the amount that was the adjusted cost base of the property to the predecessor corporation immediately before the amalgamation; 
  
  ### Partnership interest
  
  (e.1) where a partnership interest that is capital property has been acquired from a predecessor corporation to which the new corporation was related, for the purposes of this Act, the cost of that partnership interest to the new corporation shall be deemed to be the amount that was the cost of that interest to the predecessor corporation and, in respect of that partnership interest, the new corporation shall be deemed to be the same corporation as and a continuation of the predecessor corporation; 
  
  ### Security or debt obligation
  
  (e.2) subject to paragraphs 87(2)(e.3) and 87(2)(e.4) and subsection 142.6(5), where a property that is a security or debt obligation (other than a capital property or an inventory) of a predecessor corporation used by it in the year in, or held by it in the year in the course of, carrying on the business of insurance or lending money in the taxation year ending immediately before the amalgamation has been acquired by the new corporation from the predecessor corporation, the cost of the property to the new corporation shall be deemed to be the amount that was the cost amount of the property to the predecessor corporation immediately before the amalgamation; 
  
  ### Financial institutions — specified debt obligation
  
  (e.3) where the new corporation is a financial institution in its first taxation year, it shall be deemed, in respect of a specified debt obligation (other than a mark-to-market property) acquired from a predecessor corporation that was a financial institution in its last taxation year, to be the same corporation as, and a continuation of, the predecessor corporation; 
  
  ### Financial institutions — mark-to-market property
  
  (e.4) where 
  (i) the new corporation is a financial institution in its first taxation year and a property acquired by the new corporation from a predecessor corporation is a mark-to-market property of the new corporation for the year, or 
  (ii) a predecessor corporation was a financial institution in its last taxation year and a property acquired by the new corporation from the predecessor corporation was a mark-to-market property of the predecessor corporation for the year, the cost of the property to the new corporation shall be deemed to be the amount that was the fair market value of the property immediately before the amalgamation; 
  (e.41) if subsection 10.1(6) applied to a predecessor corporation in its last taxation year, each eligible derivative (as defined in subsection 10.1(5)) of the predecessor corporation immediately before the end of its last taxation year is deemed to have been reacquired, or reissued or renewed, as the case may be, by the new corporation at its fair market value immediately before the amalgamation;  
  (e.42) for the purposes of subsection 10.1(7), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Financial institutions — mark-to-market property
  
  (e.5) for the purposes of subsections 112(5) to 112(5.2) and 112(5.4) and the definition mark-to-market property in subsection 142.2(1), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  (f)  [Repealed, 2016, c. 12, s. 27]  
  (f.1)  [Repealed, 1994, c. 7, Sch. VIII, s. 37]  
  
  ### Reserves
  
  (g) for the purpose of computing the income of the new corporation for a taxation year, 
  (i) any amount that has been deducted as a reserve in computing the income of a predecessor corporation for its last taxation year shall be deemed to have been deducted as a reserve in computing the income of the new corporation for a taxation year immediately preceding its first taxation year, and 
  (ii) any amount deducted under paragraph 20(1)(p) in computing the income of a predecessor corporation for its last taxation year or a previous taxation year shall be deemed to have been deducted under that paragraph in computing the income of the new corporation for a taxation year immediately preceding its first taxation year; 
  
  ### Continuation
  
  (g.1) for the purposes of sections 12.4 and 26, subsection 97(3) and section 256.1, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Financial institution rules
  
  (g.2) for the purposes of paragraphs 142.4(4)(c) and (d) and subsections 142.51(11) and 142.6(1), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  (g.3) for the purposes of applying subsections 13(21.2), 18(15) and 40(3.4) to any property that was disposed of by a predecessor corporation before the amalgamation, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Superficial losses — capital property
  
  (g.4) for the purpose of applying paragraph 40(3.5)(c) in respect of any share that was acquired by a predecessor corporation, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Patronage dividends
  
  (g.5) for the purposes of section 135, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### COVID-19 – emergency subsidies
  
  (g.6) for the purposes of section 125.7, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation unless it is reasonable to consider that one of the main purposes of the amalgamation is to cause the new corporation to qualify for the deemed overpayment under any of subsections 125.7(2) to (2.2) or to increase the amount of that deemed overpayment; 
  
  ### COVID-19 — automobile benefits
  
  (g.7) for the purposes of subsections 6(2.2) and (2.3), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### COVID-19 — air quality improvement tax credit
  
  (g.8) for the purposes of section 127.43, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Debts
  
  (h) for the purpose of computing a deduction from the income of the new corporation for a taxation year under paragraph 20(1)(l), 20(1)(l.1) or 20(1)(p) 
  (i) any debt owing to a predecessor corporation that was included in computing the income of the predecessor corporation for its last taxation year or a preceding taxation year, 
  (ii) where a predecessor corporation was an insurer or a corporation the ordinary business of which included the lending of money, any loan or lending asset made or acquired by the predecessor corporation in the ordinary course of its business of insurance or the lending of money, or 
  (iii) where a predecessor corporation was an insurer or a corporation the ordinary business of which included the lending of money, any instrument or commitment described in paragraph 20(1)(l.1) that was issued, made or assumed by the predecessor corporation in the ordinary course of its business of insurance or the lending of money, and that by reason of the amalgamation, has been acquired by the new corporation, shall be deemed to be a debt owing to the new corporation that was included in computing its income for a preceding taxation year, a loan or lending asset made or acquired or an instrument or commitment that was issued, made or assumed by the new corporation in a preceding taxation year in the ordinary course of its business of insurance or the lending of money, as the case may be; 
  
  ### Debts
  
  (h.1) for the purposes of section 61.4, the description of F in subsection 79(3), the definition forgiven amount in subsection 80(1), subsection 80.03(7) and section 80.04, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### Special reserve
  
  (i) for the purpose of computing a deduction from the income of the new corporation for a taxation year under paragraph 20(1)(n), any amount included in computing the income of a predecessor corporation from a business for its last taxation year or a previous taxation year in respect of property sold in the course of the business shall be deemed to have been included in computing the income of the new corporation from the business for a previous year in respect of that property; 
  
  ### Special reserves
  
  (j) for the purposes of paragraphs 20(1)(m), 20(1)(m.1) and 20(1)(m.2), subsection 20(24) and section 34.2, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Inventory adjustment
  
  (j.1) for the purposes of paragraph 20(1)(ii), an amount required by paragraph 12(1)(r) to be included in computing the income of a predecessor corporation for its last taxation year shall be deemed to be an amount required by paragraph 12(1)(r) to be included in computing the income of the new corporation for a taxation year immediately preceding its first taxation year; 
  
  ### Prepaid expenses and matchable expenditures
  
  (j.2) for the purposes of subsections 18(9) and 18(9.01), section 18.1 and paragraph 20(1)(mm), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Employee benefit plans, etc.
  
  (j.3) for the purposes of paragraphs 12(1)(n.1) to (n.3) and 20(1)(r), (s), (oo) and (pp), section 32.1, paragraph 104(13)(b), subsections 144.1(4) to (7) and Part X1.3, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Accrual rules
  
  (j.4) for the purposes of subsections 12(3) and 12(9), section 12.2, subsection 20(19) and the definition adjusted cost basis in subsection 148(9) of this Act, and subsections 12(5) and (6) and paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### Cancellation of lease
  
  (j.5) for the purposes of paragraphs 20(1)(z) and 20(1)(z.1), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Continuing corporation
  
  (j.6) for the purposes of paragraphs 12(1)(t) and (x), subsections 12(2.2) and 13(7.1), (7.4) and (24), paragraphs 13(27)(b) and (28)(c), subsections 13(29) and 18(9.1), paragraphs 20(1)(e), (e.1), (v) and (hh), sections 20.1 and 32, paragraph 37(1)(c), subsection 39(13), subparagraphs 53(2)(c)(vi) and (h)(ii), paragraph 53(2)(s), subsections 53(2.1), 66(11.4), 66.7(11) and 127(10.2), section 139.1, subsection 152(4.3), the determination of D in the definition undepreciated capital cost in subsection 13(21) and the determination of L in the definition cumulative Canadian exploration expense in subsection 66.1(6), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### Certain transfers and loans
  
  (j.7) for the purposes of sections 74.4 and 74.5, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  (j.8)  [Repealed, 2013, c. 33, s. 6]  
  
  ### Part I.3 tax
  
  (j.9) for the purpose of determining the amount deductible by the new corporation for any taxation year under section 125.3, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Part I.3 and Part VI tax
  
  (j.91) for the purpose of determining the amount deductible under subsection 181.1(4) or 190.1(3) by the new corporation for any taxation year, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this paragraph does not affect the determination of the fiscal period of any corporation or the tax payable by any corporation for any taxation year that ends before the amalgamation; 
  
  ### Subsection 125(5.1) and 157.1(1)
  
  (j.92) for the purposes of subsection 125(5.1) and the definition eligible corporation in subsection 157.1(1), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### Mining reclamation trusts
  
  (j.93) for the purposes of paragraphs 12(1)(z.1) and 12(1)(z.2) and 20(1)(ss) and 20(1)(tt) and sections 107.3 and 127.41, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Film or video productions
  
  (j.94) for the purposes of sections 125.4 and 125.5, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Non-resident entities
  
  (j.95) for the purposes of sections 94 to 94.2, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Journalism organizations
  
  (j.96) for the purposes of section 125.6, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Continuing corporation
  
  (j.97) for the purposes of subsection 110(0.1), paragraph 110(1)(e) and subsection 110(1.31), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Certain payments to employees
  
  (k) for the purpose of subsection 6(3), any amount received by a person from the new corporation that would, if received by the person from a predecessor corporation, be deemed for the purpose of section 5 to be remuneration for that person’s services rendered as an officer or during a period of employment, shall be deemed for the purposes of section 5 to be remuneration for services so rendered by the person; 
  
  ### Scientific research and experimental development
  
  (l) for the purposes of section 37 and Part VIII, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Idem
  
  (l.1) for the purposes of this paragraph, paragraph 87(2)(l.2) and section 37.1, 
  (i) the base period for a particular taxation year of a new corporation that has fewer than 3 preceding taxation years shall be deemed to be the period 
  (A) commencing on the day that 
  (I) is the earliest of all days each of which is a day immediately before the commencement of a taxation year of a predecessor corporation in respect of the new corporation that ended after 1976, and 
  (II) is in the 3 year period ending on the day immediately before the commencement of the particular year, and 
  (B) ending immediately before the first day of the particular taxation year, 
  (ii) where subparagraph 87(2)(l.1)(i) applies, 
  (A) in determining the qualified expenditures made by the new corporation in its base period, there shall be included the total of all amounts each of which is the qualified expenditure made by a predecessor corporation in a taxation year that commenced in the base period of the new corporation, and 
  (B) in determining the total of the amounts paid to the new corporation by persons referred to in subparagraphs (b)(i) to (iii) of the definition expenditure base in subsection 37.1(5) in its base period, there shall be included the total of all such amounts paid to a predecessor corporation by a person referred to in those subparagraphs in a taxation year that commenced in the base period of the new corporation,  
  (iii) the capital cost to the new corporation of any property that was a research property of a predecessor corporation acquired by it from the predecessor corporation shall be deemed to be the capital cost thereof to the predecessor corporation and the property shall be deemed to be a research property of the new corporation, and 
  (iv) each amount determined in respect of the new corporation under subparagraph 37.1(3)(b)(i) or 37.1(3)(b)(iii), as the case may be, shall be deemed to be the total of the amount otherwise determined and the total of amounts each of which is the amount determined under subparagraph 37.1(3)(b)(i) or 37.1(3)(b)(iii), as the case may be, in respect of a predecessor corporation; 
  
  ### Definition of predecessor corporation 
  
  (l.2) for the purposes of this paragraph and paragraph 87(2)(l.1), 
  *predecessor corporation* includes any corporation in respect of which a predecessor corporation was a new corporation;  
  
  ### Forgiven amount
  
  (l.21) for the purposes of section 61.3, the definition unrecognized loss in subsection 80(1) and subsection 80.01(10), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### Replacement property
  
  (l.3) where before the amalgamation property of a predecessor corporation was unlawfully taken, lost, destroyed or taken under statutory authority, or was a former business property of the predecessor corporation, for the purposes of applying sections 13 and 44 and the definition former business property in subsection 248(1) to the new corporation in respect of the property and any replacement property acquired therefor, the new corporation shall be deemed to be the same corporation as, and a continuation of, the predecessor corporation;  
  
  ### Subsection 13(4.2) election
  
  (l.4) for the purposes of subsection 13(4.3) and paragraph 20(16.1)(b), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Contingent amount — section 143.4
  
  (l.5) for the purposes of section 143.4, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Reserves
  
  (m) for the purpose of computing the income of the new corporation for a taxation year, any amount claimed under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in computing a predecessor corporation’s gain for its last taxation year from the disposition of any property shall be deemed 
  (i) to have been claimed under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii), as the case may be, in computing the new corporation’s gain for a taxation year immediately preceding its first taxation year from the disposition of that property by it before its first taxation year, and 
  (ii) to be the amount determined under subparagraph 40(1)(a)(i) or 44(1)(e)(i), as the case may be, in respect of that property; 
  
  ### Gift of non-qualifying security
  
  (m.1) for the purpose of computing the new corporation’s gain under subsection 40(1.01) for any taxation year from the disposition of a property, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Gift of predecessor’s property
  
  (m.2) for the purpose of computing the fair market value of property under subsection 248(35), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Outlays made pursuant to warranty
  
  (n) for the purpose of section 42, any outlay or expense made or incurred by the new corporation in a taxation year, pursuant to or by virtue of an obligation described in that section incurred by a predecessor corporation, that would, if the outlay or expense had been made or incurred by the predecessor corporation in that year, have been deemed to be a loss of the predecessor corporation for that year from the disposition of a capital property shall be deemed to be a loss of the new corporation for that year from the disposition of a capital property; 
  
  ### Expiration of options previously granted
  
  (o) for the purpose of subsection 49(2), 
  (i) any option granted by a predecessor corporation that expires after the amalgamation is deemed to have been granted by the new corporation, and any proceeds received by the predecessor corporation for the granting of the option is deemed to have been received by the new corporation, 
  (ii) any person to whom the option was granted who was not dealing at arm’s length with the predecessor corporation at the time that the option was granted is deemed to have been dealing with the new corporation not at arm’s length at the time that the option was granted, and 
  (iii) any person to whom the option was granted who was dealing at arm’s length with the predecessor corporation at the time that the option was granted is deemed to have been dealing with the new corporation at arm’s length at the time that the option was granted; 
  
  ### Consideration for resource property disposition
  
  (p) for the purpose of computing a deduction from the income of the new corporation for a taxation year under section 64 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, any amount that has been included in computing the income of a predecessor corporation for its last taxation year or a previous taxation year by reason of subsection 59(1) or paragraph 59(3.2)(c) of this Act, of subsection 59(3) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, or of subsection 83A(5ba) or (5c) of that Act as it read in its application to a taxation year before the 1972 taxation year, shall be deemed to have been included in computing the income of the new corporation for a previous year by virtue thereof;  
  
  ### Registered plans
  
  (q) for the purposes of sections 147, 147.1 and 147.2 and any regulations made under subsection 147.1(18), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Employees profit sharing plan
  
  (r) an election made under subsection 144(10) by a predecessor corporation is deemed to be an election made by the new corporation; 
  
  ### Tax deferred cooperative shares
  
  (s) for the purpose of section 135.1, if the new corporation is, at the beginning of its first taxation year, an agricultural cooperative corporation (within the meaning assigned by subsection 135.1(1)), 
  (i) the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation that was an agricultural cooperative corporation at the end of the predecessor corporation’s last taxation year, and 
  (ii) if, on the amalgamation, the new corporation issues a share (in this subparagraph and subsection 135.1(10) referred to as the “new share”) that is described in all of paragraphs (b) to (d) of the definition tax deferred cooperative share in subsection 135.1(1) to a taxpayer in exchange for a share of a predecessor corporation (in this subparagraph and subsection 135.1(10) referred to as the “old share”) that was, at the end of the predecessor corporation’s last taxation year, a tax deferred cooperative share within the meaning assigned by that definition, and the amount of paid-up capital, and the amount, if any, that the taxpayer is entitled to receive on a redemption, acquisition or cancellation, of the new share are equal to those amounts, respectively, in respect of the old share, subsection 135.1(10) applies in respect of the exchange;  
  
  ### Deemed SIFT wind-up corporation
  
  (s.1) if a predecessor corporation was a SIFT wind-up corporation immediately before the amalgamation, the new corporation is deemed to be a SIFT wind-up corporation; 
  
  ### Pre-1972 capital surplus on hand
  
  (t) for the purpose of subsection 88(2.1), any capital property owned by a predecessor corporation on December 31, 1971 that was acquired by the new corporation by virtue of the amalgamation shall be deemed to have been acquired by the new corporation before 1972 at an actual cost to it equal to the actual cost of the property to the predecessor corporation; 
  
  ### Shares of foreign affiliate
  
  (u) where one or more shares of the capital stock of a foreign affiliate of a predecessor corporation have, by virtue of the amalgamation, been acquired by the new corporation and as a result of the acquisition the affiliate has become a foreign affiliate of the new corporation, 
  (i) for the purposes of subsection 91(5) and paragraph 92(1)(b), any amount required by section 92 to be added or deducted, as the case may be, in computing the adjusted cost base of any such share to the predecessor corporation before the amalgamation shall be deemed to have been so required to be added or deducted, as the case may be, in computing the adjusted cost base of the share to the new corporation, and 
  (ii) for the purposes of subsections 93(2.01), (2.11), (2.21) and (2.31), any exempt dividend received by the predecessor corporation on any such share is deemed to be an exempt dividend received by the new corporation on the share; 
  
  ### Gifts
  
  (v) for the purposes of section 110.1, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation with respect to gifts; 
  
  ### Taxable dividends
  
  (x) for the purposes of subsections 112(3) to 112(4.22), 
  (i) any taxable dividend received on a share that was deductible from the predecessor corporation’s income for a taxation year under section 112 or subsection 138(6) is deemed to be a taxable dividend received on the share by the new corporation that was deductible from the new corporation’s income under section 112 or subsection 138(6), as the case may be, 
  (ii) any dividend (other than a taxable dividend) received on a share by the predecessor corporation is deemed to have been received on the share by the new corporation, and 
  (iii) a share acquired by the new corporation from a predecessor corporation is deemed to have been owned by the new corporation throughout any period of time throughout which it was owned by a predecessor corporation; 
  
  ### Contributed surplus
  
  (y) for the purposes of subsections 84(1) and 84(10), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  (y.1)  [Repealed, 1998, c. 19, s. 117]  
  
  ### Foreign tax carryover
  
  (z) for the purposes of determining the new corporation’s unused foreign tax credit (within the meaning of subsection 126(7)) in respect of a country for any taxation year and determining the extent to which subsection 126(2.3) applies to reduce the amount that may be claimed by the new corporation under paragraph 126(2)(a) in respect of an unused foreign tax credit in respect of a country for a taxation year, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this paragraph shall in no respect affect the determination of 
  (i) the fiscal period of the new corporation or any of its predecessor corporations, or 
  (ii) the tax payable under this Act by any predecessor corporation; 
  
  ### Capital dividend account
  
  (z.1) for the purposes of computing the capital dividend account of the new corporation, it shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation, other than a predecessor corporation to which subsection 83(2.1) would, if a dividend were paid immediately before the amalgamation and an election were made under subsection 83(2) in respect of the full amount of that dividend, apply to deem any portion of the dividend to be paid by the predecessor corporation as a taxable dividend; 
  
  ### Application of Parts III and III.1
  
  (z.2) for the purposes of Parts III and III.1, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Refundable dividend tax on hand
  
  (aa) if the new corporation was a private corporation immediately after the amalgamation, the following rules apply: 
  (i) for the purpose of computing the eligible refundable dividend tax on hand and non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) of the new corporation at the end of its first taxation year there shall be added to the total determined under those definitions in respect of the new corporation for the year  
  (A) in respect of the new corporation’s eligible refundable dividend tax on hand, the total of all amounts each of which is the amount, if any, by which the eligible refundable dividend tax on hand of a predecessor corporation at the end of its last taxation year exceeds the total of all amounts each of which is the portion, if any, of its dividend refund for its last taxation year from its eligible refundable dividend tax on hand determined under subparagraph 129(1)(a)(i) or clause 129(1)(a)(ii)(B), and 
  (B) in respect of the new corporation’s non-eligible refundable dividend tax on hand, the total of all amounts each of which is the amount, if any, by which the non-eligible refundable dividend tax on hand of a predecessor corporation at the end of its last taxation year exceeds the portion, if any, of its dividend refund for its last taxation year from its non-eligible refundable dividend tax on hand determined under clause 129(1)(a)(ii)(A), and 
  (ii) no amount shall be added under this paragraph in respect of a predecessor corporation 
  (A) that was not a private corporation at the end of its last taxation year, or 
  (B) where subsection 129(1.2) would have applied to deem a dividend paid by the predecessor corporation immediately before the amalgamation not to be a taxable dividend for the purpose of subsection 129(1); 
  
  ### Mutual fund and investment corporations
  
  (bb) where the new corporation is a mutual fund corporation or an investment corporation, there shall be added to 
  (i) the amount determined under each of paragraphs (a) and (b) of the definition capital gains dividend account in subsection 131(6), and  
  (ii) the values of A and B in the definition refundable capital gains tax on hand in that subsection  in respect of the new corporation at any time the amounts so determined and the values of those factors immediately before the amalgamation in respect of each predecessor corporation that was, immediately before the amalgamation, a mutual fund corporation or an investment corporation; 
  
  ### Flow-through entities
  
  (bb.1) where a predecessor corporation was, immediately before the amalgamation, an investment corporation, a mortgage investment corporation or a mutual fund corporation and the new corporation is an investment corporation, a mortgage investment corporation or a mutual fund corporation, as the case may be, for the purpose of section 39.1, the new corporation is deemed to be the same corporation as, and a continuation of, the predecessor corporation; 
  
  ### Non-resident-owned investment corporation
  
  (cc) in the case of a new corporation that is a non-resident-owned investment corporation, 
  (i) for the purpose of computing its allowable refundable tax on hand (within the meaning assigned by subsection 133(9)) at any time, where a predecessor corporation had allowable refundable tax on hand immediately before the amalgamation, the amount thereof shall be added to the total determined for A in the definition allowable refundable tax on hand in subsection 133(9),  
  (ii) for the purpose of computing its capital gains dividend account (within the meaning assigned by subsection 133(8)) at any time, where a predecessor corporation had an amount in its capital gains dividend account immediately before the amalgamation, that amount shall be added to the amount determined under paragraph (a) of the description of A in the definition capital gains dividend account in subsection 133(8), and  
  (iii) for the purpose of computing its cumulative taxable income (within the meaning assigned by subsection 133(9)) at any time, where a predecessor corporation had cumulative taxable income immediately before the amalgamation, the amount thereof shall be added to the total determined for A in the definition cumulative taxable income in subsection 133(9);  
  
  ### Public corporation
  
  (ii) where a predecessor corporation was a public corporation immediately before the amalgamation, the new corporation shall be deemed to have been a public corporation at the commencement of its first taxation year; 
  
  ### Interest on certain obligations
  
  (jj) for the purposes of paragraph 81(1)(m), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Disposition of shares of controlled corporation
  
  (kk) for the purposes of paragraph 40(2)(h), 
  (i) where a corporation was controlled, directly or indirectly in any manner whatever, by a predecessor corporation immediately before the amalgamation and has, by reason of the amalgamation, become controlled, directly or indirectly in any manner whatever, by the new corporation, the new corporation shall be deemed to have acquired control of the corporation so controlled at the time control thereof was acquired by the predecessor corporation, and 
  (ii) where a predecessor corporation was immediately before the amalgamation controlled, directly or indirectly in any manner whatever, by a corporation that, immediately after the amalgamation, controlled, directly or indirectly in any manner whatever, the new corporation, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Para. 20(1)(n) and subpara. 40(1)(a)(iii) amounts
  
  (ll) notwithstanding any other provision of this Act, where any property was disposed of by a predecessor corporation, the new corporation shall, in computing 
  (i) the amount of any deduction under paragraph 20(1)(n) as a reserve in respect of the property sold in the course of business, and 
  (ii) the amount of its claim under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in respect of the disposition of the property, be deemed to be the same corporation as, and a continuation of, the predecessor corporation; 
  (mm)  [Repealed, 2013, c. 34, s. 223]  
  
  ### Refundable Part VII tax on hand
  
  (nn) for the purpose of computing the refundable Part VII tax on hand of the new corporation at the end of any taxation year, there shall be added to the total determined under paragraph 192(3)(a) the total of all amounts each of which is the amount, if any, by which 
  (i) a predecessor corporation’s refundable Part VII tax on hand at the end of its last taxation year exceeds 
  (ii) the predecessor corporation’s Part VII refund for its last taxation year; 
  (oo)  [Repealed, 2019, c. 29, s. 11]  
  
  ### Refundable investment tax credit and balance-due day
  
  (oo.1) for the purpose of applying the definition qualifying corporation in subsection 127.1(2), and subparagraph (d)(i) of the definition balance-due day in subsection 248(1), to any corporation, the new corporation is deemed to have had  
  (i) a particular taxation year that 
  (A) where it was associated with another corporation in the new corporation’s first taxation year, ended in the calendar year that precedes the calendar year in which that first year ends, and 
  (B) where clause 87(2)(oo.1)(i)(A) does not apply, immediately precedes that first year, 
  (ii) taxable income for the particular year (determined before taking into consideration the specified future tax consequences for the particular year) equal to the total of all amounts each of which is a predecessor corporation’s taxable income for its taxation year that ended immediately before the amalgamation (determined before taking into consideration the specified future tax consequences for that year), 
  (iii) a business limit for the particular year equal to the total of all amounts each of which is a predecessor corporation’s business limit for its taxation year that ended immediately before the amalgamation, and 
  (iv) a qualifying income limit for the particular year equal to the total of all amounts each of which is a predecessor corporation’s qualifying income limit for its taxation year that ended immediately before the amalgamation; 
  
  ### Cumulative offset account computation
  
  (pp) for the purpose of computing the cumulative offset account (within the meaning assigned by subsection 66.5(2)) of the new corporation at any time, there shall be added to the total otherwise determined under paragraph 66.5(2)(a) the total of all amounts each of which is the amount, if any, by which 
  (i) a predecessor corporation’s cumulative offset account at the end of its last taxation year exceeds 
  (ii) the amount deducted under subsection 66.5(1) in computing the predecessor corporation’s income for its last taxation year; 
  
  ### Continuation of corporation
  
  (qq) for the purpose of computing the new corporation’s investment tax credit at the end of any taxation year, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this paragraph does not affect the determination of the fiscal period of any corporation or the tax payable by any predecessor corporation; 
  
  ### Tax on taxable preferred shares
  
  (rr) for the purposes of subsections 112(2.9), 191(4), and 191.1(2) and 191.1(4), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Transferred liability for Part VI.1 tax
  
  (ss) for the purposes of section 191.3, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Livestock — inclusion of deferred amount
  
  (tt) for the purposes of subsections 80.3(3) and 80.3(5), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  
  ### Fuel tax rebates
  
  (uu) for the purposes of paragraph 12(1)(x.1), the description of D.1 in the definition non-capital loss in subsection 111(8), and subsections 111(10) and 111(11), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;  
  
  ### General rate income pool
  
  (vv) if the new corporation is a Canadian-controlled private corporation or a deposit insurance corporation in its first taxation year, in computing its general rate income pool at the end of that first taxation year there shall be added the total of all amounts determined under subsection 89(5) in respect of the corporation for that first taxation year; 
  
  ### Low rate income pool
  
  (ww) if the new corporation is neither a Canadian-controlled private corporation nor a deposit insurance corporation in its first taxation year, there shall be added in computing its low rate income pool at any time in that first taxation year the total of all amounts determined under subsection 89(9) in respect of the corporation for that first taxation year; and 
  (xx) for the purposes of Part VI.2, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation. 
  
  ### Application of s. 37.1(5)
  
  (2.01) The definitions in subsection 37.1(5) apply to subsection 87(2). 
  
  ### Non-capital losses, etc., of predecessor corporations
  
  (2.1) Where there has been an amalgamation of two or more corporations, for the purposes only of 
  (a) determining the new corporation’s non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for any taxation year, and 
  (b) determining the extent to which subsections 111(3) to 111(5.4) and paragraph 149(10)(c) apply to restrict the deductibility by the new corporation of any non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation, except that this subsection shall in no respect affect the determination of 
  (c) the fiscal period of the new corporation or any of its predecessors, 
  (d) the income of the new corporation or any of its predecessors, or 
  (e) the taxable income of, or the tax payable under this Act by, any predecessor corporation. 
  
  ### Vertical amalgamations
  
  (2.11) Where a new corporation is formed by the amalgamation of a particular corporation and one or more of its subsidiary wholly-owned corporations, the new corporation is deemed to be the same corporation as, and a continuation of, the particular corporation for the purposes of applying sections 111 and 126, subsections 127(5) to 127(26) and 181.1(4) to 181.1(7), Part IV and subsections 190.1(3) to 190.1(6) in respect of the particular corporation. 
  
  ### Amalgamation of insurers
  
  (2.2) Where there has been an amalgamation and one or more of the predecessor corporations was an insurer, the new corporation is, notwithstanding subsection (2), deemed, for the purposes of paragraphs 12(1)(d), (e), (e.1), (i) and (s), subsection 12.5(8), paragraphs 20(1)(l), (l.1), (p) and (jj) and 20(7)(c), subsections 20(22) and 20.4(4), sections 138, 138.1, 140, 142 and 148 and Part XII.3, to be the same corporation as, and a continuation of, each of those predecessor corporations. 
  
  ### Quebec credit unions
  
  (2.3) For the purpose of applying this section to an amalgamation governed by section 689 of An Act respecting financial services cooperatives, R.S.Q., c. C-67.3, an investment deposit of a credit union is deemed to be a share of a separate class of the capital stock of a predecessor corporation in respect of the amalgamation the adjusted cost base and paid up capital of which to the credit union is equal to the adjusted cost base to the credit union of the investment deposit immediately before the amalgamation if  
  (a) immediately before the amalgamation, the investment deposit is an investment deposit to which section 425 of the Savings and Credit Unions Act, R.S.Q., c. C-4.1, applies to the investment fund of that predecessor corporation; and  
  (b) on the amalgamation the credit union disposes of the investment deposit for consideration that consists solely of shares of a class of the capital stock of the new corporation. 
  
  ### Computation of paid-up capital
  
  (3) Subject to subsection 87(3.1), where there is an amalgamation or a merger of 2 or more Canadian corporations, in computing at any particular time the paid-up capital in respect of any particular class of shares of the capital stock of the new corporation, 
  (a) there shall be deducted that proportion of the amount, if any, by which the paid-up capital, determined without reference to this subsection, in respect of all the shares of the capital stock of the new corporation immediately after the amalgamation or merger exceeds the total of all amounts each of which is the paid-up capital in respect of a share (except a share held by any other predecessor corporation) of the capital stock of a predecessor corporation immediately before the amalgamation or merger, that 
  (i) the paid-up capital, determined without reference to this subsection, of the particular class of shares of the capital stock of the new corporation immediately after the amalgamation or merger is of 
  (ii) the paid-up capital, determined without reference to this subsection, in respect of all of the issued and outstanding shares of the capital stock of the new corporation immediately after the amalgamation or merger; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the particular class paid by the new corporation before the particular time exceeds 
  (B) the total that would be determined under clause 87(3)(b)(i)(A) if this Act were read without reference to paragraph 87(3)(a), and 
  (ii) the amount required by paragraph 87(3)(a) to be deducted in computing the paid-up capital of shares of the particular class. 
  
  ### Election for non-application of subsection (3)
  
  (3.1) Where, 
  (a) there is an amalgamation of 2 or more corporations, 
  (b) all of the issued shares, immediately before the amalgamation, of each class of shares (other than a class of shares all of the issued shares of which were cancelled on the amalgamation) of the capital stock of each predecessor corporation (in this subsection referred to as the “exchanged class”) are converted into all of the issued shares, immediately after the amalgamation, of a separate class of shares of the capital stock of the new corporation (in this subsection referred to as the “substituted class”), 
  (c) immediately after the amalgamation, the number of shareholders of each substituted class, the number of shares of each substituted class owned by each shareholder, the number of issued shares of each substituted class, the terms and conditions of each share of a substituted class, and the paid-up capital of each substituted class determined without reference to the provisions of this Act are identical to the number of shareholders of the exchanged class from which the substituted class was converted, the number of shares of each such exchanged class owned by each shareholder, the number of issued shares of each such exchanged class, the terms and conditions of each share of such exchanged class, and the paid-up capital of each such exchanged class determined without reference to the provisions of this Act, respectively, immediately before the amalgamation, and 
  (d) the new corporation elects in its return of income filed in accordance with section 150 for its first taxation year to have the provisions of this subsection apply, for the purpose of computing at any particular time the paid-up capital in respect of any particular class of shares of the capital stock of the new corporation, 
  (e) subsection 87(3) does not apply in respect of the amalgamation, and 
  (f) each substituted class shall be deemed to be the same as, and a continuation of, the exchanged class from which it was converted. 
  
  ### Shares of predecessor corporation
  
  (4) Where there has been an amalgamation of two or more corporations after May 6, 1974, each shareholder (except any predecessor corporation) who, immediately before the amalgamation, owned shares of the capital stock of a predecessor corporation (in this subsection referred to as the “old shares”) that were capital property to the shareholder and who received no consideration for the disposition of those shares on the amalgamation, other than shares of the capital stock of the new corporation (in this subsection referred to as the “new shares”), shall be deemed 
  (a) to have disposed of the old shares for proceeds equal to the total of the adjusted cost bases to the shareholder of those shares immediately before the amalgamation, and 
  (b) to have acquired the new shares of any particular class of the capital stock of the new corporation at a cost to the shareholder equal to that proportion of the proceeds described in paragraph 87(4)(a) that 
  (i) the fair market value, immediately after the amalgamation, of all new shares of that particular class so acquired by the shareholder, is of 
  (ii) the fair market value, immediately after the amalgamation, of all new shares so acquired by the shareholder, except that, where the fair market value of the old shares immediately before the amalgamation exceeds the fair market value of the new shares immediately after the amalgamation and it is reasonable to regard any portion of the excess (in this subsection referred to as the “gift portion”) as a benefit that the shareholder desired to have conferred on a person related to the shareholder, the following rules apply: 
  (c) the shareholder shall be deemed to have disposed of the old shares for proceeds of disposition equal to the lesser of 
  (i) the total of the adjusted cost bases to the shareholder, immediately before the amalgamation, of the old shares and the gift portion, and 
  (ii) the fair market value of the old shares immediately before the amalgamation, 
  (d) the shareholder’s capital loss from the disposition of the old shares shall be deemed to be nil, and 
  (e) the cost to the shareholder of any new shares of any class of the capital stock of the new corporation acquired by the shareholder on the amalgamation shall be deemed to be that proportion of the lesser of 
  (i) the total of the adjusted cost bases to the shareholder, immediately before the amalgamation, of the old shares, and 
  (ii) the total of the fair market value, immediately after the amalgamation, of all new shares so acquired by the shareholder and the amount that, but for paragraph 87(4)(d), would have been the shareholder’s capital loss from the disposition of the old shares that 
  (iii) the fair market value, immediately after the amalgamation, of the new shares of that class so acquired by the shareholder is of 
  (iv) the fair market value, immediately after the amalgamation, of all new shares so acquired by the shareholder, and where the old shares were taxable Canadian property of the shareholder, the new shares are deemed to be, at any time that is within 60 months after the amalgamation, taxable Canadian property of the shareholder. 
  
  ### Exchanged shares
  
  (4.1) For the purposes of the definition term preferred share in subsection 248(1), where there has been an amalgamation of two or more corporations after November 16, 1978 and a share of any class of the capital stock of the new corporation (in this subsection referred to as the “new share”) was issued in consideration for the disposition of a share of any class of the capital stock of a predecessor corporation (in this subsection referred to as the “exchanged share”) and the terms and conditions of the new share were the same as, or substantially the same as, the terms and conditions of the exchanged share,  
  (a) the new share shall be deemed to have been issued at the time the exchanged share was issued; 
  (b) if the exchanged share was issued under an agreement in writing, the new share shall be deemed to have been issued under that agreement; and 
  (c) the new corporation shall be deemed to be the same corporation as, and a continuation of, each such predecessor corporation. 
  
  ### Idem
  
  (4.2) Where there has been an amalgamation or merger of two or more corporations after November 27, 1986 and a share of any class of the capital stock of the new corporation (in this subsection referred to as the “new share”) was issued to a shareholder in consideration for the disposition of a share by that shareholder of any class of the capital stock of a predecessor corporation (in this subsection referred to as the “exchanged share”) and the terms and conditions of the new share were the same as, or substantially the same as, the terms and conditions of the exchanged share, for the purposes of applying the provisions of this subsection, subsections 112(2.2) and 112(2.4), Parts IV.1 and VI.1, section 258 and the definitions grandfathered share, short-term preferred share, taxable preferred share and taxable RFI share in subsection 248(1) to the new share, the following rules apply:  
  (a) the new share shall be deemed to have been issued at the time the exchanged share was issued; 
  (b) where the exchanged share was a share described in paragraph (a), (b), (c) or (d) of the definition grandfathered share in subsection 248(1), the new share shall be deemed to be the same share as the exchanged share for the purposes of that definition;  
  (c) the new share shall be deemed to have been acquired by the shareholder at the time the exchanged share was acquired by the shareholder; 
  (d) the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  (e) an election made under subsection 191.2(1) by a predecessor corporation with respect to the class of shares of its capital stock to which the exchanged share belonged shall be deemed to be an election made by the new corporation with respect to the class of shares of its capital stock to which the new share belongs; and 
  (f) where the terms or conditions of the exchanged share or an agreement in respect of the exchanged share specify an amount in respect of the exchanged share for the purposes of subsection 191(4) and an amount equal to the amount so specified in respect of the exchanged share is specified in respect of the new share for the purposes of subsection 191(4), 
  (i) for the purposes of subparagraphs 191(4)(d)(i) and 191(4)(e)(i), the new share shall be deemed to have been issued for the same consideration as that for which the exchanged share was issued and to have been issued for the purpose for which the exchanged share was issued, 
  (ii) for the purposes of subparagraphs 191(4)(d)(ii) and 191(4)(e)(ii), the new share shall be deemed to be the same share as the exchanged share and to have been issued for the purpose for which the exchanged share was issued, and 
  (iii) where the shareholder received no consideration for the disposition of the exchanged share other than the new share, for the purposes of subsection 191(4), 
  (A) in the case of an exchanged share to which subsection 191(4) applies because of paragraph 191(4)(a), the new share shall be deemed to have been issued for consideration having a fair market value equal to the consideration for which the exchanged share was issued, and 
  (B) in the case of an exchanged share to which subsection 191(4) applies because of an event described in paragraph 191(4)(b) or 191(4)(c), the consideration for which the new share was issued shall be deemed to have a fair market value equal to the fair market value of the exchanged share immediately before the time that event occurred. 
  
  ### Exchanged rights
  
  (4.3) Where there has been an amalgamation or merger of two or more corporations after June 18, 1987 and a right listed on a designated stock exchange to acquire a share of any class of the capital stock of the new corporation (in this subsection referred to as the “new right”) was acquired by a shareholder in consideration for the disposition of a right described in paragraph (d) of the definition grandfathered share in subsection 248(1) to acquire a share of any class of the capital stock of a predecessor corporation (in this subsection referred to as the “exchanged right”), the new right shall be deemed to be the same right as the exchanged right for the purposes of paragraph (d) of the definition grandfathered share in subsection 248(1) where the terms and conditions of the new right were the same as, or substantially the same as, the terms and conditions of the exchanged right and the terms and conditions of the share receivable on an exercise of the new right were the same as, or substantially the same as, the terms and conditions of the share that would have been received on an exercise of the exchanged right.  
  
  ### Flow-through shares
  
  (4.4) Where 
  (a) there is an amalgamation of two or more corporations each of which is a principal-business corporation (within the meaning assigned by subsection 66(15)) or a corporation that at no time carried on business, 
  (b) a predecessor corporation entered into an agreement with a person at a particular time for consideration given by the person to the predecessor corporation, 
  (c) for the consideration under the agreement 
  (i) a share (in this subsection referred to as the “old share”) of the predecessor corporation that was a flow-through share (other than a right to acquire a share) was issued to the person before the amalgamation, or 
  (ii) a right was issued to the person before the amalgamation to acquire a share that would, if it were issued, be a flow-through share, and 
  (d) the new corporation 
  (i) issues, on the amalgamation and in consideration for the disposition of the old share, a share (in this subsection referred to as a “new share”) of any class of its capital stock to the person (or to any person or partnership that subsequently acquired the old share) and the terms and conditions of the new share are the same as, or substantially the same as, the terms and conditions of the old share, or 
  (ii) is, because of the right referred to in subparagraph (c)(ii), obliged after the amalgamation to issue to the person a share of any class of the new corporation’s capital stock that would, if it were issued, be a flow-through share, for the purposes of subsection 66(12.66) and Part XII.6 and for the purposes of renouncing an amount under subsection 66(12.6), 66(12.601) or 66(12.62) in respect of Canadian exploration expenses or Canadian development expenses that would, but for the renunciation, be incurred by the new corporation after the amalgamation, 
  (e) the person shall be deemed to have given the consideration under the agreement to the new corporation for the issue of the new share, 
  (f) the agreement shall be deemed to have been entered into between the new corporation and the person at the particular time, 
  (g) the new share shall be deemed to be a flow-through share of the new corporation, and 
  (h) the new corporation shall be deemed to be the same corporation as, and a continuation of, the predecessor corporation. 
  
  ### Options to acquire shares of predecessor corporation
  
  (5) Where there has been an amalgamation of two or more corporations after May 6, 1974, each taxpayer (except any predecessor corporation) who immediately before the amalgamation owned a capital property that was an option to acquire shares of the capital stock of a predecessor corporation (in this subsection referred to as the “old option”) and who received no consideration for the disposition of that option on the amalgamation, other than an option to acquire shares of the capital stock of the new corporation (in this subsection referred to as the “new option”), shall be deemed 
  (a) to have disposed of the old option for proceeds equal to the adjusted cost base to the taxpayer of that option immediately before the amalgamation, and 
  (b) to have acquired the new option at a cost to the taxpayer equal to the proceeds described in paragraph 87(5)(a), and where the old option was taxable Canadian property of the taxpayer, the new option is deemed to be, at any time that is within 60 months after the amalgamation, taxable Canadian property of the taxpayer. 
  
  ### Adjusted cost base of option
  
  (5.1) Where the cost to a taxpayer of a new option is determined at any time under subsection 87(5), 
  (a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the new option the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the old option; and 
  (b) the amount determined under paragraph 87(5.1)(a) shall be added after that time in computing the adjusted cost base to the taxpayer of the new option. 
  
  ### Obligations of predecessor corporation
  
  (6) Notwithstanding subsection (7), where there has been an amalgamation of two or more corporations after May 6, 1974, each taxpayer (except any predecessor corporation) who, immediately before the amalgamation, owned a capital property that was a bond, debenture, mortgage, hypothecary claim, note or other similar obligation of a predecessor corporation (in this subsection referred to as the “old property”) and who received no consideration for the disposition of the old property on the amalgamation other than a bond, debenture, mortgage, hypothecary claim, note or other similar obligation respectively, of the new corporation (in this subsection referred to as the “new property”) is, if the amount payable to the holder of the new property on its maturity is the same as the amount that would have been payable to the holder of the old property on its maturity, deemed 
  (a) to have disposed of the old property for proceeds equal to the adjusted cost base to the taxpayer of that property immediately before the amalgamation; and 
  (b) to have acquired the new property at a cost to the taxpayer equal to the proceeds described in paragraph 87(6)(a). 
  
  ### Adjusted cost base
  
  (6.1) Where the cost to a taxpayer of a particular property that is a bond, debenture or note is determined at any time under subsection 87(6) and the terms of the bond, debenture or note conferred upon the holder the right to exchange that bond, debenture or note for shares, 
  (a) there shall be deducted after that time in computing the adjusted cost base to the taxpayer of the bond, debenture or note the total of all amounts deducted under paragraph 53(2)(g.1) in computing, immediately before that time, the adjusted cost base to the taxpayer of the property for which the particular property was exchanged at that time; and 
  (b) the amount determined under paragraph 87(6.1)(a) in respect of the particular property shall be added after that time in computing the adjusted cost base to the taxpayer of the particular property. 
  
  ### Idem
  
  (7) Where there has been an amalgamation of two or more corporations after May 6, 1974 and 
  (a) a debt or other obligation of a predecessor corporation that was outstanding immediately before the amalgamation became a debt or other obligation of the new corporation on the amalgamation, and 
  (b) the amount payable by the new corporation on the maturity of the debt or other obligation, as the case may be, is the same as the amount that would have been payable by the predecessor corporation on its maturity, the provisions of this Act 
  (c) shall not apply in respect of the transfer of the debt or other obligation to the new corporation, and 
  (d) shall apply as if the new corporation had incurred or issued the debt or other obligation at the time it was incurred or issued by the predecessor corporation under the agreement made on the day on which the predecessor corporation made an agreement under which the debt or other obligation was issued, except that, for the purposes of the definition income bond or income debenture in subsection 248(1), paragraph 87(7)(d) shall not apply to any debt or other obligation of the new corporation unless the terms and conditions thereof immediately after the amalgamation are the same as, or substantially the same as, the terms and conditions of the debt or obligation that was an income bond or income debenture of the predecessor corporation immediately before the amalgamation.  
  
  ### Foreign merger
  
  (8) Subject to subsection 95(2), where there has been a foreign merger in which a taxpayer’s shares or options to acquire shares of the capital stock of a corporation that was a predecessor foreign corporation immediately before the merger were exchanged for or became shares or options to acquire shares of the capital stock of the new foreign corporation or the foreign parent corporation, unless the taxpayer elects in the taxpayer’s return of income for the taxation year in which the foreign merger took place not to have this subsection apply, subsections (4) and (5) apply to the taxpayer as if the references in those subsections to 
  (a) “amalgamation” were read as “foreign merger”; 
  (b) “predecessor corporation” were read as “predecessor foreign corporation”; and 
  (c) “new corporation” were read as “new foreign corporation or the foreign parent corporation”. 
  
  ### Definition of foreign merger 
  
  (8.1) For the purposes of this section, 
  *foreign merger* means a merger or combination of two or more corporations each of which was, immediately before the merger or combination, resident in a country other than Canada (each of which is in this section referred to as a “predecessor foreign corporation”) to form one corporate entity resident in a country other than Canada (in this section referred to as the “new foreign corporation”) in such a manner that, and otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation,  
  (a) all or substantially all the property (except amounts receivable from any predecessor foreign corporation or shares of the capital stock of any predecessor foreign corporation) of the predecessor foreign corporations immediately before the merger or combination becomes property of the new foreign corporation as a consequence of the merger or combination; 
  (b) all or substantially all the liabilities (except amounts payable to any predecessor foreign corporation) of the predecessor foreign corporations immediately before the merger or combination become liabilities of the new foreign corporation as a consequence of the merger or combination; and 
  (c) all or substantially all of the shares of the capital stock of the predecessor foreign corporations (except any shares or options owned by any predecessor foreign corporation) are exchanged for or become, because of the merger or combination, 
  (i) shares of the capital stock of the new foreign corporation, or 
  (ii) if, immediately after the merger, the new foreign corporation was controlled by another corporation (in this section referred to as the “foreign parent corporation”) that was resident in a country other than Canada, shares of the capital stock of the foreign parent corporation. 
  
  ### Absorptive mergers
  
  (8.2) For the purposes of the definition foreign merger in subsection (8.1), if there is a merger or combination, otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation, of two or more non-resident corporations (each of which is referred to in this subsection as a “predecessor foreign corporation”), as a result of which one or more predecessor foreign corporations ceases to exist and, immediately after the merger or combination, another predecessor foreign corporation (referred to in this subsection as the “survivor corporation”) owns properties (except amounts receivable from, or shares of the capital stock of, any predecessor foreign corporation) representing all or substantially all of the fair market value of all such properties owned by each predecessor foreign corporation immediately before the merger or combination, then  
  (a) the merger or combination is deemed to be a merger or combination of the predecessor foreign corporations to form one non-resident corporation; 
  (b) the survivor corporation is deemed to be the non-resident corporation so formed; 
  (c) all of the properties of the survivor corporation immediately before the merger or combination that are properties of the survivor corporation immediately after the merger or combination are deemed to become properties of the survivor corporation as a consequence of the merger or combination; 
  (d) all of the liabilities of the survivor corporation immediately before the merger or combination that are liabilities of the survivor corporation immediately after the merger or combination are deemed to become liabilities of the survivor corporation as a consequence of the merger or combination; 
  (e) all of the shares of the capital stock of the survivor corporation that were outstanding immediately before the merger or combination that are shares of the capital stock of the survivor corporation immediately after the merger or combination are deemed to become shares of the capital stock of the survivor corporation as a consequence of the merger or combination; and 
  (f) all of the shares of the capital stock of each predecessor foreign corporation (other than the survivor corporation) that were outstanding immediately before the merger or combination and that cease to exist as a consequence of the merger or combination are deemed to be exchanged by the shareholders of each such predecessor corporation for shares of the survivor corporation as a consequence of the merger or combination. 
  
  ### Anti-avoidance
  
  (8.3) Subsection (8) does not apply in respect of a taxpayer’s shares of the capital stock of a predecessor foreign corporation that are exchanged for or become, on a foreign merger, shares of the capital stock of the new foreign corporation or the foreign parent corporation, if 
  (a) the new foreign corporation is, at the time that is immediately after the foreign merger, a foreign affiliate of the taxpayer; 
  (b) shares of the capital stock of the new foreign corporation are, at that time, excluded property (as defined in subsection 95(1)) of another foreign affiliate of the taxpayer; and 
  (c) the foreign merger is part of a transaction or event or a series of transactions or events that includes a disposition of shares of the capital stock of the new foreign corporation, or property substituted for the shares, to 
  (i) a person (other than a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest (within the meaning assigned by paragraph 95(2)(m)) at the time of the transaction or event or throughout the series, as the case may be) with whom the taxpayer was dealing at arm’s length immediately after the transaction, event or series, or 
  (ii) a partnership a member of which is, immediately after the transaction, event or series, a person described in subparagraph (i). 
  
  ### Taxable Canadian property — conditions for rollover
  
  (8.4) Subsection (8.5) applies at any time if 
  (a) there is at that time a foreign merger of two or more predecessor foreign corporations (within the meaning assigned by subsection (8.1), if that subsection and subsection (8.2) were read without reference to the expression “otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation”) that were, immediately before that time, 
  (i) resident in the same country, and 
  (ii) related to each other (determined without reference to paragraph 251(5)(b)); 
  (b) because of the foreign merger, 
  (i) a predecessor foreign corporation (referred to in this subsection and subsection (8.5) as the “disposing predecessor foreign corporation”) disposes of a property (referred to in this subsection and subsection (8.5) as the “subject property”) that is, at that time, 
  (A) a taxable Canadian property (other than treaty-protected property) of the disposing predecessor foreign corporation, and 
  (B) any of the following: 
  (I) a share of the capital stock of a corporation, 
  (II) an interest in a partnership, and 
  (III) an interest in a trust, and 
  (ii) the subject property becomes property of a corporation that is a new foreign corporation for the purposes of subsection (8.1); 
  (c) no shareholder (except any predecessor foreign corporation) that owned shares of the capital stock of a predecessor foreign corporation immediately before the foreign merger received consideration for the disposition of those shares on the foreign merger, other than shares of the capital stock of the new foreign corporation; 
  (d) if the subject property is a share of the capital stock of a corporation or an interest in a trust, the corporation or trust is not, at any time in the 24-month period beginning at that time, as part of a transaction or event, or series of transactions or events including the foreign merger, subject to a loss restriction event; and 
  (e) the new foreign corporation and the disposing predecessor foreign corporation jointly elect in writing under this paragraph in respect of the foreign merger and file the election with the Minister on or before the filing-due date of the disposing predecessor foreign corporation (or the date that would be its filing-due date, if subsection (8.5) did not apply in respect of the disposition of the subject property) for the taxation year that includes that time. 
  
  ### Foreign merger — taxable Canadian property rollover
  
  (8.5) If this subsection applies at any time, 
  (a) if the subject property is an interest in a partnership, 
  (i) the disposing predecessor foreign corporation is deemed not to dispose of the subject property (other than for the purposes of subsection (8.4)), and 
  (ii) the new foreign corporation is deemed 
  (A) to have acquired the subject property at a cost equal to the cost of the subject property to the disposing predecessor foreign corporation, and 
  (B) to be the same corporation as, and a continuation of, the disposing predecessor foreign corporation in respect of the subject property; and 
  (b) if the subject property is a share of the capital stock of a corporation or an interest in a trust, 
  (i) the subject property is deemed to have been disposed of at that time by the disposing predecessor foreign corporation to the new foreign corporation (that is referred to in subparagraph (8.4)(b)(ii)) for proceeds of disposition equal to the adjusted cost base of the subject property to the disposing predecessor foreign corporation immediately before that time, and 
  (ii) the cost of the subject property to the new foreign corporation is deemed to be the amount that is deemed by subparagraph (i) to be the proceeds of disposition of the subject property. 
  
  ### Rules applicable in respect of certain mergers
  
  (9) Where there has been a merger of two or more taxable Canadian corporations to form a new corporation that was controlled, immediately after the merger, by a taxable Canadian corporation (in this subsection referred to as the “parent”) and, on the merger, shares of the capital stock of the parent (in this subsection referred to as “parent shares”) were issued by the parent to persons who were, immediately before the merger, shareholders of a predecessor corporation, the following rules apply: 
  (a) for the purposes of paragraph 87(1)(c), subsection 87(4) and the Income Tax Application Rules, any parent shares received by a shareholder of a predecessor corporation shall be deemed to be shares of the capital stock of the new corporation received by the shareholder by virtue of the merger;  
  (a.1) for the purposes of subsections 87(4.1) and 87(4.2), a parent share issued to a shareholder in consideration for the disposition of a share of a class of the capital stock of a predecessor corporation shall be deemed to be a share of a class of the capital stock of the new corporation that was issued in consideration for the disposition of a share of a class of the capital stock of a predecessor corporation by that shareholder; 
  (a.2) for the purposes of subsection 87(4.3), a right listed on a designated stock exchange to acquire a share of a class of the capital stock of the parent shall be deemed to be a right listed on a designated stock exchange to acquire a share of a class of the capital stock of the new corporation; 
  (a.21) for the purpose of paragraph (4.4)(d) 
  (i) each parent share received by a shareholder of a predecessor corporation is deemed to be a share of the capital stock of the new corporation issued to the shareholder by the new corporation on the merger, and 
  (ii) any obligation of the parent to issue a share of any class of its capital stock to a person in circumstances described in subparagraph (4.4)(d)(ii) is deemed to be an obligation of the new corporation to issue a share to the person; 
  (a.3) for the purpose of applying subsection 87(5) in respect of the merger, the reference in that subsection to “the new corporation” shall be read as a reference to “the parent”; 
  (a.4) for the purpose of paragraph 87(9)(c), any shares of the new corporation acquired by the parent on the merger shall be deemed to be new shares; 
  (a.5) for the purpose of applying subsection 87(10) in respect of the merger, 
  (i) the reference in paragraph 87(10)(b) to “the new corporation” shall be read as a reference to “the new corporation or the parent, within the meaning assigned by subsection 87(9)”, and 
  (ii) the references in paragraphs 87(10)(c) and 87(10)(f) to “the new corporation” shall be read as references to “the public corporation described in paragraph 87(9)(b)”. 
  (b) in computing, at any particular time, the paid-up capital in respect of any particular class of shares of the capital stock of the parent that included parent shares immediately after the merger 
  (i) there shall be deducted that proportion of the amount, if any, by which the paid-up capital, determined without reference to this paragraph, in respect of all the shares of the capital stock of the parent immediately after the merger exceeds the total of all amounts each of which is the paid-up capital in respect of a share of the capital stock of the parent or a predecessor corporation (other than any share of a predecessor corporation owned by the parent or by another predecessor corporation and any share of a predecessor corporation owned by a shareholder other than the parent or another predecessor corporation that was not exchanged on the merger for parent shares) immediately before the merger that 
  (A) the paid-up capital, determined without reference to this paragraph, in respect of that particular class of shares of the capital stock of the parent immediately after the merger is of 
  (B) the paid-up capital, determined without reference to this paragraph, in respect of all the issued and outstanding shares of the classes of the capital stock of the parent that included parent shares immediately after the merger, and 
  (ii) there shall be added an amount equal to the lesser of 
  (A) the amount, if any, by which 
  (I) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the particular class paid by the parent before the particular time exceeds 
  (II) the total that would be determined under subclause 87(9)(b)(ii)(A)(I) if this Act were read without reference to subparagraph 87(9)(b)(i), and 
  (B) the amount required by subparagraph 87(9)(b)(i) to be deducted in computing the paid-up capital of shares of the particular class; and 
  (c) notwithstanding paragraph 87(4)(b), the parent shall be deemed to have acquired the new shares of any particular class of the capital stock of the new corporation at a cost equal to the total of 
  (i) the amount otherwise determined under paragraph 87(4)(b) to be the cost of those shares, and 
  (ii) in any case where the parent owned, immediately after the merger, all the issued shares of the capital stock of the new corporation, such portion of 
  (A) the amount, if any, by which 
  (I) the amount by which the total of the money on hand of the new corporation and all amounts each of which is the cost amount to the new corporation of a property owned by it, immediately after the merger, exceeds the total of all amounts each of which is the amount of any debt owing by the new corporation, or of any other obligation of the new corporation to pay any amount, that was outstanding immediately after the merger, exceeds 
  (II) the total of the adjusted cost bases to the parent of all shares of the capital stock of each predecessor corporation beneficially owned by it immediately before the merger as is designated by the parent in respect of the shares of that particular class in its return of income under this Part for its taxation year in which the merger occurred, except that 
  (B) in no case shall the amount so designated in respect of the shares of a particular class exceed the amount, if any, by which the total fair market value, immediately after the merger, of the shares of that particular class issued by virtue of the merger exceeds the cost of those shares to the parent determined without reference to this paragraph, and 
  (C) in no case shall the total of the amounts so designated in respect of the shares of each class of the capital stock of the new corporation exceed the amount determined under clause 87(9)(c)(ii)(A). 
  
  ### Share deemed listed
  
  (10) Where 
  (a) a new corporation is formed as a result of an amalgamation, 
  (b) the new corporation is a public corporation, 
  (c) the new corporation issues a share (in this subsection referred to as the “new share”) of its capital stock, 
  (d) the new share is issued in exchange for a share (in this subsection referred to as the “old share”) of the capital stock of a predecessor corporation, 
  (e) immediately before the amalgamation, the old share was listed on a designated stock exchange, and 
  (f) the new share is redeemed, acquired or cancelled by the new corporation within 60 days after the amalgamation, the new share is deemed, for the purposes of subsection 116(6), the definitions qualified investment in subsections 146(1), 146.1(1), 146.3(1) and 146.4(1), in section 204 and in subsection 207.01(1), and the definition taxable Canadian property in subsection 248(1), to be listed on the exchange until the earliest time at which it is so redeemed, acquired or cancelled.  
  
  ### Vertical amalgamations
  
  (11) Where at any time there is an amalgamation of a corporation (in this subsection referred to as the “parent”) and one or more other corporations (each of which in this subsection is referred to as the “subsidiary”) each of which is a subsidiary wholly-owned corporation of the parent, 
  (a) the shares of the subsidiary are deemed to have been disposed of by the parent immediately before the amalgamation for proceeds equal to the proceeds that would be determined under paragraph 88(1)(b) if subsections 88(1) and 88(1.7) applied, with any modifications that the circumstances require, to the amalgamation; and 
  (b) the cost to the new corporation of each capital property of the subsidiary acquired on the amalgamation is deemed to be the amount that would have been the cost to the parent of the property if the property had been distributed at that time to the parent on a winding-up of the subsidiary and subsections 88(1) and 88(1.7) had applied to the winding-up. 
  
  ### Winding-up
  
  88 (1) Where a taxable Canadian corporation (in this subsection referred to as the “subsidiary”) has been wound up after May 6, 1974 and not less than 90% of the issued shares of each class of the capital stock of the subsidiary were, immediately before the winding-up, owned by another taxable Canadian corporation (in this subsection referred to as the “parent”) and all of the shares of the subsidiary that were not owned by the parent immediately before the winding-up were owned at that time by persons with whom the parent was dealing at arm’s length, notwithstanding any other provision of this Act other than subsection 69(11), the following rules apply: 
  (a) subject to paragraphs 88(1)(a.1) and 88(1)(a.3), each property (other than an interest in a partnership) of the subsidiary that was distributed to the parent on the winding-up shall be deemed to have been disposed of by the subsidiary for proceeds equal to 
  (i) in the case of a Canadian resource property, a foreign resource property or a right to receive production (as defined in subsection 18.1(1)) to which a matchable expenditure (as defined in subsection 18.1(1)) relates, nil, and 
  (ii)  [Repealed, 1994, c. 7, Sch. VIII, s. 38]  
  (iii) in the case of any other property, the cost amount to the subsidiary of the property immediately before the winding-up; 
  (a.1) each property of the subsidiary that was distributed to the parent on the winding-up shall, for the purpose of paragraph 88(2.1)(b) or 88(2.1)(e), be deemed not to have been disposed of; 
  (a.2) each interest of the subsidiary in a partnership that was distributed to the parent on the winding-up shall, except for the purpose of paragraph 98(5)(g), be deemed not to have been disposed of by the subsidiary; 
  (a.3) where 
  (i) the subsidiary was a financial institution in its taxation year in which its assets were distributed to the parent on the winding up, and 
  (ii) the parent was a financial institution in its taxation year in which it received the assets of the subsidiary on the winding up, each specified debt obligation (other than a mark-to-market property) of the subsidiary that was distributed to the parent on the winding-up shall, except for the purpose of subsection 69(11), be deemed not to have been disposed of, and for the purpose of this paragraph, 
  *financial institution*, 
  *mark-to-market property* and 
  *specified debt obligation* have the meanings assigned by subsection 142.2(1);  
  (b) the shares of the capital stock of the subsidiary owned by the parent immediately before the winding-up shall be deemed to have been disposed of by the parent on the winding-up for proceeds equal to the greater of 
  (i) the lesser of the paid-up capital in respect of those shares immediately before the winding-up and the amount determined under subparagraph 88(1)(d)(i), and 
  (ii) the total of all amounts each of which is an amount in respect of any share of the capital stock of the subsidiary so disposed of by the parent on the winding-up, equal to the adjusted cost base to the parent of the share immediately before the winding-up; 
  (c) subject to paragraph 87(2)(e.3) (as modified by paragraph 88(1)(e.2)), and notwithstanding paragraph 87(2)(e.1) (as modified by paragraph 88(1)(e.2)), the cost to the parent of each property of the subsidiary distributed to the parent on the winding-up shall be deemed to be 
  (i) in the case of a property that is an interest in a partnership, the amount that but for this paragraph would be the cost to the parent of the property, and 
  (ii) in any other case, the amount, if any, by which 
  (A) the amount that would, but for subsection 69(11), be deemed by paragraph 88(1)(a) to be the proceeds of disposition of the property exceeds 
  (B) any reduction of the cost amount to the subsidiary of the property made because of section 80 on the winding-up, plus where the property was a capital property (other than an ineligible property) of the subsidiary at the time that the parent last acquired control of the subsidiary and was owned by the subsidiary thereafter without interruption until such time as it was distributed to the parent on the winding-up, the amount determined under paragraph 88(1)(d) in respect of the property and, for the purposes of this paragraph, 
  *ineligible property* means  
  (iii) depreciable property, 
  (iv) property transferred to the parent on the winding-up where the transfer is part of a distribution (within the meaning assigned by subsection 55(1)) made in the course of a reorganization in which a dividend was received to which subsection 55(2) would, but for paragraph 55(3)(b), apply, 
  (v) property acquired by the subsidiary from the parent or from any person or partnership that was not (otherwise than because of a right referred to in paragraph 251(5)(b)) dealing at arm’s length with the parent, or any other property acquired by the subsidiary in substitution for it, where the acquisition was part of the series of transactions or events in which the parent last acquired control of the subsidiary, and 
  (vi) property distributed to the parent on the winding-up where, as part of the series of transactions or events that includes the winding-up, 
  (A) the parent acquired control of the subsidiary, and 
  (B) any property distributed to the parent on the winding-up or any other property acquired by any person in substitution therefor is acquired by 
  (I) a particular person (other than a specified person) that, at any time during the course of the series and before control of the subsidiary was last acquired by the parent, was a specified shareholder of the subsidiary, 
  (II) 2 or more persons (other than specified persons), if a particular person would have been, at any time during the course of the series and before control of the subsidiary was last acquired by the parent, a specified shareholder of the subsidiary if all the shares that were then owned by those 2 or more persons were owned at that time by the particular person, or 
  (III) a corporation (other than a specified person or the subsidiary) 
  1 of which a particular person referred to in subclause 88(1)(c)(vi)(B)(I) is, at any time during the course of the series and after control of the subsidiary was last acquired by the parent, a specified shareholder, or 
  2 of which a particular person would be, at any time during the course of the series and after control of the subsidiary was last acquired by the parent, a specified shareholder if all the shares then owned by persons (other than specified persons) referred to in subclause 88(1)(c)(vi)(B)(II) and acquired by those persons as part of the series were owned at that time by the particular person; 
  (c.1)  [Repealed, 2016, c. 12, s. 28]  
  (c.2) for the purposes of this paragraph and subparagraph 88(1)(c)(vi), 
  (i)  
  *specified person*, at any time, means  
  (A) the parent, 
  (B) each person who would be related to the parent at that time if 
  (I) this Act were read without reference to paragraph 251(5)(b), and 
  (II) each person who is the child of a deceased individual were related to each brother or sister of the individual and to each child of a deceased brother or sister of the individual, and 
  (C) if the time is before the incorporation of the parent, each person who is described in clause (B) throughout the period that begins at the time the parent is incorporated and ends at the time that is immediately before the beginning of the winding-up, 
  (i.1) a person described in clause (i)(B) or (C) is deemed not to be a specified person if it can reasonably be considered that one of the main purposes of one or more transactions or events is to cause the person to be a specified person so as to prevent a property that is distributed to the parent on the winding-up from being an ineligible property for the purposes of paragraph (c), 
  (ii) where at any time a property is owned or acquired by a partnership or a trust, 
  (A) the partnership or the trust, as the case may be, shall be deemed to be a person that is a corporation having one class of issued shares, which shares have full voting rights under all circumstances, 
  (B) each member of the partnership or beneficiary under the trust, as the case may be, shall be deemed to own at that time the proportion of the number of issued shares of the capital stock of the corporation that 
  (I) the fair market value at that time of that member’s interest in the partnership or that beneficiary’s interest in the trust, as the case may be, is of 
  (II) the fair market value at that time of all the members’ interests in the partnership or beneficiaries’ interests in the trust, as the case may be, and 
  (C) the property shall be deemed to have been owned or acquired at that time by the corporation, 
  (iii) in determining whether a person is a specified shareholder of a corporation, 
  (A) the reference in the definition 
  *specified shareholder* in subsection 248(1) to “the issued shares of any class of the capital stock of the corporation or of any other corporation that is related to the corporation” shall be read as “the issued shares of any class (other than a specified class) of the capital stock of the corporation or of any other corporation that is related to the corporation and that has a significant direct or indirect interest in any issued shares of the capital stock of the corporation”,  
  (A.1) a corporation controlled by another corporation is, at any time, deemed not to own any shares of the capital stock of the other corporation if, at that time, the corporation does not have a direct or an indirect interest in any of the shares of the capital stock of the other corporation, 
  (A.2) the definition 
  *specified shareholder* in subsection 248(1) is to be read without reference to its paragraph (a) in respect of any share of the capital stock of the subsidiary that the person would, but for this clause, be deemed to own solely because the person has a right described in paragraph 251(5)(b) to acquire shares of the capital stock of a corporation that  
  (I) is controlled by the subsidiary, and 
  (II) does not have a direct or an indirect interest in any of the shares of the capital stock of the subsidiary, and 
  (B) a corporation is deemed not to be a specified shareholder of itself, and 
  (iv) property that is distributed to the parent on the winding-up is deemed not to be acquired by a person if the person acquired the property before the acquisition of control referred to in clause (c)(vi)(A) and the property is not owned by the person at any time after that acquisition of control; 
  (c.3) for the purpose of clause 88(1)(c)(vi)(B), property acquired by any person in substitution for particular property or properties distributed to the parent on the winding-up includes 
  (i) property (other than a specified property) owned by the person at any time after the acquisition of control referred to in clause (c)(vi)(A) more than 10% of the fair market value of which is, at that time, attributable to the particular property or properties, and 
  (ii) property owned by the person at any time after the acquisition of control referred to in clause 88(1)(c)(vi)(A) the fair market value of which is, at that time, determinable primarily by reference to the fair market value of, or to any proceeds from a disposition of, the particular property or properties but does not include 
  (iii) money, 
  (iv) property that was not owned by the person at any time after the acquisition of control referred to in clause 88(1)(c)(vi)(A), 
  (v) property described in subparagraph 88(1)(c.3)(i) if the only reason the property is described in that subparagraph is because a specified property described in any of subparagraphs 88(1)(c.4)(i) to 88(1)(c.4)(iv) was received as consideration for the acquisition of a share of the capital stock of the subsidiary in the circumstances described in subparagraphs 88(1)(c.4)(i) to 88(1)(c.4)(iv), 
  (vi) a share of the capital stock of the subsidiary or a debt owing by it, if the share or debt, as the case may be, was owned by the parent immediately before the winding-up, or 
  (vii) a share of the capital stock of a corporation or a debt owing by a corporation, if the fair market value of the share or debt, as the case may be, was not, at any time after the beginning of the winding-up, wholly or partly attributable to property distributed to the parent on the winding-up; 
  (c.4) for the purposes of subparagraphs 88(1)(c.3)(i) and 88(1)(c.3)(v), a specified property is 
  (i) a share of the capital stock of the parent that was 
  (A) received as consideration for the acquisition of a share of the capital stock of the subsidiary by the parent or by a corporation that was a specified subsidiary corporation of the parent immediately before the acquisition, or 
  (B) issued for consideration that consists solely of money, 
  (ii) an indebtedness that was issued 
  (A) by the parent as consideration for the acquisition of a share of the capital stock of the subsidiary by the parent, or 
  (B) for consideration that consists solely of money, 
  (iii) a share of the capital stock of a taxable Canadian corporation that was received as consideration for the acquisition of a share of the capital stock of the subsidiary by the taxable Canadian corporation or by the parent where the parent was a specified subsidiary corporation of the taxable Canadian corporation immediately before the acquisition, 
  (iv) an indebtedness of a taxable Canadian corporation that was issued by it as consideration for the acquisition of a share of the capital stock of the subsidiary by the taxable Canadian corporation or by the parent where the parent was a specified subsidiary corporation of the taxable Canadian corporation immediately before the acquisition, and 
  (v) if the subsidiary was formed on the amalgamation of two or more predecessor corporations at least one of which was a subsidiary wholly-owned corporation of the parent, 
  (A) a share of the capital stock of the subsidiary that was issued on the amalgamation and that is, before the beginning of the winding-up, 
  (I) redeemed, acquired or cancelled by the subsidiary for consideration that consists solely of money or shares of the capital stock of the parent, or of any combination of the two, or 
  (II) exchanged for shares of the capital stock of the parent, or 
  (B) a share of the capital stock of the parent issued on the amalgamation in exchange for a share of the capital stock of a predecessor corporation; 
  (vi)  [Repealed, 2013, c. 40, s. 40]  
  (c.5) for the purpose of paragraph 88(1)(c.4), a corporation is a specified subsidiary corporation of another corporation, at any time, where the other corporation holds, at that time, shares of the corporation 
  (i) that give the shareholder 90% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and 
  (ii) having a fair market value of 90% or more of the fair market value of all the issued shares of the capital stock of the corporation; 
  (c.6) for the purpose of paragraph 88(1)(c.3) and notwithstanding subsection 256(9), where control of a corporation is acquired by way of articles of arrangement, that control is deemed to have been acquired at the end of the day on which the arrangement becomes effective; 
  (c.7) for the purpose of subparagraph 88(1)(c)(iii), a leasehold interest in a depreciable property and an option to acquire a depreciable property are depreciable properties; 
  (c.8) for the purpose of clause (c.2)(iii)(A), a specified class of the capital stock of a corporation is a class of shares of the capital stock of the corporation where 
  (i) the paid-up capital in respect of the class was not, at any time, less than the fair market value of the consideration for which the shares of that class then outstanding were issued, 
  (ii) the shares are non-voting in respect of the election of the board of directors of the corporation, except in the event of a failure or default under the terms or conditions of the shares, 
  (iii) under neither the terms and conditions of the shares nor any agreement in respect of the shares are the shares convertible into or exchangeable for shares other than shares of a specified class of the capital stock of the corporation, and 
  (iv) under neither the terms and conditions of the shares nor any agreement in respect of the shares is any holder of the shares entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm’s length an amount (excluding any premium for early redemption) greater than the total of the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends on the shares; 
  (c.9) for the purposes of paragraph (c.4), a reference to a share of the capital stock of a corporation includes a right to acquire a share of the capital stock of the corporation; 
  (d) the amount determined under this paragraph in respect of each property of the subsidiary distributed to the parent on the winding-up is such portion of the amount, if any, by which the total determined under subparagraph 88(1)(b)(ii) exceeds the total of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount in respect of any property owned by the subsidiary immediately before the winding-up, equal to the cost amount to the subsidiary of the property immediately before the winding-up, plus the amount of any money of the subsidiary on hand immediately before the winding-up, exceeds the total of 
  (B) all amounts each of which is the amount of any debt owing by the subsidiary, or of any other obligation of the subsidiary to pay any amount, that was outstanding immediately before the winding-up, and 
  (C) the amount of any reserve (other than a reserve referred to in paragraph 20(1)(n), subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) of this Act or in subsection 64(1) or (1.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as those two provisions read immediately before November 3, 1981) deducted in computing the subsidiary’s income for its taxation year during which its assets were distributed to the parent on the winding-up, and  
  (i.1) the total of all amounts each of which is an amount in respect of any share of the capital stock of the subsidiary disposed of by the parent on the winding-up or in contemplation of the winding-up, equal to the total of all amounts received by the parent or by a corporation with which the parent was not dealing at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b) in respect of the subsidiary) in respect of 
  (A) taxable dividends on the share or on any share (in this subparagraph referred to as a “replaced share”) for which the share or a replaced share was substituted or exchanged to the extent that the amounts thereof were deductible from the recipient’s income for any taxation year by virtue of section 112 or subsection 138(6) and were not amounts on which the recipient was required to pay tax under Part VII of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on March 31, 1977, or  
  (B) capital dividends and life insurance capital dividends on the share or on any share (in this subparagraph referred to as a “replaced share”) for which a share or a replaced share was substituted or exchanged, as is designated by the parent in respect of that capital property in its return of income under this Part for its taxation year in which the subsidiary was so wound up, except that 
  (ii) the amount designated in respect of any such capital property may not exceed the amount determined by the formula is the fair market value of the property at the time the parent last acquired control of the subsidiary, is the greater of the cost amount to the subsidiary of the property at the time the parent last acquired control of the subsidiary and the cost amount to the subsidiary of the property immediately before the winding-up, and is the prescribed amount, and 
  (ii.1) for the purpose of calculating the amount in subparagraph (ii) in respect of an interest of the subsidiary in a partnership, the fair market value of the interest at the time the parent last acquired control of the subsidiary is deemed to be the amount determined by the formula is the fair market value (determined without reference to this subparagraph) of the interest at that time, and is the portion of the amount by which the fair market value (determined without reference to this subparagraph) of the interest at that time exceeds its cost amount at that time as may reasonably be regarded as being attributable at that time to the total of all amounts each of which is 
  (A) in the case of a depreciable property held directly by the partnership or held indirectly by the partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of the property exceeds its cost amount, 
  (B) in the case of a Canadian resource property or a foreign resource property held directly by the partnership or held indirectly by the partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of the property, or 
  (C) in the case of a property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the partnership or held indirectly through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of the property exceeds its cost amount, and 
  (iii) in no case shall the total of amounts so designated in respect of all such capital properties exceed the amount, if any, by which the total determined under subparagraph 88(1)(b)(ii) exceeds the total of the amounts determined under subparagraphs 88(1)(d)(i) and 88(1)(d)(i.1), 
  (d.1) subsection 84(2) and section 21 of the Income Tax Application Rules do not apply to the winding-up of the subsidiary, and subsection 13(21.2) does not apply to the winding-up of the subsidiary with respect to property acquired by the parent on the winding-up;  
  (d.2) in determining, for the purposes of this paragraph and paragraphs 88(1)(c) and 88(1)(d), the time at which a person or group of persons (in this paragraph and paragraph 88(1)(d.3) referred to as the “acquirer”) last acquired control of the subsidiary, where control of the subsidiary was acquired from another person or group of persons (in this paragraph referred to as the “vendor”) with whom the acquirer was not (otherwise than solely because of a right referred to in paragraph 251(5)(b)) dealing at arm’s length, the acquirer is deemed to have last acquired control of the subsidiary at the earlier of 
  (i) the time at which the vendor last acquired control (within the meaning that would be assigned by subsection 186(2) if the reference in that subsection to “another corporation” were read as “a person” and the references in that subsection to “the other corporation” were read as “the person”) of the subsidiary, and 
  (ii) the time at which the vendor was deemed for the purpose of this paragraph to have last acquired control of the subsidiary; 
  (d.3) for the purposes of paragraphs 88(1)(c), 88(1)(d) and 88(1)(d.2), where at any time control of a corporation is last acquired by an acquirer because of an acquisition of shares of the capital stock of the corporation as a consequence of the death of an individual, the acquirer is deemed to have last acquired control of the corporation immediately after the death from a person who dealt at arm’s length with the acquirer; 
  (e) for the purposes of the description of A in subparagraph (d)(ii.1), the fair market value of an interest in a particular partnership held by the subsidiary at the time the parent last acquired control of the subsidiary is deemed not to include the amount that is the total of each amount that is the fair market value of a property that would otherwise be included in the fair market value of the interest, if 
  (i) as part of the transaction or event or series of transactions or events in which control of the subsidiary is last acquired by the parent and on or before the acquisition of control, 
  (A) the subsidiary disposes of the property to the particular partnership or any other partnership and subsection 97(2) applies to the disposition, or 
  (B) where the property is an interest in a partnership, the subsidiary acquires the interest in the particular partnership or any other partnership from a person or partnership with whom the subsidiary does not deal at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)) and section 85 applies in respect of the acquisition of the interest, and 
  (ii) at the time of the acquisition of control, the particular partnership holds directly, or indirectly through one or more other partnerships, property described in clauses (A) to (C) of the description of B in subparagraph (d)(ii.1); 
  (e.1) the subsidiary may, for the purposes of computing its income for its taxation year during which its assets were transferred to, and its obligations were assumed by, the parent on the winding-up, claim any reserve that would have been allowed under this Part if its assets had not been transferred to, or its obligations had not been assumed by, the parent on the winding-up and notwithstanding any other provision of this Part, no amount shall be included in respect of any reserve so claimed in computing the income of the subsidiary for its taxation year, if any, following the year in which its assets were transferred to or its obligations were assumed by the parent; 
  (e.2) paragraphs 87(2)(c), (d.1), (e.1), (e.3), (e.42), (g) to (l), (l.21) to (u), (x), (z.1), (z.2), (aa), (cc), (ll), (nn), (pp), (rr) and (tt) to (xx), subsection 87(6) and, subject to section 78, subsection 87(7) apply to the winding-up as if the references in those provisions to 
  (i) “amalgamation” were read as “winding-up”, 
  (ii) “predecessor corporation” were read as “subsidiary”, 
  (iii) “new corporation” were read as “parent”, 
  (iv) “its first taxation year” were read as “its taxation year during which it received the assets of the subsidiary on the winding-up”, 
  (v) “its last taxation year” were read as “its taxation year during which its assets were distributed to the parent on the winding-up”, 
  (vi) “predecessor corporation’s gain” were read as “subsidiary’s gain”, 
  (vii) “predecessor corporation’s income” were read as “subsidiary’s income”, 
  (viii) “new corporation’s income” were read as “parent’s income”, 
  (ix) “subsection 89(5)” and “subsection 89(9)” were read as “subsection 89(6)” and “subsection 89(10)”, respectively, 
  (x) “any predecessor private corporation” were read as “the subsidiary (if it was a private corporation at the time of the winding-up)”, 
  (xi) and (xii)  [Repealed, 1994, c. 7, Sch. II, s. 66]  
  (xiii) “two or more corporations” were read as “a subsidiary”, 
  (xiv) and (xv)  [Repealed, 1998, c. 19, s. 118]  
  (xvi) “the life insurance capital dividend account of any predecessor corporation immediately before the amalgamation” were read as “the life insurance capital dividend account of the subsidiary at the time the subsidiary was wound-up”, 
  (xvii) “predecessor corporation’s refundable Part VII tax on hand” were read as “subsidiary’s refundable Part VII tax on hand”, 
  (xviii) “predecessor corporation’s Part VII refund” were read as “subsidiary’s Part VII refund”, 
  (xix) “predecessor corporation’s refundable Part VIII tax on hand” were read as “subsidiary’s refundable Part VIII tax on hand”, 
  (xx) “predecessor corporation’s Part VIII refund” were read as “subsidiary’s Part VIII refund”, and 
  (xxi) “predecessor corporation’s cumulative offset account” were read as “subsidiary’s cumulative offset account”; 
  (e.3) for the purpose of computing the parent’s investment tax credit at the end of any particular taxation year ending after the subsidiary was wound up, 
  (i) property acquired or expenditures made by the subsidiary or an amount included in the investment tax credit of the subsidiary by virtue of paragraph (b) of the definition 
  *investment tax credit* in subsection 127(9) in a taxation year (in this paragraph referred to as the “expenditure year”) shall be deemed to have been acquired, made or included, as the case may be, by the parent in its taxation year in which the expenditure year of the subsidiary ended, and  
  (ii) there shall be added to the amounts otherwise determined for the purposes of paragraphs (f) to (k) of the definition 
  *investment tax credit* in subsection 127(9) in respect of the parent for the particular year  
  (A) the amounts that would have been determined in respect of the subsidiary for the purposes of paragraph (f) of the definition 
  *investment tax credit* in subsection 127(9) for its taxation year in which it was wound up if the reference therein to “a preceding taxation year” were read as a reference to “the year or a preceding taxation year”,  
  (B) the amounts determined in respect of the subsidiary for the purposes of paragraphs (g) to (i) and (k) of the definition 
  *investment tax credit* in subsection 127(9) for its taxation year in which it was wound up, and  
  (C) the amount determined in respect of the subsidiary for the purposes of paragraph (j) of the definition 
  *investment tax credit* in subsection 127(9) for its taxation year in which it was wound up except that, for the purpose of the calculation in this clause, where control of the subsidiary has been acquired by a person or group of persons (each of whom is referred to in this clause as the “purchaser”) at any time (in this clause referred to as “that time”) before the end of the taxation year in which the subsidiary was wound up, there may be added to the amount determined under subparagraph 127(9.1)(d)(i) in respect of the subsidiary the amount, if any, by which that proportion of the amount that, but for subsections 127(3) and 127(5) and sections 126, 127.2 and 127.3, would be the parent’s tax payable under this Part for the particular year, that,  
  (I) where the subsidiary carried on a particular business in the course of which a property was acquired, or an expenditure was made, before that time in respect of which an amount was included in computing the subsidiary’s investment tax credit for its taxation year in which it was wound up, and the parent carried on the particular business throughout the particular year, the amount, if any, by which the total of all amounts each of which is the parent’s income for the particular year from the particular business, or the parent’s income for the particular year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the subsidiary in carrying on the particular business before that time, exceeds the total of the amounts, if any, deducted for the particular year under paragraph 111(1)(a) or 111(1)(d) by the parent in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business is of the greater of 
  (II) the amount determined under subclause 88(1)(e.3)(ii)(C)(I), and 
  (III) the parent’s taxable income for the particular year exceeds the amount, if any, calculated under subparagraph 127(9.1)(d)(i) in respect of the particular business or the other business, as the case may be, in respect of the parent at the end of the particular year to the extent that those amounts determined in respect of the subsidiary may reasonably be considered to have been included in computing the parent’s investment tax credit at the end of the particular year by virtue of subparagraph 88(1)(e.3)(i); and, for the purposes of the definitions 
  *first term shared-use-equipment* and 
  *second term shared-use-equipment* in subsection 127(9), the parent shall be deemed to be the same corporation as, and a continuation of, the subsidiary;  
  (e.4) for the purpose of computing the parent’s employment tax credit at the end of any particular taxation year ending after the subsidiary was wound up, 
  (i) the subsidiary’s taxpayer employment credits for any taxation year (in this paragraph referred to as the “employment year”) and any amounts required to be added by virtue of subsection 127(15) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the subsidiary’s employment tax credit at the end of the employment year shall be deemed to be taxpayer employment credits of the parent for, and amounts required to be added by virtue of that subsection in computing the parent’s employment tax credit at the end of, its taxation year in which the employment year of the subsidiary ended, and  
  (ii) there shall be added to the amounts otherwise determined under paragraphs 127(16)(c) and (d) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of the parent for the particular taxation year, the amounts that would have been determined under those paragraphs in respect of the subsidiary for its taxation year in which it was wound-up if the reference in paragraph 127(16)(c) of that Act to “the five immediately preceding taxation years” were read as a reference to “that taxation year or the five immediately preceding taxation years” to the extent that those amounts determined in respect of the subsidiary may reasonably be considered to be in respect of a taxpayer employment credit or an amount required to be added by virtue of subsection 127(15) of that Act that is included in computing the parent’s employment tax credit at the end of the particular year by virtue of subparagraph 88(1)(e.4)(i);  
  (e.5)  [Repealed, 1996, c. 21, s. 16]  
  (e.6) if a subsidiary has made a gift in a taxation year (in this section referred to as the “gift year”), for the purposes of computing the amount deductible under section 110.1 by the parent for its taxation years that end after the subsidiary was wound up, the parent is deemed to have made a gift, in each of its taxation years in which a gift year of the subsidiary ended, equal to the amount, if any, by which the total of all amounts, each of which is the amount of a gift or, in the case of a gift made after December 20, 2002, the eligible amount of the gift, made by the subsidiary in the gift year exceeds the total of all amounts deducted under section 110.1 by the subsidiary in respect of those gifts; 
  (e.61) the parent is deemed for the purpose of section 110.1 to have made any gift deemed by subsection 118.1(13) to have been made by the subsidiary after the subsidiary ceased to exist; 
  (e.7) for the purposes of 
  (i) determining the amount deductible by the parent under subsection 126(2) for any taxation year commencing after the commencement of the winding-up, and 
  (ii) determining the extent to which subsection 126(2.3) applies to reduce the amount that may be claimed by the parent under paragraph 126(2)(a), any unused foreign tax credit (within the meaning of subsection 126(7)) of the subsidiary in respect of a country for a particular taxation year (in this section referred to as the “foreign tax year”), to the extent that it exceeds the total of all amounts each of which is claimed in respect thereof under paragraph 126(2)(a) in computing the tax payable by the subsidiary under this Part for any taxation year, shall be deemed to be an unused foreign tax credit of the parent for its taxation year in which the subsidiary’s foreign tax year ended; 
  (e.8)  [Repealed, 2019, c. 29, s. 12]  
  (e.9) for the purpose of applying the definition 
  *qualifying corporation* in subsection 127.1(2), and subparagraph (d)(i) of the definition 
  *balance-due day* in subsection 248(1), to any corporation (other than the subsidiary)  
  (i) where the parent is associated with another corporation in a taxation year (in this paragraph referred to as the “current year”) of the parent that begins after the parent received an asset of the subsidiary on the winding-up and ends in a calendar year, 
  (A) the parent’s taxable income for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year) is deemed to be the total of 
  (I) its taxable income for that last year (determined before applying this paragraph to the winding-up and before taking into consideration the specified future tax consequences for that last year), and 
  (II) the total of the subsidiary’s taxable incomes for its taxation years that ended in that preceding calendar year (determined without reference to subparagraph 88(1)(e.9)(iii) and before taking into consideration the specified future tax consequences for those years), 
  (B) the parent’s business limit for that last year is deemed to be the total of 
  (I) its business limit (determined before applying this paragraph to the winding-up) for that last year, and 
  (II) the total of the subsidiary’s business limits (determined without reference to subparagraph 88(1)(e.9)(iii)) for its taxation years that ended in that preceding calendar year, and 
  (C) the parent’s qualifying income limit for that last year is deemed to be the total of 
  (I) its qualifying income limit (determined before applying this paragraph to the winding-up) for that last year, and 
  (II) the total of the subsidiary’s qualifying income limits (determined without reference to subparagraph (iii)) for its taxation years that ended in that preceding calendar year, 
  (ii) where the parent received an asset of the subsidiary on the winding-up before the current year and subparagraph 88(1)(e.9)(i) does not apply, 
  (A) the parent’s taxable income for its immediately preceding taxation year (determined before taking into consideration the specified future tax consequences for that preceding year) is deemed to be the total of 
  (I) its taxable income for that preceding taxation year (determined before applying this paragraph to the winding-up and before taking into consideration the specified future tax consequences for that preceding taxation year), and 
  (II) the total of the subsidiary’s taxable incomes for the subsidiary’s taxation years that end in the calendar year in which that preceding taxation year ended (determined before taking into consideration the specified future tax consequences for those years), 
  (B) the parent’s business limit for that preceding taxation year is deemed to be the total of 
  (I) its business limit (determined before applying this paragraph to the winding-up) for that preceding taxation year, and 
  (II) the total of the subsidiary’s business limits (determined without reference to subparagraph 88(1)(e.9)(iii)) for the subsidiary’s taxation years that end in the calendar year in which that preceding taxation year ended, and 
  (C) the parent’s qualifying income limit for that preceding taxation year is deemed to be the total of 
  (I) its qualifying income limit (determined before applying this paragraph to the winding-up) for that preceding taxation year, and 
  (II) the total of the subsidiary’s qualifying income limits (determined without reference to subparagraph (iii)) for the subsidiary’s taxation years that end in the calendar year in which that preceding taxation year ended, and 
  (iii) where the parent and the subsidiary are associated with each other in the current year, the subsidiary’s taxable income, the subsidiary’s business limit and the subsidiary’s qualifying income limit for each taxation year that ends after the first time that the parent receives an asset of the subsidiary on the winding-up are deemed to be nil; 
  (f) where property that was depreciable property of a prescribed class of the subsidiary has been distributed to the parent on the winding-up and the capital cost to the subsidiary of the property exceeds the amount deemed by paragraph 88(1)(a) to be the subsidiary’s proceeds of disposition of the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), 
  (i) notwithstanding paragraph 88(1)(c), the capital cost to the parent of the property shall be deemed to be the amount that was the capital cost of the property to the subsidiary, and 
  (ii) the excess shall be deemed to have been allowed to the parent in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the parent of the property; 
  (g) where the subsidiary was an insurance corporation, 
  (i) for the purposes of paragraphs 12(1)(d), (e), (e.1), (i) and (s), subsection 12.5(8), paragraphs 20(1)(l), (l.1), (p) and (jj) and 20(7)(c), subsections 20(22) and 20.4(4), sections 138, 138.1, 140, 142 and 148 and Part XII.3, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary, and 
  (ii) for the purpose of determining the amount of the gross investment revenue required to be included under subsection 138(9) in the income of the subsidiary and the parent and the amount of gains and losses of the subsidiary and the parent from property used by them in the year or held by them in the year in the course of carrying on an insurance business in Canada 
  (A) the subsidiary and the parent shall, in addition to their normal taxation years, be deemed to have had a taxation year ending immediately before the time when the property of the subsidiary was transferred to, and the obligations of the subsidiary were assumed by, the parent on the winding-up, and 
  (B) for the taxation years of the subsidiary and the parent following the time referred to in clause 88(1)(g)(ii)(A), the property transferred to, and the obligations assumed by, the parent on the winding-up shall be deemed to have been transferred or assumed, as the case may be, on the last day of the taxation year ending immediately before that time and the parent shall be deemed to be the same corporation as and a continuation of the subsidiary with respect to that property, those obligations and the insurance businesses carried on by the subsidiary; 
  (h) for the purposes of subsections 112(5) to 112(5.2) and 112(5.4) and the definition 
  *mark-to-market property* in subsection 142.2(1), the parent shall be deemed, in respect of each property distributed to it on the winding-up, to be the same corporation as, and a continuation of, the subsidiary;  
  (i) for the purpose of subsection 142.5(2), the subsidiary’s taxation year in which its assets were distributed to the parent on the winding-up shall be deemed to have ended immediately before the time when the assets were distributed; and 
  (j) for the purposes of subsection 10.1(6), the subsidiary’s taxation year in which an eligible derivative (as defined in subsection 10.1(5)) was distributed to, or assumed by, the parent on the winding-up is deemed to have ended immediately before the time when the eligible derivative was distributed or assumed.  
  
  ### Non-capital losses, etc., of subsidiary
  
  (1.1) Where a Canadian corporation (in this subsection referred to as the “subsidiary”) has been wound up and not less than 90% of the issued shares of each class of the capital stock of the subsidiary were, immediately before the winding-up, owned by another Canadian corporation (in this subsection referred to as the “parent”) and all the shares of the subsidiary that were not owned by the parent immediately before the winding-up were owned at that time by a person or persons with whom the parent was dealing at arm’s length, for the purpose of computing the taxable income of the parent under this Part and the tax payable under Part IV by the parent for any taxation year commencing after the commencement of the winding-up, such portion of any non-capital loss, restricted farm loss, farm loss or limited partnership loss of the subsidiary as may reasonably be regarded as its loss from carrying on a particular business (in this subsection referred to as the “subsidiary’s loss business”) and any other portion of any non-capital loss or limited partnership loss of the subsidiary as may reasonably be regarded as being derived from any other source or being in respect of a claim made under section 110.5 for any particular taxation year of the subsidiary (in this subsection referred to as the “subsidiary’s loss year”), to the extent that it 
  (a) was not deducted in computing the taxable income of the subsidiary for any taxation year of the subsidiary, and 
  (b) would have been deductible in computing the taxable income of the subsidiary for any taxation year beginning after the commencement of the winding-up, on the assumption that it had such a taxation year and that it had sufficient income for that year, shall, for the purposes of this subsection, paragraphs 111(1)(a), 111(1)(c), 111(1)(d) and 111(1)(e), subsection 111(3) and Part IV, 
  (c) in the case of such portion of any non-capital loss, restricted farm loss, farm loss or limited partnership loss of the subsidiary as may reasonably be regarded as its loss from carrying on the subsidiary’s loss business, be deemed, for the taxation year of the parent in which the subsidiary’s loss year ended, to be a non-capital loss, restricted farm loss, farm loss or limited partnership loss, respectively, of the parent from carrying on the subsidiary’s loss business, that was not deductible by the parent in computing its taxable income for any taxation year that commenced before the commencement of the winding-up, 
  (d) in the case of any other portion of any non-capital loss or limited partnership loss of the subsidiary as may reasonably be regarded as being derived from any other source, be deemed, for the taxation year of the parent in which the subsidiary’s loss year ended, to be a non-capital loss or a limited partnership loss, respectively, of the parent that was derived from the source from which the subsidiary derived the loss and that was not deductible by the parent in computing its taxable income for any taxation year that commenced before the commencement of the winding-up, and 
  (d.1) in the case of any other portion of any non-capital loss of the subsidiary as may reasonably be regarded as being in respect of a claim made under section 110.5, be deemed, for the taxation year of the parent in which the subsidiary’s loss year ended, to be a non-capital loss of the parent in respect of a claim made under section 110.5 that was not deductible by the parent in computing its taxable income for any taxation year that commenced before the commencement of the winding-up, except that 
  (e) if control of the parent has been acquired by a person or group of persons at any time after the commencement of the winding-up, or control of the subsidiary has been acquired by a person or group of persons at any time whatever, no amount in respect of the subsidiary’s non-capital loss or farm loss for a taxation year ending before that time is deductible in computing the taxable income of the parent for a particular taxation year ending after that time, except that such portion of the subsidiary’s non-capital loss or farm loss as may reasonably be regarded as its loss from carrying on a business and, where a business was carried on by the subsidiary in that year, such portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing its taxable income for the year is deductible only 
  (i) if that business is carried on by the subsidiary or the parent for profit or with a reasonable expectation of profit throughout the particular year, and 
  (ii) to the extent of the total of the parent’s income for the particular year from that business and, where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, from any other business substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services and for the purpose of this paragraph, where this subsection applied to the winding-up of another corporation in respect of which the subsidiary was the parent and this paragraph applied in respect of losses of that other corporation, the subsidiary shall be deemed to be the same corporation as, and a continuation of, that other corporation with respect to those losses, and 
  (f) any portion of a loss of the subsidiary that would otherwise be deemed by paragraph 88(1.1)(c), 88(1.1)(d) or 88(1.1)(d.1) to be a loss of the parent for a particular taxation year beginning after the commencement of the winding-up shall be deemed, for the purpose of computing the parent’s taxable income for taxation years beginning after the commencement of the winding-up, to be such a loss of the parent for its immediately preceding taxation year and not for the particular year, where the parent so elects in its return of income under this Part for the particular year. 
  
  ### Net capital losses of subsidiary
  
  (1.2) Where the winding-up of a Canadian corporation (in this subsection referred to as the “subsidiary”) commenced after March 31, 1977 and not less than 90% of the issued shares of each class of the capital stock of the subsidiary were, immediately before the winding-up, owned by another Canadian corporation (in this subsection referred to as the “parent”) and all the shares of the subsidiary that were not owned by the parent immediately before the winding-up were owned at that time by persons with whom the parent was dealing at arm’s length, for the purposes of computing the taxable income of the parent for any taxation year commencing after the commencement of the winding-up, any net capital loss of the subsidiary for any particular taxation year of the subsidiary (in this subsection referred to as the “subsidiary’s loss year”), to the extent that it 
  (a) was not deducted in computing the taxable income of the subsidiary for any taxation year of the subsidiary, and 
  (b) would have been deductible in computing the taxable income of the subsidiary for any taxation year beginning after the commencement of the winding-up, on the assumption that it had such a taxation year and that it had sufficient income and taxable capital gains for that year, shall, for the purposes of this subsection, paragraph 111(1)(b) and subsection 111(3), be deemed to be a net capital loss of the parent for its taxation year in which the particular taxation year of the subsidiary ended, except that 
  (c) where at any time control of the parent or subsidiary has been acquired by a person or group of persons, no amount in respect of the subsidiary’s net capital loss for a taxation year ending before that time is deductible in computing the parent’s taxable income for a taxation year ending after that time, and 
  (d) any portion of a net capital loss of the subsidiary that would otherwise be deemed by this subsection to be a loss of the parent for a particular taxation year beginning after the commencement of the winding-up shall be deemed, for the purposes of computing its taxable income for taxation years beginning after the commencement of the winding-up, to be a net capital loss of the parent for its immediately preceding taxation year and not for the particular year, where the parent so elects in its return of income under this Part for the particular year. 
  
  ### Computation of income and tax of parent
  
  (1.3) For the purpose of paragraphs 88(1)(e.3), 88(1)(e.6) and 88(1)(e.7), subsections 88(1.1) and 88(1.2), section 110.1, subsections 111(1) and 111(3) and Part IV, where a parent corporation has been incorporated or otherwise formed after the end of an expenditure year, gift year, foreign tax year or loss year, as the case may be, of a subsidiary of the parent, for the purpose of computing the taxable income of, and the tax payable under this Part and Part IV by, the parent for any taxation year, 
  (a) it shall be deemed to have been in existence during the particular period beginning immediately before the end of the subsidiary’s first expenditure year, gift year, foreign tax year or loss year, as the case may be, and ending immediately after it was incorporated or otherwise formed; 
  (b) it shall be deemed to have had, throughout the particular period, fiscal periods ending on the day of the year on which its first fiscal period ended; and 
  (c) it shall be deemed to have been controlled, throughout the particular period, by the person or persons who controlled it immediately after it was incorporated or otherwise formed. 
  
  ### Qualified expenditure of subsidiary
  
  (1.4) For the purposes of this subsection and section 37.1, where the rules in subsection 88(1) applied to the winding-up of a subsidiary, for the purpose of computing the income of its parent for any taxation year commencing after the subsidiary has been wound up, the following rules apply: 
  (a) where the parent’s base period consists of fewer than three taxation years, its base period shall be determined on the assumption that it had taxation years in each of the calendar years preceding the year in which it was incorporated, each of which commenced on the same day of the year as the day of its incorporation; 
  (b) the qualified expenditure made by the parent in a particular taxation year in its base period shall be deemed to be the total of the amount thereof otherwise determined and the qualified expenditure made by the subsidiary in its taxation year ending in the same calendar year as the particular year; 
  (c) the total of the amounts paid to the parent by persons referred to in subparagraphs (b)(i) to (iii) of the definition 
  *expenditure base* in subsection 37.1(5) in a particular taxation year in its base period shall be deemed to be the total otherwise determined and all those amounts paid to the subsidiary by a person referred to in those subparagraphs in the subsidiary’s taxation year ending in the same calendar year as the particular year; and  
  (d) there shall be added to the total of the amounts otherwise determined in respect of the parent under subparagraphs 37.1(3)(b)(i) and 37.1(3)(b)(iii) respectively, the total of the amounts determined under those subparagraphs in respect of the subsidiary. 
  
  ### Application of s. 37.1(5)
  
  (1.41) The definitions in subsection 37.1(5) apply to subsection 88(1.4). 
  
  ### Parent continuation of subsidiary
  
  (1.5) For the purposes of section 29 of the Income Tax Application Rules, subsection 59(3.3) and sections 66, 66.1, 66.2, 66.21, 66.4 and 66.7, where the rules in subsection (1) applied to the winding-up of a subsidiary, its parent is deemed to be the same corporation as, and a continuation of, the subsidiary.  
  
  ### Idem
  
  (1.6) Where a corporation that carries on a farming business and computes its income from that business in accordance with the cash method is wound up in circumstances to which subsection 88(1) applies and, at the time that is immediately before the winding-up of the corporation, owned inventory that was used in connection with that business, 
  (a) for the purposes of subparagraph 88(1)(a)(iii), the cost amount to the corporation at that time of property purchased by it that is included in that inventory shall be deemed to be the amount determined by the formula is the amount, if any, that would be included under paragraph 28(1)(c) in computing the corporation’s income for its last taxation year beginning before that time if that year had ended at that time, is the value (determined in accordance with subsection 28(1.2)) to the corporation at that time of the purchased inventory that is distributed to the parent on the winding-up, is the value (determined in accordance with subsection 28(1.2)) of all of the inventory purchased by the corporation that was owned by it in connection with that business at that time, and is the lesser of 
  (i) such additional amount as the corporation designates in respect of the property, and 
  (ii) the amount, if any, by which the fair market value of the property at that time exceeds the amount determined for A in respect of the property; 
  (b) for the purpose of subparagraph 28(1)(a)(i), the disposition of the inventory and the receipt of the proceeds of disposition therefor shall be deemed to have occurred at that time and in the course of carrying on the business; and 
  (c) where the parent carries on a farming business and computes its income therefrom in accordance with the cash method, for the purposes of section 28, 
  (i) an amount equal to the cost to the parent of the inventory shall be deemed to have been paid by it, and 
  (ii) the parent shall be deemed to have purchased the inventory for an amount equal to that cost, in the course of carrying on that business and at the time it acquired the inventory. 
  
  ### Interpretation
  
  (1.7) For the purposes of paragraphs 88(1)(c) and 88(1)(d), where a parent of a subsidiary did not deal at arm’s length with another person (other than a corporation the control of which was acquired by the parent from a person with whom the parent dealt at arm’s length) at any time before the winding-up of the subsidiary, the parent and the other person are deemed never to have dealt with each other at arm’s length, whether or not the parent and the other person coexisted. 
  
  ### Application of subsection (1.9)
  
  (1.8) Subsection (1.9) applies if 
  (a) a corporation has made a designation (referred to in this subsection and subsection (1.9) as the “initial designation”) under paragraph (1)(d) in respect of a share of the capital stock of a foreign affiliate of the corporation, or an interest in a partnership that, based on the assumptions contained in paragraph 96(1)(c), owns a share of the capital stock of a foreign affiliate of the corporation, on or before the filing-due date for its return of income under this Part for the taxation year in which a disposition of the share or the partnership interest, as the case may be, occurred in the course of a winding-up referred to in subsection (1) or an amalgamation referred to in subsection 87(11); 
  (b) the corporation made reasonable efforts to determine the foreign affiliate’s tax-free surplus balance (within the meaning assigned by subsection 5905(5.5) of the Income Tax Regulations), in respect of the corporation, that was relevant in the computation of the maximum amount available under subparagraph (1)(d)(ii) to be designated in respect of that disposition; and  
  (c) the corporation amends the initial designation on or before the day that is 10 years after the filing-due date referred to in paragraph (a). 
  
  ### Amended designation
  
  (1.9) If this subsection applies and, in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit the initial designation to be amended, the amended designation under paragraph (1.8)(c) is deemed to have been made on the day on which the initial designation was made and the initial designation is deemed not to have been made. 
  
  ### Winding-up of Canadian corporation
  
  (2) Where a Canadian corporation (other than a subsidiary to the winding-up of which the rules in subsection 88(1) applied) has been wound up after 1978 and, at a particular time in the course of the winding-up, all or substantially all of the property owned by the corporation immediately before that time was distributed to the shareholders of the corporation, 
  (a) for the purposes of computing the corporation’s 
  (i) capital dividend account, 
  (i.1) capital gains dividend account (within the meaning assigned by subsection 131(6), where the corporation is an investment corporation, 
  (ii) capital gains dividend account (within the meaning assigned by section 133), and 
  (iii) pre-1972 capital surplus on hand, at the time (in this paragraph referred to as the “time of computation”) immediately before the particular time, 
  (iv) the taxation year of the corporation that otherwise would have included the particular time shall be deemed to have ended immediately before the time of computation, and a new taxation year shall be deemed to have commenced at that time, and 
  (v) each property of the corporation that was so distributed at the particular time shall be deemed to have been disposed of by the corporation immediately before the end of the taxation year so deemed to have ended for proceeds equal to the fair market value of the property immediately before the particular time, 
  (vi)  [Repealed, 1994, c. 7, Sch. II, s. 66]  
  (b) where the corporation is, by virtue of subsection 84(2), deemed to have paid at the particular time a dividend (in this paragraph referred to as the “winding-up dividend”) on shares of any class of its capital stock, the following rules apply: 
  (i) such portion of the winding-up dividend as does not exceed the corporation’s capital dividend account immediately before that time or capital gains dividend account immediately before that time, as the case may be, shall be deemed, for the purposes of an election in respect thereof under subsection 83(2), 131(1) (as that subsection applies for the purposes of section 130) or 133(7.1), as the case may be, and where the corporation has so elected, for all other purposes, to be the full amount of a separate dividend, 
  (ii) the portion of the winding-up dividend equal to the lesser of the corporation’s pre-1972 capital surplus on hand immediately before that time and the amount by which the winding-up dividend exceeds 
  (A) the portion thereof in respect of which the corporation has made an election under subsection 83(2), or 
  (B) the portion thereof in respect of which the corporation has made an election under subsection 133(7.1), as the case may be, shall be deemed not to be a dividend, 
  (iii) notwithstanding the definition 
  *taxable dividend* in subsection 89(1), the winding-up dividend, to the extent that it exceeds the total of the portion thereof deemed by subparagraph 88(2)(b)(i) to be a separate dividend for all purposes and the portion deemed by subparagraph 88(2)(b)(ii) not to be a dividend, shall be deemed to be a separate dividend that is a taxable dividend, and  
  (iv) each person who held any of the issued shares of that class at the particular time shall be deemed to have received that proportion of any separate dividend determined under subparagraph 88(2)(b)(i) or 88(2)(b)(iii) that the number of shares of that class held by the person immediately before the particular time is of the number of issued shares of that class outstanding immediately before that time, and 
  (c) for the purpose of computing the income of the corporation for its taxation year that includes the particular time, paragraph 12(1)(t) shall be read as follows: 
  “12(1)(t) the amount deducted under subsection 127(5) or 127(6) in computing the taxpayer’s tax payable for the year or a preceding taxation year to the extent that it was not included under this paragraph in computing the taxpayer’s income for a preceding taxation year or is not included in an amount determined under paragraph 13(7.1)(e) or 37(1)(e) or subparagraph 53(2)(c)(vi) or 53(2)(h)(ii) or the amount determined for I in the definition 
  *undepreciated capital cost* in subsection 13(21) or L in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6);”.  
  
  ### Definition of 
  *pre-1972 capital surplus on hand* 
  
  (2.1) For the purposes of subsection 88(2), 
  *pre-1972 capital surplus on hand* of a particular corporation at a particular time means the amount, if any, by which the total of  
  (a) the corporation’s 1971 capital surplus on hand on December 31, 1978 within the meaning of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on that date,  
  (b) the total of all amounts each of which is an amount in respect of a capital property of the corporation owned by it on December 31, 1971 and disposed of by it after 1978 and before the particular time, equal to the amount, if any, by which the lesser of its fair market value on valuation day (within the meaning assigned by section 24 of the Income Tax Application Rules) and the corporation’s proceeds of disposition of that capital property exceeds its actual cost to the corporation determined without reference to the Income Tax Application Rules other than subsections 26(15), (17) and (21) to (27) of that Act,  
  (c) where before the particular time a subsidiary (to the winding-up of which the rules in subsection 88(1) applied) of the particular corporation has been wound up after 1978, an amount equal to the pre-1972 capital surplus on hand of the subsidiary immediately before the commencement of the winding-up, and 
  (d) where the particular corporation is a new corporation formed as a result of an amalgamation (within the meaning of section 87) after 1978 and before the particular time, the total of all amounts each of which is an amount in respect of a predecessor corporation, equal to the predecessor corporation’s pre-1972 capital surplus on hand immediately before the amalgamation exceeds 
  (e) the total of all amounts each of which is an amount in respect of a capital property (other than depreciable property) of the corporation owned by it on December 31, 1971 and disposed of by it after 1978 and before the particular time equal to the amount, if any, by which its actual cost to the corporation determined without reference to the Income Tax Application Rules, other than subsections 26(15), (17) and (21) to (27) of that Act, exceeds the greater of the fair market value of the property on valuation day (within the meaning assigned by section 24 of that Act) and the corporation’s proceeds of disposition of the property.  
  
  ### Determination of pre-1972 capital surplus on hand
  
  (2.2) For the purposes of determining the pre-1972 capital surplus on hand of any corporation at a particular time after 1978, the following rules apply: 
  (a) an amount referred to in paragraphs 88(2.1)(b) and 88(2.1)(e) in respect of the corporation shall be deemed to be nil, where the property disposed of is 
  (i) a share of the capital stock of a subsidiary, within the meaning of subsection 88(1), that was disposed of on the winding-up of the subsidiary where that winding-up commenced after 1978, 
  (ii) a share of the capital stock of another Canadian corporation that was controlled, within the meaning assigned by subsection 186(2), by the corporation immediately before the disposition and that was disposed of by the corporation after 1978 to a person with whom the corporation was not dealing at arm’s length immediately after the disposition, other than by a disposition referred to in paragraph 88(2.2)(b), or 
  (iii) subject to subsection 26(21) of the Income Tax Application Rules, a share of the capital stock of a particular corporation that was disposed of by the corporation after 1978, on an amalgamation, within the meaning assigned by subsection 87(1), where the corporation controlled, within the meaning assigned by subsection 186(2), both the particular corporation immediately before the amalgamation and the new corporation immediately after the amalgamation; and  
  (b) where another corporation that is a Canadian corporation owned a capital property on December 31, 1971 and subsequently disposed of it to the corporation in a transaction to which section 85 applied, the other corporation shall be deemed not to have disposed of that property in the transaction and the corporation shall be deemed to have owned that property on December 31, 1971 and to have acquired it at an actual cost equal to the actual cost of that property to the other corporation. 
  
  ### Actual cost of certain depreciable property
  
  (2.3) For the purpose of subsection 88(2.1), the actual cost of the depreciable property that was acquired by a corporation before the commencement of its 1949 taxation year that is capital property referred to in that subsection shall be deemed to be the capital cost of that property to the corporation (within the meaning assigned by section 144 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1971 taxation year).  
  
  ### Liquidation and dissolution of foreign affiliate
  
  (3) Notwithstanding subsection 69(5), if at any time a taxpayer receives a property (referred to in this subsection as the “distributed property”) from a foreign affiliate (referred to in this subsection as the “disposing affiliate”) of the taxpayer on a liquidation and dissolution of the disposing affiliate and the distributed property is received in respect of shares of the capital stock of the disposing affiliate that are disposed of on the liquidation and dissolution, 
  (a) subject to subsections (3.3) and (3.5), the distributed property is deemed to have been disposed of at that time by the disposing affiliate to the taxpayer for proceeds of disposition equal to the relevant cost base (within the meaning assigned by subsection 95(4)) to the disposing affiliate of the distributed property in respect of the taxpayer, immediately before that time, if 
  (i) the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate, or 
  (ii) the distributed property is a share of the capital stock of another foreign affiliate of the taxpayer that was, immediately before that time, excluded property (within the meaning assigned by subsection 95(1)) of the disposing affiliate; 
  (b) if paragraph (a) does not apply to the distributed property, the distributed property is deemed to have been disposed of at that time by the disposing affiliate to the taxpayer for proceeds of disposition equal to the distributed property’s fair market value at that time; 
  (c) the distributed property is deemed to have been acquired, at that time, by the taxpayer at a cost equal to the amount determined under paragraph (a) or (b) to be the disposing affiliate’s proceeds of disposition of the distributed property; 
  (d) each share (referred to in paragraph (e) and subsections (3.3) and (3.4) as a “disposed share”) of a class of the capital stock of the disposing affiliate that is disposed of by the taxpayer on the liquidation and dissolution is deemed to be disposed of for proceeds of disposition equal to the amount determined by the formula is the total of all amounts each of which is the net distribution amount in respect of a distribution of distributed property made, at any time, in respect of the class, and is the total number of issued and outstanding shares of the class that are owned by the taxpayer during the liquidation and dissolution; and 
  (e) if the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate, any loss of the taxpayer in respect of the disposition of a disposed share is deemed to be nil. 
  
  ### Qualifying liquidation and dissolution
  
  (3.1) For the purposes of subsections (3), (3.3) and (3.5), a 
  *qualifying liquidation and dissolution* of a foreign affiliate (referred to in this subsection as the “disposing affiliate”) of a taxpayer means a liquidation and dissolution of the disposing affiliate in respect of which the taxpayer elects in accordance with prescribed rules and  
  (a) the taxpayer owns not less than 90% of the issued and outstanding shares of each class of the capital stock of the disposing affiliate throughout the liquidation and dissolution; or 
  (b) both 
  (i) the percentage determined by the following formula is greater than or equal to 90%: is the amount, if any, by which 
  (A) the total of all amounts each of which is the fair market value, at the time at which it is distributed, of a property that is distributed by the disposing affiliate to the taxpayer in the course of the liquidation and dissolution in respect of shares of the capital stock of the disposing affiliate exceeds 
  (B) the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by the taxpayer in consideration for a property referred to in clause (A), and is the amount, if any, by which 
  (A) the total of all amounts each of which is the fair market value, at the time at which it is distributed, of a property that is distributed by the disposing affiliate to a shareholder of the disposing affiliate in the course of the liquidation and dissolution in respect of shares of the capital stock of the disposing affiliate exceeds 
  (B) the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by a shareholder of the disposing affiliate in consideration for a property referred to in clause (A), and 
  (ii) at the time of each distribution of property by the disposing affiliate in the course of the liquidation and dissolution in respect of shares of the capital stock of the disposing affiliate, the taxpayer holds shares of that capital stock that would, if an annual general meeting of the shareholders of the disposing affiliate were held at that time, entitle it to 90% or more of the votes that could be cast under all circumstances at the meeting. 
  
  ### Net distribution amount
  
  (3.2) For the purposes of the description of A in paragraph (3)(d), 
  *net distribution amount* in respect of a distribution of distributed property means the amount determined by the formula  is the cost to the taxpayer of the distributed property as determined under paragraph (3)(c), and is the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by the taxpayer in consideration for the distribution of the distributed property. 
  
  ### Suppression election
  
  (3.3) For the purposes of paragraph (3)(a), if the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate and the taxpayer would, in the absence of this subsection and, for greater certainty, after taking into account any election under subsection 93(1), realize a capital gain (the amount of which is referred to in subsection (3.4) as the “capital gain amount”) from the disposition of a disposed share, the taxpayer may elect, in accordance with prescribed rules, that distributed property that was, immediately before the disposition, capital property of the disposing affiliate be deemed to have been disposed of by the disposing affiliate to the taxpayer for proceeds of disposition equal to the amount claimed (referred to in subsection (3.4) as the “claimed amount”) by the taxpayer in the election. 
  
  ### Conditions for subsection (3.3) election
  
  (3.4) An election under subsection (3.3) in respect of distributed property disposed of in the course of the liquidation and dissolution is not valid unless 
  (a) the claimed amount in respect of each distributed property does not exceed the amount that would, in the absence of subsection (3.3), be determined under paragraph (3)(a) in respect of the distributed property; and 
  (b) the amount determined by the following formula does not exceed the total of all amounts each of which is the capital gain amount in respect of a disposed share: is the total of all amounts that would, in the absence of subsection (3.3), be determined under paragraph (3)(a) to be the proceeds of disposition of a distributed property in respect of which an election under subsection (3.3) is made by the taxpayer, and is the total of all amounts each of which is the claimed amount in respect of a distributed property referred to in the description of A. 
  
  ### Taxable Canadian property
  
  (3.5) For the purposes of paragraph (3)(a), the distributed property is deemed to have been disposed of by the disposing affiliate to the taxpayer for proceeds of disposition equal to the adjusted cost base of the distributed property to the disposing affiliate immediately before the time of its disposition, if 
  (a) the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate; 
  (b) the distributed property is, at the time of its disposition, taxable Canadian property (other than treaty-protected property) of the disposing affiliate that is a share of the capital stock of a corporation resident in Canada; and 
  (c) the taxpayer and the disposing affiliate have jointly elected in accordance with prescribed rules. 
  
  ### Amalgamation deemed not to be acquisition of control
  
  (4) For the purposes of paragraphs (1)(c), (c.2), (d) and (d.2) and, for greater certainty, paragraphs (c.3) to (c.8) and (d.3), 
  (a) subject to paragraph 88(4)(c), control of any corporation shall be deemed not to have been acquired because of an amalgamation; 
  (b) any corporation formed as a result of an amalgamation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation; and 
  (c) in the case of an amalgamation described in subsection 87(9), control of a predecessor corporation that was not controlled by the parent before the amalgamation shall be deemed to have been acquired by the parent immediately before the amalgamation. 
  
  ### Application
  
  88.1 (1) Subsection (2) applies to a trust’s distribution of property to a taxpayer if 
  (a) the distribution is a SIFT trust wind-up event; 
  (b) the trust is 
  (i) a SIFT wind-up entity whose only beneficiary, at all times at which the trust makes a distribution that is a SIFT trust wind-up event, is a taxable Canadian corporation, or 
  (ii) a trust whose only beneficiary, at all times at which the trust makes a distribution that is a SIFT trust wind-up event, is another trust described by subparagraph (i); 
  (c) where the trust is a SIFT wind-up entity, the distribution occurs no more than 60 days after the earlier of 
  (i) the first SIFT trust wind-up event of the trust, and 
  (ii) the first distribution to the trust that is a SIFT trust wind-up event of another trust; and 
  (d) if the property is shares of the capital stock of a taxable Canadian corporation, 
  (i) the property was not acquired by the trust on a distribution to which subsection 107(3.1) applies, and 
  (ii) the trust elects in writing, filed with the Minister on or before the trust’s filing-due date for its taxation year that includes the time of the distribution, that this section apply to the distribution. 
  
  ### SIFT trust wind-up event
  
  (2) If this subsection applies to a trust’s distribution of property to a taxpayer, subsections 88(1) to (1.7), and section 87 and paragraphs 256(7)(a) to (e) as they apply for the purposes of those subsections, apply, with any modifications that the circumstances require, as if 
  (a) the trust were a taxable Canadian corporation (in this subsection referred to as the “subsidiary”) that is not a private corporation; 
  (b) where the taxpayer is a SIFT wind-up entity, the taxpayer were a taxable Canadian corporation that is not a private corporation; 
  (c) the distribution were a winding-up of the subsidiary; 
  (d) the taxpayer’s interest as a beneficiary under the trust were shares of a single class of shares of the capital stock of the subsidiary owned by the taxpayer; 
  (e) paragraph 88(1)(b) deemed the taxpayer’s proceeds of disposition of the shares described in paragraph (d) and owned by the taxpayer immediately before the distribution to be equal to the adjusted cost base to the taxpayer of the taxpayer’s interest as a beneficiary under the trust immediately before the distribution; 
  (f) each trust, a majority-interest beneficiary (in this subsection, within the meaning assigned by section 251.1) of which is another trust that is by operation of this subsection treated as if it were a corporation, were a corporation; and 
  (g) except for the purposes of subsections 88(1.1) and (1.2), the taxpayer last acquired control of the subsidiary and of each corporation (including a trust that is by operation of this subsection treated as if it were a corporation) controlled by the subsidiary at the time, if any, at which the taxpayer last became a majority-interest beneficiary of the trust. 
  
  ### Definitions
  
  89 (1) In this Subdivision,  
  *adjusted taxable income* of a corporation for a taxation year is the amount determined by the formula  is 
  (a) unless paragraph (b) applies, the corporation’s taxable income for the taxation year, and 
  (b) if the corporation is a deposit insurance corporation in the taxation year, nil, is the amount determined by multiplying the amount, if any, deducted by the corporation under subsection 125(1) for the taxation year by the quotient obtained by dividing 100 by the rate of the deduction provided under that subsection for the taxation year, and is 
  (a) if the corporation is a Canadian-controlled private corporation in the taxation year, the lesser of the corporation’s aggregate investment income for the taxation year and the corporation’s taxable income for the taxation year, and 
  (b) in any other case, nil; ( revenu imposable rajusté)   
  *Canadian corporation* at any time means a corporation that is resident in Canada at that time and was  
  (a) incorporated in Canada, or 
  (b) resident in Canada throughout the period that began on June 18, 1971 and that ends at that time, and for greater certainty, a corporation formed at any particular time by the amalgamation or merger of, or by a plan of arrangement or other corporate reorganization in respect of, 2 or more corporations (otherwise than as a result of the acquisition of property of one corporation by another corporation, pursuant to the purchase of the property by the other corporation or as a result of the distribution of the property to the other corporation on the winding-up of the corporation) is a Canadian corporation because of paragraph (a) only if 
  (c) that reorganization took place under the laws of Canada or a province, and 
  (d) each of those corporations was, immediately before the particular time, a Canadian corporation; ( société canadienne)   
  *capital dividend account* of a corporation at any particular time means the amount, if any, by which the total of  
  (a) the amount, if any, by which the total of 
  (i) the total of all amounts each of which is the amount if any, by which 
  (A) the amount of the corporation’s capital gain — computed without reference to subclause 52(3)(a)(ii)(A)(II) and subparagraph 53(1)(b)(ii) — from the disposition (other than a disposition under paragraph 40(3.1)(a) or subsection 40(12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year that began after the corporation last became a private corporation and that ended after 1971 and ending immediately before the particular time (in this definition referred to as the 
  *period*)  exceeds the total of 
  (B) the portion of the capital gain referred to in clause (A) that is the corporation’s taxable capital gain, 
  (B.1) the corporation’s taxable capital gain from a disposition in the period under subsection 40(12), and 
  (C) the portion of the amount, if any, by which the amount determined under clause (A) exceeds the amount determined under clause (B) from the disposition by it of a property that can reasonably be regarded as having accrued while the property, or a property for which it was substituted, 
  (I) except in the case of a disposition of a designated property, was a property of a corporation (other than a private corporation, an investment corporation, a mortgage investment corporation or a mutual fund corporation), 
  (II) where, after November 26, 1987, the property became a property of a Canadian-controlled private corporation (otherwise than by reason of a change in the residence of one or more shareholders of the corporation), was a property of a corporation controlled directly or indirectly in any manner whatever by one or more non-resident persons, or 
  (III) where, after November 26, 1987, the property became a property of a private corporation that was not exempt from tax under this Part on its taxable income, was a property of a corporation exempt from tax under this Part on its taxable income, and 
  (i.1) all amounts each of which is an amount in respect of a distribution made, in the period and after September 15, 2016, by a trust to the corporation in respect of capital gains of the trust equal to the lesser of 
  (A) the amount, if any, by which 
  (I) the amount of the distribution exceeds 
  (II) the amount designated under subsection 104(21) by the trust in respect of the net taxable capital gains of the trust attributable to those capital gains, and 
  (B) the amount determined by the formula is the fraction or whole number determined when 1 is subtracted from the reciprocal of the fraction under paragraph 38(a) applicable to the trust for the year, and is the amount referred to in subclause (A)(II), exceeds 
  (ii) the total of all amounts each of which is the amount, if any, by which 
  (A) the amount of the corporation’s capital loss — computed without reference to subclause 52(3)(a)(ii)(A)(II) and subparagraph 53(1)(b)(ii) — from the disposition (other than a disposition under subsection 40(3.12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period exceeds the total of 
  (B) the part of the capital loss referred to in clause (A) that is the corporation’s allowable capital loss, and 
  (C) the portion of the amount, if any, by which the amount determined under clause (A) exceeds the amount determined under clause (B) from the disposition by it of a property that can reasonably be regarded as having accrued while the property, or a property for which it was substituted, 
  (I) except in the case of a disposition of a designated property, was a property of a corporation (other than a private corporation, an investment corporation, a mortgage investment corporation or a mutual fund corporation), 
  (II) where, after November 26, 1987, the property became a property of a Canadian-controlled private corporation (otherwise than by reason of a change in the residence of one or more shareholders of the corporation), was a property of a corporation controlled directly or indirectly in any manner whatever by one or more non-resident persons, or 
  (III) where, after November 26, 1987, the property became a property of a private corporation that was not exempt from tax under this Part on its taxable income, was a property of a corporation exempt from tax under this Part on its taxable income, 
  (b) all amounts each of which is an amount in respect of a dividend received by the corporation on a share of the capital stock of another corporation in the period, which amount was, by virtue of subsection 83(2), not included in computing the income of the corporation, 
  (c) the total of all amounts each of which is an amount required to have been included under this paragraph as it read in its application to a taxation year that ended before February 28, 2000, 
  (c.1) the amount, if any, by which 
  (i) 1/2 of the total of all amounts each of which is an amount required by paragraph 14(1)(b) (as it read before 2017) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, exceeds 
  (ii) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula is 1/2 of the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and 
  (iii) in any other case, nil, 
  (c.2) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount required by paragraph 14(1)(b) (as it read before 2017) or subparagraph 13(38)(d)(iii) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ends after October 17, 2000, exceeds 
  (ii) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ends after October 17, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula is the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and 
  (iii) in any other case, nil, 
  (d) the amount, if any, by which the total of 
  (i) all amounts each of which is the proceeds of a life insurance policy of which the corporation was a beneficiary on or before June 28, 1982 received by the corporation in the period and after 1971 in consequence of the death of any person, and 
  (ii) all amounts each of which is the proceeds of a life insurance policy (other than an LIA policy) of which the corporation was not a beneficiary on or before June 28, 1982 received by the corporation in the period and after May 23, 1985 in consequence of the death of any person exceeds the total of all amounts each of which is 
  (iii) the 
  *adjusted cost basis* (in this paragraph as defined in subsection 148(9)), immediately before the death, of  
  (A) if the death occurs before March 22, 2016, a policy referred to in subparagraph (i) or (ii) to the corporation, and 
  (B) if the death occurs after March 21, 2016, a policyholder’s interest in a policy referred to in subparagraph (i) or (ii), 
  (iv) if the policy is a 10/8 policy immediately before the death and the death occurs after 2013, the amount outstanding, immediately before the death, of the borrowing that is described in subparagraph (a)(i) of the definition 
  *10/8 policy* in subsection 248(1) in respect of the policy,  
  (v) if the death occurs after March 21, 2016, an interest in the policy was disposed of by a policyholder (other than a taxable Canadian corporation) after 1999 and before March 22, 2016 and subsection 148(7) applied to the disposition, the total of 
  (A) the amount, if any, by which the fair market value of consideration given in respect of the disposition exceeds the total of 
  (I) the greater of the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition and the adjusted cost basis to the policyholder of the interest immediately before the disposition, and 
  (II) the amount by which the paid-up capital of any class of the capital stock of a corporation resulting from the disposition is reduced at the beginning of March 22, 2016 because of the application of paragraphs 148(7)(c) and (f) in respect of the disposition, and 
  (B) if the paid-up capital in respect of a class of shares of the capital stock of a corporation was increased before March 22, 2016 as described in subparagraph 148(7)(f)(iii) in respect of the disposition, the amount, if any, by which the total reduction in the paid-up capital in respect of that class — not exceeding the amount of that increase — after that increase and before March 22, 2016 (except to the extent that the amount of the reduction was deemed by subsection 84(4) or (4.1) to be a dividend received by a taxpayer) exceeds the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition, or 
  (vi) if the death occurs after March 21, 2016, an interest in the policy was disposed of by a policyholder (other than a taxable Canadian corporation) after 1999 and before March 22, 2016 and subsection 148(7) applied to the disposition, the amount, if any, determined by the formula is the amount, if any, by which the lesser of the adjusted cost basis to the policyholder of the interest immediately before the disposition and the fair market value of consideration given in respect of the disposition exceeds the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition, and is the absolute value of the negative amount, if any, that would be, in the absence of section 257, the adjusted cost basis, immediately before the death, of the interest in the policy, 
  (e) the amount of the corporation’s life insurance capital dividend account immediately before May 24, 1985, and 
  (f) all amounts each of which is an amount in respect of a distribution made, in the period and before September 16, 2016, by a trust to the corporation in respect of capital gains of the trust equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the amount of the distribution exceeds 
  (B) the amount designated under subsection 104(21) by the trust (other than a designation to which subsection 104(21.4), as it read in its application to the corporation’s last taxation year that began before November 2011, applied) in respect of the net taxable capital gains of the trust attributable to those capital gains, and 
  (ii) the amount determined by the formula is the fraction or whole number determined when 1 is subtracted from the reciprocal of the fraction under paragraph 38(a) applicable to the trust for the year, and is the amount referred to in clause (i) (B), and 
  (g) all amounts each of which is an amount in respect of a distribution made by a trust to the corporation in the period in respect of a dividend (other than a taxable dividend) paid on a share of the capital stock of another corporation resident in Canada to the trust during a taxation year of the trust throughout which the trust was resident in Canada equal to the lesser of 
  (i) the amount of the distribution, and 
  (ii) the amount designated under subsection 104(20) by the trust in respect of the corporation in respect of that dividend, exceeds the total of all capital dividends that became payable by the corporation after the commencement of the period and before the particular time; ( compte de dividendes en capital)   
  *designated property* means  
  (a) any property of a private corporation that last became a private corporation before November 13, 1981 and that was acquired by it 
  (i) before November 13, 1981, or 
  (ii) after November 12, 1981 pursuant to an agreement in writing entered into on or before that date, 
  (b) any property of a private corporation that was acquired by it from another private corporation with which the private corporation was not dealing at arm’s length (otherwise than by virtue of a right referred to in paragraph 251(5)(b)) at the time the property was acquired, where the property was a designated property of the other private corporation, 
  (c) a share acquired by a private corporation in a transaction to which section 51, subsection 85(1) or section 85.1, 86 or 87 applied in exchange for another share that was a designated property of the corporation, or 
  (d) a replacement property (within the meaning assigned by section 44) for a designated property disposed of by virtue of an event referred to in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in section 54; (bien désigné)   
  *eligible dividend* means  
  (a) an amount that is equal to the portion of a taxable dividend that is received by a person resident in Canada, paid by a corporation resident in Canada and designated under subsection (14) to be an eligible dividend, and 
  (b) in respect of a person resident in Canada, an amount that is deemed by subsection 96(1.11) or 104(16) to be a taxable dividend that is received by the person; ( dividende déterminé)   
  *excessive eligible dividend designation*, made by a corporation in respect of an eligible dividend paid by the corporation at any time in a taxation year, means  
  (a) unless paragraph (c) applies to the dividend, if the corporation is in the taxation year a Canadian-controlled private corporation or a deposit insurance corporation, the amount, if any, determined by the formula is the total of all amounts each of which is the amount of an eligible dividend paid by the corporation in the taxation year, is the greater of nil and the corporation’s general rate income pool at the end of the taxation year, and is the amount of the eligible dividend, 
  (b) unless paragraph (c) applies to the dividend, if the corporation is not a corporation described in paragraph (a), the amount, if any, determined by the formula is the lesser of 
  (i) the total of all amounts each of which is an eligible dividend paid by the corporation at that time, and 
  (ii) the corporation’s low rate income pool at that time, is the amount of the eligible dividend, and is the amount determined under subparagraph (i) of the description of A, and 
  (c) an amount equal to the amount of the eligible dividend, if it is reasonable to consider that the eligible dividend was paid in a transaction, or as part of a series of transactions, one of the main purposes of which was to artificially maintain or increase the corporation’s general rate income pool, or to artificially maintain or decrease the corporation’s low rate income pool; ( désignation excessive de dividende déterminé)   
  *general rate factor* of a corporation for a taxation year is the total of  
  (a) that proportion of 0.68 that the number of days in the taxation year that are before 2010 is of the number of days in the taxation year, 
  (b) that proportion of 0.69 that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year, 
  (c) that proportion of 0.70 that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and 
  (d) that proportion of 0.72 that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year; ( facteur du taux géneral)   
  *general rate income pool* at the end of a particular taxation year, of a taxable Canadian corporation that is a Canadian-controlled private corporation or a deposit insurance corporation in the particular taxation year, is the positive or negative amount determined by the formula  is the positive or negative amount that would, before taking into consideration the specified future tax consequences for the particular taxation year, be determined by the formula is the corporation’s general rate income pool at the end of its preceding taxation year, is the amount, if any, that is the product of the corporation’s general rate factor for the particular taxation year multiplied by its adjusted taxable income for the particular taxation year, is the total of all amounts each of which is 
  (a) an eligible dividend received by the corporation in the particular taxation year, or 
  (b) an amount deductible under section 113 in computing the taxable income of the corporation for the particular taxation year, is the total of all amounts determined under subsections (4) to (6) in respect of the corporation for the particular taxation year, and is 
  (a) unless paragraph (b) applies, the amount, if any, by which 
  (i) the total of all amounts each of which is the amount of an eligible dividend paid by the corporation in its preceding taxation year exceeds 
  (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, or 
  (b) if subsection (4) applies to the corporation in the particular taxation year, nil, and is the amount determined by the formula is the corporation’s general rate factor for the particular taxation year, is the total of the corporation’s full rate taxable incomes (as would be defined in the definition 
  *full rate taxable income* in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) to (iii)) for the corporation’s preceding three taxation years, determined without taking into consideration the specified future tax consequences, for those preceding taxation years, that arise in respect of the particular taxation year, and  is the total of the corporation’s full rate taxable incomes (as would be defined in the definition 
  *full rate taxable income* in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) to (iii)) for those preceding taxation years; (compte de revenu à taux général)   
  *low rate income pool*, at any particular time in a particular taxation year, of a corporation (in this definition referred to as the “non-CCPC”) that is resident in Canada and is in the particular taxation year neither a Canadian-controlled private corporation nor a deposit insurance corporation, is the amount determined by the formula  is the non-CCPC’s low rate income pool at the end of its preceding taxation year, is the total of all amounts each of which is an amount deductible under section 112 in computing the non-CCPC’s taxable income for the year in respect of a taxable dividend (other than an eligible dividend) that became payable, in the particular taxation year but before the particular time, to the non-CCPC by a corporation resident in Canada, is the total of all amounts determined under subsections (8) to (10) in respect of the non-CCPC for the particular taxation year, is 
  (a) if the non-CCPC would, but for paragraph (d) of the definition 
  *Canadian-controlled private corporation* in subsection 125(7), be a Canadian-controlled private corporation in its preceding taxation year, 80% of its aggregate investment income for its preceding taxation year, and  
  (b) in any other case, nil, is 
  (a) if the non-CCPC was not a Canadian-controlled private corporation in its preceding taxation year, 80% of the amount determined by multiplying the amount, if any, deducted by the corporation under subsection 125(1) for that preceding taxation year by the quotient obtained by dividing 100 by the rate of the deduction provided under that subsection for that preceding taxation year, and 
  (b) in any other case, nil, is 
  (a) if the non-CCPC was an investment corporation in its preceding taxation year, four times the amount, if any, deducted by it under subsection 130(1) for its preceding taxation year, and 
  (b) in any other case, nil, is the total of all amounts each of which is a taxable dividend (other than an eligible dividend, a capital gains dividend within the meaning assigned by subsection 130.1(4) or 131(1) or a taxable dividend deductible by the non-CCPC under subsection 130.1(1) in computing its income for the particular taxation year or for its preceding taxation year) that became payable, in the particular taxation year but before the particular time, by the non-CCPC, and is the total of all amounts each of which is an excessive eligible dividend designation made by the non-CCPC in the particular taxation year but before the particular time; ( compte de revenu à taux réduit)   
  *paid-up capital* at any particular time means,  
  (a) in respect of a share of any class of the capital stock of a corporation, an amount equal to the paid-up capital at that time, in respect of the class of shares of the capital stock of the corporation to which that share belongs, divided by the number of issued shares of that class outstanding at that time, 
  (b) in respect of a class of shares of the capital stock of a corporation, 
  (i) where the particular time is before May 7, 1974, an amount equal to the paid-up capital in respect of that class of shares at the particular time, computed without reference to the provisions of this Act, 
  (ii) where the particular time is after May 6, 1974, and before April 1, 1977, an amount equal to the paid-up capital in respect of that class of shares at the particular time, computed in accordance with the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on March 31, 1977, and  
  (iii) if the particular time is after March 31, 1977, an amount equal to the paid-up capital in respect of that class of shares at the particular time, computed without reference to the provisions of this Act except subsections 51(3) and 66.3(2) and (4), sections 84.1 and 84.2, subsections 85(2.1), 85.1(2.1) and (8), 86(2.1), 87(3) and (9), paragraph 128.1(1)(c.3), subsections 128.1(2) and (3), section 135.2, subsections 138(11.7), 139.1(6) and (7), 148(7), 192(4.1) and 194(4.1) and sections 212.1 and 212.3, except that, where the corporation is a cooperative corporation (within the meaning assigned by subsection 136(2)) or a credit union and the statute by or under which it was incorporated does not provide for paid-up capital in respect of a class of shares, the paid-up capital in respect of that class of shares at the particular time, computed without reference to the provisions of this Act, shall be deemed to be the amount, if any, by which 
  (iv) the total of the amounts received by the corporation in respect of shares of that class issued and outstanding at that time exceeds 
  (v) the total of all amounts each of which is an amount or part thereof described in subparagraph (iv) repaid by the corporation to persons who held any of the issued shares of that class before that time, and 
  (c) in respect of all the shares of the capital stock of a corporation, an amount equal to the total of all amounts each of which is an amount equal to the paid-up capital in respect of any class of shares of the capital stock of the corporation at the particular time; ( capital versé)   
  *private corporation* at any particular time means a corporation that, at the particular time, is resident in Canada, is not a public corporation and is not controlled by one or more public corporations (other than prescribed venture capital corporations) or prescribed federal Crown corporations or by any combination thereof and, for greater certainty, for the purposes of determining at any particular time when a corporation last became a private corporation,  
  (a) a corporation that was a private corporation at the commencement of its 1972 taxation year and thereafter without interruption until the particular time shall be deemed to have last become a private corporation at the end of its 1971 taxation year, and 
  (b) a corporation incorporated after 1971 that was a private corporation at the time of its incorporation and thereafter without interruption until the particular time shall be deemed to have last become a private corporation immediately before the time of its incorporation; ( société privée)   
  *public corporation* at any particular time means  
  (a) a corporation that is resident in Canada at the particular time if at that time a class of shares of the capital stock of the corporation is listed on a designated stock exchange in Canada, 
  (b) a corporation (other than a prescribed labour-sponsored venture capital corporation) that is resident in Canada at the particular time if at any time after June 18, 1971 and 
  (i) before the particular time, it elected in prescribed manner to be a public corporation, and at the time of the election it complied with prescribed conditions relating to the number of its shareholders, the dispersal of ownership of its shares and the public trading of its shares, or 
  (ii) before the day that is 30 days before the day that includes the particular time it was, by notice in writing to the corporation, designated by the Minister to be a public corporation and at the time it was so designated it complied with the conditions referred to in subparagraph (i), unless after the election or designation, as the case may be, was made and before the particular time, it ceased to be a public corporation because of an election or designation under paragraph (c), or 
  (c) a corporation (other than a prescribed labour-sponsored venture capital corporation) that is resident in Canada at the particular time if, at any time after June 18, 1971 and before the particular time it was a public corporation, unless after the time it last became a public corporation and 
  (i) before the particular time, it elected in prescribed manner not to be a public corporation, and at the time it so elected it complied with prescribed conditions relating to the number of its shareholders, the dispersal of ownership of its shares and the public trading of its shares, or 
  (ii) before the day that is 30 days before the day that includes the particular time, it was, by notice in writing to the corporation, designated by the Minister not to be a public corporation and at the time it was so designated it complied with the conditions referred to in subparagraph (i), and where a corporation has, on or before its filing-due date for its first taxation year, become a public corporation, it is, if it so elects in its return of income for the year, deemed to have been a public corporation from the beginning of the year until the time when it so became a public corporation; ( société publique)   
  *taxable Canadian corporation* means a corporation that, at the time the expression is relevant,  
  (a) was a Canadian corporation, and 
  (b) was not, by reason of a statutory provision, exempt from tax under this Part; ( société canadienne imposable)   
  *taxable dividend* means a dividend other than  
  (a) a dividend in respect of which the corporation paying the dividend has elected in accordance with subsection 83(1) as it read prior to 1979 or in accordance with subsection 83(2), and 
  (b) a qualifying dividend paid by a public corporation to shareholders of a prescribed class of tax-deferred preferred shares of the corporation within the meaning of subsection 83(1). ( dividende imposable)  
  
  ### Application of s. 138(12)
  
  (1.01) The definitions in subsection 138(12) apply to this section. 
  
  ### Capital dividend account where control acquired
  
  (1.1) Where at any particular time after March 31, 1977 a corporation that was, at a previous time, a private corporation controlled directly or indirectly in any manner whatever by one or more non-resident persons becomes a Canadian-controlled private corporation (otherwise than by reason of a change in the residence of one or more of its shareholders), in computing the corporation’s capital dividend account at and after the particular time there shall be deducted the amount of the corporation’s capital dividend account immediately before the particular time. 
  
  ### Capital dividend account of tax-exempt corporation
  
  (1.2) Where at any particular time after November 26, 1987 a corporation ceases to be exempt from tax under this Part on its taxable income, in computing the corporation’s capital dividend account at and after the particular time there shall be deducted the amount of the corporation’s capital dividend account (computed without reference to this subsection) immediately after the particular time. 
  
  ### Where corporation is beneficiary
  
  (2) For the purposes of this section, 
  (a) where a corporation was a beneficiary under a life insurance policy on June 28, 1982, it shall be deemed not to have been a beneficiary under such a policy on or before June 28, 1982 where at any time after December 1, 1982 a prescribed premium has been paid under the policy or there has been a prescribed increase in any benefit on death under the policy; and 
  (b) where a corporation becomes a beneficiary under a life insurance policy by virtue of an amalgamation or a winding-up to which subsection 87(1) or 88(1) applies, it shall be deemed to have been a beneficiary under the policy throughout the period during which its predecessor or subsidiary, as the case may be, was a beneficiary under the policy. 
  
  ### Simultaneous dividends
  
  (3) Where a dividend becomes payable at the same time on more than one class of shares of the capital stock of a corporation, for the purposes of sections 83, 84 and 88, the dividend on any such class of shares shall be deemed to become payable at a different time than the dividend on the other class or classes of shares and to become payable in the order designated 
  (a) by the corporation on or before the day on or before which its return of income for its taxation year in which such dividends become payable is required to be filed; or 
  (b) in any other case, by the Minister. 
  
  ### GRIP addition — becoming CCPC
  
  (4) If, in a particular taxation year, a corporation is a Canadian-controlled private corporation or a deposit insurance corporation but was, in its preceding taxation year, a corporation resident in Canada other than a Canadian-controlled private corporation or a deposit insurance corporation, there may be included in computing the corporation’s general rate income pool at the end of the particular taxation year, the amount determined by the formula is the total of all amounts each of which is the cost amount to the corporation of a property immediately before the end of its preceding taxation year; is the amount of any money of the corporation on hand immediately before the end of its preceding taxation year; is the amount, if any, by which 
  (a) the total of all amounts that, if the corporation had had unlimited income for its preceding taxation year from each business carried on, and from each property held, by it in that preceding taxation year and had realized an unlimited amount of capital gains for that preceding taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that preceding taxation year exceeds 
  (b) the total of all amounts deducted under subsection 111(1) in computing the corporation’s taxable income for that preceding taxation year; is the total of all amounts each of which is the amount of any debt owing by the corporation, or of any other obligation of the corporation to pay any amount, that was outstanding immediately before the end of its preceding taxation year; is the paid up capital, immediately before the end of its preceding taxation year, of all of the issued and outstanding shares of the capital stock of the corporation; is the total of all amounts each of which is a reserve deducted in computing the corporation’s income for its preceding taxation year; is the corporation’s capital dividend account, if any, immediately before the end of its preceding taxation year; and is the corporation’s low rate income pool immediately before the end of its preceding taxation year. 
  
  ### GRIP addition — post-amalgama­tion
  
  (5) If a Canadian-controlled private corporation or a deposit insurance corporation (in this subsection referred to as the “new corporation”) is formed as a result of an amalgamation (within the meaning assigned by subsection 87(1)), there shall be included in computing the new corporation’s general rate income pool at the end of its first taxation year the total of all amounts each of which is 
  (a) in respect of a predecessor corporation that was, in its taxation year that ended immediately before the amalgamation (in this paragraph referred to as its “last taxation year”), a Canadian-controlled private corporation or a deposit insurance corporation, the positive or negative amount determined in respect of the predecessor corporation by the formula is the predecessor corporation’s general rate income pool at the end of its last taxation year, and is the amount, if any, by which 
  (i) the total of all amounts each of which is an eligible dividend paid by the predecessor corporation in its last taxation year exceeds 
  (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the predecessor corporation in its last taxation year; or 
  (b) in respect of a predecessor corporation (in this paragraph referred to as the “non-CCPC predecessor”) that was, in its taxation year that ended immediately before the amalgamation (in this paragraph referred to as its “last taxation year”), not a Canadian-controlled private corporation or a deposit insurance corporation, the amount determined by the formula is the total of all amounts each of which is the cost amount to the non-CCPC predecessor of a property immediately before the end of its last taxation year, is the amount of any money of the non-CCPC predecessor on hand immediately before the end of its last taxation year, is the amount, if any, by which 
  (i) the total of all amounts that, if the non-CCPC predecessor had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds 
  (ii) the total of all amounts deducted under subsection 111(1) in computing the non-CCPC predecessor’s taxable income for its last taxation year, is the total of all amounts each of which is the amount of any debt owing by the non-CCPC predecessor, or of any other obligation of the non-CCPC predecessor to pay any amount, that was outstanding immediately before the end of its last taxation year, is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the non-CCPC predecessor, is the total of all amounts each of which is a reserve deducted in computing the non-CCPC predecessor’s income for its last taxation year, is the non-CCPC predecessor’s capital dividend account, if any, immediately before the end of its last taxation year, and is the non-CCPC predecessor’s low rate income pool immediately before the end of its last taxation year. 
  
  ### GRIP addition — post-winding-up
  
  (6) If subsection 88(1) applies to the winding-up of a subsidiary into a parent (within the meanings assigned by that subsection) that is a Canadian-controlled private corporation or a deposit insurance corporation, there shall be included in computing the parent’s general rate income pool at the end of its taxation year that immediately follows the taxation year during which it receives the assets of the subsidiary on the winding-up 
  (a) if the subsidiary was, in its taxation year during which its assets were distributed to the parent on the winding-up (in this paragraph referred to as its “last taxation year”), a Canadian-controlled private corporation or a deposit insurance corporation, the positive or negative amount determined by the formula is the subsidiary’s general rate income pool at the end of its last taxation year, and is the amount, if any, by which 
  (i) the total of all amounts each of which is an eligible dividend paid by the subsidiary in its last taxation year exceeds 
  (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the subsidiary in its last taxation year; and 
  (b) in any other case, the amount determined by the formula is the total of all amounts each of which is the cost amount to the subsidiary of a property immediately before the end of its taxation year during which its assets were distributed to the parent on the winding-up (in this paragraph referred to as its “last taxation year”), is the amount of any money of the subsidiary on hand immediately before the end of its last taxation year, is the amount, if any, by which 
  (i) the total of all amounts that, if the subsidiary had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds 
  (ii) the total of all amounts deducted under subsection 111(1) in computing the subsidiary’s taxable income for its last taxation year, is the total of all amounts each of which is the amount of any debt owing by the subsidiary, or of any other obligation of the subsidiary to pay any amount, that was outstanding immediately before the end of its last taxation year, is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the subsidiary, is the total of all amounts each of which is a reserve deducted in computing the subsidiary’s income for its last taxation year, is the subsidiary’s capital dividend account, if any, immediately before the end of its last taxation year, and is the subsidiary’s low rate income pool immediately before the end of its last taxation year. 
  
  ### GRIP addition for 2006
  
  (7) If a corporation was (or, but for an election under subsection (11), would have been), throughout its first taxation year that includes any part of January 1, 2006, a Canadian-controlled private corporation, its general rate income pool at the end of its immediately preceding taxation year is deemed to be the greater of nil and the amount determined by the formula is the total of 
  (a) 63% of the total of all amounts each of which is the corporation’s full rate taxable income (as defined in subsection 123.4(1)), for a taxation year of the corporation that ended after 2000 and before 2004, determined before taking into consideration the specified future tax consequences for that taxation year, 
  (b) 63% of the total of all amounts each of which is the corporation’s full rate taxable income (as would be defined in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) and (ii)), for a taxation year of the corporation that ended after 2003 and before 2006, determined before taking into consideration the specified future tax consequences for that taxation year, and 
  (c) all amounts each of which was deductible under subsection 112(1) in computing the corporation’s taxable income for a taxation year of the corporation (in this paragraph referred to as the “particular corporation”) that ended after 2000 and before 2006, and is in respect of a dividend received from a corporation (in this paragraph referred to as the “payer corporation”) that was, at the time it paid the dividend, connected (within the meaning assigned by subsection 186(4)) with the particular corporation, to the extent that it is reasonable to consider, having regard to all the circumstances (including but not limited to other shareholders having received dividends from the payer corporation), that the dividend was attributable to an amount that is, or if this subsection applied to the payer corporation would be, described in this paragraph or in paragraph (a) or (b) in respect of the payer corporation; and is the total of all amounts each of which is a taxable dividend paid by the corporation in those taxation years. 
  
  ### LRIP addition — ceasing to be CCPC
  
  (8) If, in a particular taxation year, a corporation is neither a Canadian-controlled private corporation nor a deposit insurance corporation but was, in its preceding taxation year, a Canadian-controlled private corporation or a deposit insurance corporation, there shall be included in computing the corporation’s low rate income pool at any time in the particular taxation year the amount determined by the formula is the total of all amounts each of which is the cost amount to the corporation of a property immediately before the end of its preceding taxation year; is the amount of any money of the corporation on hand immediately before the end of its preceding taxation year; is the amount, if any, by which 
  (a) the total of all amounts that, if the corporation had had unlimited income for its preceding taxation year from each business carried on, and from each property held, by it in that preceding taxation year and had realized an unlimited amount of capital gains for that preceding taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that preceding taxation year exceeds 
  (b) the total of all amounts deducted under subsection 111(1) in computing the corporation’s taxable income for its preceding taxation year; is the total of all amounts each of which is the amount of any debt owing by the corporation, or of any other obligation of the corporation to pay any amount, that was outstanding immediately before the end of its preceding taxation year; is the paid up capital, immediately before the end of its preceding taxation year, of all of the issued and outstanding shares of the capital stock of the corporation; is the total of all amounts each of which is a reserve deducted in computing the corporation’s income for its preceding taxation year; is 
  (a) if the corporation is not a private corporation in the particular taxation year, the corporation’s capital dividend account, if any, immediately before the end of its preceding taxation year, and 
  (b) in any other case, nil; and is the positive or negative amount determined by the formula is the corporation’s general rate income pool at the end of its preceding taxation year, and is the amount, if any, by which 
  (a) the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation year exceeds 
  (b) the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year. 
  
  ### LRIP addition — amalgamation
  
  (9) If a corporation that is resident in Canada and that is neither a Canadian-controlled private corporation nor a deposit insurance corporation (in this subsection referred to as the “new corporation”) is formed as a result of the amalgamation or merger of two or more corporations one or more of which is a taxable Canadian corporation, there shall be included in computing the new corporation’s low rate income pool at any time in its first taxation year the total of all amounts each of which is 
  (a) in respect of a predecessor corporation that was, in its taxation year that ended immediately before the amalgamation, neither a Canadian-controlled private corporation nor a deposit insurance corporation, the predecessor corporation’s low rate income pool at the end of that taxation year; and 
  (b) in respect of a predecessor corporation (in this paragraph referred to as the “CCPC predecessor”) that was, throughout its taxation year that ended immediately before the amalgamation (in this paragraph referred to as its “last taxation year”), a Canadian-controlled private corporation or a deposit insurance corporation, the amount determined by the formula is the total of all amounts each of which is the cost amount to the CCPC predecessor of a property immediately before the end of its last taxation year, is the amount of any money of the CCPC predecessor on hand immediately before the end of its last taxation year, is the amount, if any, by which 
  (i) the total of all amounts that, if the CCPC predecessor had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds 
  (ii) the total of all amounts deducted under subsection 111(1) in computing the CCPC predecessor’s taxable income for its last taxation year, is the total of all amounts each of which is the amount of any debt owing by the CCPC predecessor, or of any other obligation of the CCPC predecessor to pay any amount, that was outstanding immediately before the end of its last taxation year, is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the CCPC predecessor, is the total of all amounts each of which is a reserve deducted in computing the CCPC predecessor’s income for its last taxation year, is 
  (i) if the new corporation is not a private corporation in its first taxation year, the CCPC predecessor’s capital dividend account, if any, immediately before the end of its last taxation year, and 
  (ii) in any other case, nil, and is the positive or negative amount determined by the formula is the CCPC predecessor’s general rate income pool at the end of its last taxation year, and is the amount, if any, by which 
  (i) the total of all amounts each of which is an eligible dividend paid by the CCPC predecessor in its last taxation year exceeds 
  (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the CCPC predecessor in its last taxation year. 
  
  ### LRIP addition — winding-up
  
  (10) If, in a particular taxation year, a corporation (in this subsection referred to as the “parent”) is neither a Canadian-controlled private corporation nor a deposit insurance corporation and in the particular taxation year all or substantially all of the assets of another corporation (in this subsection referred to as the “subsidiary”) were distributed to the parent on a dissolution or winding-up of the subsidiary, there shall be included in computing the parent’s low rate income pool at any time in the particular taxation year that is at or after the end of the subsidiary’s taxation year (in this subsection referred to as the subsidiary’s “last taxation year”) during which its assets were distributed to the parent on the winding-up, 
  (a) if the subsidiary was, in its last taxation year, neither a Canadian-controlled private corporation nor a deposit insurance corporation, the subsidiary’s low rate income pool immediately before the end of that taxation year; and 
  (b) in any other case, the amount determined by the formula is the total of all amounts each of which is the cost amount to the subsidiary of a property immediately before the end of its last taxation year, is the amount of any money of the subsidiary on hand immediately before the end of its last taxation year, is the amount, if any, by which 
  (i) the total of all amounts that, if the subsidiary had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds 
  (ii) the total of all amounts deducted under subsection 111(1) in computing the subsidiary’s taxable income for its last taxation year, is the total of all amounts each of which is the amount of any debt owing by the subsidiary, or of any other obligation of the subsidiary to pay any amount, that was outstanding immediately before the end of its last taxation year, is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the subsidiary, is the total of all amounts each of which is a reserve deducted in computing the subsidiary’s income for its last taxation year, is 
  (i) if the parent is not a private corporation in the particular taxation year, the subsidiary’s capital dividend account, if any, immediately before the end of its last taxation year, and 
  (ii) in any other case, nil, and is the positive or negative amount determined by the formula is the subsidiary’s general rate income pool at the end of its last taxation year, and is the amount, if any, by which 
  (i) the total of all amounts each of which is an eligible dividend paid by the subsidiary in its last taxation year exceeds 
  (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the subsidiary in its last taxation year. 
  
  ### Election: non-CCPC
  
  (11) Subject to subsection (12), a corporation that files with the Minister on or before its filing-due date for a particular taxation year an election in prescribed form to have this subsection apply is deemed for the purposes described in paragraph (d) of the definition 
  *Canadian-controlled private corporation* in subsection 125(7) not to be a Canadian-controlled private corporation at any time in or after the particular taxation year.  
  
  ### Revoking election
  
  (12) If a corporation files with the Minister on or before its filing-due date for a particular taxation year a notice in prescribed form revoking, as of the end of the particular taxation year, an election described in subsection (11), the election ceases to apply to the corporation at the end of the particular taxation year. 
  
  ### Repeated elections — consent required
  
  (13) If a corporation has, under subsection (12), revoked an election, any subsequent election under subsection (11) or subsequent revocation under subsection (12) is invalid unless 
  (a) the Minister consents in writing to the subsequent election or the subsequent revocation, as the case may be; and 
  (b) the corporation complies with any conditions imposed by the Minister. 
  
  ### Dividend designation
  
  (14) A corporation designates a portion of a dividend it pays at any time to be an eligible dividend by notifying in writing at that time each person or partnership to whom the dividend is paid that the portion of the dividend is an eligible dividend. 
  
  ### Late designation
  
  (14.1) If, in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit a designation under subsection (14) to be made before the day that is three years after the day on which the designation was required to be made, the designation is deemed to have been made at the time the designation was required to be made. 
  
  ### Meaning of expression 
  *deposit insurance corporation* 
  
  (15) For the purposes of paragraphs 87(2)(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)(e.2)), the definitions 
  *excessive eligible dividend designation*, 
  *general rate income pool*, and 
  *low rate income pool* in subsection (1) and subsections (4) to (6) and (8) to (10), a corporation is a deposit insurance corporation if it would be a deposit insurance corporation as defined in the definition 
  *deposit insurance corporation* in subsection 137.1(5) were that definition read without reference to its paragraph (b) and were this Act read without reference to subsection 137.1(5.1).  
  
  # SUBDIVISION I 
  
  ## Shareholders of Corporations Not Resident in Canada 
  
  ### Dividend from non-resident corporation
  
  90 (1) In computing the income for a taxation year of a taxpayer resident in Canada, there is to be included any amount received by the taxpayer at any time in the year as, on account or in lieu of payment of, or in satisfaction of, a dividend on a share owned by the taxpayer of the capital stock of a non-resident corporation. 
  
  ### Dividend from foreign affiliate
  
  (2) For the purposes of this Act, an amount is deemed to be a dividend paid or received, as the case may be, at any time on a share of a class of the capital stock of a non-resident corporation that is a foreign affiliate of a taxpayer if the amount is the share’s portion of a pro rata distribution (other than a distribution made in the course of a liquidation and dissolution of the corporation, on a redemption, acquisition or cancellation of the share by the corporation, or on a qualifying return of capital in respect of the share) made at that time by the corporation in respect of all the shares of that class. 
  
  ### Qualifying return of capital
  
  (3) For the purposes of subsection (2), a distribution made at any time by a foreign affiliate of a taxpayer in respect of a share of the capital stock of the affiliate that is a reduction of the paid-up capital of the affiliate in respect of the share and that would, in the absence of this subsection, be deemed under subsection (2) to be a dividend paid or received, at that time, on the share is a qualifying return of capital, at that time, in respect of the share if an election is made under this subsection, in respect of the distribution and in accordance with prescribed rules, 
  (a) by the taxpayer, where there is no person or partnership that meets the conditions in subparagraphs (b)(i) and (ii); or 
  (b) jointly by the taxpayer and each person or partnership that is, at that time, 
  (i) a connected person or partnership in respect of the taxpayer, and 
  (ii) a person or partnership of which the affiliate would, at that time, be a foreign affiliate if paragraph (b) of the definition 
  *equity percentage* in subsection 95(4) were read as if the reference in that paragraph to “any corporation” were a reference to “any corporation other than a corporation resident in Canada”.  
  
  ### Connected person or partnership
  
  (4) For the purposes of subsection (3), a 
  *connected person or partnership* in respect of a taxpayer, at any time, is  
  (a) a person that is, at that time, related to the taxpayer, and 
  (b) a partnership a member of which is, at that time, 
  (i) the taxpayer, or 
  (ii) a person that is related to the taxpayer. 
  
  ### Exclusion
  
  (5) No amount paid or received at any time is, for the purposes of this Act, a dividend paid or received on a share of the capital stock of a non-resident corporation that is a foreign affiliate of a taxpayer unless it is so deemed under this Part. 
  
  ### Loan from foreign affiliate
  
  (6) Except where subsection 15(2) applies, if a person or partnership receives at any time a loan from, or becomes at that time indebted to, a creditor that is at that time a foreign affiliate (referred to in subsections (9), (11) and (15) as the “creditor affiliate”) of a taxpayer resident in Canada or that is at that time a partnership (referred to in subsections (9), (11) and (15) as the “creditor partnership”) of which such an affiliate is a member and the person or partnership is at that time a specified debtor in respect of the taxpayer, then the specified amount in respect of the loan or indebtedness is to be included in computing the income of the taxpayer for the taxpayer’s taxation year that includes that time. 
  
  ### Upstream loan continuity — reorganizations
  
  (6.1) Subsection (6.11) applies at any time if 
  (a) immediately before that time, a person or partnership (referred to in this subsection and subsection (6.11) as the “original debtor”) owes an amount in respect of a loan or indebtedness (referred to in this subsection and subsection (6.11) as the “pre-transaction loan”) to another person or partnership (referred to in this subsection and subsection (6.11) as the “original creditor”); 
  (b) the pre-transaction loan was, at the time it was made or entered into, a loan or indebtedness that is described in subsection (6); and 
  (c) in the course of an amalgamation, a merger, a winding-up or a liquidation and dissolution, 
  (i) the amount owing in respect of the pre-transaction loan becomes owing at that time by another person or partnership (the amount owing after that time and the other person or partnership are referred to in subsection (6.11) as the “post-transaction loan payable” and the “new debtor”, respectively), 
  (ii) the amount owing in respect of the pre-transaction loan becomes owing at that time to another person or partnership (the amount owing after that time and the other person or partnership are referred to in subsection (6.11) as the “post-transaction loan receivable” and the “new creditor”, respectively), or 
  (iii) the taxpayer in respect of which the original debtor was a specified debtor at the time referred to in paragraph (b) 
  (A) ceases to exist, or 
  (B) merges with one or more corporations to form one corporate entity (referred to in subsection (6.11) as the “new corporation”). 
  
  ### Upstream loan continuity — reorganizations
  
  (6.11) If this subsection applies at any time, for the purposes of subsections (6) and (7) to (15) and 39(2.1) and (2.2) and paragraph 95(2)(g.04), 
  (a) if the condition in subparagraph (6.1)(c)(i) is met, 
  (i) the post-transaction loan payable is deemed to be the same loan or indebtedness as the pre-transaction loan, and 
  (ii) the new debtor is deemed to be same debtor as, and a continuation of, the original debtor; 
  (b) if the condition in subparagraph (6.1)(c)(ii) is met, 
  (i) the post-transaction loan receivable is deemed to be the same loan or indebtedness as the pre-transaction loan, and 
  (ii) the new creditor is deemed to be same creditor as, and a continuation of, the original creditor; 
  (c) if the condition in clause (6.1)(c)(iii)(A) is met, 
  (i) subject to subparagraph (ii), each entity that held an equity interest in the taxpayer immediately before the winding-up (referred to in this paragraph as a “successor entity”) is deemed to be the same entity as, and a continuation of, the taxpayer, and 
  (ii) for the purposes of applying subsection (13) and the description of A in subsection (14), an amount is deemed, in respect of a loan or indebtedness, to have been included under subsection (6) in computing the income of each successor entity equal to 
  (A) if the taxpayer is a partnership, the amount that may reasonably be considered to be the successor entity’s share (determined in a manner consistent with the determination of the successor entity’s share of the income of the partnership under subsection 96(1) for the taxpayer’s final fiscal period) of the specified amount that was required to be included in computing the income of the taxpayer under subsection (6) in respect of the loan or indebtedness, and 
  (B) in any other case, the proportion of the specified amount included in computing the taxpayer’s income under subsection (6), in respect of the loan or indebtedness, that the fair market value of the successor entity’s equity interest in the taxpayer, immediately before the distribution of the taxpayer’s assets on the winding-up, is of the total fair market value of all equity interests in the taxpayer at that time; and 
  (d) if the condition in clause (6.1)(c)(iii)(B) is met, the new corporation is deemed to be the same corporation as, and a continuation of, the taxpayer. 
  
  ### Back-to-back loans
  
  (7) For the purposes of this subsection and subsections (6), (8) to (15) and 39(2.1) and (2.2) and paragraph 95(2)(g.04), if at any time a person or partnership (referred to in this subsection as the “intermediate lender”) makes a loan to another person or partnership (in this subsection referred to as the “intended borrower”) because the intermediate lender received a loan from another person or partnership (in this subsection referred to as the “initial lender”) 
  (a) the loan made by the intermediate lender to the intended borrower is deemed, at that time, to have been made by the initial lender to the intended borrower (to the extent of the lesser of the amount of the loan made by the initial lender to the intermediate lender and the amount of the loan made by the intermediate lender to the intended borrower) under the same terms and conditions and at the same time as it was made by the intermediate lender; and 
  (b) the loan made by the initial lender to the intermediate lender and the loan made by the intermediate lender to the intended borrower are deemed not to have been made to the extent of the amount of the loan deemed to have been made under paragraph (a). 
  
  ### Exceptions to subsection (6)
  
  (8) Subsection (6) does not apply to 
  (a) a loan or indebtedness that is repaid, other than as part of a series of loans or other transactions and repayments, within two years of the day the loan was made or the indebtedness arose; 
  (b) indebtedness that arose in the ordinary course of the business of the creditor or a loan made in the ordinary course of the creditor’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the creditor) if, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the indebtedness or loan within a reasonable time;  
  (c) a loan that was made, or indebtedness that arose, in the ordinary course of carrying on a life insurance business outside Canada if 
  (i) the loan or indebtedness is owed by the taxpayer or by a subsidiary wholly-owned corporation of the taxpayer, 
  (ii) the taxpayer, or the subsidiary wholly-owned corporation, as the case may be, is a life insurance corporation resident in Canada, 
  (iii) the loan or indebtedness directly relates to a business of the taxpayer, or of the subsidiary wholly-owned corporation, that is carried on outside Canada, and 
  (iv) the interest on the loan or indebtedness is, or would be if it were otherwise income from property, included in the active business income of the creditor, or if the creditor is a partnership, a member of the partnership, under clause 95(2)(a)(ii)(A); and 
  (d) subject to subsection (8.1), an upstream deposit owing to an eligible bank affiliate. 
  
  ### Interpretation — partnerships
  
  (8.01) For the purposes of paragraph (8)(b), a borrower shall be considered to deal at arm’s length with a creditor only if 
  (a) for greater certainty, the borrower and the creditor deal with each other at arm’s length; 
  (b) where either the borrower or the creditor is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party; and 
  (c) where both the borrower and the creditor are partnerships, the borrower and each member of the borrower deal at arm’s length with the creditor and each member of the creditor. 
  
  ### Upstream deposit  — eligible bank affiliate
  
  (8.1) For the purposes of this section, if a taxpayer is an eligible Canadian bank and an eligible bank affiliate of the taxpayer is owed, at any time in a particular taxation year of the affiliate or the immediately preceding taxation year, an upstream deposit, 
  (a) the affiliate is deemed to make a loan to the taxpayer immediately before the end of the particular year equal to the amount determined by the following formula, where all amounts referred to in the formula are to be determined using Canadian currency: is 90% of the average of all amounts each of which is, in respect of a calendar month that ends in the particular year, the greatest total amount at any time in the month of the upstream deposits owing to the affiliate, is the lesser of 
  (i) the amount, if any, by which the affiliate’s excess liquidity for the particular year exceeds the average of all amounts each of which is, in respect of a calendar month that ends in the particular year, the greatest total amount at any time in the month of eligible Canadian indebtedness owing to the affiliate, and 
  (ii) the amount determined for A, and is the amount, if any, by which the amount determined for A for the immediately preceding year exceeds the amount determined for B for the immediately preceding year; and 
  (b) if the formula in paragraph (a) would, in the absence of section 257, result in a negative amount for the particular year, 
  (i) the taxpayer is deemed to repay immediately before the end of the particular year — in an amount equal to the absolute value of the negative amount and in the order in which they arose — loans made by the affiliate under paragraph (a) in a prior taxation year and not previously repaid, and 
  (ii) the repayment is deemed to not be part of a series of loans or other transactions and repayments. 
  
  ### Corporations: deduction for amounts included under subsection (6) or (12)
  
  (9) There may be deducted in computing the income for a taxation year of a corporation resident in Canada a particular amount, in respect of a specified amount included under subsection (6), or an amount included under subsection (12), in computing the corporation’s income for the taxation year in respect of a particular loan or indebtedness, if 
  (a) the corporation demonstrates that the particular amount is the total of all amounts (not to exceed the amount so included) each of which would — if the specified amount in respect of the particular loan or indebtedness were, at the time (referred to in subparagraph (i) and subsection (11) as the “lending time”) the particular loan was made or the particular indebtedness was incurred, instead paid by the creditor affiliate, or the creditor partnership, as the case may be, to the corporation directly as part of one dividend, or indirectly as part of one or more dividends and, if applicable, partnership distributions — reasonably be considered to have been deductible, in respect of the payment, for the corporation’s taxation year in which the specified amount was included in its income under subsection (6), in computing 
  (i) the taxable income of the corporation under any of 
  (A) paragraph 113(1)(a), in respect of the exempt surplus — at the lending time, in respect of the corporation — of a foreign affiliate of the corporation, 
  (B) paragraph 113(1)(a.1), in respect of the hybrid surplus — at the lending time, in respect of the corporation — of a foreign affiliate of the corporation, if the amount of that hybrid surplus is less than or equal to the amount determined by the formula is the affiliate’s hybrid underlying tax in respect of the corporation at the lending time, is the corporation’s relevant tax factor (within the meaning assigned by subsection 95(1)) for the corporation’s taxation year that includes the lending time, and is the affiliate’s hybrid surplus in respect of the corporation at the lending time, 
  (C) paragraph 113(1)(b), in respect of the taxable surplus — at the lending time, in respect of the corporation — of a foreign affiliate of the corporation, and 
  (D) paragraph 113(1)(d), in respect of the pre-acquisition surplus — at the lending time, in respect of the corporation — of a foreign affiliate of the corporation to the extent of the adjusted cost base to the corporation, at the lending time, of the shares of the capital stock of the affiliate, and except if the specified debtor is 
  (I) a non-resident person with which the corporation does not deal at arm’s length, or 
  (II) a partnership any member of which is a person described in subclause (I), or 
  (ii) the income of the corporation under subsection 91(5), in respect of the taxable surplus of a foreign affiliate of the corporation, unless the specified debtor is a person or partnership described in subclause (i)(D)(I) or (II); 
  (b) that exempt surplus, hybrid surplus, taxable surplus, or adjusted cost base is not relevant in applying this subsection in respect of any other loan made or indebtedness incurred, or in respect of any deduction claimed under subsection 91(5) or 113(1) in respect of a dividend paid, during the period in which the particular loan or indebtedness is outstanding; and 
  (c) that adjusted cost base is not relevant in determining the taxability of any other distribution made during the period in which the particular loan or indebtedness is outstanding. 
  
  ### Corporate partners: application of subsection (9)
  
  (10) In applying subsection (9) to a corporation resident in Canada that is a member of a partnership at the end of a fiscal period of the partnership, 
  (a) each amount that may reasonably be considered to be the corporation’s share (determined in a manner consistent with the determination of the corporation’s share of the income of the partnership under subsection 96(1)) of each specified amount that is required to be included in computing the income of the partnership for that fiscal period under subsection (6), in respect of a particular loan or indebtedness, is deemed to be a specified amount in respect of the particular loan or indebtedness that was included in the corporation’s income, for its taxation year that includes the last day of that fiscal period, under subsection (6); 
  (b) subparagraph (9)(a)(i) is to be read without reference to its clause (D); 
  (c) subparagraph (9)(a)(ii) is to be read as follows: 
  (ii) the income of the partnership, referred to in subsection (10), under subsection 91(5), in respect of the taxable surplus of a foreign affiliate of the partnership, to the extent of the amount that may reasonably be considered to be the corporation’s share of that deduction (determined in a manner consistent with the determination of the corporation’s share of the income of the partnership under subsection 96(1)); 
  (d) paragraph (9)(b) is to be read as follows: 
  (b) that exempt surplus, hybrid surplus, or taxable surplus is not relevant in applying this subsection in respect of any other loan made or indebtedness incurred, or in respect of any deduction claimed under subsection 91(5) or 113(1) in respect of a dividend paid, during the period in which the particular loan or indebtedness is outstanding; and 
  (e) subsection (9) is to be read without reference to its paragraph (c). 
  
  ### Downstream surplus
  
  (11) For the purposes of subparagraph (9)(a)(i), the amounts of exempt surplus or exempt deficit, hybrid surplus or hybrid deficit, hybrid underlying tax, taxable surplus or taxable deficit, and underlying foreign tax of the creditor affiliate, or of each foreign affiliate of the corporation that is a member of the creditor partnership, as the case may be, in respect of the corporation, at the lending time are deemed to be the amounts that would be determined, at the lending time, under subparagraph 5902(1)(a)(i) of the Income Tax Regulations if that subparagraph were applicable at the lending time and the references in that subparagraph to “the dividend time” were references to the lending time.  
  
  ### Add-back for subsection (9) deduction
  
  (12) There is to be included in computing the income of a corporation resident in Canada for a particular taxation year any amount deducted by the corporation under subsection (9) in computing the corporation’s income for the taxation year that immediately precedes the particular year. 
  
  ### No double deduction
  
  (13) A corporation may not claim a deduction for a taxation year under subsection (9) in respect of the same portion of the specified amount in respect of a loan or indebtedness for which a deduction is claimed for that year or a preceding year by the corporation, or by a partnership of which the corporation is a member, under subsection (14). 
  
  ### Repayment of loan
  
  (14) There may be deducted in computing the income of a taxpayer for a particular taxation year the amount determined by the formula is the specified amount, in respect of a loan or indebtedness, that is included under subsection (6) in computing the taxpayer’s income for a preceding taxation year, is the portion of the loan or indebtedness that was repaid in the particular year, to the extent it is established, by subsequent events or otherwise, that the repayment was not part of a series of loans or other transactions and repayments, and is the amount, in respect of the loan or indebtedness, that is referred to in the description of A in the definition 
  *specified amount* in subsection (15).  
  
  ### Definitions
  
  (15) The following definitions apply in this section.  
  *eligible bank affiliate* has the same meaning as in subsection 95(2.43). (filiale bancaire admissible)   
  *eligible Canadian bank* has the same meaning as in subsection 95(2.43). (banque canadienne admissible)   
  *eligible Canadian indebtedness* has the same meaning as in subsection 95(2.43). (dettes canadiennes admissibles)   
  *excess liquidity* has the same meaning as in subsection 95(2.43). (liquidités excédentaires)   
  *specified amount*, in respect of a loan or indebtedness that is required by subsection (6) to be included in computing the income of a taxpayer for a taxation year, means the amount determined by the formula  is the amount of the loan or indebtedness, and is, in the case of 
  (a) a creditor affiliate of the taxpayer, the percentage that is or would be, if the taxpayer referred to in subsection (6) were a corporation resident in Canada, the taxpayer’s surplus entitlement percentage (in this definition determined without reference to subsection 5908(1) of the Income Tax Regulations) in respect of the creditor affiliate at the time (referred to in this definition as the “determination time”) referred to in subsection (6), or  
  (b) a creditor partnership of which a foreign affiliate of the taxpayer is a member, the total of each percentage determined, in respect of a member (referred to in this paragraph as a “member affiliate”) of the creditor partnership that is a foreign affiliate of the taxpayer, by the formula is the percentage that is or would be, if the taxpayer were a corporation resident in Canada, the taxpayer’s surplus entitlement percentage in respect of a particular member affiliate at the determination time, is the fair market value, at the determination time, of the particular member affiliate’s direct or indirect interest in the creditor partnership, and is the fair market value, at the determination time, of all interests in the creditor partnership, and is, 
  (a) if the debtor under the loan or indebtedness is 
  (i) another foreign affiliate of the taxpayer, the percentage that is or would be, if the taxpayer were a corporation resident in Canada, the taxpayer’s surplus entitlement percentage in respect of the other affiliate at the determination time, or 
  (ii) a partnership (referred to in this paragraph as the “borrower partnership”) of which one or more other foreign affiliates of the taxpayer are members, the total of each percentage that is determined by the following formula in respect of each such member is the percentage that is or would be, if the taxpayer were a corporation resident in Canada, the taxpayer’s surplus entitlement percentage in respect of a particular member of the borrower partnership at the determination time, is the fair market value, at the determination time, of the particular member’s direct or indirect interest in the borrower partnership, and is the fair market value, at the determination time, of all interests in the borrower partnership, and 
  (b) in any other case, nil. ( montant déterminé)   
  *specified debtor*, in respect of a taxpayer resident in Canada, at any time, means  
  (a) the taxpayer; 
  (b) a person with which the taxpayer does not, at that time, deal at arm’s length, other than 
  (i) a non-resident corporation that is at that time a controlled foreign affiliate, within the meaning assigned by section 17, of the taxpayer, or  
  (ii) a non-resident corporation (other than a corporation that is described in subparagraph (i)) that is, at that time, a foreign affiliate of the taxpayer, if each share of the capital stock of the affiliate is owned at that time by any of 
  (A) the taxpayer, 
  (B) persons resident in Canada, 
  (C) non-resident persons that deal at arm’s length with the taxpayer, 
  (D) persons described in subparagraph (i), 
  (E) partnerships, each member of which is described in any of clauses (A) to (F), and 
  (F) a corporation each shareholder of which is described in any of clauses (A) to (F); 
  (c) a partnership a member of which is at that time a person or partnership that is a specified debtor in respect of the taxpayer because of paragraph (a) or (b); and 
  (d) if the taxpayer is a partnership, 
  (i) any member of the partnership that is a corporation resident in Canada if the creditor affiliate, or member of the creditor partnership, as the case may be, is, at that time, a foreign affiliate of the corporation, 
  (ii) a person with which a corporation referred to in subparagraph (i) does not, at that time, deal at arm’s length, other than a controlled foreign affiliate, within the meaning assigned by section 17, of the partnership or of a member of the partnership that owns, directly or indirectly, an interest in the partnership representing at least 90% of the fair market value of all such interests, or 
  (iii) a partnership a member of which is at that time a person that is a specified debtor in respect of the taxpayer because of subparagraph (i) or (ii). ( débiteur déterminé)   
  *upstream deposit* has the same meaning as in subsection 95(2.43). (dépôt en amont)  
  
  ### Amounts to be included in respect of share of foreign affiliate
  
  91 (1) In computing the income for a taxation year of a taxpayer resident in Canada, there shall be included, in respect of each share owned by the taxpayer of the capital stock of a controlled foreign affiliate of the taxpayer, as income from the share, the percentage of the foreign accrual property income of any controlled foreign affiliate of the taxpayer, for each taxation year of the affiliate ending in the taxation year of the taxpayer, equal to that share’s participating percentage in respect of the affiliate, determined at the end of each such taxation year of the affiliate. 
  
  ### Conditions for application of subsection (1.2)
  
  (1.1) Subsection (1.2) applies at a particular time in respect of a particular foreign affiliate of a taxpayer resident in Canada if 
  (a) an amount would be included under subsection (1) in computing the income of the taxpayer, in respect of a share of the particular affiliate or another foreign affiliate of the taxpayer that has an equity percentage (as defined in subsection 95(4)) in the particular affiliate, for the taxation year of the particular affiliate (determined without reference to subsection (1.2)) that includes the particular time (referred to in this subsection and subsection (1.3) as the “ordinary taxation year” of the particular affiliate), if the ordinary taxation year of the particular affiliate ended at the particular time;  
  (b) immediately after the particular time, there is 
  (i) an acquisition of control of the taxpayer, or 
  (ii) a triggering event that can reasonably be considered to result in a change in the aggregate participating percentage of the taxpayer in respect of the particular affiliate for the ordinary taxation year of the particular affiliate; 
  (c) if subparagraph (b)(i) applies, all or a portion of an amount described in paragraph 95(2)(f) that accrued to the particular affiliate during the portion of the ordinary taxation year of the particular affiliate before the particular time is excluded in computing the income of another taxpayer because paragraph 95(2)(f.1) applies as a result of the taxpayer being, at a time before the acquisition of control, a designated acquired corporation of the other taxpayer; and 
  (d) if subparagraph (b)(ii) applies, none of the following is the case: 
  (i) the change referred to in that subparagraph 
  (A) is a decrease, and 
  (B) is equal to the total of all amounts each of which is the increase — that can reasonably be considered to result from the triggering event — in the aggregate participating percentage of another taxpayer, in respect of the particular affiliate for the ordinary taxation year of the particular affiliate, if the other taxpayer 
  (I) is a person resident in Canada, other than a person that is — or a trust, any of the beneficiaries under which is — by reason of a statutory provision, exempt from tax under this Part, and 
  (II) is related to the taxpayer, 
  1 if the triggering event results from a winding-up of the taxpayer to which subsection 88(1) applies, at the particular time, and 
  2 in any other case, immediately after the particular time, 
  (ii) the triggering event is on an amalgamation as defined in subsection 87(1),  
  (iii) the triggering event is an excluded acquisition or disposition, in respect of the ordinary taxation year of the particular affiliate, and 
  (iv) if one or more triggering events — all of which are described in subparagraph (b)(ii) and in respect of which none of the conditions in subparagraphs (i) to (iii) are satisfied — occur in the ordinary taxation year of the particular affiliate, the percentage determined by the following formula is not greater than 5%: is the total of all amounts each of which is the decrease — which can reasonably be considered to result from a triggering event described in subparagraph (b)(ii) (other than a triggering event that satisfies the conditions in subparagraph (i) or (ii)) — in the aggregate participating percentage of the taxpayer in respect of the particular affiliate for the ordinary taxation year of the particular affiliate, and is the total of all amounts each of which is the increase — which can reasonably be considered to result from a triggering event described in subparagraph (b)(ii) (other than a triggering event that satisfies the conditions in subparagraph (i) or (ii)) — in the aggregate participating percentage of the taxpayer in respect of the particular affiliate for the ordinary taxation year of the particular affiliate. 
  
  ### Deemed year-end
  
  (1.2) If this subsection applies at a particular time in respect of a foreign affiliate of a particular taxpayer resident in Canada, then for the purposes of this section and section 92, 
  (a) in respect of the particular taxpayer and each connected person, or connected partnership, in respect of the particular taxpayer, the affiliate’s taxation year that would, in the absence of this subsection, have included the particular time is deemed to have ended at the time (referred to in this section as the “stub-period end time”) that is immediately before the particular time; 
  (b) if the affiliate is, immediately after the particular time, a foreign affiliate of the particular taxpayer or a connected person, or connected partnership, in respect of the particular taxpayer, the affiliate’s next taxation year after the stub-period end time is deemed, in respect of the particular taxpayer or the connected person or connected partnership, as the case may be, to begin immediately after the particular time; and 
  (c) in determining the foreign accrual property income of the affiliate for the taxation year referred to in paragraph (a) in respect of the particular taxpayer or a connected person or connected partnership, in respect of the particular taxpayer, all transactions or events that occur at the particular time are deemed to occur at the stub-period end time. 
  
  ### Definitions
  
  (1.3) The following definitions apply in this subsection and subsections (1.1) and (1.2).  
  *aggregate participating percentage*, of a taxpayer in respect of a foreign affiliate of the taxpayer for a taxation year of the affiliate, means the total of all amounts, each of which is the participating percentage, in respect of the affiliate, of a share of the capital stock of a corporation that is owned by the taxpayer at the end of the taxation year. (pourcentage de participation total)   
  *connected person*, in respect of a particular taxpayer, means a person that — at or immediately after the particular time at which subsection (1.2) applies in respect of a foreign affiliate of the particular taxpayer — is resident in Canada and  
  (a) does not deal at arm’s length with the particular taxpayer; or 
  (b) deals at arm’s length with the particular taxpayer, if 
  (i) the foreign affiliate is a foreign affiliate of the person at the particular time, and 
  (ii) the aggregate participating percentage of the person in respect of the foreign affiliate for the affiliate’s ordinary taxation year may reasonably be considered to have increased as a result of the triggering event that gave rise to the application of subsection (1.2). ( personne rattachée)   
  *connected partnership*, in respect of a particular taxpayer, means a partnership if, at or immediately after the particular time at which subsection (1.2) applies in respect of a foreign affiliate of the particular taxpayer,  
  (a) the particular taxpayer or a connected person in respect of the particular taxpayer is, directly or indirectly through one or more partnerships, a member of the partnership; or 
  (b) if paragraph (a) does not apply, 
  (i) the foreign affiliate is a foreign affiliate of the partnership at the particular time, and 
  (ii) the aggregate participating percentage of the partnership in respect of the foreign affiliate for the affiliate’s ordinary taxation year may reasonably be considered to have increased as a result of the triggering event that gave rise to the application of subsection (1.2). ( société de personnes rattachée)   
  *excluded acquisition or disposition*, in respect of a taxation year of a foreign affiliate of a taxpayer, means an acquisition or disposition of an equity interest in a corporation, partnership or trust that can reasonably be considered to result in a change in the aggregate participating percentage of the taxpayer in respect of the affiliate for the taxation year of the affiliate, if  
  (a) the change is less than 1%; and 
  (b) it cannot reasonably be considered that one of the main reasons the acquisition or disposition occurs as a separate acquisition or disposition from one or more other acquisitions or dispositions is to avoid the application of subsection (1.2). ( acquisition ou disposition exclue)   
  *triggering event* means  
  (a) an acquisition or disposition of an equity interest in a corporation, partnership or trust; 
  (b) a change in the terms or conditions of a share of the capital stock of a corporation or the rights as a member of a partnership or as a beneficiary under a trust; and 
  (c) a disposition or change of a right referred to in paragraph 95(6)(a). ( événement déclencheur)  
  
  ### Election for application of subsection (1.2)
  
  (1.4) If the conditions in subsection (1.1) are not met at a particular time in respect of a particular foreign affiliate of a taxpayer resident in Canada, subsection (1.2) applies in respect of the particular affiliate at that time if 
  (a) the conditions in paragraph (1.1)(a) are met in respect of the particular affiliate at the particular time; 
  (b) immediately after the particular time there is a disposition of shares of the capital stock of the particular affiliate or another foreign affiliate of the taxpayer that had an equity percentage (as defined in subsection 95(4)) in the particular affiliate by  
  (i) the taxpayer, or 
  (ii) a controlled foreign affiliate of the taxpayer; and 
  (c) the taxpayer and all specified corporations jointly elect in writing to apply subsection (1.2) in respect of the disposition and file the election with the Minister on or before the day that is the earliest filing-due date for all taxpayers making the election in respect of the taxation year in which the transaction to which the election relates occurred, and for this purpose, a 
  *specified corporation* means a corporation that at or immediately after the particular time meets the following conditions:  
  (i) the corporation is resident in Canada, 
  (ii) the corporation does not deal at arm’s length with the taxpayer, and 
  (iii) the particular affiliate is a foreign affiliate of the corporation, or of a partnership of which the corporation is, directly or indirectly through one or more partnerships, a member. 
  (1.5)  [Repealed, 2017, c. 33, s. 28]  
  
  ### Reserve where foreign exchange restriction
  
  (2) Where an amount in respect of a share has been included in computing the income of a taxpayer for a taxation year by virtue of subsection 91(1) or 91(3) and the Minister is satisfied that, by reason of the operation of monetary or exchange restrictions of a country other than Canada, the inclusion of the whole amount with no deduction for a reserve in respect thereof would impose undue hardship on the taxpayer, there may be deducted in computing the taxpayer’s income for the year such amount as a reserve in respect of the amount so included as the Minister deems reasonable in the circumstances. 
  
  ### Reserve for preceding year to be included
  
  (3) In computing the income of a taxpayer for a taxation year, there shall be included each amount in respect of a share that was deducted by virtue of subsection 91(2) in computing the taxpayer’s income for the immediately preceding year. 
  
  ### Amounts deductible in respect of foreign taxes
  
  (4) Where, by virtue of subsection 91(1), an amount in respect of a share has been included in computing the income of a taxpayer for a taxation year or for any of the 5 immediately preceding taxation years (in this subsection referred to as the “income amount”), there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the product obtained when 
  (i) the portion of the foreign accrual tax applicable to the income amount that was not deductible under this subsection in any previous year is multiplied by 
  (ii) the taxpayer’s relevant tax factor for the year, and 
  (b) the amount, if any, by which the income amount exceeds the total of the amounts in respect of that share deductible under this subsection in any of the 5 immediately preceding taxation years in respect of the income amount. 
  
  ### Denial of foreign accrual tax
  
  (4.1) For the purposes of the definition 
  *foreign accrual tax* in subsection 95(1), foreign accrual tax applicable to a particular amount included in computing a taxpayer’s income under subsection (1) for a taxation year of the taxpayer in respect of a particular foreign affiliate of the taxpayer is not to include the amount that would, in the absence of this subsection, be foreign accrual tax applicable to the particular amount if, at any time in the taxation year (referred to in this subsection as the “affiliate year”) of the particular affiliate that ends in the taxation year of the taxpayer,  
  (a) a specified owner in respect of the taxpayer is considered, 
  (i) under the income tax laws (referred to in subsections (4.5) and (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of a particular corporation — that is, at any time in the affiliate year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to own less than all of the shares of the capital stock of the particular corporation that are considered to be owned by the specified owner for the purposes of this Act, or 
  (ii) under the income tax laws (referred to in subsections (4.5) and (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of a particular partnership — that is, at any time in the affiliate year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to have a lesser direct or indirect share of the income of the particular partnership than the specified owner is considered to have for the purposes of this Act; or 
  (b) where the taxpayer is a partnership, the direct or indirect share of the income of the partnership of any member of the partnership that is, at any time in the affiliate year, a person resident in Canada or a foreign affiliate of such a person is, under the income tax laws (referred to in subsection (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of the partnership is subject to income taxation, less than the member’s direct or indirect share of that income for the purposes of this Act. 
  
  ### Specified owner
  
  (4.2) For the purposes of subsections (4.1) and (4.5), a 
  *specified owner*, at any time, in respect of a taxpayer means the taxpayer or a person or partnership that is, at that time,  
  (a) a partnership of which the taxpayer is a member; 
  (b) a foreign affiliate of the taxpayer; 
  (c) a partnership a member of which is a foreign affiliate of the taxpayer; or 
  (d) a person or partnership referred to in any of subparagraphs (4.4)(a)(i) to (iii). 
  
  ### Pertinent person or partnership
  
  (4.3) For the purposes of this subsection and subsection (4.1), a 
  *pertinent person or partnership*, at any time, in respect of a particular foreign affiliate of a taxpayer means the particular affiliate or a person or partnership that is, at that time,  
  (a) another foreign affiliate of the taxpayer 
  (i) in which the particular affiliate has an equity percentage, or 
  (ii) that has an equity percentage in the particular affiliate; 
  (b) a partnership a member of which is at that time a pertinent person or partnership in respect of the particular affiliate under this subsection; or 
  (c) a person or partnership referred to in any of subparagraphs (4.4)(b)(i) to (iii). 
  
  ### Series of transactions
  
  (4.4) For the purposes of subsections (4.2) and (4.3), if, as part of a series of transactions or events that includes the earning of the foreign accrual property income that gave rise to the particular amount referred to in subsection (4.1), a foreign affiliate (referred to in this subsection as the “funding affiliate”) of the taxpayer or of a person (referred to in this subsection as the “related person”) resident in Canada that is related to the taxpayer, or a partnership (referred to in this subsection as the “funding partnership”) of which such an affiliate is a member, directly or indirectly provided funding to the particular affiliate, or a partnership of which the particular affiliate is a member, otherwise than by way of loans or other indebtedness that are subject to terms or conditions made or imposed, in respect of the loans or other indebtedness, that do not differ from those that would be made or imposed between persons dealing at arm’s length or by way of an acquisition of shares of the capital stock of any corporation, then 
  (a) if the funding affiliate is, or the funding partnership has a member that is, a foreign affiliate of the related person, the following persons and partnerships are deemed, at all times during which the foreign accrual property income is earned by the particular affiliate, to be specified owners in respect of the taxpayer: 
  (i) the related person, 
  (ii) each foreign affiliate of the related person, and 
  (iii) each partnership a member of which is a person referred to in subparagraph (i) or (ii); and 
  (b) the following persons and partnerships are deemed, at all times during which the foreign accrual property income is earned by the particular affiliate, to be pertinent persons or partnerships in respect of the particular affiliate: 
  (i) the funding affiliate or the funding partnership, 
  (ii) a non-resident corporation 
  (A) in which the funding affiliate has an equity percentage, or 
  (B) that has an equity percentage in the funding affiliate, and 
  (iii) a partnership a member of which is a person or partnership referred to in subparagraph (i) or (ii). 
  
  ### Exception — hybrid entities
  
  (4.5) For the purposes of subparagraph (4.1)(a)(i), a specified owner in respect of the taxpayer is not to be considered, under the relevant foreign tax law, to own less than all of the shares of the capital stock of a corporation that are considered to be owned for the purposes of this Act solely because the specified owner or the corporation is not treated as a corporation under the relevant foreign tax law. 
  
  ### Exceptions — partnerships
  
  (4.6) For the purposes of subparagraph (4.1)(a)(ii) and paragraph (4.1)(b), a member of a partnership is not to be considered to have a lesser direct or indirect share of the income of the partnership under the relevant foreign tax law than for the purposes of this Act solely because of one or more of the following: 
  (a) a difference between the relevant foreign tax law and this Act in the manner of 
  (i) computing the income of the partnership, or 
  (ii) allocating the income of the partnership because of the admission to, or withdrawal from, the partnership of any of its members; 
  (b) the treatment of the partnership as a corporation under the relevant foreign tax law; or 
  (c) the fact that the member is not treated as a corporation under the relevant foreign tax law. 
  
  ### Deemed ownership
  
  (4.7) For the purposes of subsection (4.1), if a specified owner owns, for the purposes of this Act, shares of the capital stock of a corporation and the dividends, or similar amounts, in respect of those shares are treated under the income tax laws of any country other than Canada under the laws of which any income of the corporation is subject to income taxation as interest or another form of deductible payment, the specified owner is deemed to be considered, under those tax laws, to own less than all of the shares of the capital stock of the corporation that are considered to be owned by the specified owner for the purposes of this Act. 
  
  ### Amounts deductible in respect of dividends received
  
  (5) Where in a taxation year a taxpayer resident in Canada has received a dividend on a share of the capital stock of a corporation that was at any time a controlled foreign affiliate of the taxpayer, there may be deducted, in respect of such portion of the dividend as is prescribed to have been paid out of the taxable surplus of the affiliate, in computing the taxpayer’s income for the year, the lesser of 
  (a) the amount by which that portion of the dividend exceeds the amount, if any, deductible in respect thereof under paragraph 113(1)(b), and 
  (b) the amount, if any, by which 
  (i) the total of all amounts required by paragraph 92(1)(a) to be added in computing the adjusted cost base to the taxpayer of the share before the dividend was so received by the taxpayer exceeds 
  (ii) the total of all amounts required by paragraph 92(1)(b) to be deducted in computing the adjusted cost base to the taxpayer of the share before the dividend was so received by the taxpayer. 
  (5.1) to (5.3)  [Repealed, 2009, c. 2, s. 23]  
  
  ### Idem
  
  (6) Where a share of the capital stock of a foreign affiliate of a taxpayer that is a taxable Canadian corporation is acquired by the taxpayer from another corporation resident in Canada with which the taxpayer is not dealing at arm’s length, for the purpose of subsection 91(5), any amount required by section 92 to be added or deducted, as the case may be, in computing the adjusted cost base to the other corporation of the share shall be deemed to have been so required to be added or deducted, as the case may be, in computing the adjusted cost base to the taxpayer of the share. 
  
  ### Shares acquired from a partnership
  
  (7) For the purpose of subsection (5), where a taxpayer resident in Canada acquires a share of the capital stock of a corporation that is immediately after the acquisition a foreign affiliate of the taxpayer from a partnership of which the taxpayer, or a corporation resident in Canada with which the taxpayer was not dealing at arm’s length at the time the share was acquired, was a member (each such person referred to in this subsection as the “member”) at any time during any fiscal period of the partnership that began before the acquisition, 
  (a) that portion of any amount required by subsection 92(1) to be added to the adjusted cost base to the partnership of the share of the capital stock of the foreign affiliate equal to the amount included in the income of the member because of subsection 96(1) in respect of the amount that was included in the income of the partnership because of subsection (1) or (3) in respect of the foreign affiliate and added to that adjusted cost base, and 
  (b) that portion of any amount required by subsection 92(1) to be deducted from the adjusted cost base to the partnership of the share of the capital stock of the foreign affiliate equal to the amount by which the income of the member from the partnership under subsection 96(1) was reduced because of the amount deducted in computing the income of the partnership under subsection (2), (4) or (5) and deducted from that adjusted cost base is deemed to be an amount required by subsection 92(1) to be added or deducted, as the case may be, in computing the adjusted cost base to the taxpayer of the share. 
  
  ### Adjusted cost base of share of foreign affiliate
  
  92 (1) In computing, at any time in a taxation year, the adjusted cost base to a taxpayer resident in Canada of any share owned by the taxpayer of the capital stock of a foreign affiliate of the taxpayer, 
  (a) there shall be added in respect of that share any amount included in respect of that share under subsection 91(1) or (3) in computing the taxpayer’s income for the year or any preceding taxation year (or that would have been required to have been so included in computing the taxpayer’s income but for subsection 56(4.1) and sections 74.1 to 75 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952); and  
  (b) there shall be deducted in respect of that share 
  (i) any amount deducted by the taxpayer under subsection 91(2) or (4), and 
  (ii) any dividend received by the taxpayer before that time, to the extent of the amount deducted by the taxpayer, in respect of the dividend, under subsection 91(5) in computing the taxpayer’s income for the year or any preceding taxation year (or that would have been deductible by the taxpayer but for subsection 56(4.1) and sections 74.1 to 75 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952).  
  
  ### Adjustment for prescribed amount
  
  (1.1) The prescribed amount shall be added in computing the adjusted cost base of a share of the capital stock of a foreign affiliate of a corporation resident in Canada to 
  (a) another foreign affiliate of the corporation; or 
  (b) a partnership of which another foreign affiliate of the corporation is a member. 
  
  ### Adjustment re adjusted cost base
  
  (1.2) There is to be added in computing the adjusted cost base to a taxpayer of a share of the capital stock of a foreign affiliate of the taxpayer any amount required by paragraph 93(4)(b) to be so added. 
  
  ### Deduction in computing adjusted cost base
  
  (2) In computing, at any time in a taxation year, 
  (a) the adjusted cost base to a corporation resident in Canada (in this subsection referred to as an “owner”) of any share of the capital stock of a foreign affiliate of the corporation, or 
  (b) the adjusted cost base to a foreign affiliate (in this subsection referred to as an “owner”) of a person resident in Canada of any share of the capital stock of another foreign affiliate of that person, there shall be deducted, in respect of any dividend received on the share before that time by the owner of the share, an amount equal to the amount, if any, by which 
  (c) such portion of the amount of the dividend so received as was deductible by virtue of paragraph 113(1)(d) from the income of the owner for the year in computing the owner’s taxable income for the year or as would have been so deductible if the owner had been a corporation resident in Canada, exceeds 
  (d) such portion of any income or profits tax paid by the owner to the government of a country other than Canada as may reasonably be regarded as having been paid in respect of the portion described in paragraph 92(2)(c). 
  
  ### Idem
  
  (3) In computing, at any time in a taxation year, the adjusted cost base to a corporation resident in Canada of any share of the capital stock of a foreign affiliate of the corporation, there shall be deducted an amount in respect of any dividend received on the share by the corporation before that time equal to such portion of the amount so received as was deducted under subsection 113(2) from the income of the corporation for the year or any preceding year in computing its taxable income. 
  
  ### Disposition of a partnership interest
  
  (4) Where a corporation resident in Canada or a foreign affiliate of a corporation resident in Canada has at any time disposed of all or a portion of an interest in a partnership of which it was a member, there shall be added, in computing the proceeds of disposition of that interest, the amount determined by the formula is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount that was deductible under paragraph 113(1)(d) by the member from its income in computing its taxable income for any taxation year of the member that began before that time in respect of any portion of a dividend received by the partnership, or would have been so deductible if the member were a corporation resident in Canada, exceeds 
  (b) the total of all amounts each of which is the portion of any income or profits tax paid by the partnership or the member of the partnership to a government of a country other than Canada that can reasonably be considered as having been paid in respect of the member’s share of the dividend described in paragraph (a); is the total of 
  (a) the total of all amounts each of which was an amount added under this subsection in computing the member’s proceeds of a disposition before that time of another interest in the partnership, and 
  (b) the total of all amounts each of which was an amount deemed by subsection (5) to be a gain of the member from a disposition before that time of a share by the partnership; is the adjusted cost base, immediately before that time, of the portion of the member’s interest in the partnership disposed of by the member at that time; and is the adjusted cost base, immediately before that time, of the member’s interest in the partnership immediately before that time. 
  
  ### Deemed gain from the disposition of a share
  
  (5) Where a partnership has, at any time in a fiscal period of the partnership at the end of which a corporation resident in Canada or a foreign affiliate of a corporation resident in Canada was a member, disposed of a share of the capital stock of a corporation, the amount determined under subsection (6) in respect of such a member is deemed to be a gain of the member from the disposition of the share by the partnership for the member’s taxation year in which the fiscal period of the partnership ends. 
  
  ### Formula
  
  (6) The amount determined for the purposes of subsection (5) is the amount determined by the formula is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount that was deductible under paragraph 113(1)(d) by the member from its income in computing its taxable income for a taxation year in respect of any portion of a dividend received by the partnership on the share in a fiscal period of the partnership that began before the time referred to in subsection (5) and ends in the member’s taxation year, or would have been so deductible if the member were a corporation resident in Canada, exceeds 
  (b) the total of all amounts each of which is the portion of any income or profits tax paid by the partnership or the member to a government of a country other than Canada that can reasonably be considered as having been paid in respect of the member’s share of the dividend described in paragraph (a); and is the total of all amounts each of which is an amount that was added under subsection (4) in computing the member’s proceeds of a disposition before the time referred to in subsection (5) of an interest in the partnership. 
  
  ### Election re disposition of share of foreign affiliate
  
  93 (1) For the purposes of this Act, if a corporation resident in Canada elects, in accordance with prescribed rules, in respect of any share of the capital stock of a particular foreign affiliate of the corporation that is disposed of, at any time, by the corporation (referred to in this subsection as the “disposing corporation”) or by another foreign affiliate (referred to in this subsection as the “disposing affiliate”) of the corporation, 
  (a) the amount (referred to in this subsection as the “elected amount”) designated by the corporation in its election not exceeding the amount that would, in the absence of this subsection, be the gain of the disposing corporation or disposing affiliate, as the case may be, from the disposition of the share, is deemed 
  (i) to have been a dividend received on the share from the particular affiliate by the disposing corporation or disposing affiliate, as the case may be, immediately before that time, and 
  (ii) not to have been received by the disposing corporation or disposing affiliate, as the case may be, as proceeds of disposition in respect of the disposition of the share; and 
  (b) if subsection 40(3) applies to the disposing corporation or disposing affiliate, as the case may be, in respect of the share, the amount deemed by that subsection to be the gain of the disposing corporation or disposing affiliate, as the case may be, from the disposition of the share is, except for the purposes of paragraph 53(1)(a), deemed to be equal to the amount, if any, by which 
  (i) the amount deemed by that subsection to be the gain from the disposition of the share determined without reference to this paragraph exceeds 
  (ii) the elected amount. 
  
  ### Application of subsection (1.11)
  
  (1.1) Subsection (1.11) applies if 
  (a) a particular foreign affiliate of a corporation resident in Canada disposes at any time of a share (referred to in this paragraph and subsection (1.11) as the “disposed share”) of the capital stock of another foreign affiliate of the corporation and the particular affiliate would, in the absence of subsections (1) and (1.11), have a capital gain from the disposition of the disposed share; or 
  (b) a corporation resident in Canada would, in the absence of subsections (1) and (1.11), be deemed under subsection 40(3), because of an election under subsection 90(3) or subparagraph 5901(2)(b)(i) of the Income Tax Regulations, to have realized a gain from a disposition at any time of a share (referred to in subsection (1.11) as the “disposed share”) of the capital stock of a foreign affiliate of the corporation.  
  
  ### Deemed election
  
  (1.11) If this subsection applies, the corporation resident in Canada referred to in subsection (1.1) is deemed 
  (a) to have made an election, at the time referred to in subsection (1.1), under subsection (1) in respect of the disposition of the disposed share; and 
  (b) to have designated, in the election, the prescribed amount in respect of the disposition of the disposed share. 
  
  ### Disposition of shares of a foreign affiliate held by a partnership
  
  (1.2) Where a particular corporation resident in Canada or a foreign affiliate of the particular corporation (each of which is referred to in this subsection as the “disposing corporation”) would, but for this subsection, have a taxable capital gain from a disposition by a partnership, at any time, of shares of a class of the capital stock of a foreign affiliate of the particular corporation and the particular corporation so elects in prescribed manner in respect of the disposition, 
  (a) twice 
  (i) the amount designated by the particular corporation (which amount shall not exceed the amount that is equal to the proportion of the taxable capital gain of the partnership that the number of shares of that class of the capital stock of the foreign affiliate, determined as the amount, if any, by which the number of those shares that were deemed to have been owned by the disposing corporation for the purposes of subsection 93.1(1) immediately before the disposition exceeds the number of those shares that were deemed to have been owned for those purposes by the disposing corporation immediately after the disposition, is of the number of those shares of the foreign affiliate that were owned by the partnership immediately before the disposition), or 
  (ii) if subsection (1.3) applies, the prescribed amount in respect of those shares is deemed to have been a dividend received immediately before that time on the number of those shares of the foreign affiliate which shall be determined as the amount, if any, by which the number of those shares that the disposing corporation was deemed to own for the purpose of subsection 93.1(1) immediately before the disposition exceeds the number of those shares of the foreign affiliate that the disposing corporation was deemed to own for the purposes of subsection 93.1 (1) immediately after the disposition; 
  (b) notwithstanding section 96, the disposing corporation’s taxable capital gain from the disposition of those shares is deemed to be the amount, if any, by which the disposing corporation’s taxable capital gain from the disposition of the shares otherwise determined exceeds the amount designated by the particular corporation in respect of the shares; 
  (c) for the purpose of any regulation made under this subsection, the disposing corporation is deemed to have disposed of the number of those shares of the foreign affiliate which shall be determined as the amount, if any, by which the number of those shares that the disposing corporation was deemed to own for the purposes of subsection 93.1(1) immediately before the disposition exceeds the number of those shares that the disposing corporation was deemed to own for those purposes immediately after the disposition; 
  (d) for the purposes of section 113 in respect of the dividend referred to in paragraph (a), the disposing corporation is deemed to have owned the shares on which that dividend was received; and 
  (e) where the disposing corporation has a taxable capital gain from the partnership because of the application of subsection 40(3) to the partnership in respect of those shares, for the purposes of this subsection, the shares are deemed to have been disposed of by the partnership. 
  
  ### Deemed election
  
  (1.3) Where a foreign affiliate of a particular corporation resident in Canada has a gain from the disposition by a partnership at any time of shares of a class of the capital stock of a foreign affiliate of the particular corporation that are excluded property, the particular corporation is deemed to have made an election under subsection (1.2) in respect of the number of shares of the foreign affiliate which shall be determined as the amount, if any, by which the number of those shares that the disposing corporation was deemed to own for the purposes of subsection 93.1(1) immediately before the disposition exceeds the number of those shares that the disposing corporation was deemed to own for those purposes immediately after the disposition. 
  
  ### Application of subsection (2.01)
  
  (2) Subsection (2.01) applies if 
  (a) a particular corporation (referred to in subparagraph (2.01)(b)(ii) as the “vendor”, as the context requires) resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.01) as the “disposition time”) of a share (referred to in subsection (2.01) as the “affiliate share”) of the capital stock of a foreign affiliate of the particular corporation; or 
  (b) a foreign affiliate (referred to in subparagraph (2.01)(b)(ii) as the “vendor”) of a particular corporation resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.01) as the “disposition time”) of a share (referred to in subsection (2.01) as the “affiliate share”) of the capital stock of another foreign affiliate of the particular corporation that is not excluded property. 
  
  ### Loss limitation on disposition of share of foreign affiliate
  
  (2.01) If this subsection applies, the amount of the particular loss referred to in paragraph (2)(a) or (b) is deemed to be the greater of 
  (a) the amount determined by the formula is the amount of the particular loss determined without reference to this section, is the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate share or on a share for which the affiliate share was substituted, by 
  (i) the particular corporation referred to in subsection (2), 
  (ii) another corporation that is related to the particular corporation, 
  (iii) a foreign affiliate of the particular corporation, or 
  (iv) a foreign affiliate of another corporation that is related to the particular corporation, and is the total of 
  (i) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate share or a share for which the affiliate share was substituted, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, 
  (ii) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate share or a share for which the affiliate share was substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B, 
  (iii) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and 
  (iv) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and 
  (b) the lesser of 
  (i) the portion of the particular loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and 
  (ii) the amount determined in respect of the vendor that is 
  (A) if the particular loss is a capital loss, the amount of a gain (other than a specified gain) that 
  (I) was made within 30 days before or after the disposition time by the vendor and that 
  1 is deemed under subsection 39(2) to be a capital gain of the vendor for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and 
  2 is in respect of the settlement or extinguishment of a foreign currency debt that was issued or incurred by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor and that was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation and can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or 
  (II) is a capital gain realized within 30 days before or after the disposition time by the vendor under an agreement that 
  1 was entered into by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  2 provides for the purchase, sale or exchange of currency, and 
  3 can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share, or 
  (B) in any other case, the amount of a gain (other than a specified gain or a capital gain) that was realized within 30 days before or after the disposition time by the vendor that is included in computing the income of the vendor for the taxation year that includes the time the gain was realized and 
  (I) that is in respect of the settlement or extinguishment of a foreign currency debt that 
  1 was issued or incurred by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor, 
  2 was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and 
  3 can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or 
  (II) under an agreement that 
  1 was entered into by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  2 provides for the purchase, sale or exchange of currency, and 
  3 can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share. 
  
  ### Specified gain
  
  (2.02) For the purposes of clauses (2.01)(b)(ii)(A) and (B), a 
  *specified gain* means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in sub-subclause (2.01)(b)(ii)(A)(I)2 or subclause (2.01)(b)(ii)(B)(I), as the case may be, or that arises under a particular agreement referred to in subclause (2.01)(b)(ii)(A)(II) or (B)(II), if the particular corporation, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.  
  
  ### Application of subsection (2.11)
  
  (2.1) Subsection (2.11) applies if 
  (a) a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.11) as the “disposition time”) by a partnership (referred to in subsections (2.11) and (2.12) as the “disposing partnership”) of a share (referred to in subsection (2.11) as the “affiliate share”) of the capital stock of a foreign affiliate of the particular corporation; or 
  (b) a foreign affiliate of a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.11) as the “disposition time”) by a partnership (referred to in subsections (2.11) and (2.12) as the “disposing partnership”) of a share (referred to in subsection (2.11) as the “affiliate share”) of the capital stock of another foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the share immediately before the disposition time. 
  
  ### Loss limitation on disposition of foreign affiliate share by a partnership
  
  (2.11) If this subsection applies, the amount of the particular allowable capital loss referred to in paragraph (2.1)(a) or (b) is deemed to be the greater of 
  (a) the amount determined by the formula is the amount of the particular allowable capital loss determined without reference to this section, is ½ of the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate share or on a share for which the affiliate share was substituted, by 
  (i) the particular corporation referred to in subsection (2.1), 
  (ii) another corporation that is related to the particular corporation, 
  (iii) a foreign affiliate of the particular corporation, or 
  (iv) a foreign affiliate of another corporation that is related to the particular corporation, and is the total of 
  (i) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate share or a share for which the affiliate share was substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B, 
  (ii) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate share or a share for which the affiliate share was substituted, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, 
  (iii) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and 
  (iv) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and 
  (b) the lesser of 
  (i) the portion of the particular allowable capital loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and 
  (ii) ½ of the amount determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.1)(b)) of the particular corporation, that is the amount of a gain (other than a specified gain) that 
  (A) was made within 30 days before or after the disposition time by the disposing partnership to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be, and that 
  (I) is deemed under subsection 39(2) to be a capital gain of the disposing partnership for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and 
  (II) is in respect of the settlement or extinguishment of a foreign currency debt that 
  1 was issued or incurred by the disposing partnership within 30 days before or after the acquisition of the affiliate share by the disposing partnership, 
  2 was, at all times at which it was a debt obligation of the disposing partnership, owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and 
  3 can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or 
  (B) is a capital gain (to the extent that the capital gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) realized within 30 days before or after the disposition time by the disposing partnership under an agreement that 
  (I) was entered into by the disposing partnership, within 30 days before or after the acquisition of the affiliate share by the disposing partnership, with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  (II) provides for the purchase, sale or exchange of currency, and 
  (III) can reasonably be considered to have been entered into by the disposing partnership for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share. 
  
  ### Specified gain
  
  (2.12) For the purposes of subparagraph (2.11)(b)(ii), a 
  *specified gain* means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in subclause (2.11)(b)(ii)(A)(II), or that arises under a particular agreement referred to in clause (2.11)(b)(ii)(B), if the disposing partnership, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.  
  
  ### Application of subsection (2.21)
  
  (2.2) Subsection (2.21) applies if 
  (a) a particular corporation (referred to in subparagraph (2.21)(b)(ii) as the “vendor”, as the context requires) resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.21) as the “disposition time”) of an interest (referred to in subsection (2.21) as the “partnership interest”) in a partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.21) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation; or 
  (b) a foreign affiliate (referred to in subparagraph (2.21)(b)(ii) as the “vendor”) of a particular corporation resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.21) as the “disposition time”) of an interest (referred to in subsection (2.21) as the “partnership interest”) in a partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.21) as the “affiliate shares”) of the capital stock of another foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the shares immediately before the disposition time. 
  
  ### Loss limitation on disposition of partnership that has foreign affiliate shares
  
  (2.21) If this subsection applies, the amount of the particular loss referred to in paragraph (2.2)(a) or (b) is deemed to be the greater of 
  (a) the amount determined by the formula is the amount of the particular loss determined without reference to this section, is the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on affiliate shares or on shares for which affiliate shares were substituted, by 
  (i) the particular corporation referred to in subsection (2.2), 
  (ii) another corporation that is related to the particular corporation, 
  (iii) a foreign affiliate of the particular corporation, or 
  (iv) a foreign affiliate of another corporation that is related to the particular corporation, and is the total of 
  (i) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B, 
  (ii) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B, 
  (iii) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, and 
  (iv) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and 
  (b) the lesser of 
  (i) the portion of the particular loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and 
  (ii) the amount determined in respect of the vendor that is 
  (A) if the particular loss is a capital loss, the amount of a gain (other than a specified gain) that 
  (I) was made within 30 days before or after the disposition time by the vendor and that 
  1 is deemed under subsection 39(2) to be a capital gain of the vendor for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and 
  2 is in respect of the settlement or extinguishment of a foreign currency debt that was issued or incurred by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor and that was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation and can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or 
  (II) is a capital gain realized within 30 days before or after the disposition time by the vendor under an agreement that 
  1 was entered into by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  2 provides for the purchase, sale or exchange of currency, and 
  3 can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest, or 
  (B) in any other case, the amount of a gain (other than a specified gain or a capital gain) that was realized within 30 days before or after the disposition time by the vendor that is included in computing the income of the vendor for the taxation year that includes the time the gain was realized and 
  (I) that is in respect of the settlement or extinguishment of a foreign currency debt that 
  1 was issued or incurred by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor, 
  2 was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and 
  3 can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or 
  (II) under an agreement that 
  1 was entered into by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  2 provides for the purchase, sale or exchange of currency, and 
  3 can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest. 
  
  ### Specified gain
  
  (2.22) For the purposes of clauses (2.21)(b)(ii)(A) and (B), a 
  *specified gain* means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in sub-subclause (2.21)(b)(ii)(A)(I)2 or subclause (2.21)(b)(ii)(B)(I), as the case may be, or that arises under a particular agreement referred to in subclause (2.21)(b)(ii)(A)(II) or (B)(II), if the particular corporation, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.  
  
  ### Application of subsection (2.31)
  
  (2.3) Subsection (2.31) applies if 
  (a) a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.31) as the “disposition time”) by a particular partnership of an interest (referred to in subsection (2.31) as the “partnership interest”) in another partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.31) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation; or 
  (b) a foreign affiliate of a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.31) as the “disposition time”) by a particular partnership of an interest (referred to in subsection (2.31) as the “partnership interest”) in another partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.31) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the shares immediately before the disposition time. 
  
  ### Loss limitation on disposition by a partnership of an indirect interest in foreign affiliate shares
  
  (2.31) If this subsection applies, the amount of the particular allowable capital loss referred to in paragraph (2.3)(a) or (b) is deemed to be the greater of 
  (a) the amount determined by the formula is the amount of the particular allowable capital loss determined without reference to this section, is ½ of the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate shares or on shares for which the affiliate shares were substituted, by 
  (i) the particular corporation referred to in subsection (2.3), 
  (ii) another corporation that is related to the particular corporation, 
  (iii) a foreign affiliate of the particular corporation, or 
  (iv) a foreign affiliate of another corporation that is related to the particular corporation, and is the total of 
  (i) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B, 
  (ii) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B, 
  (iii) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and 
  (iv) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, and 
  (b) the lesser of 
  (i) the portion of the particular allowable capital loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and 
  (ii) ½ of the amount determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.3)(b)), of the particular corporation, that is the amount of a gain (other than a specified gain) that 
  (A) was made within 30 days before or after the disposition time by the particular partnership to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be, and that 
  (I) is deemed under subsection 39(2) to be a capital gain of the particular partnership for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and 
  (II) is in respect of the settlement or extinguishment of a foreign currency debt that 
  1 was issued or incurred by the particular partnership within 30 days before or after the acquisition of the partnership interest by the particular partnership, 
  2 was, at all times at which it was a debt obligation of the particular partnership, owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and 
  3 can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or 
  (B) is a capital gain (to the extent that the capital gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) realized within 30 days before or after the disposition time by the particular partnership under an agreement that 
  (I) was entered into by the particular partnership, within 30 days before or after the acquisition of the partnership interest by the particular partnership, with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation, 
  (II) provides for the purchase, sale or exchange of currency, and 
  (III) can reasonably be considered to have been entered into by the particular partnership for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest. 
  
  ### Specified gain
  
  (2.32) For the purposes of subparagraph (2.31)(b)(ii), a 
  *specified gain* means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in subclause (2.31)(b)(ii)(A)(II), or that arises under a particular agreement referred to in clause (2.31)(b)(ii)(B), if the particular partnership, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.  
  
  ### Exempt dividends
  
  (3) For the purposes of subsections (2.01), (2.11), (2.21) and (2.31), 
  (a) a dividend received by a corporation resident in Canada is an exempt dividend to the extent of the amount in respect of the dividend that is deductible from the income of the corporation for the purpose of computing the taxable income of the corporation because of any of paragraphs 113(1)(a) to (c); and 
  (b) a dividend received by a particular foreign affiliate of a corporation resident in Canada from another foreign affiliate of the corporation is an exempt dividend to the extent of the amount, if any, by which the portion of the dividend that was not prescribed to have been paid out of the pre-acquisition surplus of the other affiliate exceeds the total of such portion of the income or profits tax that can reasonably be considered to have been paid in respect of that portion of the dividend by the particular affiliate or by a partnership in which the particular affiliate had, at the time of the payment of the income or profits tax, a partnership interest, either directly or indirectly; and 
  (c) the prescribed amount is deemed to be an amount that is received, at the adjustment time referred to in subsection 5905(7.7) of the Income Tax Regulations, by a particular foreign affiliate of a corporation resident in Canada from another foreign affiliate of the corporation and that is in respect of an exempt dividend on a share of the capital stock of the other affiliate.  
  
  ### Loss on disposition of shares of foreign affiliate
  
  (4) If a taxpayer resident in Canada or a foreign affiliate (which taxpayer or foreign affiliate is referred to in this subsection as the “transferee”) of the taxpayer has acquired shares of the capital stock of one or more foreign affiliates (each referred to in this subsection as an “acquired affiliate”) of the taxpayer on a disposition of shares (such shares disposed of being referred to in this subsection as the “disposed shares”) of the capital stock of any other foreign affiliate of the taxpayer (other than, where the transferee is a foreign affiliate of the taxpayer, a disposition of shares that are, immediately before the acquisition, excluded property of the transferee or a disposition to which subsection 40(3.4) applies), the following rules apply: 
  (a) the capital loss, if any, of the transferee from the disposition, is deemed to be nil; and 
  (b) in computing the adjusted cost base to the transferee of a share of a particular class of the capital stock of an acquired affiliate that is owned by the transferee immediately after the disposition, there is to be added the amount determined by the formula is the total of all amounts each of which is the cost amount to the transferee, immediately before the disposition, of a disposed share, is the total of 
  (i) the total of all amounts each of which is the proceeds of disposition of a disposed share, and 
  (ii) the total of all amounts in respect of the computation of losses of the transferee from the dispositions of the disposed shares, each of which is, in respect of the disposition of a disposed share, the amount by which the amount for A in the formula in paragraph (2.01)(a) exceeds the amount determined by that formula, is the fair market value, immediately after the disposition, of all shares of the particular class owned, immediately after the disposition, by the transferee, is the fair market value, immediately after the disposition, of all shares owned, immediately after the disposition, by the transferee of the capital stock of all acquired affiliates, and is the number of shares of the particular class that are owned by the transferee immediately after the disposition. 
  
  ### Late filed elections
  
  (5) Where the election referred to in subsection 93(1) was not made on or before the day on or before which the election was required by that subsection to be made, the election shall be deemed to have been made on that day if, on or before the day that is 3 years after that day, 
  (a) the election is made in prescribed manner; and 
  (b) an estimate of the penalty in respect of that election is paid by the corporation when that election is made. 
  
  ### Special cases
  
  (5.1) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable 
  (a) to permit an election under subsection 93(1) to be made after the day that is 3 years after the day on or before which the election was required by that subsection to be made, or 
  (b) to permit an election made under subsection 93(1) to be amended, the election or amended election shall be deemed to have been made on the day on or before which the election was so required to be made if 
  (c) the election or amended election is made in prescribed form, and 
  (d) an estimate of the penalty in respect of the election or amended election is paid by the corporation when the election or amended election is made, and where this subsection applies to the amendment of an election, that election shall be deemed not to have been effective. 
  
  ### Amended election
  
  (5.2) An election (referred to in this subsection as the “amended election”) by a taxpayer under subsection (1) in respect of a disposition of shares of the capital stock of a foreign affiliate of the taxpayer is deemed to have been made on the day on or before which the election was required to be made and any previous election (referred to in this subsection as the “old election”) under subsection (1) in respect of that disposition is deemed not to have been made if 
  (a) the taxpayer has not elected under section 51 of the Technical Tax Amendments Act, 2012 ;  
  (b) the taxpayer made the old election on or before December 18, 2009; 
  (c) in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit the old election to be amended; and 
  (d) the amended election is made in prescribed form on or before December 31, 2013. 
  
  ### Penalty for late filed election
  
  (6) For the purposes of this section, the penalty in respect of an election or amended election referred to in paragraph 93(5)(a) or 93(5.1)(c) is an amount equal to the lesser of 
  (a) 1/4 of 1% of the amount designated in the election or amended election for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 93(1) to be made and ending on the day the election is made, and 
  (b) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in paragraph 93(6)(a). 
  
  ### Unpaid balance of penalty
  
  (7) The Minister shall, with all due dispatch, examine each election and amended election referred to in paragraph 93(5)(a) or 93(5.1)(c), assess the penalty payable and send a notice of assessment to the corporation, and the corporation shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Shares held by partnership
  
  93.1 (1) For the purpose of determining whether a non-resident corporation is a foreign affiliate of a corporation resident in Canada for the purposes of a specified provision, if, based on the assumptions contained in paragraph 96(1)(c), at any time shares of a class of the capital stock of a corporation are owned by a partnership or are deemed under this subsection to be owned by a partnership, then each member of the partnership is deemed to own at that time the number of those shares that is equal to the proportion of all those shares that 
  (a) the fair market value of the member’s interest in the partnership at that time is of 
  (b) the fair market value of all members’ interests in the partnership at that time. 
  
  ### Specified provisions for subsection (1)
  
  (1.1) For the purposes of subsection (1), the specified provisions are 
  (a) subsections (2), (5), 20(12) and 39(2.1), sections 90, 93, 93.3 and 113, paragraphs 128.1(1)(c.3) and (d), section 212.3, subsection 219.1(2) and section 233.4; 
  (b) section 95 to the extent that section is applied for the purposes of the provisions referred to in paragraph (a); 
  (c) any regulations made for the purposes of the provisions referred to in paragraph (a); and 
  (d) paragraph 95(2)(g.04), subsections 95(2.2) and (8) to (12) and section 126. 
  
  ### Where dividends received by a partnership
  
  (2) Where, based on the assumptions contained in paragraph 96(1)(c), at any time shares of a class of the capital stock of a foreign affiliate of a corporation resident in Canada (in this subsection referred to as “affiliate shares”) are owned by a partnership and at that time the affiliate pays a dividend on affiliate shares to the partnership (in this subsection referred to as the “partnership dividend”), 
  (a) for the purposes of sections 93 and 113 and any regulations made for the purposes of those sections, each member of the partnership (other than another partnership) is deemed to have received the proportion of the partnership dividend that 
  (i) the fair market value of the member’s interest held, directly or indirectly through one or more other partnerships, in the partnership at that time is of 
  (ii) the fair market value of all the interests in the partnership held directly by members of the partnership at that time; 
  (b) for the purposes of sections 93 and 113 and any regulations made for the purposes of those sections, the proportion of the partnership dividend deemed by paragraph (a) to have been received by a member of the partnership at that time is deemed to have been received by the member in equal proportions on each affiliate share that is property of the partnership at that time; 
  (c) for the purpose of applying section 113, in respect of the dividend referred to in paragraph (a), each affiliate share referred to in paragraph (b) is deemed to be owned by each member of the partnership; and 
  (d) notwithstanding paragraphs (a) to (c), 
  (i) where the corporation resident in Canada is a member of the partnership, the amount deductible by it under section 113 in respect of the dividend referred to in paragraph (a) shall not exceed the portion of the amount of the dividend included in its income pursuant to subsection 96(1), and 
  (ii) where another foreign affiliate of the corporation resident in Canada is a member of the partnership, the amount included in that other affiliate’s income in respect of the dividend referred to in paragraph (a) shall not exceed the amount that would be included in its income pursuant to subsection 96(1) in respect of the partnership dividend received by the partnership if the value for H in the definition 
  *foreign accrual property income* in subsection 95(1) were nil and this Act were read without reference to this subsection.  
  
  ### Tiered partnerships
  
  (3) A person or partnership that is (or is deemed by this subsection to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership, and the person or partnership is deemed to have, directly, rights to the income or capital of the other partnership to the extent of the person or partnership’s direct and indirect rights to that income or capital, for the purposes of applying 
  (a) except to the extent that the context otherwise requires, a provision of this Subdivision; 
  (b) any of paragraphs 13(21.2)(a), 14(12)(a), 18(13)(a), 40(2)(e.1), (e.3) and (g) and (3.3)(a); and 
  (c) subsections 39(2.1), 40(3.6) and 87(8.3). 
  
  ### Partnership deemed to be corporation
  
  (4) For the purpose of applying clause 95(2)(a)(ii)(D) in respect of an amount paid or payable by a partnership to a foreign affiliate, of a taxpayer, that is a member of the partnership or to another foreign affiliate of the taxpayer, 
  (a) if, at any time, all the members (in this subsection referred to as “member affiliates”) of the partnership are foreign affiliates of the taxpayer, 
  (i) the partnership is deemed to be, at that time in respect of the taxpayer and the member affiliates, a non-resident corporation without share capital, and 
  (ii) all the membership interests in the partnership are deemed to be, at that time, equity interests in the corporation held by the member affiliates; and 
  (b) if, at any time, all the member affiliates are resident in a particular country and the partnership does not carry on business outside the particular country, the partnership is deemed to be, at that time, resident in the particular country. 
  
  ### Computing FAPI in respect of partnership
  
  (5) For the purpose of applying a relevant provision in respect of a foreign affiliate of a taxpayer resident in Canada, if at any time the taxpayer is a partnership of which a particular corporation resident in Canada, or a foreign affiliate of the particular corporation, is a member and if, based on the relevant assumptions, the particular corporation and the taxpayer would be related, then 
  (a) a non-resident corporation that is, at that time, a foreign affiliate of the particular corporation is deemed to be, at that time, a foreign affiliate of the taxpayer; and 
  (b) the taxpayer is deemed to have, at that time, a qualifying interest in respect of that foreign affiliate if the particular corporation has, at that time, a qualifying interest in respect of the non-resident corporation. 
  
  ### Relevant provisions and assumptions
  
  (6) For the purposes of subsection (5), 
  (a) the relevant provisions are 
  (i) paragraph (b) of the description of A in the definition 
  *foreign accrual property income* in subsection 95(1),  
  (ii) in determining whether a property of a foreign affiliate of a taxpayer is excluded property of the affiliate, the description of B in the definition 
  *foreign accrual property income* in subsection 95(1),  
  (iii) paragraphs 95(2)(a) and (g), and 
  (iv) subsections 95(2.2) and (2.21); and 
  (b) the relevant assumptions are that 
  (i) the partnership is a non-resident corporation having capital stock of a single class divided into 100 issued shares that each have full voting rights, and 
  (ii) each member of the partnership (other than another partnership) owns, at any time, the proportion of the issued shares of that class that 
  (A) the fair market value of the member’s interest held, directly or indirectly through one or more partnerships, in the partnership at that time is of 
  (B) the fair market value of all the interests in the partnership held directly by members of the partnership at that time. 
  
  ### Definitions
  
  93.2 (1) The definitions in this subsection apply in this section.  
  *equity interest*, in a non-resident corporation without share capital, means any right, whether absolute or contingent, conferred by the non-resident corporation to receive, either immediately or in the future, an amount that can reasonably be regarded as all or any part of the capital, revenue or income of the non-resident corporation, but does not include a right as creditor.  (participation)   
  *non-resident corporation without share capital* means a non-resident corporation that, determined without reference to this section, does not have capital divided into shares. (société non-résidente sans capital-actions)  
  
  ### Non-resident corporation without share capital
  
  (2) For the purposes of this Act, 
  (a) equity interests in a non-resident corporation without share capital that have identical rights and obligations, determined without reference to proportionate differences in all of those rights and obligations, are deemed to be shares of a separate class of the capital stock of the corporation; 
  (b) the corporation is deemed to have 100 issued and outstanding shares of each class of its capital stock; 
  (c) each person or partnership that holds, at any time, an equity interest in a particular class of the capital stock of the corporation is deemed to own, at that time, that number of shares of the particular class that is equal to the proportion of 100 that 
  (i) the fair market value, at that time, of all the equity interests of the particular class held by the person or partnership is of 
  (ii) the fair market value, at that time, of all the equity interests of the particular class; and 
  (d) shares of a particular class of the capital stock of the corporation are deemed to have rights and obligations that are the same as those of the corresponding equity interests. 
  
  ### Non-resident corporation without share capital
  
  (3) For the purposes of section 51, subsection 85.1(3), section 86 and paragraph 95(2)(c), 
  (a) subject to paragraph (b), if at any time a taxpayer resident in Canada or a foreign affiliate of the taxpayer (in this subsection referred to as the “vendor”) disposes of capital property that is shares of the capital stock of a foreign affiliate of the taxpayer, or a debt obligation owing to the taxpayer by the affiliate, to — or exchanges the shares or debt for shares of the capital stock of — a non-resident corporation without share capital, that is immediately after that time a foreign affiliate of the taxpayer, in a manner that increases the fair market value of a class of shares of the capital stock of the non-resident corporation, the non-resident corporation is deemed to have issued, and the vendor is deemed to have received, new shares of the class as consideration in respect of the disposition or exchange; and 
  (b) if the taxpayer elects under this paragraph and files the election in writing with the Minister on or before its filing-due date for the taxation year that includes the day on which the disposition or exchange occurs, paragraph (a) does not apply to the disposition or exchange. 
  
  ### Definition of specified trust 
  
  93.3 (1) In this section, 
  *specified trust*, at any time, means a trust in respect of which the following apply at that time:  
  (a) in the absence of subsection (3), the trust would be described in paragraph (h) of the definition 
  *exempt foreign trust* in subsection 94(1);  
  (b) the trust is resident in Australia or India (in this section referred to as the “specified jurisdiction”); 
  (c) the interest of each beneficiary under the trust is described by reference to units of the trust; and 
  (d) the liability of each beneficiary under the trust is limited by the operation of any law governing the trust. 
  
  ### Conditions for subsection (3)
  
  (2) Subsection (3) applies at any time to a taxpayer resident in Canada in respect of a trust if 
  (a) a non-resident corporation is at that time beneficially interested in the trust; 
  (b) the non-resident corporation is at that time a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest; 
  (c) the trust is at that time a specified trust; 
  (d) the total fair market value at that time of all fixed interests (in this section as defined in subsection 94(1)) of a class in the trust held by the non-resident corporation, or persons or partnerships that do not deal at arm’s length with the non-resident corporation, is at least 10% of the total fair market value at that time of all fixed interests of the class; and 
  (e) unless the non-resident corporation first acquires a beneficial interest in the trust at that time or the non-resident corporation first becomes a foreign affiliate of the taxpayer at that time, immediately before that time (referred to in this paragraph as the “preceding time”) subsection (3) applied 
  (i) to the taxpayer in respect of the trust, or 
  (ii) to a corporation resident in Canada, that at the preceding time did not deal at arm’s length with the taxpayer, in respect of the trust. 
  
  ### Specified trusts
  
  (3) If this subsection applies at any time to a taxpayer resident in Canada in respect of a trust, the following rules apply at that time for the specified purposes: 
  (a) the trust is deemed to be a non-resident corporation that is resident in the specified jurisdiction and not to be a trust; 
  (b) each particular class of fixed interests in the trust is deemed to be a separate class of 100 issued shares, of the capital stock of the non-resident corporation, that have the same attributes as the interests of the particular class; 
  (c) each beneficiary under the trust is deemed to hold the number of shares of each separate class described in paragraph (b) equal to the proportion of 100 that the fair market value at that time of that beneficiary’s fixed interests in the corresponding particular class of fixed interests in the trust is of the fair market value at that time of all fixed interests in the particular class; 
  (d) the non-resident corporation is deemed to be controlled by the taxpayer resident in Canada  — a foreign affiliate of which is referred to in paragraph (2)(b) and is beneficially interested in the trust  —  that has the greatest equity percentage in the non-resident corporation; 
  (e) a particular foreign affiliate of the taxpayer in which the taxpayer has a direct equity percentage (as defined in subsection 95(4)) at a particular time, and that is not a controlled foreign affiliate of the taxpayer at that time, is deemed to be a controlled foreign affiliate of the taxpayer at that time if, at that time, 
  (i) the particular affiliate has an equity percentage (as defined in subsection 95(4)) in the foreign affiliate referred to in paragraph (2)(b), or 
  (ii) the particular affiliate is the foreign affiliate referred to in paragraph (2)(b); and 
  (f) section 94.2 does not apply to the taxpayer in respect of the trust. 
  
  ### Specified purposes
  
  (4) For the purposes of subsection (3), the specified purposes are 
  (a) the determination, in respect of an interest in a specified trust, of the Canadian tax results (as defined in subsection 261(1)) of the taxpayer resident in Canada referred to in subsection (3) for a taxation year in respect of shares of the capital stock of a foreign affiliate of the taxpayer;  
  (b) the filing obligations of the taxpayer under section 233.4; and 
  (c) if the taxpayer is a corporation resident in Canada, the application of section 212.3 in respect of an investment (as defined in subsection 212.3(10)) by the taxpayer. 
  
  ### Mergers
  
  (5) For the purposes of this section, 
  (a) if there has been an amalgamation to which subsection 87(1) applies, the new corporation referred to in that subsection is deemed to be the same corporation as, and a continuation of, each predecessor corporation referred to in that subsection; and 
  (b) if there has been a winding-up to which subsection 88(1) applies, the parent referred to in that subsection is deemed to be the same corporation as, and a continuation of, the subsidiary referred to in that subsection. 
  
  ### Definitions
  
  94 (1) The following definitions apply in this section and section 94.2.  
  *arm’s length transfer*, at any time by a person or partnership (referred to in this definition as the “transferor”) means a transfer or loan (which transfer or loan is referred to in this definition as the “transfer”) of property (other than restricted property) that is made at that time (referred to in this definition as the “transfer time”) by the transferor to a particular person or partnership (referred to in this definition as the “recipient”) if  
  (a) it is reasonable to conclude that none of the reasons (determined by reference to all the circumstances including the terms of a trust, an intention, the laws of a country or the existence of an agreement, a memorandum, a letter of wishes or any other arrangement) for the transfer is the acquisition at any time by any person or partnership of an interest as a beneficiary under a non-resident trust; and 
  (b) the transfer is 
  (i) a payment of interest, of a dividend, of rent, of a royalty or of any other return on investment, or any substitute for such a return on investment, in respect of a particular property held by the recipient, if the amount of the payment is not more than the amount that the transferor would have paid if the transferor dealt at arm’s length with the recipient, 
  (ii) a payment made by a corporation on a reduction of the paid-up capital in respect of shares of a class of its capital stock held by the recipient, if the amount of the payment is not more than the lesser of the amount of the reduction in the paid-up capital and the consideration for which the shares were issued, 
  (iii) a transfer in exchange for which the recipient transfers or loans property to the transferor, or becomes obligated to transfer or loan property to the transferor, and for which it is reasonable to conclude 
  (A) having regard only to the transfer and the exchange, that the transferor would have been willing to make the transfer if the transferor dealt at arm’s length with the recipient, and 
  (B) that the terms and conditions, and circumstances, under which the transfer was made would have been acceptable to the transferor if the transferor dealt at arm’s length with the recipient, 
  (iv) a transfer made in satisfaction of an obligation referred to in subparagraph (iii) and for which it is reasonable to conclude 
  (A) having regard only to the transfer and the obligation, that the transferor would have been willing to make the transfer if the transferor dealt at arm’s length with the recipient, and 
  (B) that the terms and conditions, and circumstances, under which the transfer was made would have been acceptable to the transferor if the transferor dealt at arm’s length with the recipient, 
  (v) a payment of an amount owing by the transferor under a written agreement the terms and conditions of which, when entered into, were terms and conditions that, having regard only to the amount owing and the agreement, would have been acceptable to the transferor if the transferor dealt at arm’s length with the recipient of the payment, 
  (vi) a payment made before 2002 to a trust, to a corporation controlled by a trust or to a partnership of which a trust is a majority-interest partner in repayment of or otherwise in respect of a loan made by a trust, corporation or partnership to the transferor, or 
  (vii) a payment made after 2001 to a trust, to a corporation controlled by the trust or to a partnership of which the trust is a majority-interest partner, in repayment of or otherwise in respect of a particular loan made by the trust, corporation or partnership to the transferor and either 
  (A) the payment is made before 2011 and they would have been willing to enter into the particular loan if they dealt at arm’s length with each other, or 
  (B) the payment is made before 2005 in accordance with fixed repayment terms agreed to before June 23, 2000. ( transfert sans lien de dépendance)   
  *beneficiary* under a trust includes  
  (a) a person or partnership that is beneficially interested in the trust; and 
  (b) a person or partnership that would be beneficially interested in the trust if the reference in subparagraph 248(25)(b)(ii) to 
  (i) “any arrangement in respect of the particular trust” were read as a reference to “any arrangement (including, for greater certainty, the terms or conditions of a share, or any arrangement in respect of a share, of the capital stock of a corporation that is beneficially interested in the particular trust) in respect of the particular trust”, and 
  (ii) “the particular person or partnership might” were read as a reference to “the particular person or partnership becomes (or could become on the exercise of any discretion by any person or partnership), directly or indirectly, entitled to any amount derived, directly or indirectly, from the income or capital of the particular trust or might”. ( bénéficiaire)   
  *closely held corporation* at any time means a corporation, other than a corporation in respect of which  
  (a) there is at least one class of shares of its capital stock that includes shares prescribed for the purpose of paragraph 110(1)(d); 
  (b) it is reasonable to conclude that at that time, in respect of each class of shares described in paragraph (a), shares of the class are held by at least 150 shareholders each of whom holds shares of the class that have a total fair market value of at least $500; and 
  (c) it is reasonable to conclude that at that time in no case does a particular shareholder (or particular shareholder together with any other shareholder with whom the particular shareholder does not deal at arm’s length) hold shares of the corporation 
  (i) that would give the particular shareholder (or the particular shareholder together with those other shareholders referred to in this paragraph) 10% or more of the votes that could be cast under any circumstance at an annual meeting of shareholders of the corporation if the meeting were held at that time, or 
  (ii) that have a fair market value of 10% or more of the fair market value of all of the issued and outstanding shares of the corporation. ( société à peu d’actionnaires)   
  *connected contributor*, to a trust at a particular time, means a contributor to the trust at the particular time, other than a person all of whose contributions to the trust made at or before the particular time were made at a non-resident time of the person. (contribuant rattaché)   
  *contribution* to a trust by a particular person or partnership means  
  (a) a transfer or loan (other than an arm’s length transfer) of property to the trust by the particular person or partnership; 
  (b) if a particular transfer or loan (other than an arm’s length transfer) of property is made by the particular person or partnership as part of a series of transactions that includes another transfer or loan (other than an arm’s length transfer) of property to the trust by another person or partnership, that other transfer or loan to the extent that it can reasonably be considered to have been made in respect of the particular transfer or loan; and 
  (c) if the particular person or partnership becomes obligated to make a particular transfer or loan (other than a transfer or loan that would, if it were made, be an arm’s length transfer) of property as part of a series of transactions that includes another transfer or loan (other than an arm’s length transfer) of property to the trust by another person or partnership, that other transfer or loan to the extent that it can reasonably be considered to have been made in respect of the obligation. ( apport)   
  *contributor* to a trust at any time means a person (other than an exempt person but including a person that has ceased to exist) that, at or before that time, has made a contribution to the trust. (contribuant)   
  *electing contributor* at any time in respect of a trust means a resident contributor, to the trust, who has elected to have subsection (16) apply in respect of the contributor and the trust for a taxation year of the contributor that includes that time or that ends before that time and for all subsequent taxation years, if  
  (a) the election was in writing filed with the Minister on or before the contributor’s filing-due date for the first taxation year of the contributor for which the election was to take effect (referred to in this definition as the “initial year”); and 
  (b) the election included both the trust’s account number as assigned by the Minister and evidence that the contributor notified, no later than 30 days after the end of the trust’s taxation year that ends in the initial year, the trust that the election would be made. ( contribuant déterminé)   
  *electing trust* in respect of a trust’s particular taxation year means the trust, if the trust  
  (a) holds at any time in the particular taxation year, or in a prior taxation year of the trust throughout which it was deemed by subsection (3) to be resident in Canada for the purpose of computing its income, property that is at that time part of its non-resident portion; 
  (b) elects to have paragraph (3)(f) apply to it for 
  (i) its first taxation year 
  (A) throughout which it is deemed by subsection (3) to be resident in Canada for the purpose of computing its income, and 
  (B) in which it holds property that is at a time in the year part of its non-resident portion, and 
  (ii) all of its taxation years that end after its taxation year described in subparagraph (i); and 
  (c) files the election described in paragraph (b) in writing filed with the Minister with the trust’s return of income for its taxation year described in subparagraph (b)(i). ( fiducie déterminée)   
  *exempt amount* in respect of a trust’s particular taxation year means an amount that is  
  (a) paid or credited (in this definition within the meaning assigned by Part XIII) by the trust before 2004; 
  (b) paid or credited by the trust and referred to in paragraph 104(7.01)(b) in respect of the trust for the particular taxation year; or 
  (c) paid in the particular taxation year (or within 60 days after the end of the particular taxation year) by the trust directly to a beneficiary (determined without reference to subsection 248(25)) under the trust if 
  (i) the beneficiary is a natural person none of whose interests as a beneficiary under the trust was ever acquired for consideration, 
  (ii) the amount is described in subparagraph 212(1)(c)(i) and is not included in computing an exempt amount in respect of any other taxation year of the trust, 
  (iii) the trust was created before October 30, 2003, and 
  (iv) no contribution has been made to the trust on or after July 18, 2005. ( somme exclue)   
  *exempt foreign trust* at a particular time means  
  (a) a non-resident trust if 
  (i) each beneficiary under the trust at the particular time is 
  (A) an individual who, at the time that the trust was created, was, because of mental or physical infirmity, dependent on an individual who is a contributor to the trust or on an individual related to such a contributor (which beneficiary is referred to in this paragraph as an “infirm beneficiary”), or 
  (B) a person who is entitled, only after the particular time, to receive or otherwise obtain the use of any of the trust’s income or capital, 
  (ii) at the particular time there is at least one infirm beneficiary who suffers from a mental or physical infirmity that causes the beneficiary to be dependent on a person, 
  (iii) each infirm beneficiary is, at all times that the infirm beneficiary is a beneficiary under the trust during the trust’s taxation year that includes the particular time, non-resident, and 
  (iv) each contribution to the trust made at or before the particular time can reasonably be considered to have been, at the time that the contribution was made, made to provide for the maintenance of an infirm beneficiary during the expected period of the beneficiary’s infirmity; 
  (b) a non-resident trust if 
  (i) the trust was created as a consequence of the breakdown of a marriage or common-law partnership of two particular individuals to provide for the maintenance of a beneficiary under the trust who was, during that marriage or common-law partnership, 
  (A) a child of both of those particular individuals (which beneficiary is referred to in this paragraph as a “child beneficiary”), or 
  (B) one of those particular individuals (which beneficiary is referred to in this paragraph as the “adult beneficiary”), 
  (ii) each beneficiary under the trust at the particular time is 
  (A) a child beneficiary under 21 years of age, 
  (B) a child beneficiary under 31 years of age who is enrolled at any time in the trust’s taxation year that includes the particular time at an educational institution that is described in subclause (iv)(B)(I) or (II), 
  (C) the adult beneficiary, or 
  (D) a person who is entitled, only after the particular time, to receive or otherwise obtain the use of any of the trust’s income or capital, 
  (iii) each beneficiary described in any of clauses (ii)(A) to (C) is, at all times that the beneficiary is a beneficiary under the trust during the trust’s taxation year that includes the particular time, non-resident, and 
  (iv) each contribution to the trust, at the time that the contribution was made, was 
  (A) an amount paid by the particular individual other than the adult beneficiary that would be a support amount as defined in subsection 56.1(4) if it had been paid by that particular individual directly to the adult beneficiary, or 
  (B) made by one of those particular individuals or a person related to one of those particular individuals to provide for the maintenance of a child beneficiary while the child was either under 21 years of age or was under 31 years of age and enrolled at an educational institution located outside Canada that is 
  (I) a university, college or other educational institution that provides courses at a post-secondary school level, or 
  (II) an educational institution that provides courses designed to furnish a person with skills for, or improve a person’s skills in, an occupation; 
  (c) a non-resident trust if 
  (i) at the particular time the trust is an agency of the United Nations, 
  (ii) at the particular time the trust owns and administers a university described in subparagraph (a)(iv) of the definition 
  *qualified donee* in subsection 149.1(1),  
  (iii) at any time in the trust’s taxation year that includes the particular time or at any time in the preceding calendar year Her Majesty in right of Canada has made a gift to the trust, or 
  (iv) the trust is established under the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992, or any protocol to it that has been ratified by the Government of Canada;  
  (d) a non-resident trust 
  (i) that throughout the particular period that began at the time it was created and ends at the particular time would be non-resident if this Act were read without reference to subsection (1) as that subsection read in its application to taxation years that include December 31, 2000, 
  (ii) that was created exclusively for charitable purposes and has been operated throughout the particular period exclusively for charitable purposes, 
  (iii) if the particular time is more than 24 months after the day on which the trust was created, in respect of which, there are at the particular time at least 20 persons (other than trusts) each of whom at the particular time 
  (A) is a contributor to the trust, 
  (B) exists, and 
  (C) deals at arm’s length with at least 19 other contributors to the trust, 
  (iv) the income of which (determined in accordance with the laws described in subparagraph (v)) for each of its taxation years that ends at or before the particular time would, if the income were not distributed and the laws described in subparagraph (v) did not apply, be subject to an income or profits tax in the country in which it was resident in each of those taxation years, and 
  (v) that was, for each of its taxation years that ends at or before the particular time, exempt under the laws of the country in which it was resident from the payment of income or profits tax to the government of that country in recognition of the charitable purposes for which the trust is operated; 
  (e) a non-resident trust that throughout the trust’s taxation year that includes the particular time is a trust governed by an employees profit sharing plan, a retirement compensation arrangement or a foreign retirement arrangement; 
  (f) a non-resident trust if 
  (i) throughout the particular period that began when it was created and ends at the particular time it has been operated exclusively for the purpose of administering or providing employee benefits in respect of employees or former employees, and 
  (ii) throughout the trust’s taxation year that includes the particular time 
  (A) the trust is a trust governed by an employee benefit plan or is a trust described in paragraph (a.1) of the definition 
  *trust* in subsection 108(1),  
  (B) the trust is maintained for the benefit of natural persons the majority of whom are non-resident, and 
  (C) no benefits are provided under the trust other than benefits in respect of qualifying services; 
  (g) a non-resident trust (other than a prescribed trust or a trust described in paragraph (a.1) of the definition 
  *trust* in subsection 108(1)) that throughout the particular period that began when it was created and ends at the particular time  
  (i) has been resident in a particular country (other than Canada) the laws of which have, throughout the particular period, 
  (A) imposed an income or profits tax, and 
  (B) exempted the trust from the payment of all income tax, and all profits tax, to the government of that particular country in recognition of the purposes for which the trust is operated, and 
  (ii) has been operated exclusively for the purpose of administering or providing superannuation or pension benefits that are primarily in respect of services rendered in the particular country by natural persons who were non-resident at the time those services were rendered; 
  (h) a non-resident trust (other than a trust that elects, in writing filed with the Minister on or before the trust’s filing-due date for the trust’s taxation year that includes the particular time, not to be an exempt foreign trust under this paragraph for the taxation year in which the election is made and for each subsequent taxation year), if at the particular time 
  (i) the only beneficiaries who may for any reason receive, at or after the particular time and directly from the trust, any of the income or capital of the trust are beneficiaries that hold fixed interests in the trust, and 
  (ii) any of the following applies: 
  (A) there are at least 150 beneficiaries described in subparagraph (i) under the trust each of whose fixed interests in the trust have at the particular time a total fair market value of at least $500, 
  (B) all fixed interests in the trust are listed on a designated stock exchange and in the 30 days immediately preceding the particular time fixed interests in the trust were traded on a designated stock exchange on at least 10 days, 
  (C) each outstanding fixed interest in the trust 
  (I) was issued by the trust in exchange for consideration that was not less than 90% of the interest’s proportionate share of the net asset value of the trust’s property at the time of its issuance, or 
  (II) was acquired in exchange for consideration equal to the fair market value of the interest at the time of its acquisition, or 
  (D) the trust is governed by 
  (I) a Roth IRA, within the meaning of section 408A of the Internal Revenue Code of the United States, or  
  (II) a plan or arrangement that was created after September 21, 2007, that is subject to that Code and that the Minister agrees is substantially similar to a Roth IRA; or 
  (i) a trust that is at the particular time a prescribed trust. ( fiducie étrangère exempte)   
  *exempt person* at any time means  
  (a) Her Majesty in right of Canada or a province; 
  (b) a person whose taxable income for the taxation year that includes that time is exempt from tax under this Part because of subsection 149(1); 
  (c) a trust resident in Canada or a Canadian corporation 
  (i) that was established by or arises under an Act of Parliament or of the legislature of a province, and 
  (ii) the principal activities of which at that time are to administer, manage or invest the monies of one or more pension funds or plans established under an Act of Parliament or of the legislature of a province; 
  (d) a trust or corporation established by or arising by reason of an Act of Parliament or the legislature of a province in connection with a scheme or program for the compensation of workers injured in an accident arising out of or in the course of their employment; 
  (e) a trust resident in Canada all the beneficiaries under which are at that time exempt persons; 
  (f) a Canadian corporation all the shares, or rights to shares, of which are held at that time by exempt persons; 
  (g) a Canadian corporation without share capital all the property of which is held at that time exclusively for the benefit of exempt persons; 
  (h) a partnership all the members of which are at that time exempt persons; and 
  (i) a trust or corporation that is at that time a mutual fund. ( personne exemptée)   
  *exempt service* means a service rendered at any time by a person or partnership (referred to in this definition as the “service provider”) to, for or on behalf of, another person or partnership (referred to in this definition as the “recipient”) if  
  (a) the recipient is a trust and the service relates to the administration of the trust; or 
  (b) the following conditions apply in respect of the service, namely, 
  (i) the service is rendered in the service provider’s capacity at that time as an employee or agent of the recipient, 
  (ii) in exchange for the service, the recipient transfers or loans property or becomes obligated to transfer or loan property, and 
  (iii) it is reasonable to conclude 
  (A) having regard only to the service and the exchange, that the service provider would be willing to carry out the service if the service provider were dealing at arm’s length with the recipient, and 
  (B) that the terms, conditions and circumstances under which the service is provided would be acceptable to the service provider if the service provider were dealing at arm’s length with the recipient. ( service exempté)   
  *fixed interest* at any time of a person or partnership in a trust means an interest of the person or partnership as a beneficiary (in this definition, determined without reference to subsection 248(25)) under the trust provided that no amount of the income or capital of the trust to be distributed at any time in respect of any interest in the trust depends on the exercise by any person or partnership of, or the failure by any person or partnership to exercise, any discretionary power, other than a power in respect of which it is reasonable to conclude that  
  (a) the power is consistent with normal commercial practice; 
  (b) the power is consistent with terms that would be acceptable to the beneficiaries under the trust if the beneficiaries were dealing with each other at arm’s length; and 
  (c) the exercise of, or failure to exercise, the power will not materially affect the value of an interest as a beneficiary under the trust relative to the value of other such interests under the trust. ( participation fixe)   
  *joint contributor* at any time in respect of a contribution to a trust means, if more than one contributor has made the contribution, each of those contributors that is at that time a resident contributor to the trust. (contribuant conjoint)   
  *mutual fund* at a particular time means a mutual fund trust or mutual fund corporation (referred to in this definition as the “fund”), but does not include a fund in respect of which statements or representations have been made at or before the particular time — by the fund, or by a promoter or other representative of the fund, in respect of the acquisition or offering of an interest in the fund — that the taxes, if any, under this Part on the income, profit or gains for any particular year — in respect of property that is held by the fund and that is, or derives its value from, an interest in a trust — are less than, or are expected to be less than, the tax that would have been applicable under this Part if the income, profits or gains from the property had been earned directly by a person who acquires an interest in the fund. (fonds commun de placement)   
  *non-resident portion* of a trust at any time means all property held by the trust to the extent that it is not at that time part of the resident portion of the trust. (partie non-résidente)   
  *non-resident time* of a person in respect of a contribution to a trust and a particular time means a time (referred to in this definition as the “contribution time”) at which the person made a contribution to a trust that is before the particular time and at which the person was non-resident (or, if the person is not in existence at the contribution time, the person was non-resident throughout the 18 months before ceasing to exist), if the person was non-resident or not in existence throughout the period that began 60 months before the contribution time (or, if the person is an individual and the trust arose on and as a consequence of the death of the individual, 18 months before the contribution time) and ends at the earlier of  
  (a) the time that is 60 months after the contribution time, and 
  (b) the particular time. ( moment de non-résidence)   
  *promoter* of a trust or corporation at any time means  
  (a) a person or partnership that at or before that time establishes, organizes or substantially reorganizes the undertakings of the trust or corporation, as the case may be; and 
  (b) for the purposes of the definition 
  *mutual fund* in this subsection, a person or partnership described by paragraph (a) and a person or partnership who in the course of a business  
  (i) sells or issues, or promotes the sale, issuance or acquisition of, an interest in a mutual fund corporation or mutual fund trust, 
  (ii) acts as an agent or advisor in respect of the sale or issuance, or the promotion of the sale, issuance or acquisition of, an interest in a mutual fund corporation or mutual fund trust, or 
  (iii) accepts, whether as a principal or agent, consideration in respect of an interest in a mutual fund corporation or mutual fund trust. ( promoteur)   
  *qualifying services* means services that are  
  (a) rendered to an employer by an employee of the employer, which employee was non-resident throughout the period during which the services were rendered; 
  (b) rendered to an employer by an employee of the employer, other than services that were 
  (i) rendered primarily in Canada, 
  (ii) rendered primarily in connection with a business carried on by the employer in Canada, or 
  (iii) a combination of services described in subparagraphs (i) and (ii); 
  (c) rendered in a particular calendar month to an employer by an employee of the employer, which employee 
  (i) was resident in Canada throughout no more than 60 months during the 72-month period that ends at the end of the particular month, and 
  (ii) became a member of, or a beneficiary under, the plan or trust under which benefits in respect of the services may be provided (or a similar plan or trust for which the plan or the trust was substituted) before the end of the calendar month following the month in which the employee became resident in Canada; or 
  (d) any combination of services that are qualifying services determined without reference to this paragraph. ( services admissibles)   
  *resident beneficiary* under a trust at any time means a person (other than a person that is at that time a successor beneficiary under the trust or an exempt person) that is, at that time, a beneficiary under the trust if, at that time,  
  (a) the person is resident in Canada; and 
  (b) there is a connected contributor to the trust. ( bénéficiaire résident)   
  *resident contributor*, to a trust at any time, means a person that is, at that time, resident in Canada and a contributor to the trust, but — if the trust was created before 1960 by a person who was non-resident when the trust was created — does not include an individual (other than a trust) who has not, after 1959, made a contribution to the trust. (contribuant résident)   
  *resident portion* of a trust at a particular time means all of the trust’s property that is  
  (a) property in respect of which a contribution has been made at or before the particular time to the trust by a contributor that is at the particular time a resident contributor, or if there is at the particular time a resident beneficiary under the trust a connected contributor, to the trust and, for the purposes of this paragraph, 
  (i) if a property is held by a contributor in common or in partnership immediately before the property is contributed to the trust, it is contributed by the contributor only to the extent that the contributor so held the property, and 
  (ii) if the contribution is a transfer described by any of paragraphs (2)(a), (c), (d) or (f), the property in respect of which the contribution has been made is deemed to be 
  (A) in respect of a transfer under paragraph (2)(a), property 
  (I) if clause (2)(a)(ii)(A) applies, the fair market value of which has increased because of a transfer or loan described by subparagraph (2)(a)(i), or 
  (II) if clause (2)(a)(ii)(B) applies, that would not otherwise be included in the resident portion of the trust, that is selected by the trust (or, failing which, is selected by the Minister) and that has a fair market value at least equal to the absolute value of a decrease in a liability or potential liability of the trust that arose because of a transfer or loan described by subparagraph (2)(a)(i), 
  (B) in respect of a transfer under paragraph (2)(c), property described by subparagraph (2)(c)(ii), 
  (C) in respect of a transfer under paragraph (2)(d), property acquired as a result of any undertaking including a guarantee, covenant or agreement given by a person or partnership other than the trust to ensure the repayment, in whole or in part, of a loan or other indebtedness incurred by the trust as described by paragraph (2)(d), and 
  (D) in respect of a transfer under paragraph (2)(f), property selected by the trust (or, failing which, is selected by the Minister) that has a fair market value at least equal to the fair market value of property deemed to be transferred to the trust as described by paragraph (2)(f); 
  (b) property that is acquired, at or before the particular time, by way of indebtedness incurred by the trust (referred to in this paragraph as the “subject property”), if 
  (i) all or part of the indebtedness is secured on property (other than the subject property) that is held in the trust’s resident portion, 
  (ii) it was reasonable to conclude, at the time that the indebtedness was incurred, that the indebtedness would be repaid with recourse to any property (other than the subject property) held at any time in the trust’s resident portion, or 
  (iii) a person resident in Canada or partnership of which a person resident in Canada is a member has become obligated, either absolutely or contingently, to effect any undertaking including a guarantee, covenant or agreement given to ensure the repayment, in whole or in part, of the indebtedness, or provided any other financial assistance in respect of the indebtedness; 
  (c) property to the extent that it is derived, directly or indirectly, in any manner whatever, from property described by any of paragraphs (a), (b) and (d), and, without limiting the generality of the foregoing, including property derived from the income (computed without reference to paragraph (16)(f) and subsections 104(6) and (12)) of the trust for a taxation year of the trust that ends at or before the particular time and property in respect of which an amount would be described at the particular time in respect of the trust by the definition 
  *capital dividend account* in subsection 89(1) if the trust were at the particular time a corporation; and  
  (d) property to the extent that it is at the particular time substituted for a property described by any of paragraphs (a) to (c). ( partie résidente)   
  *restricted property* of a person or partnership means property that the person or partnership holds and that is  
  (a) a share (or a right to acquire a share) of the capital stock of a closely held corporation if the share or right, or a property for which the share or right was substituted, was at any time acquired by the person or partnership as part of a transaction or series of transactions under which 
  (i) a specified share of the capital stock of a closely held corporation was acquired by any person or partnership in exchange for, as consideration for or upon the conversion of any property and the cost of the specified share to the person who acquired it was less than the fair market value of the specified share at the time of the acquisition, or 
  (ii) a share (other than a specified share) of the capital stock of a closely held corporation becomes a specified share of the capital stock of the corporation; 
  (b) an indebtedness or other obligation, or a right to acquire an indebtedness or other obligation, of a closely held corporation if 
  (i) the indebtedness, obligation or right, or property for which the indebtedness, obligation or right was substituted, became property of the person or partnership as part of a transaction or series of transactions under which 
  (A) a specified share of the capital stock of a closely held corporation was acquired by any person or partnership in exchange for, as consideration for or upon the conversion of any property and the cost of the specified share to the person who acquired it was less than the fair market value of the specified share at the time of the acquisition, or 
  (B) a share (other than a specified share) of a closely held corporation becomes a specified share of the capital stock of the corporation, and 
  (ii) the amount of any payment under the indebtedness, obligation or right (whether the right to the amount is immediate or future, absolute or contingent or conditional on or subject to the exercise of any discretion by any person or partnership) is, directly or indirectly, determined primarily by one or more of the following criteria: 
  (A) the fair market value of, production from or use of any of the property of the closely held corporation, 
  (B) gains or profits from the disposition of any of the property of the closely held corporation, 
  (C) income, profits, revenue or cash flow of the closely held corporation, or 
  (D) any other criterion similar to a criterion referred to in any of clauses (A) to (C); and 
  (c) property 
  (i) that the person or partnership acquired as part of a series of transactions described in paragraph (a) or (b) in respect of another property, and 
  (ii) the fair market value of which is derived in whole or in part, directly or indirectly, from that other property. ( bien d’exception)   
  *specified party* in respect of a particular person at any time means  
  (a) the particular person’s spouse or common-law partner at that time; 
  (b) a corporation that at that time 
  (i) is a controlled foreign affiliate of the particular person or their spouse or common-law partner, or 
  (ii) would be a controlled foreign affiliate of a partnership, of which the particular person is a majority-interest partner, if the partnership were a person resident in Canada at that time; 
  (c) a person, or a partnership of which the particular person is a majority-interest partner, for which it is reasonable to conclude that the benefit referred to in subparagraph (8)(a)(iv) was conferred 
  (i) in contemplation of the person becoming after that time a corporation described by paragraph (b), or 
  (ii) to avoid or minimize a liability that arose, or that would otherwise have arisen, under this Part with respect to the particular person; or 
  (d) a corporation in which the particular person, or partnership of which the particular person is a majority-interest partner, is a shareholder if 
  (i) the corporation is at or before that time a beneficiary under a trust, and 
  (ii) the particular person or the partnership is a beneficiary under the trust solely because of the application of paragraph (b) of the definition 
  *beneficiary* in this subsection to the particular person or the partnership in respect of the corporation. (tiers déterminé)   
  *specified share* means a share of the capital stock of a corporation other than a share that is a prescribed share for the purpose of paragraph 110(1)(d). (action déterminée)   
  *specified time* in respect of a trust for a taxation year of the trust means  
  (a) if the trust exists at the end of the taxation year, the time that is the end of that taxation year; and 
  (b) in any other case, the time in that taxation year that is immediately before the time at which the trust ceases to exist. ( moment déterminé)   
  *successor beneficiary* at any time under a trust means a person that is a beneficiary under the trust solely because of a right of the person to receive any of the trust’s income or capital, if under that right the person may so receive that income or capital only on or after the death after that time of an individual who, at that time, is alive and  
  (a) is a contributor to the trust; 
  (b) is related to (in this definition including an uncle, aunt, niece or nephew of) a contributor to the trust; or 
  (c) would have been related to a contributor to the trust if every individual who was alive before that time were alive at that time. ( bénéficiaire remplaçant)   
  *transaction* includes an arrangement or event. (opération)   
  *trust* includes, for greater certainty, an estate. (fiducie)  
  
  ### Rules of application
  
  (2) In this section and section 94.2, 
  (a) a person or partnership is deemed to have transferred, at any time, a property to a trust if 
  (i) at that time the person or partnership transfers or loans property (other than by way of an arm’s length transfer) to another person or partnership, and 
  (ii) because of that transfer or loan 
  (A) the fair market value of one or more properties held by the trust increases at that time, or 
  (B) a liability or potential liability of the trust decreases at that time; 
  (b) the fair market value, at any time, of a property deemed by paragraph (a) to be transferred at that time by a person or partnership is deemed to be the amount of the absolute value of the increase or decrease, as the case may be, referred to in subparagraph (a)(ii) in respect of the property, and if that time is after August 27, 2010, and the property that the person or partnership transfers or loans at that time is restricted property of the person or partnership, the property deemed by paragraph (a) to be transferred at that time to a trust is deemed to be restricted property transferred at that time to the trust; 
  (c) a person or partnership is deemed to have transferred, at any time, property to a trust if 
  (i) at that time the person or partnership transfers restricted property, or loans property other than by way of an arm’s length transfer, to another person (referred to in this paragraph and paragraph (c.1) as the “intermediary”), 
  (ii) at or after that time, the trust holds property (other than property described by paragraph (14)(b)) the fair market value of which is derived in whole or in part, directly or indirectly, from property held by the intermediary, and 
  (iii) it is reasonable to conclude that one of the reasons the transfer or loan is made is to avoid or minimize a liability under this Part; 
  (c.1) the fair market value, at any time, of a property deemed by paragraph (c) to be transferred at that time by a person or partnership is deemed to be the fair market value of the property referred to in subparagraph (c)(i), and if that time is after October 24, 2012 and the property that the person or partnership transfers or loans to the intermediary is restricted property of the intermediary, the property deemed by paragraph (c) to be transferred at that time by the person or partnership to a trust is deemed to be restricted property transferred at that time to the trust throughout the period in which the intermediary holds the restricted property; 
  (d) if, at any time, a particular person or partnership becomes obligated, either absolutely or contingently, to effect any undertaking including a guarantee, covenant or agreement given to ensure the repayment, in whole or in part, of a loan or other indebtedness incurred by another person or partnership, or has provided any other financial assistance to another person or partnership, 
  (i) the particular person or partnership is deemed to have transferred, at that time, property to that other person or partnership, and 
  (ii) the property, if any, transferred to the particular person or partnership from the other person or partnership in exchange for the guarantee or other financial assistance is deemed to have been transferred to the particular person or partnership in exchange for the property deemed by subparagraph (i) to have been transferred; 
  (e) the fair market value at any time of a property deemed by subparagraph (d)(i) to have been transferred at that time to another person or partnership is deemed to be the amount at that time of the loan or indebtedness incurred by the other person or partnership to which the property relates; 
  (f) if, at any time after June 22, 2000, a particular person or partnership renders any service (other than an exempt service) to, for or on behalf of another person or partnership, 
  (i) the particular person or partnership is deemed to have transferred, at that time, property to that other person or partnership, and 
  (ii) the property, if any, transferred to the particular person or partnership from the other person or partnership in exchange for the service is deemed to have been transferred to the particular person or partnership in exchange for the property deemed by subparagraph (i) to have been transferred; 
  (g) each of the following acquisitions of property by a particular person or partnership is deemed to be a transfer of the property, at the time of the acquisition of the property, to the particular person or partnership from the person or partnership from which the property was acquired, namely, the acquisition by the particular person or partnership of 
  (i) a share of a corporation from the corporation, 
  (ii) an interest as a beneficiary under a trust (otherwise than from a beneficiary under the trust), 
  (iii) an interest in a partnership (otherwise than from a member of the partnership), 
  (iv) a debt owing by a person or partnership from the person or partnership, and 
  (v) a right (granted after June 22, 2000, by the person or partnership from which the right was acquired) to acquire or to be loaned property; 
  (h) the fair market value at any time of a property deemed by subparagraph (f)(i) to have been transferred at that time is deemed to be the fair market value at that time of the service to which the property relates; 
  (i) a person or partnership that at any time becomes obligated to do an act that would, if done, constitute the transfer or loan of a property to another person or partnership is deemed to have become obligated at that time to transfer or loan, as the case may be, property to that other person or partnership; 
  (j) in applying at any time the definition 
  *non-resident time* in subsection (1), if a trust acquires property of an individual as a consequence of the death of the individual and the individual was immediately before death resident in Canada, the individual is deemed to have transferred the property to the trust immediately before the individual’s death;  
  (k) a transfer or loan of property at any time is deemed to be made at that time jointly by a particular person or partnership and a second person or partnership (referred to in this paragraph as the “specified person”) if 
  (i) the particular person or partnership transfers or loans property at that time to another person or partnership, 
  (ii) the transfer or loan is made at the direction, or with the acquiescence, of the specified person, and 
  (iii) it is reasonable to conclude that one of the reasons the transfer or loan is made is to avoid or minimize the liability, of any person or partnership, under this Part that arose, or that would otherwise have arisen, because of the application of this section; 
  (k.1) a transfer or loan of property made at any time on or after November 9, 2006, is deemed to be made at that time jointly by a particular person or partnership and a second person or partnership (referred to in this paragraph as the “specified person”) if 
  (i) the particular person or partnership transfers or loans property at that time to another person or partnership, and 
  (ii) a purpose or effect of the transfer or loan may reasonably be considered to be to provide benefits in respect of services rendered by a person as an employee of the specified person (whether the provision of the benefits is because of a right that is immediate or future, absolute or contingent, or conditional on or subject to the exercise of any discretion by any person or partnership); 
  (l) a transfer or loan of property at any time is deemed to be made at that time jointly by a corporation and a person or partnership (referred to in this paragraph as the “specified person”) if 
  (i) the corporation transfers or loans property at that time to another person or partnership, 
  (ii) the transfer or loan is made at the direction, or with the acquiescence, of the specified person, 
  (iii) that time is not, or would not be if the transfer or loan were a contribution of the specified person, 
  (A) a non-resident time of the specified person, or 
  (B) if the specified person is a partnership, a non-resident time of one or more members of the partnership, and 
  (iv) either 
  (A) the corporation is, at that time, a controlled foreign affiliate of the specified person, or would at that time be a controlled foreign affiliate of the specified person if the specified person were at that time resident in Canada, or 
  (B) it is reasonable to conclude that the transfer or loan was made in contemplation of the corporation becoming after that time a corporation described in clause (A); 
  (m) a particular person or partnership is deemed to have transferred, at a particular time, a particular property or particular part of it, as the case may be, to a corporation described in subparagraph (i) or a second person or partnership described in subparagraph (ii) if 
  (i) the particular property is a share of the capital stock of a corporation held at the particular time by the particular person or partnership, and as consideration for the disposition at or before the particular time of the share, the particular person or partnership received at the particular time (or became entitled at the particular time to receive) from the corporation a share of the capital stock of the corporation, or 
  (ii) the particular property (or property for which the particular property is substituted) was acquired, before the particular time, from the second person or partnership by any person or partnership, in circumstances that are described by any of subparagraphs (g)(i) to (v) (or would be so described if it applied at the time of that acquisition) and at the particular time, 
  (A) the terms or conditions of the particular property change, 
  (B) the second person or partnership redeems, acquires or cancels the particular property or the particular part of it, 
  (C) if the particular property is a debt owing by the second person or partnership, the debt or the particular part of it is settled or cancelled, or 
  (D) if the particular property is a right to acquire or to be loaned property, the particular person or partnership exercises the right; 
  (n) a contribution made at any time by a particular trust to another trust is deemed to have been made at that time jointly by the particular trust and by each person or partnership that is at that time a contributor to the particular trust; 
  (o) a contribution made at any time by a particular partnership to a trust is deemed to have been made at that time jointly by the particular partnership and by each person or partnership that is at that time a member of the particular partnership; 
  (p) subject to paragraph (q) and subsection (9), the amount of a contribution to a trust at the time it was made is deemed to be the fair market value, at that time, of the property that was the subject of the contribution; 
  (q) a person or partnership that at any time acquires a fixed interest in a trust (or a right, issued by the trust, to acquire a fixed interest in the trust) from another person or partnership (other than from the trust that issued the interest or the right) is deemed to have made at that time a contribution to the trust and the amount of the contribution is deemed to be equal to the fair market value at that time of the interest or right, as the case may be; 
  (r) a particular person or partnership that has acquired a fixed interest in a trust as a consequence of making a contribution to the trust — or that has made a contribution to the trust as a consequence of having acquired a fixed interest in the trust or a right described in paragraph (q) — is, for the purpose of applying this section at any time after the time that the particular person or partnership transfers the fixed interest or the right, as the case may be, to another person or partnership (which transfer is referred to in this paragraph as the “sale”), deemed not to have made the contribution in respect of the fixed interest, or right, that is the subject of the sale if 
  (i) in exchange for the sale, the other person or partnership transfers or loans, or becomes obligated to transfer or loan, property (which property is referred to in subparagraph (ii) as the “consideration”) to the particular person or partnership, and 
  (ii) it is reasonable to conclude 
  (A) having regard only to the sale and the consideration that the particular person or partnership would be willing to make the sale if the particular person or partnership were dealing at arm’s length with the other person or partnership, and 
  (B) that the terms and conditions made or imposed in respect of the exchange would be acceptable to the particular person or partnership if the particular person or partnership were dealing at arm’s length with the other person or partnership; 
  (s) a transfer to a trust by a particular person or partnership is deemed not to be, at a particular time, a contribution to the trust if 
  (i) the particular person or partnership has transferred, at or before the particular time and in the ordinary course of business of the particular person or partnership, property to the trust, 
  (ii) the transfer is not an arm’s length transfer, but would be an arm’s length transfer if the definition 
  *arm’s length transfer* in subsection (1) were read without reference to paragraph (a) and subparagraphs (b)(i), (ii) and (iv) to (vii) of that definition,  
  (iii) it is reasonable to conclude that the particular person or partnership was the only person or partnership that acquired, in respect of the transfer, an interest as a beneficiary under the trust, 
  (iv) the particular person or partnership was required, under the securities law of a country or of a political subdivision of the country in respect of the issuance by the trust of interests as a beneficiary under the trust, to acquire an interest because of the particular person or partnership’s status at the time of the transfer as a manager or promoter of the trust, 
  (v) at the particular time the trust is not an exempt foreign trust, but would be at that time an exempt foreign trust if it had not made an election under paragraph (h) of the definition 
  *exempt foreign trust* in subsection (1), and  
  (vi) the particular time is before the earliest of 
  (A) the first time at which the trust becomes an exempt foreign trust, 
  (B) the first time at which the particular person or partnership ceases to be a manager or promoter of the trust, and 
  (C) the time that is 24 months after the first time at which the total fair market value of consideration received by the trust in exchange for interests as a beneficiary (other than the particular person or partnership’s interest referred to in subparagraph (iii)) under the trust is greater than $500,000; 
  (t) a transfer, by a Canadian corporation of particular property, that is at a particular time a contribution by the Canadian corporation to a trust, is deemed not to be, after the particular time, a contribution by the Canadian corporation to the trust if 
  (i) the trust acquired the property before the particular time from the Canadian corporation in circumstances described in subparagraph (g)(i) or (iv), 
  (ii) as a result of a transfer (which transfer is referred to in this paragraph as the “sale”) at the particular time by any person or partnership (referred to in this paragraph as the “seller”) to another person or partnership (referred to in this paragraph as the “buyer”) the trust 
  (A) no longer holds any property that is shares of the capital stock of, or debt issued by, the Canadian corporation, and 
  (B) no longer holds any property that is property the fair market value of which is derived in whole or in part, directly or indirectly, from shares of the capital stock of, or debt issued by, the Canadian corporation, 
  (iii) the buyer deals at arm’s length immediately before the particular time with the Canadian corporation, the trust and the seller, 
  (iv) in exchange for the sale, the buyer transfers or becomes obligated to transfer property (which property is referred to in this paragraph as the “consideration”) to the seller, and 
  (v) it is reasonable to conclude 
  (A) having regard only to the sale and the consideration that the seller would be willing to make the sale if the seller were dealing at arm’s length with the buyer, 
  (B) that the terms and conditions made or imposed in respect of the exchange would be acceptable to the seller if the seller were dealing at arm’s length with the buyer, and 
  (C) that the value of the consideration is not, at or after the particular time, determined in whole or in part, directly or indirectly, by reference to shares of the capital stock of, or debt issued by, the Canadian corporation; 
  (u) a transfer, before October 11, 2002, to a personal trust by an individual (other than a trust) of particular property is deemed not to be a contribution of the particular property by the individual to the trust if 
  (i) the individual identifies the trust in prescribed form filed with the Minister on or before the individual’s filing-due date for the individual’s 2003 taxation year (or a later date that is acceptable to the Minister), and 
  (ii) the Minister is satisfied that 
  (A) the individual (and any person or partnership not dealing at any time at arm’s length with the individual) has never loaned or transferred, directly or indirectly, restricted property to the trust, 
  (B) in respect of each contribution (determined without reference to this paragraph) made before October 11, 2002, by the individual to the trust, none of the reasons (determined by reference to all the circumstances including the terms of the trust, an intention, the laws of a country or the existence of an agreement, a memorandum, a letter of wishes or any other arrangement) for the contribution was to permit or facilitate, directly or indirectly, the conferral at any time of a benefit (for greater certainty, including an interest as a beneficiary under the trust) on 
  (I) the individual, 
  (II) a descendant of the individual, or 
  (III) any person or partnership with whom the individual or descendant does not, at any time, deal at arm’s length, and 
  (C) the total of all amounts each of which is the amount of a contribution (determined without reference to this paragraph) made before October 11, 2002, by the individual to the trust does not exceed the greater of 
  (I) 1% of the total of all amounts each of which is the amount of a contribution (determined without reference to this paragraph) made to the trust before October 11, 2002, and 
  (II) $500; and 
  (v) a loan made by a particular specified financial institution to a trust is deemed not to be a contribution to the trust if 
  (i) the loan is made on terms and conditions that would have been agreed to by persons dealing at arm’s length, and 
  (ii) the loan is made by the specified financial institution in the ordinary course of the business carried on by it. 
  
  ### Liabilities of non-resident trusts and others
  
  (3) If at a specified time in a trust’s particular taxation year (other than a trust that is, at that time, an exempt foreign trust) the trust is non-resident (determined without reference to this subsection) and, at that time, there is a resident contributor to the trust or a resident beneficiary under the trust, 
  (a) the trust is deemed to be resident in Canada throughout the particular taxation year for the purposes of 
  (i) section 2, 
  (ii) computing the trust’s income for the particular taxation year, 
  (iii) applying subsections 104(13.1) to (28) and 107(2.1), in respect of the trust and a beneficiary under the trust, 
  (iv) applying clause 53(2)(h)(i.1)(B), the definition 
  *non-resident entity* in subsection 94.1(2), subsection 107(2.002) and section 115, in respect of a beneficiary under the trust,  
  (v) paragraph (c) and subsection 111(9), 
  (vi) determining an obligation of the trust to file a return under section 233.3 or 233.4, 
  (vii) determining the rights and obligations of the trust under Divisions I and J, 
  (viii) determining the liability of the trust for tax under Part I, and under Part XIII on amounts paid or credited (in this paragraph having the meaning assigned by Part XIII) to the trust, 
  (ix) applying Part XIII in respect of an amount (other than an exempt amount) paid or credited by the trust to any person, and 
  (x) determining whether a foreign affiliate of a taxpayer (other than the trust) is a controlled foreign affiliate of the taxpayer; 
  (b) no deduction shall be made under subsection 20(11) by the trust in computing its income for the particular taxation year, and for the purposes of applying subsection 20(12) and section 126 to the trust for the particular taxation year 
  (i) in determining the non-business-income tax (in this paragraph as defined by subsection 126(7)) paid by the trust for the particular taxation year, paragraph (b) of the definition 
  *non-business-income tax* does not apply, and  
  (ii) if, at that specified time, the trust is resident in a country other than Canada, 
  (A) the trust’s income for the particular taxation year (other than income — not including dividends or interest — from sources in Canada) is deemed to be from sources in that country and not to be from any other source, and 
  (B) the business-income tax (in this paragraph as defined by subsection 126(7)), and the non-business-income tax, paid by the trust for the particular taxation year are deemed to have been paid by the trust to the government of that country and not to any other government; 
  (c) if the trust was non-resident throughout its taxation year (referred to in this paragraph as the “preceding year”) immediately preceding the particular taxation year, the trust is deemed to have 
  (i) immediately before the end of the preceding year, disposed of each property (other than property described in any of subparagraphs 128.1(1)(b)(i) to (iv)) held by the trust at that time for proceeds of disposition equal to its fair market value at that time, and 
  (ii) at the beginning of the particular taxation year, acquired each of those properties so disposed of at a cost equal to its proceeds of disposition; 
  (d) each person that at any time in the particular taxation year is a resident contributor to the trust (other than an electing contributor in respect of the trust at the specified time) or a resident beneficiary under the trust 
  (i) has jointly and severally, or solidarily, with the trust and with each other such person, the rights and obligations of the trust in respect of the particular taxation year under Divisions I and J, and 
  (ii) is subject to Part XV in respect of those rights and obligations; 
  (e) each person that at any time in the particular taxation year is a beneficiary under the trust and was a person from whom an amount would be recoverable at the end of the trust’s 2006 taxation year under subsection (2) (as it read in its application to taxation years that end before 2007) in respect of the trust if the person had received before the trust’s 2007 taxation year amounts described under paragraph (2)(a) or (b) in respect of the trust (as those paragraphs read in their application to taxation years that end before 2007) 
  (i) has, to the extent of the person’s recovery limit for the year, jointly and severally, or solidarily, with the trust and with each other such person, the rights and obligations of the trust in respect of the taxation years, of the trust, that end before 2007 under Divisions I and J, and 
  (ii) is, to the extent of the person’s recovery limit for the year, subject to Part XV in respect of those rights and obligations; 
  (f) if the trust (referred to in this paragraph as the “particular trust”) is an electing trust in respect of the particular taxation year, 
  (i) an inter vivos trust (in this paragraph referred to as the “non-resident portion trust”) is deemed for the purposes of this Act (other than for the purposes of subsection 104(2))  
  (A) to be created at the first time at which the particular trust exists in its first taxation year in respect of which the particular trust is an electing trust, and 
  (B) to continue in existence until the earliest of 
  (I) the time at which the particular trust ceases to be resident in Canada because of subsection (5) or (5.1), 
  (II) the time at which the particular trust ceases to exist, and 
  (III) the time at which the particular trust becomes resident in Canada otherwise than because of this subsection, 
  (ii) all of the particular trust’s property that is part of the particular trust’s non-resident portion is deemed to be the property of the non-resident portion trust and not to be, except for the purposes of this paragraph and the definition 
  *electing trust* in subsection (1), the particular trust’s property,  
  (iii) the terms and conditions of, and rights and obligations of beneficiaries under, the particular trust (determined by reference to all the circumstances including the terms of a trust, an intention, the laws of a country or the existence of an agreement, a memorandum, a letter of wishes or any other arrangement) are deemed to be the terms and conditions of, and rights and obligations of beneficiaries under, the non-resident portion trust, 
  (iv) for greater certainty 
  (A) the trustees of the particular trust are deemed to be the trustees of the non-resident portion trust, 
  (B) the beneficiaries under the particular trust are deemed to be the beneficiaries under the non-resident portion trust, and 
  (C) the non-resident portion trust is deemed not to have a resident contributor or connected contributor to it, 
  (v) the non-resident portion trust is deemed to be, without affecting the liability of its trustees for their own income tax, in respect of its property an individual, 
  (vi) if all or part of a property becomes at a particular time part of the particular trust’s non-resident portion and immediately before that time the property or that part, as the case may be, was part of its resident portion, the particular trust is deemed to have transferred at the particular time the property or that part, as the case may be, to the non-resident portion trust, 
  (vii) if all or part of a property becomes at a particular time part of the particular trust’s resident portion and immediately before that time the property or that part, as the case may be, was part of its non-resident portion, the non-resident portion trust is deemed to have transferred at the particular time the property or that part, as the case may be, to the particular trust, 
  (viii) the particular trust and the non-resident portion trust are deemed at all times to be affiliated with each other and to not deal with each other at arm’s length, 
  (ix) the particular trust 
  (A) has jointly and severally, or solidarily, with the non-resident portion trust, the rights and obligations of the non-resident portion trust in respect of any taxation year under Divisions I and J, and 
  (B) is subject to Part XV in respect of those rights and obligations, and 
  (x) if the non-resident portion trust ceases to exist at a particular time (for greater certainty, as determined by clause (i)(B)) 
  (A) the non-resident portion trust is deemed, at the time (referred to in this subparagraph as the “disposition time”) that is immediately before the time that is immediately before the particular time, to have 
  (I) in the case of each property of the non-resident portion trust that is property described in any of subparagraphs 128.1(1)(b)(i) to (iv), disposed of the property for proceeds of disposition equal to the cost amount to it of the property at the disposition time, and 
  (II) in the case of each other property of the non-resident portion trust, disposed of the property for proceeds of disposition equal to its fair market value of the property at the disposition time, 
  (B) the particular trust is deemed to have acquired, at the time that is immediately before the particular time, each property described in subclause (A)(I) or (II) at a cost equal to the proceeds determined under that subclause in respect of the property, and 
  (C) each person or partnership that is at the time immediately before the particular time a beneficiary under the non-resident portion trust is deemed 
  (I) at the disposition time to have disposed of the beneficiary’s interest as a beneficiary under the non-resident portion trust for proceeds equal to the beneficiary’s cost amount in the interest at the disposition time, and 
  (II) at the disposition time, to have ceased to be, other than for purposes of this clause, a beneficiary under the non-resident portion trust; and 
  (g) if a person deducts or withholds any amount (referred to in this paragraph as the “withholding amount”) as required by section 215 from a particular amount paid or credited or deemed to have been paid or credited to the trust, and the particular amount has been included in the trust’s income for the particular taxation year, the withholding amount is deemed to have been paid on account of the trust’s tax under this Part for the particular taxation year. 
  
  ### Excluded provisions
  
  (4) For greater certainty, paragraph (3)(a) does not deem a trust to be resident in Canada for the purposes of 
  (a) the definitions 
  *arm’s length transfer* and 
  *exempt foreign trust* in subsection (1);  
  (b) subsections (8.1) and (8.2), paragraph (14)(a), subsections 70(6) and 73(1), the definition 
  *Canadian partnership* in subsection 102(1), paragraph 107.4(1)(c), the definition 
  *qualified disability trust* in subsection 122(3), paragraph (a) of the definition 
  *mutual fund trust* in subsection 132(6), the definition 
  *eligible trust* in subsection 135.2(1) and subparagraph (b)(i) of the definition 
  *investment fund* in subsection 251.2(1);  
  (c) determining the liability of a person (other than the trust) that would arise under section 215; 
  (d) determining whether, in applying subsection 128.1(1), the trust becomes resident in Canada at a particular time; 
  (e) determining whether, in applying subsection 128.1(4), the trust ceases to be resident in Canada at a particular time; 
  (f) subparagraph (f)(i) of the definition 
  *disposition* in subsection 248(1);  
  (g) determining whether subsection 107(5) applies to a distribution on or after July 18, 2005, of property to the trust; and 
  (h) determining whether subsection 75(2) applies. 
  
  ### Deemed cessation of residence — loss of resident contributor or resident beneficiary
  
  (5) A trust is deemed to cease to be resident in Canada at the earliest time at which there is neither a resident contributor to the trust nor a resident beneficiary under the trust in a taxation year (determined without reference to subsection 128.1(4)) of the trust 
  (a) that immediately follows a taxation year of the trust throughout which it was deemed by subsection (3) to be resident in Canada for the purpose of computing its income; and 
  (b) at a specified time in which the trust 
  (i) is non-resident, 
  (ii) is not an exempt foreign trust, and 
  (iii) has no resident contributor to it or resident beneficiary under it. 
  
  ### Deemed cessation of residence — becoming an exempt foreign trust
  
  (5.1) A trust is deemed to cease to be resident in Canada at the earliest time at which the trust becomes an exempt foreign trust in a taxation year (determined without reference to subsection 128.1(4)) of the trust 
  (a) that immediately follows a taxation year of the trust throughout which it was deemed by subsection (3) to be resident in Canada for the purpose of computing its income; and 
  (b) at a specified time in which 
  (i) there is a resident contributor to the trust or a resident beneficiary under the trust, and 
  (ii) the trust is an exempt foreign trust. 
  
  ### Administrative relief — changes in status
  
  (5.2) If a trust is deemed by subsection (5) or (5.1) to cease to be resident in Canada at a particular time, the following rules apply to the trust in respect of the particular taxation year that is, as a result of that cessation of residence, deemed by subparagraph 128.1(4)(a)(i) to end immediately before the particular time: 
  (a) the trust’s return of income for the particular taxation year is deemed to be filed with the Minister on a timely basis if it is filed with the Minister within 90 days from the end of the trust’s taxation year that is deemed by subparagraph 128.1(4)(a)(i) to start at the particular time; and 
  (b) an amount that is included in the trust’s income (determined without reference to subsections 104(6) and (12)) for the particular taxation year but that became payable (determined without regard to this paragraph) by the trust in the period after the particular taxation year and before the end of the trust’s taxation year that is deemed by subparagraph 128.1(4)(a)(i) to start at the particular time, is deemed to have become payable by the trust immediately before the end of the particular taxation year and not at any other time. 
  
  ### Ceasing to be an exempt foreign trust
  
  (6) If at a specified time in a trust’s taxation year it is an exempt foreign trust, at a particular time in the immediately following taxation year (determined without reference to this subsection) the trust ceases to be an exempt foreign trust (otherwise than because of becoming resident in Canada), and at the particular time there is a resident contributor to, or resident beneficiary under, the trust, 
  (a) the trust’s taxation year (determined without reference to this subsection) that includes the particular time is deemed to have ended immediately before the particular time and a new taxation year of the trust is deemed to begin at the particular time; and 
  (b) for the purpose of determining the trust’s fiscal period after the particular time, the trust is deemed not to have established a fiscal period before the particular time. 
  
  ### Limit to amount recoverable
  
  (7) The maximum amount recoverable under the provisions referred to in paragraph (3)(d) at any particular time from a person in respect of a trust (other than a person that is deemed, under subsection (12) or (13), to be a contributor or a resident contributor to the trust) and a particular taxation year of the trust is the person’s recovery limit at the particular time in respect of the trust and the particular year if 
  (a) either 
  (i) the person is liable under a provision referred to in paragraph (3)(d) in respect of the trust and the particular year solely because the person was a resident beneficiary under the trust at a specified time in respect of the trust in the particular year, or 
  (ii) at a specified time in respect of the trust in the particular year, the total of all amounts each of which is the amount, at the time it was made, of a contribution to the trust made before the specified time by the person or by another person or partnership not dealing at arm’s length with the person, is not more than the greater of 
  (A) $10,000, and 
  (B) 10% of the total of all amounts each of which was the amount, at the time it was made, of a contribution made to the trust before the specified time; 
  (b) except if the total determined in subparagraph (a)(ii) in respect of the person and all persons or partnerships not dealing at arm’s length with the person is $10,000 or less, the person has filed on a timely basis under section 233.2 all information returns required to be filed by the person before the particular time in respect of the trust (or on any later day that is acceptable to the Minister); and 
  (c) it is reasonable to conclude that for each transaction that occurred before the end of the particular year at the direction of, or with the acquiescence of, the person 
  (i) none of the purposes of the transaction was to enable the person to avoid or minimize any liability under a provision referred to in paragraph (3)(d) in respect of the trust, and 
  (ii) the transaction was not part of a series of transactions any of the purposes of which was to enable the person to avoid or minimize any liability under a provision referred to in paragraph (3)(d) in respect of the trust. 
  
  ### Recovery limit
  
  (8) The recovery limit referred to in paragraph (3)(e) and subsection (7) at a particular time of a particular person in respect of a trust and a particular taxation year of the trust is the amount, if any, by which the greater of 
  (a) the total of all amounts each of which is 
  (i) an amount received or receivable after 2000 and before the particular time 
  (A) by the particular person on the disposition of all or part of the person’s interest as a beneficiary under the trust, or 
  (B) by a person or partnership (that was, when the amount became receivable, a specified party in respect of the particular person) on the disposition of all or part of the specified party’s interest as a beneficiary under the trust, 
  (ii) an amount (other than an amount described in subparagraph (i)) made payable by the trust after 2000 and before the particular time to 
  (A) the particular person because of the interest of the particular person as a beneficiary under the trust, or 
  (B) a person or partnership (that was, when the amount became payable, a specified party in respect of the particular person) because of the interest of the specified party as a beneficiary under the trust, 
  (iii) an amount received after August 27, 2010, by the particular person, or a person or partnership (that was, when the amount was received, a specified party in respect of the particular person), as a loan from the trust to the extent that the amount has not been repaid, 
  (iv) an amount (other than an amount described in any of subparagraphs (i) to (iii)) that is the fair market value of a benefit received or enjoyed, after 2000 and before the particular time, from or under the trust by 
  (A) the particular person, or 
  (B) a person or partnership that was, when the benefit was received or enjoyed, a specified party in respect of the particular person, or 
  (v) the maximum amount that would be recoverable from the particular person at the end of the trust’s 2006 taxation year under subsection (2) (as it read in its application to taxation years that end before 2007) if the trust had tax payable under this Part at the end of the trust’s 2006 taxation year and that tax payable exceeded the total of the amounts described in respect of the particular person under paragraphs (2)(a) and (b) (as they read in their application to taxation years that end before 2007), except to the extent that the amount so recoverable is in respect of an amount that is included in the particular person’s recovery limit because of subparagraph (i) or (ii), and 
  (b) the total of all amounts each of which is the amount, when made, of a contribution to the trust before the particular time by the particular person, exceeds the total of all amounts each of which is 
  (c) an amount recovered before the particular time from the particular person in connection with a liability of the particular person (in respect of the trust and the particular year or a preceding taxation year of the trust) that arose because of the application of subsection (3) (or the application of this section as it read in its application to taxation years that end before 2007), 
  (d) an amount (other than an amount in respect of which this paragraph has applied in respect of any other person) recovered before the particular time from a specified party in respect of the particular person in connection with a liability of the particular person (in respect of the trust and the particular year or a preceding taxation year of the trust) that arose because of the application of subsection (3) (or the application of this section as it read in its application to taxation years that end before 2007), or 
  (e) the amount, if any, by which the particular person’s tax payable under this Part for any taxation year in which an amount described in any of subparagraphs (a)(i) to (iv) was paid, became payable, was received, became receivable or was enjoyed by the particular person exceeds the amount that would have been the particular person’s tax payable under this Part for that taxation year if no such amount were paid, became payable, were received, became receivable or were enjoyed by the particular person in that taxation year. 
  
  ### Application of subsection (8.2)
  
  (8.1) Subsection (8.2) applies at any time to a particular person, and to a particular property, in respect of a non-resident trust, if at that time 
  (a) the particular person is resident in Canada; and 
  (b) the trust holds the particular property on condition that the particular property or property substituted for the particular property 
  (i) may 
  (A) revert to the particular person, or 
  (B) pass to one or more persons or partnerships to be determined by the particular person, or 
  (ii) shall not be disposed of by the trust during the existence of the particular person, except with the particular person’s consent or in accordance with the particular person’s direction. 
  
  ### Deemed transfer of restricted property
  
  (8.2) If this subsection applies at any time to a particular person, and to a particular property, in respect of a non-resident trust, then in applying this section in respect of the trust for a taxation year of the trust that includes that time 
  (a) every transfer or loan made at or before that time by the particular person (or by a trust or partnership of which the particular person was a beneficiary or member, as the case may be) of the particular property, of another property for which the particular property is a substitute, or of property from which the particular property derives, or the other property derived, its value in whole or in part, directly or indirectly, is deemed to be a transfer or loan, as the case may be, by the particular person 
  (i) that is not an arm’s length transfer, and 
  (ii) that is, for the purposes of paragraph (2)(c) and subsection (9), a transfer or loan of restricted property; and 
  (b) paragraph (2)(c) is to be read without reference to subparagraph (2)(c)(iii) in its application to each transfer and loan described in paragraph (a). 
  
  ### Determination of contribution amount — restricted property
  
  (9) If a person or partnership contributes at any time restricted property to a trust, the amount of the contribution at that time is deemed, for the purposes of this section, to be the greater of 
  (a) the amount, determined without reference to this subsection, of the contribution at that time, and 
  (b) the amount that is the greatest fair market value of the restricted property, or property substituted for it, in the period that begins immediately after that time and ends at the end of the third calendar year that ends after that time. 
  
  ### Contributor — resident in Canada within 60 months after contribution
  
  (10) In applying this section at each specified time, in respect of a trust’s taxation year, that is before the particular time at which a contributor to the trust becomes resident in Canada within 60 months after making a contribution to the trust, the contribution is deemed to have been made at a time other than a non-resident time of the contributor if 
  (a) in applying the definition 
  *non-resident time* in subsection (1) at each of those specified times, the contribution was made at a non-resident time of the contributor; and  
  (b) in applying the definition 
  *non-resident time* in subsection (1) immediately after the particular time, the contribution is made at a time other than a non-resident time of the contributor.  
  
  ### Application of subsections (12) and (13)
  
  (11) Subsections (12) and (13) apply to a trust or a person in respect of a trust if 
  (a) at any time property of a trust (referred to in this subsection and subsections (12) and (13) as the “original trust”) is transferred or loaned, directly or indirectly, in any manner, to another trust (referred to in this subsection and subsections (12) and (13) as the “transferee trust”); 
  (b) the original trust 
  (i) is deemed to be resident in Canada immediately before that time because of paragraph (3)(a), 
  (ii) would be deemed to be resident in Canada immediately before that time because of paragraph (3)(a) if this section, as it read in its application to the 2013 taxation year, were read without reference to paragraph (a) of the definition 
  *connected contributor* in subsection (1) and paragraph (a) of the definition 
  *resident contributor* in that subsection,  
  (iii) was deemed to be resident in Canada immediately before that time because of subsection (1) as it read in its application to taxation years that end before 2007, or 
  (iv) would have been deemed to be resident in Canada immediately before that time because of subsection (1) as it read in its application to taxation years that end before 2007 if that subsection were read in that application without reference to subclause (b)(i)(A)(III) of that subsection; and 
  (c) it is reasonable to conclude that one of the reasons the transfer or loan is made is to avoid or minimize a liability under this Part that arose, or that would otherwise have arisen, because of the application of this section (or the application of this section as it read in its application to taxation years that end before 2007). 
  
  ### Deemed resident contributor
  
  (12) The original trust described in subsection (11) (including a trust that has ceased to exist) is deemed to be, at and after the time of the transfer or loan referred to in that subsection, a resident contributor to the transferee trust for the purpose of applying this section in respect of the transferee trust. 
  
  ### Deemed contributor
  
  (13) A person (including any person that has ceased to exist) that is, at the time of the transfer or loan referred to in subsection (11), a contributor to the original trust, is deemed to be at and after that time 
  (a) a contributor to the transferee trust; and 
  (b) a connected contributor to the transferee trust, if at that time the person is a connected contributor to the original trust. 
  
  ### Restricted property — exception
  
  (14) A particular property that is, or will be, at any time held, loaned or transferred, as the case may be, by a particular person or partnership is not restricted property held, loaned or transferred, as the case may be, at that time by the particular person or partnership if 
  (a) the following conditions are met: 
  (i) the particular property (and property, if any, for which it is, or is to be, substituted) was not, and will not be, at any time acquired, held, loaned or transferred by the particular person or partnership (or any person or partnership with whom the particular person or partnership does not at any time deal at arm’s length) in whole or in part for the purpose of permitting any change in the value of the property of a corporation (that is, at any time, a closely held corporation) to accrue directly or indirectly in any manner whatever to the value of property held by a non-resident trust, 
  (ii) the Minister is satisfied that the particular property (and property, if any, for which it is, or is to be, substituted) is described by subparagraph (i), and 
  (iii) the particular property is identified in prescribed form, containing prescribed information, filed, by or on behalf of the particular person or partnership, with the Minister on or before 
  (A) in the case of a person, the particular person’s filing-due date for the particular person’s taxation year that includes that time, 
  (B) in the case of a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the particular partnership or would be required to be so filed if that section applied to the partnership, or  
  (C) another date that is acceptable to the Minister; or 
  (b) at that time 
  (i) the particular property is 
  (A) a share of the capital stock of a corporation, 
  (B) a fixed interest in a trust, or 
  (C) an interest, as a member of a partnership, under which, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, 
  (ii) there are at least 150 persons each of whom holds at that time property that at that time 
  (A) is identical to the particular property, and 
  (B) has a total fair market value of at least $500, 
  (iii) the total of all amounts each of which is the fair market value, at that time, of the particular property (or of identical property that is held, at that time, by the particular person or partnership or a person or partnership with whom the particular person or partnership does not deal at arm’s length) does not exceed 10% of the total of all amounts each of which is the fair market value, at that time, of the particular property or of identical property held by any person or partnership, 
  (iv) property that is identical to the particular property can normally be acquired by and sold by members of the public in the open market, and 
  (v) the particular property, or identical property, is listed on a designated stock exchange. 
  
  ### Anti-avoidance
  
  (15) In applying this section, 
  (a) if it can reasonably be considered that one of the main reasons that a person or partnership 
  (i) is at any time a shareholder of a corporation is to cause the condition in paragraph (b) of the definition 
  *closely held corporation* in subsection (1) to be satisfied in respect of the corporation, the condition is deemed not to have been satisfied at that time in respect of the corporation,  
  (ii) holds at any time an interest in a trust is to cause the condition in clause (h)(ii)(A) of the definition 
  *exempt foreign trust* in subsection (1) to be satisfied in respect of the trust, the condition is deemed not to have been satisfied at that time in respect of the trust, and  
  (iii) holds at any time a property is to cause the condition described in subparagraph (14)(b)(ii) to be satisfied in respect of the property or an identical property held by any person, the condition is deemed not to have been satisfied at that time in respect of the property or the identical property; 
  (b) if at any time at or before a specified time in a trust’s taxation year, a resident contributor to the trust contributes to the trust property that is restricted property of the trust, or property for which restricted property of the trust is substituted, and the trust is at that specified time an exempt foreign trust by reason of paragraph (f) of the definition 
  *exempt foreign trust* in subsection (1), the amount of the trust’s income for the taxation year from the restricted property, and the amount of any taxable capital gain from the disposition in the taxation year by the trust of the restricted property, shall be included in computing the income of the resident contributor for its taxation year in which that taxation year of the trust ends and not in computing the income of the trust for that taxation year of the trust; and  
  (c) if at a specified time in a trust’s taxation year it is an exempt foreign trust by reason of paragraph (h) of the definition 
  *exempt foreign trust* in subsection (1), at a time immediately before a particular time in the immediately following taxation year (determined without reference to subsection (6)) there is a resident contributor to, or resident beneficiary under, the trust, at the time that is immediately before the particular time a beneficiary holds a fixed interest in the trust, and at the particular time the interest ceases to be a fixed interest in the trust,  
  (i) the trust is deemed, other than for purposes of subsection (6), not to be an exempt foreign trust at any time in the trust’s taxation year (referred to in this paragraph as its “assessment year”) that ends (for greater certainty as determined under paragraph (6)(a)) at the time that is immediately before the particular time, 
  (ii) the trust shall include in computing its income for its assessment year an amount equal to the amount determined by the formula is the amount by which the total of all amounts each of which is the fair market value of a property held by the trust at the end of its assessment year exceeds the total of all amounts each of which is the principal amount outstanding at the end of its assessment year of a liability of the trust, is the amount by which the total of all amounts each of which is the fair market value of a property held by the trust at the earliest time at which there is a resident contributor to, or resident beneficiary under, the trust and at which the trust is an exempt foreign trust (referred to in this paragraph as the “initial time”) exceeds the total of all amounts each of which is the principal amount outstanding at the initial time of a liability of the trust, and is the total of all amounts each of which is the amount of a contribution made to the trust in the period that begins at the initial time and ends at the end of its assessment year (in this paragraph referred to as the “interest gross-up period”), and 
  (iii) if the trust is liable for tax for its assessment year, then throughout the period that begins at the trust’s balance-due day for each taxation year that ends in the interest gross-up period and ends at the balance-due day for its assessment year, the trust is (in addition to any excess otherwise determined in respect of the trust under that subsection) deemed to have an excess for the purposes of subsection 161(1) equal to the amount determined by the formula is the amount determined under subparagraph (ii) in respect of the trust for the particular taxation year, and is the number of the trust’s taxation years that end in the interest gross-up period. 
  
  ### Attribution to electing contributors
  
  (16) If at a specified time in respect of a trust for a taxation year of the trust (referred to in this subsection as the “trust’s year”), there is an electing contributor in respect of the trust, the following rules apply: 
  (a) the electing contributor is required to include in computing their income for their taxation year (referred to in this subsection as the “contributor’s year”) in which the trust’s year ends, the amount determined by the formula is the total of all amounts each of which is 
  (i) if at or before the specified time the electing contributor has made a contribution to the trust and is not a joint contributor in respect of the trust and the contribution, the amount of the contribution, or 
  (ii) if at or before the specified time the electing contributor has made a contribution to the trust and is a joint contributor in respect of the trust and the contribution, the amount obtained when the amount of the contribution is divided by the number of joint contributors in respect of the contribution, is the total of all amounts each of which is the amount that would be determined under A for each resident contributor, or connected contributor, to the trust at the specified time if all of those contributors were electing contributors in respect of the trust, is the trust’s income, computed without reference to paragraph (f), for the trust’s year, and is the amount deducted by the trust under section 111 in computing its taxable income for the trust’s year; 
  (b) subject to paragraph (c), the amount, if any, required by paragraph (a) to be included in the electing contributor’s income for the contributor’s year is deemed to be income from property from a source in Canada; 
  (c) for the purposes of this paragraph, paragraph (d) and section 126, an amount in respect of the trust’s income for the trust’s year from a source in a country other than Canada is deemed to be income of the electing contributor for the contributor’s year from that source if 
  (i) the amount is designated by the trust, in respect of the electing contributor, in the trust’s return of income under this Part for the trust’s year, 
  (ii) the amount may reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust) to be part of the amount that because of paragraph (a) was included in computing the income of the electing contributor for the contributor’s year, and 
  (iii) the total of all amounts designated by the trust, under this paragraph or subsection 104(22) in respect of that source, in the trust’s return of income under this Part for the trust’s year is not greater than the trust’s income for the trust’s year from that source; 
  (d) for the purposes of this paragraph and section 126, the electing contributor is deemed to have paid as business-income tax (in this subsection as defined by subsection 126(7)) or non-business-income tax (in this subsection as defined by subsection 126(7)), as the case may be, for the contributor’s year in respect of a source the amount determined by the formula is the amount that, in the absence of subparagraph (e)(i), would be the business-income tax or non-business-income tax, as the case may be, paid by the trust in respect of that source for the trust’s year, is the total of all amounts each of which is an amount designated under paragraph (c) in respect of that source by the trust in respect of the electing contributor in the trust’s return of income under this Part for the trust’s year, and is the trust’s income for the trust’s year from that source; 
  (e) in applying subsection 20(12) and section 126 in respect of the trust’s year there shall be deducted 
  (i) in computing the trust’s income from a source for the trust’s year the total of all amounts each of which is an amount deemed by paragraph (c) to be income from that source of the electing contributor for the contributor’s year, and 
  (ii) in computing the business-income tax or non-business-income tax paid by the trust for the trust’s year in respect of a source the total of all amounts in respect of that source each of which is an amount deemed by paragraph (d) to be paid by the electing contributor as business-income tax or non-business-income tax, as the case may be, in respect of that source; 
  (f) in computing the trust’s income for the trust’s year there may be deducted the amount that does not exceed the amount included by reason of paragraph (a) in the electing contributor’s income for the contributor’s year; and 
  (g) if before the specified time the electing contributor made a contribution to the trust as part of a series of transactions in which another person made the same contribution, in applying paragraphs (a) to (f) in respect of the electing contributor and the other person, the other person is deemed not to be a joint contributor in respect of the contribution if it can reasonably be considered that one of the main purposes of the series was to obtain the benefit of any deduction in computing income, taxable income or tax payable under this Act or any balance of undeducted outlays, expenses or other amounts available to the other person or any exemption available to the other person from tax payable under this Act. 
  
  ### Liability for joint contribution
  
  (17) If, at or before a specified time in a trust’s taxation year (referred to in this subsection as the “trust’s year”), there is an electing contributor in respect of the trust who is a joint contributor in respect of a contribution to the trust, 
  (a) each person who is a joint contributor in respect of the contribution 
  (i) has, in respect of the contribution, jointly and severally, or solidarily, the rights and obligations under Divisions I and J of each other person (referred to in this subsection as the “specified person”) who is, at or before the specified time, a joint contributor in respect of that contribution, for the specified person’s taxation year in which the trust’s year ends, and 
  (ii) is subject to Part XV in respect of those rights and obligations; and 
  (b) the maximum amount recoverable under the provisions referred to in paragraph (a) at a particular time from the person in respect of the contribution and a taxation year, of another person who is the specified person, in which the trust’s year ends is the amount determined by the formula is the total of the amounts payable by the specified person under this Part for the specified person’s taxation year in which the trust’s year ends, is the amount that would be determined for A if the total of the amounts payable by the specified person under this Part for the particular specified person’s taxation year in which the trust’s year ends were computed without reference to the contribution, and is the amount recovered before the particular time from the specified person, and any other joint contributor in respect of the trust and the contribution, in connection with the liability of the specified person in respect of the contribution. 
  
  ### Offshore investment fund property
  
  94.1 (1) If in a taxation year a taxpayer holds or has an interest in property (referred to in this section as an “offshore investment fund property”) 
  (a) that is a share of the capital stock of, an interest in, or a debt of, a non-resident entity (other than a controlled foreign affiliate of the taxpayer or a prescribed non-resident entity) or an interest in or a right or option to acquire such a share, interest or debt, and 
  (b) that may reasonably be considered to derive its value, directly or indirectly, primarily from portfolio investments of that or any other non-resident entity in 
  (i) shares of the capital stock of one or more corporations, 
  (ii) indebtedness or annuities, 
  (iii) interests in one or more corporations, trusts, partnerships, organizations, funds or entities, 
  (iv) commodities, 
  (v) real estate, 
  (vi) Canadian or foreign resource properties, 
  (vii) currency of a country other than Canada, 
  (viii) rights or options to acquire or dispose of any of the foregoing, or 
  (ix) any combination of the foregoing, and it may reasonably be concluded, having regard to all the circumstances, including 
  (c) the nature, organization and operation of any non-resident entity and the form of, and the terms and conditions governing, the taxpayer’s interest in, or connection with, any non-resident entity, 
  (d) the extent to which any income, profits and gains that may reasonably be considered to be earned or accrued, whether directly or indirectly, for the benefit of any non-resident entity are subject to an income or profits tax that is significantly less than the income tax that would be applicable to such income, profits and gains if they were earned directly by the taxpayer, and 
  (e) the extent to which the income, profits and gains of any non-resident entity for any fiscal period are distributed in that or the immediately following fiscal period, that one of the main reasons for the taxpayer acquiring, holding or having the interest in such property was to derive a benefit from portfolio investments in assets described in any of subparagraphs 94.1(1)(b)(i) to 94.1(1)(b)(ix) in such a manner that the taxes, if any, on the income, profits and gains from such assets for any particular year are significantly less than the tax that would have been applicable under this Part if the income, profits and gains had been earned directly by the taxpayer, there shall be included in computing the taxpayer’s income for the year the amount, if any, by which 
  (f) the total of all amounts each of which is the product obtained when 
  (i) the designated cost to the taxpayer of the offshore investment fund property at the end of a month in the year is multiplied by 
  (ii) 1/12 of the total of 
  (A) the prescribed rate of interest for the period that includes that month, and 
  (B) two per cent exceeds 
  (g) the taxpayer’s income for the year (other than a capital gain) from the offshore investment fund property determined without reference to this subsection. 
  
  ### Definitions
  
  (2) In this section,  
  *designated cost* to a taxpayer at any time in a taxation year of an offshore investment fund property that the taxpayer holds or has an interest in means the amount determined by the formula  is the cost amount to the taxpayer of the property at that time (determined without reference to paragraphs 53(1)(m) and 53(1)(q), subparagraph 53(2)(c)(i.3), paragraphs 53(2)(g) and 53(2)(g.1) and section 143.2), is, where an additional amount has been made available by a person to another person after 1984 and before that time, whether by way of gift, loan, payment for a share, transfer of property at less than its fair market value or otherwise, in circumstances such that it may reasonably be concluded that one of the main reasons for so making the additional amount available to the other person was to increase the value of the property, the total of all amounts each of which is the amount, if any, by which such an additional amount exceeds any increase in the cost amount to the taxpayer of the property by virtue of that additional amount, is the total of all amounts each of which is an amount included in respect of the offshore investment fund property by virtue of this section in computing the taxpayer’s income for a preceding taxation year, and is 
  (a) where the taxpayer has held or has had the interest in the property at all times since the end of 1984, the amount, if any, by which the fair market value of the property at the end of 1984 exceeds the cost amount to the taxpayer of the property at the end of 1984, or 
  (b) in any other case, the total of 
  (i) the amount, if any, by which the fair market value of the property at the particular time the taxpayer acquired the property exceeds the cost amount to the taxpayer of the property at the particular time, and 
  (ii) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount that would have been included in respect of the property because of this section in computing the taxpayer’s income for a taxation year that began before June 20, 1996 if the cost to the taxpayer of the property were equal to the fair market value of the property at the particular time exceeds 
  (B) the total of all amounts each of which is an amount that was included in respect of the property because of this section in computing the taxpayer’s income for a taxation year that began before June 20, 1996, except that the designated cost of an offshore investment fund property that is a prescribed offshore investment fund property is nil; ( coût désigné)   
  *non-resident entity* at any time means  
  (a) a corporation that is at that time non-resident, 
  (b) a partnership, organization, fund or entity that is at that time non-resident or is not at that time situated in Canada, or 
  (c) an exempt foreign trust (other than a trust described in any of paragraphs (a) to (g) of the definition 
  *exempt foreign trust* in subsection 94(1)). (entité non-résidente)  
  
  ### Interpretation
  
  (3) Where subsection 94.1(1) is applied with respect to an offshore investment fund property that was 
  (a) held by the taxpayer on February 15, 1984, 
  (b) received as a stock dividend in respect of a share of the capital stock of a non-resident entity held by the taxpayer on February 15, 1984, 
  (c) received as a stock dividend in respect of a share of the capital stock of a non-resident entity that the taxpayer had previously received as described in paragraph 94.1(3)(b), or 
  (d) substituted for a property held by the taxpayer on February 15, 1984 pursuant to an arrangement that existed on that date, the reference to “1984” in the descriptions of B and in the definition 
  *designated cost* in subsection 94.1(2) shall be read as a reference to “1985”.  
  
  ### Investments in non-resident commercial trusts
  
  94.2 (1) Subsection (2) applies to a beneficiary under a trust, and to any particular person of which any such beneficiary is a controlled foreign affiliate, at any time if 
  (a) the trust is at that time an exempt foreign trust (other than a trust described in any of paragraphs (a) to (g) of the definition 
  *exempt foreign trust* in subsection 94(1));  
  (b) either 
  (i) the total fair market value at that time of all fixed interests of a particular class in the trust held by the beneficiary, persons or partnerships not dealing at arm’s length with the beneficiary, or persons or partnerships that acquired their interests in the trust in exchange for consideration given to the trust by the beneficiary, is at least 10% of the total fair market value at that time of all fixed interests of the particular class, or 
  (ii) the beneficiary or the particular person has at or before that time contributed restricted property to the trust; and 
  (c) the beneficiary is at that time a 
  (i) resident beneficiary, 
  (ii) mutual fund, 
  (iii) controlled foreign affiliate of the particular person, or 
  (iv) partnership of which a person described in any of subparagraphs (i) to (iii) is a member. 
  
  ### Deemed corporation
  
  (2) If this subsection applies at any time to a beneficiary under, or a particular person in respect of, a trust, then for the purposes of applying this section, subsections 91(1) to (4), paragraph 94.1(1)(a) and sections 95 and 233.4 to the beneficiary under, and, if applicable, to the particular person in respect of, the trust 
  (a) the trust is deemed to be at that time a non-resident corporation 
  (i) controlled by each of the beneficiary and the particular person, and 
  (ii) having, for each particular class of fixed interests in the trust, a separate class of capital stock of 100 issued shares that have the same attributes as the interests of the particular class; and 
  (b) each beneficiary under the trust is deemed to hold at that time the number of shares of each separate class described in subparagraph (a)(ii) equal to the proportion of 100 that the fair market value at that time of that beneficiary’s fixed interests in the corresponding particular class of fixed interests in the trust is of the fair market value at that time of all fixed interests in the particular class. 
  
  ### Relief from double tax
  
  (3) For the purposes of applying subsection 91(1) to the beneficiary, and, if applicable, to the particular person, to whom subsection (2) applies 
  (a) there may be deducted in computing the foreign accrual property income of the trust referred to in paragraph (2)(a) (in this subsection referred to as the “entity”) for a particular taxation year of the entity the amount that would, in the absence of this paragraph, be the portion of the entity’s foreign accrual property income that would reasonably be considered to have been if this Part were applicable to all beneficiaries of the entity, included under subsection 104(13) in computing the income of any beneficiary of the entity for the taxation year in which the particular taxation year of the entity ends; and 
  (b) subsection 5904(2) of the Income Tax Regulations is to be read without reference to its paragraph (a) in determining the distribution entitlement of all the shares of a class of the capital stock of the entity at the end of the particular taxation year.  
  
  ### Request for information
  
  (4) If the Minister sends a written request, served personally or by registered mail, to a taxpayer requesting additional information for the purpose of enabling the Minister to determine the fair market value of interests in a trust for the purpose of determining the application of subsections (1) to (3) for a taxation year to the taxpayer, and information that may reasonably be considered to be sufficient to make the determination is not received by the Minister within 120 days (or within any longer period that is acceptable to the Minister) after the Minister sends the request, then in applying this section for the taxation year to the taxpayer the fair market value of those interests is deemed to be the fair market value as reasonably determined by the Minister based on the information received by the Minister within 120 days (or within any longer period that is acceptable to the Minister) after the Minister sends the request and any other information the Minister considers reasonable. 
  
  ### Definitions for this Subdivision
  
  95 (1) In this Subdivision,  
  *active business* of a foreign affiliate of a taxpayer means any business carried on by the foreign affiliate other than  
  (a) an investment business carried on by the foreign affiliate, 
  (b) a business that is deemed by subsection (2) to be a business other than an active business carried on by the foreign affiliate, or 
  (c) a non-qualifying business of the foreign affiliate; ( entreprise exploitée activement)   
  *antecedent corporation* of a particular corporation means  
  (a) a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation to which subsection 87(11) applied and by which the particular corporation was formed, 
  (b) a predecessor corporation (within the meaning of subsection 87(1)) of the corporation (referred to in this definition as the “first amalco”) that was formed on an amalgamation of the predecessor corporation and another corporation, where 
  (i) shares of the capital stock of the predecessor corporation that were not owned by the other corporation, or by a corporation of which the other corporation is a subsidiary wholly-owned corporation, were exchanged on the amalgamation for shares of the capital stock of the first amalco that were, during the series of transactions or events that includes the amalgamation, redeemed, acquired or cancelled by the first amalco for money, 
  (ii) the first amalco was a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation to which subsection 87(11) applied and by which the particular corporation was formed, and 
  (iii) the amalgamation referred to in subparagraph (i) occurred in a series of transactions or events that included the amalgamation referred to in subparagraph (ii), 
  (c) a corporation that was wound-up into the particular corporation in a winding-up to which subsection 88(1) applied, or 
  (d) an antecedent corporation of an antecedent corporation of the particular corporation; ( société antécédente)   
  *calculating currency* for a taxation year of a foreign affiliate of a taxpayer means  
  (a) the currency of the country in which the foreign affiliate is resident at the end of the taxation year, or 
  (b) any currency that the taxpayer demonstrates to be reasonable in the circumstances; ( monnaie de calcul)   
  *controlled foreign affiliate*, at any time, of a taxpayer resident in Canada, means  
  (a) a foreign affiliate of the taxpayer that is, at that time, controlled by the taxpayer, or 
  (b) a foreign affiliate of the taxpayer that would, at that time, be controlled by the taxpayer if the taxpayer owned 
  (i) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the taxpayer, 
  (ii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with the taxpayer, 
  (iii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the persons (each of whom is referred to in this definition as a “relevant Canadian shareholder”), in any set of persons not exceeding four (which set of persons shall be determined without reference to the existence of or the absence of any relationship, connection or action in concert between those persons), who 
  (A) are resident in Canada, 
  (B) are not the taxpayer or a person described in subparagraph (ii), and 
  (C) own, at that time, shares of the capital stock of the foreign affiliate, and 
  (iv) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with any relevant Canadian shareholder; ( société étrangère affiliée contrôlée)   
  *designated acquired corporation* of a taxpayer means a particular antecedent corporation of the taxpayer if  
  (a) the taxpayer or another antecedent corporation of the taxpayer acquired control of 
  (i) the particular antecedent corporation, or 
  (ii) a corporation (referred to in this definition as a “successor corporation”) of which the particular antecedent corporation is an antecedent corporation, and 
  (b) immediately before the acquisition of control or a series of transactions or events that includes the acquisition of control, the taxpayer, the other antecedent corporation or a corporation resident in Canada of which the taxpayer or the other antecedent corporation is a subsidiary wholly-owned corporation, as the case may be, dealt at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)) with the particular antecedent corporation or the successor corporation, as the case may be; ( société acquise désignée)   
  *designated liquidation and dissolution*, of a foreign affiliate (referred to in this definition as the “disposing affiliate”) of a taxpayer, means a liquidation and dissolution of the disposing affiliate in respect of which  
  (a) the taxpayer had, immediately before the time of the earliest distribution of property by the disposing affiliate in the course of the liquidation and dissolution, a surplus entitlement percentage in respect of the disposing affiliate of not less than 90%, 
  (b) both 
  (i) the percentage determined by the following formula is greater than or equal to 90%: is the amount, if any, by which 
  (A) the total of all amounts each of which is the fair market value, at the time at which it is distributed, of a property that is distributed by the disposing affiliate, in respect of shares of the capital stock of the disposing affiliate, in the course of the liquidation and dissolution to one particular shareholder of the disposing affiliate that was, immediately before the time of the distribution, a foreign affiliate of the taxpayer exceeds 
  (B) the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by the particular shareholder in consideration for a property referred to in clause (A), and is the amount, if any, by which 
  (A) the total of all amounts each of which is the fair market value, at the time at which it is distributed, of a property that is distributed by the disposing affiliate, in respect of shares of the capital stock of the disposing affiliate, to a shareholder of the disposing affiliate in the course of the liquidation and dissolution exceeds 
  (B) the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by a shareholder of the disposing affiliate in consideration for a property referred to in clause (A), and 
  (ii) at the time of each distribution of property by the disposing affiliate in the course of the liquidation and dissolution in respect of shares of the capital stock of the disposing affiliate, the particular shareholder holds shares of that capital stock that would, if an annual general meeting of the shareholders of the disposing affiliate were held at that time, entitle it to 90% or more of the votes that could be cast under all circumstances at the meeting, or 
  (c) one particular shareholder of the disposing affiliate that was, throughout the liquidation and dissolution, a foreign affiliate of the taxpayer owns not less than 90% of the issued shares of each class of the capital stock of the disposing affiliate throughout the liquidation and dissolution; ( liquidation et dissolution désignées)   
  *eligible trust*, at any time, means a trust, other than a trust  
  (a) created or maintained for charitable purposes, 
  (b) governed by an employee benefit plan, 
  (c) described in paragraph (a.1) of the definition 
  *trust* in subsection 108(1),  
  (d) governed by a salary deferral arrangement, 
  (e) operated for the purpose of administering or providing superannuation, pension, retirement or employee benefits, or 
  (f) where the amount of income or capital that any entity may receive directly from the trust at any time as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power; ( fiducie admissible)   
  *entity* includes an association, a corporation, a fund, a natural person, a joint venture, an organization, a partnership, a syndicate and a trust; (entité)   
  *excluded property*, at a particular time, of a foreign affiliate of a taxpayer means any property of the foreign affiliate that is  
  (a) used or held by the foreign affiliate principally for the purpose of gaining or producing income from an active business carried on by it, 
  (b) shares of the capital stock of another foreign affiliate of the taxpayer where all or substantially all of the fair market value of the property of the other foreign affiliate is attributable to property, of that other foreign affiliate, that is excluded property, 
  (c) property all or substantially all of the income from which is, or would be, if there were income from the property, income from an active business (which, for this purpose, includes income that would be deemed to be income from an active business by paragraph (2)(a) if that paragraph were read without reference to subparagraph (v)), or 
  (c.1) property arising under or as a result of an agreement that 
  (i) provides for the purchase, sale or exchange of currency, and 
  (ii) either 
  (A) can reasonably be considered to have been made by the affiliate to reduce its risk, with respect to an amount that was receivable under an agreement that relates to the sale of excluded property or with respect to an amount that was receivable and was a property described in paragraph (c), of fluctuations in the value of the currency in which the amount receivable was denominated, or 
  (B) can reasonably be considered to have been made by the affiliate to reduce its risk, with respect to any of the following amounts, of fluctuations in the value of the currency in which that amount was denominated: 
  (I) an amount that was payable under an agreement that relates to the purchase of property that (at all times between the time of the acquisition of the property and the particular time) is excluded property of the affiliate, 
  (II) an amount of indebtedness, to the extent that the proceeds derived from the issuance or incurring of the indebtedness can reasonably be considered to have been used to acquire property that (at all times between the time of the acquisition of that property and the particular time) is excluded property of the affiliate, or 
  (III) an amount of indebtedness, to the extent that the proceeds derived from the issuance or incurring of the indebtedness can reasonably be considered to have been used to repay the outstanding balance of 
  1 an amount that, immediately before the time of that repayment, is described by subclause (I), 
  2 an amount of indebtedness of the affiliate that, immediately before the time of that repayment, is described by subclause (II), or 
  3 an amount of indebtedness of the affiliate that, immediately before the time of that repayment, is described by this subclause, and, for the purposes of the definitions 
  *foreign affiliate* in this subsection and 
  *direct equity percentage* in subsection 95(4) as they apply to this definition, where at any time a foreign affiliate of a taxpayer has an interest in a partnership,  
  (d) the partnership shall be deemed to be a non-resident corporation having capital stock of a single class divided into 100 issued shares, and 
  (e) the affiliate shall be deemed to own at that time that proportion of the issued shares of that class that 
  (i) the fair market value of the affiliate’s interest in the partnership at that time is of 
  (ii) the fair market value of all interests in the partnership at that time; ( bien exclu)   
  *exempt trust*, at a particular time in respect of a taxpayer resident in Canada, means a trust that, at that time, is a trust under which the interest of each beneficiary under the trust is, at all times that the interest exists during the trust’s taxation year that includes the particular time, a specified fixed interest of the beneficiary in the trust, if at the particular time  
  (a) the trust is an eligible trust, 
  (b) there are at least 150 beneficiaries each of whom holds a specified fixed interest, in the trust, that has a fair market value of at least $500, and 
  (c) the total of all amounts each of which is the fair market value of an interest as a beneficiary under the trust held by a specified purchaser in respect of the taxpayer is not more than 10% of the total fair market value of all interests as a beneficiary under the trust; ( fiducie exonérée)   
  *foreign accrual property income* of a foreign affiliate of a taxpayer, for any taxation year of the affiliate, means the amount determined by the formula  is the amount that would, if section 80 did not apply to the affiliate for the year or a preceding taxation year, be the total of all amounts, each of which is the affiliate’s income for the year from property, the affiliate’s income for the year from a business other than an active business or the affiliate’s income for the year from a non-qualifying business of the affiliate, in each case that amount being determined as if each amount described in clause (2)(a)(ii)(D) that was paid or payable, directly or indirectly, by the affiliate to another foreign affiliate of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length were nil where an amount in respect of the income derived by the other foreign affiliate from that amount that was paid or payable to it by the affiliate was added in computing its income from an active business, other than 
  (a) interest that would, by virtue of paragraph 81(1)(m), not be included in computing the income of the affiliate if it were resident in Canada, 
  (b) a dividend from another foreign affiliate of the taxpayer, 
  (c) a taxable dividend to the extent that the amount thereof would, if the dividend were received by the taxpayer, be deductible by the taxpayer under section 112, or 
  (d) any amount included because of subsection 80.4(2) in the affiliate’s income in respect of indebtedness to another corporation that is a foreign affiliate of the taxpayer or of a person resident in Canada with whom the taxpayer does not deal at arm’s length, is twice the total of all amounts included in computing the affiliate’s income from property or businesses (other than active businesses) for the year because of subsection 80(13), is the amount determined for G in respect of the affiliate for the preceding taxation year, is the total of all amounts each of which is the portion of the affiliate’s income (to the extent that the income is not included under the description of A) for the year, or of the affiliate’s taxable capital gain for the year that can reasonably be considered to have accrued after its 1975 taxation year, from a disposition of property 
  (a) that is not, at the time of disposition, excluded property of the affiliate, or 
  (b) that is, at the time of disposition, excluded property of the affiliate, if any of paragraphs (2)(c), (d) and (d.1), subparagraph (2)(e)(i) and paragraph 88(3)(a) applies to the disposition, is, where the affiliate is a controlled foreign affiliate of the taxpayer, the amount that would be required to be included in computing its income for the year if 
  (a) subsection 94.1(1) were applicable in computing that income, 
  (b) the words “earned directly by the taxpayer” in that subsection were replaced by the words “earned by the person resident in Canada in respect of whom the taxpayer is a foreign affiliate”, 
  (c) the words “other than a controlled foreign affiliate of the taxpayer or a prescribed non-resident entity” in paragraph 94.1(1)(a) were replaced by the words “other than a prescribed non-resident entity or a controlled foreign affiliate of a person resident in Canada of whom the taxpayer is a controlled foreign affiliate”, and 
  (d) the words “other than a capital gain” in paragraph 94.1(1)(g) were replaced by the words “other than any income that would not be included in the taxpayer’s foreign accrual property income for the year if the value of C in the definition 
  *foreign accrual property income* in subsection 95(1) were nil and other than a capital gain”,  is the total of all amounts, each of which is the affiliate’s loss for the year from property, the affiliate’s loss for the year from a business other than an active business of the affiliate or the affiliate’s loss for the year from a non-qualifying business of the affiliate, in each case that amount being determined as if there were not included in the affiliate’s income any amount described in any of paragraphs (a) to (d) of the description of A and as if each amount described in clause (2)(a)(ii)(D) that was paid or payable, directly or indirectly, by the affiliate to another foreign affiliate of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length were nil where an amount in respect of the income derived by the other foreign affiliate from that amount that was paid or payable to it by the affiliate was added in computing its income from an active business, is the lesser of 
  (a) the amount of the affiliate’s allowable capital losses for the year from dispositions of property (other than excluded property and property in respect of which an election is made by the taxpayer under subsection 88(3.3)) that can reasonably be considered to have accrued after its 1975 taxation year, and 
  (b) the total of all amounts each of which is the portion of a taxable capital gain of the affiliate that is included in the amount determined for B in respect of the affiliate for the year, is the prescribed amount for the year, is the lesser of 
  (a) the prescribed amount for the year, and 
  (b) the amount, if any, by which 
  (i) the total of all amounts each of which is the portion of a taxable capital gain of the affiliate that is included in the amount determined for B in respect of the affiliate for the year exceeds 
  (ii) the amount determined for E in respect of the affiliate for the year, is the amount, if any, by which 
  (a) the total of amounts determined for A.1 and A.2 in respect of the affiliate for the year exceeds 
  (b) the total of all amounts determined for D to F.1 in respect of the affiliate for the year, and is 
  (a) if the affiliate was a member of a partnership at the end of the fiscal period of the partnership that ended in the year and the partnership received a dividend at a particular time in that fiscal period from a corporation that would be, if the reference in subsection 93.1(1) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, a foreign affiliate of the taxpayer for the purposes of sections 93 and 113 at that particular time, then the portion of the amount of that dividend that is included in the value determined for A in respect of the affiliate for the year and that would be, if the reference in subsection 93.1(2) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, deemed by paragraph 93.1(2)(a) to have been received by the affiliate for the purposes of sections 93 and 113, and 
  (b) in any other case, nil; ( revenu étranger accumulé, tiré de biens)   
  *foreign accrual tax* applicable to any amount included under subsection 91(1) in computing a taxpayer’s income for a taxation year of the taxpayer in respect of a particular foreign affiliate of the taxpayer means, subject to subsection 91(4.1),  
  (a) the portion of any income or profits tax that may reasonably be regarded as applicable to that amount and that is paid by 
  (i) the particular affiliate, 
  (ii) another foreign affiliate (in paragraph (b) referred to as the “shareholder affiliate”) of the taxpayer where 
  (A) the other affiliate has an equity percentage in the particular affiliate, 
  (B) the income or profits tax is paid to a country other than Canada, and 
  (C) the other affiliate, and not the particular affiliate, is liable for that tax under the laws of that country, or 
  (iii) another foreign affiliate of the taxpayer in respect of a dividend received, directly or indirectly, from the particular affiliate, if that other affiliate has an equity percentage in the particular affiliate, and 
  (b) any amount prescribed in respect of the particular affiliate or the shareholder affiliate, as the case may be, to be foreign accrual tax applicable to that amount; ( impôt étranger accumulé)   
  *foreign affiliate*, at any time, of a taxpayer resident in Canada means a non-resident corporation in which, at that time,  
  (a) the taxpayer’s equity percentage is not less than 1%, and 
  (b) the total of the equity percentages in the corporation of the taxpayer and of each person related to the taxpayer (where each such equity percentage is determined as if the determinations under paragraph (b) of the definition 
  *equity percentage* in subsection 95(4) were made without reference to the equity percentage of any person in the taxpayer or in any person related to the taxpayer) is not less than 10%,  except that a corporation is not a foreign affiliate of a non-resident-owned investment corporation; ( société étrangère affiliée)   
  *foreign bank* means an entity that would be a foreign bank within the meaning assigned by the definition of that expression in section 2 of the Bank Act if  
  (a) that definition were read without reference to the portion thereof after paragraph (g) thereof, and 
  (b) the entity had not been exempt under section 12 of that Act from being a foreign bank; ( banque étrangère)   
  *income from an active business* of a foreign affiliate of a taxpayer for a taxation year includes the foreign affiliate’s income for the taxation year that pertains to or is incident to that active business but does not include  
  (a) the foreign affiliate’s income from property for the taxation year, 
  (b) the foreign affiliate’s income for the taxation year from a business that is deemed by subsection (2) to be a business other than an active business of the foreign affiliate, or 
  (c) the foreign affiliate’s income from a non-qualifying business of the foreign affiliate for the taxation year; ( revenu provenant d’une entreprise exploitée activement)   
  *income from a non-qualifying business* of a foreign affiliate of a taxpayer resident in Canada for a taxation year includes the foreign affiliate’s income for the taxation year that pertains to or is incident to that non-qualifying business, but does not include  
  (a) the foreign affiliate’s income from property for the taxation year, or 
  (b) the foreign affiliate’s income for the taxation year from a business that is deemed by subsection (2) to be a business other than an active business of the foreign affiliate; ( revenu provenant d’une entreprise non admissible)   
  *income from property* of a foreign affiliate of a taxpayer for a taxation year includes the foreign affiliate’s income for the taxation year from an investment business and the foreign affiliate’s income for the taxation year from an adventure or concern in the nature of trade, but does not include  
  (a) the foreign affiliate’s income for the taxation year from a business that is deemed by subsection (2) to be a business other than an active business of the foreign affiliate, or 
  (b) the foreign affiliate’s income for the taxation year that pertains to or is incident to 
  (i) an active business of the foreign affiliate, or 
  (ii) a non-qualifying business of the foreign affiliate; ( revenu de biens)   
  *investment business* of a foreign affiliate of a taxpayer means a business carried on by the foreign affiliate in a taxation year (other than a business deemed by subsection (2) to be a business other than an active business carried on by the foreign affiliate and other than a non-qualifying business of the foreign affiliate) the principal purpose of which is to derive income from property (including interest, dividends, rents, royalties or any similar returns or substitutes for such interest, dividends, rents, royalties or returns), income from the insurance or reinsurance of risks, income from the factoring of trade accounts receivable, or profits from the disposition of investment property, unless it is established by the taxpayer or the foreign affiliate that, throughout the period in the taxation year during which the business was carried on by the foreign affiliate,  
  (a) the business (other than any business conducted principally with persons with whom the affiliate does not deal at arm’s length) is 
  (i) a business carried on by it as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, the activities of which are regulated under the laws 
  (A) of each country in which the business is carried on through a permanent establishment in that country and of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, 
  (B) of the country in which the business is principally carried on, or 
  (C) if the affiliate is related to a non-resident corporation, of the country under whose laws that non-resident corporation is governed and any of exists, was (unless that non-resident corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union, or 
  (ii) the development of real property or immovables for sale, the lending of money, the leasing or licensing of property or the insurance or reinsurance of risks, 
  (b) either 
  (i) the affiliate (otherwise than as a member of a partnership) carries on the business (the affiliate being, in respect of those times, in that period of the year, that it so carries on the business, referred to in paragraph (c) as the “operator”), or 
  (ii) the affiliate carries on the business as a qualifying member of a partnership (the partnership being, in respect of those times, in that period of the year, that the affiliate so carries on the business, referred to in paragraph (c) as the “operator”), and 
  (c) the operator employs 
  (i) more than five employees full time in the active conduct of the business, or 
  (ii) the equivalent of more than five employees full time in the active conduct of the business taking into consideration only 
  (A) the services provided by employees of the operator, and 
  (B) the services provided outside Canada to the operator by any one or more persons each of whom is, during the time at which the services were performed by the person, an employee of 
  (I) a corporation related to the affiliate (otherwise than because of a right referred to in paragraph 251(5)(b)), 
  (II) in the case where the operator is the affiliate, 
  1 a corporation (referred to in this subparagraph as a “providing shareholder”) that is a qualifying shareholder of the affiliate, 
  2 a designated corporation in respect of the affiliate, or 
  3 a designated partnership in respect of the affiliate, and 
  (III) in the case where the operator is the partnership described in subparagraph (b)(ii), 
  1 any person (referred to in this subparagraph as a “providing member”) who is a qualifying member of that partnership, 
  2 a designated corporation in respect of the affiliate, or 
  3 a designated partnership in respect of the affiliate, if the corporations referred to in subclause (B)(I) and the designated corporations, designated partnerships, providing shareholders or providing members referred to in subclauses (B)(II) and (III) receive compensation from the operator for the services provided to the operator by those employees the value of which is not less than the cost to those corporations, partnerships, shareholders or members of the compensation paid or accruing to the benefit of those employees that performed the services during the time at which the services were performed by those employees; ( entreprise de placement)   
  *investment property* of a foreign affiliate of a taxpayer includes  
  (a) a share of the capital stock of a corporation other than a share of another foreign affiliate of the taxpayer that is excluded property of the affiliate, 
  (b) an interest in a partnership other than an interest in a partnership that is excluded property of the affiliate, 
  (c) an interest in a trust other than an interest in a trust that is excluded property of the affiliate, 
  (d) indebtedness or annuities, 
  (e) commodities or commodities futures purchased or sold, directly or indirectly in any manner whatever, on a commodities or commodities futures exchange (except commodities manufactured, produced, grown, extracted or processed by the affiliate or a person to whom the affiliate is related (otherwise than because of a right referred to in paragraph 251(5)(b)) or commodities futures in respect of such commodities), 
  (f) currency, 
  (g) real property or immovables, 
  (h) Canadian and foreign resource properties, 
  (i) interests in funds or entities other than corporations, partnerships and trusts, and 
  (j) interests in, or for civil law rights in, or options in respect of, property that is included in any of paragraphs (a) to (i); ( bien de placement)   
  *lease obligation* of a person includes an obligation under an agreement that authorizes the use of or the production or reproduction of property including information or any other thing; (obligation découlant d’un bail)   
  *lending of money* by a person (for the purpose of this definition referred to as the “lender”) includes  
  (a) the acquisition by the lender of trade accounts receivable (other than trade accounts receivable owing by a person with whom the lender does not deal at arm’s length) from another person or the acquisition by the lender of any interest in any such accounts receivable, 
  (b) the acquisition by the lender of loans made by and lending assets (other than loans or lending assets owing by a person with whom the lender does not deal at arm’s length) of another person or the acquisition by the lender of any interest in such a loan or lending asset, 
  (c) the acquisition by the lender of a foreign resource property (other than a foreign resource property that is a rental or royalty payable by a person with whom the lender does not deal at arm’s length) of another person, and 
  (d) the sale by the lender of loans or lending assets (other than loans or lending assets owing by a person with whom the lender does not deal at arm’s length) or the sale by the lender of any interest in such loans or lending assets; and for the purpose of this definition, the definition 
  *lending asset* in subsection 248(1) shall be read without the words “but does not include a prescribed property”; (prêt d’argent)   
  *licensing of property* includes authorizing the use of or the production or reproduction of property including information or any other thing; (concession d’une licence sur un bien)   
  *non-qualifying business* of a foreign affiliate of a taxpayer at any time means a business carried on by the foreign affiliate through a permanent establishment in a jurisdiction that, at the end of the foreign affiliate’s taxation year that includes that time, is a non-qualifying country, other than  
  (a) an investment business of the foreign affiliate, or 
  (b) a business that is deemed by subsection (2) to be a business other than an active business of the foreign affiliate; ( entreprise non admissible)   
  *non-qualifying country*, at any time, means a country or other jurisdiction  
  (a) with which Canada neither has a tax treaty at that time nor has, before that time, signed an agreement that will, on coming into effect, be a tax treaty, 
  (a.1) for which, if the time is after February 2014, the Convention on Mutual Administrative Assistance in Tax Matters — concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada — is at that time not in force and does not have effect, 
  (b) with which Canada does not have a comprehensive tax information exchange agreement that is in force and has effect at that time, and 
  (c) with which Canada has, more than 60 months before that time, either 
  (i) begun negotiations for a comprehensive tax information exchange agreement (unless that time is before 2014 and Canada was, on March 19, 2007, in the course of negotiating a comprehensive tax information exchange agreement with that jurisdiction), or 
  (ii) sought, by written invitation, to enter into negotiations for a comprehensive tax information exchange agreement (unless that time is before 2014 and Canada was, on March 19, 2007, in the course of negotiating a comprehensive tax information exchange agreement with that jurisdiction); ( pays non admissible)   
  *participating percentage* of a particular share owned by a taxpayer of the capital stock of a corporation in respect of any foreign affiliate of the taxpayer that was, at the end of its taxation year, a controlled foreign affiliate of the taxpayer is  
  (a) where the foreign accrual property income of the affiliate for that year is $5,000 or less, nil, and 
  (b) where the foreign accrual property income of the affiliate for that year exceeds $5,000, 
  (i) the percentage that would be the taxpayer’s equity percentage in the affiliate at the end of that taxation year on the assumption that the taxpayer owned no shares other than the particular share (but in no case shall that assumption be made for the purpose of determining whether or not a corporation is a foreign affiliate of the taxpayer) if 
  (A) the affiliate and each corporation that is relevant to the determination of the taxpayer’s equity percentage in the affiliate have, at that time, only one class of issued shares, and 
  (B) no foreign affiliate (referred to in this clause as the “upper-tier affiliate”) of the taxpayer that is relevant to the determination of the taxpayer’s equity percentage in the affiliate has, at that time, an equity percentage in a foreign affiliate (including, for greater certainty, the affiliate) of the taxpayer that has an equity percentage in the upper-tier affiliate, and 
  (ii) in any other case, the percentage determined in prescribed manner; ( pourcentage de participation)   
  *permanent establishment* has the meaning assigned by regulation; (établissement stable)   
  *relevant tax factor*, of a person or partnership for a taxation year, means  
  (a) in the case of a corporation, or of a partnership all the members of which, other than non-resident persons, are corporations, the quotient obtained by the formula is the percentage set out in paragraph 123(1)(a), and is 
  (i) in the case of a corporation, the percentage that is the corporation’s general rate reduction percentage (as defined by section 123.4) for the taxation year, and 
  (ii) in the case of a partnership, the percentage that would be determined under subparagraph (i) in respect of the partnership if the partnership were a corporation whose taxation year is the partnership’s fiscal period, and 
  (b) in any other case, 1.9; ( facteur fiscal approprié)   
  *specified fixed interest*, at any time, of an entity in a trust, means an interest of the entity as a beneficiary under the trust if  
  (a) the interest includes, at that time, rights of the entity as a beneficiary under the trust to receive, at or after that time and directly from the trust, income and capital of the trust, 
  (b) the interest was issued by the trust, at or before that time, to an entity, in exchange for consideration and the fair market value, at the time at which the interest was issued, of that consideration was equal to the fair market value, at the time at which it was issued, of the interest, 
  (c) the only manner in which any part of the interest may cease to be the entity’s is by way of a disposition (determined without reference to paragraph (i) of the definition 
  *disposition* in subsection 248(1) and paragraph 248(8)(c)) by the entity of that part, and  
  (d) no amount of income or capital of the trust that any entity may receive directly from the trust at any time as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power; ( participation fixe désignée)   
  *specified person or partnership*, in respect of a taxpayer, at any time means the taxpayer or a person (other than a designated acquired corporation of the taxpayer), or a partnership, that is at that time  
  (a) a person (other than a partnership) that is resident in Canada and does not, at that time, deal at arm’s length with the taxpayer, 
  (b) a specified predecessor corporation of the taxpayer or of a specified person or partnership in respect of the taxpayer, 
  (c) a foreign affiliate of 
  (i) the taxpayer, 
  (ii) a person that is at that time a specified person or partnership in respect of the taxpayer under this definition because of paragraph (a) or (b), or 
  (iii) a partnership that is at that time a specified person or partnership in respect of the taxpayer under this definition because of paragraph (d), or 
  (d) a partnership a member of which is at that time a specified person or partnership in respect of the taxpayer under this definition; ( personne ou société de personnes déterminée)   
  *specified predecessor corporation* of a particular corporation means  
  (a) an antecedent corporation of the particular corporation, 
  (b) a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation by which the particular corporation was formed, or 
  (c) a specified predecessor corporation of a specified predecessor corporation of the particular corporation; ( société remplacée déterminée)   
  *specified purchaser*, at any time, in respect of a particular taxpayer resident in Canada, means an entity that is, at that time,  
  (a) the particular taxpayer, 
  (b) an entity resident in Canada with which the particular taxpayer does not deal at arm’s length, 
  (c) a foreign affiliate of an entity described in any of paragraphs (a) and (b) and (d) to (f), 
  (d) a trust (other than an exempt trust) in which an entity described in any of paragraphs (a) to (c) and (e) and (f) is beneficially interested, 
  (e) a partnership of which an entity described in any of paragraphs (a) to (d) and (f) is a member, or 
  (f) an entity (other than an entity described in any of paragraphs (a) to (e)) with which an entity described in any of paragraphs (a) to (e) does not deal at arm’s length; ( acheteur déterminé)   
  *surplus entitlement percentage*, at any time, of a taxpayer in respect of a foreign affiliate has the meaning assigned by regulation; (pourcentage de droit au surplus)   
  *taxable Canadian business*, at any time, of a foreign affiliate of a taxpayer resident in Canada or of a partnership of which a foreign affiliate of a taxpayer resident in Canada is a member (which foreign affiliate or partnership is referred to in this definition as the “operator”), means a business the income from which  
  (a) is, or would be if there were income from the business for the operator’s taxation year or fiscal period that includes that time, included in computing the foreign affiliate’s taxable income earned in Canada for a taxation year under subparagraph 115(1)(a)(ii), and 
  (b) is not, or would not be if there were income from the business for the operator’s taxation year or fiscal period that includes that time, exempt, because of a tax treaty with a country, from tax under this Part; ( entreprise canadienne imposable)   
  *taxation year* in relation to a foreign affiliate of a taxpayer means the period for which the accounts of the foreign affiliate have been ordinarily made up, but no such period may exceed 53 weeks; (année d’imposition)   
  *trust company* includes a corporation that is resident in Canada and that is a loan company as defined in subsection 2(1) of the Canadian Payments Act. (société de fiducie)  
  
  ### British Virgin Islands
  
  (1.1) For the purposes of paragraph (b) of the definition 
  *non-qualifying country* in subsection (1), the British Overseas Territory of the British Virgin Islands is deemed to have a comprehensive tax information exchange agreement with Canada that is in force and has effect after 2013 and before March 11, 2014.  
  
  ### Determination of certain components of foreign accrual property income
  
  (2) For the purposes of this Subdivision, 
  (a) in computing the income or loss from an active business for a taxation year of a particular foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout the year or that is a controlled foreign affiliate of the taxpayer throughout the year, there shall be included any income or loss of the particular foreign affiliate for the year from sources in a country other than Canada that would otherwise be income or loss from property of the particular foreign affiliate for the year to the extent that 
  (i) the income or loss 
  (A) is derived by the particular foreign affiliate from activities of the particular foreign affiliate, or of a particular partnership of which the particular foreign affiliate is a member, to the extent that the activities occur while the particular affiliate is a qualifying member of the particular partnership that can reasonably be considered to be directly related to active business activities carried on in a country other than Canada by 
  (I) another foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year, 
  (II) a life insurance corporation that is resident in Canada throughout the year and that is 
  1 the taxpayer, 
  2 a person who controls the taxpayer, 
  3 a person controlled by the taxpayer, or 
  4 a person controlled by a person who controls the taxpayer, 
  (III) the particular foreign affiliate or a partnership of which the particular foreign affiliate is a member, to the extent that the activities occur while the particular affiliate is a qualifying member of the partnership, or 
  (IV) a partnership of which another foreign affiliate of the taxpayer, in respect of which the taxpayer has a qualifying interest throughout the year, is a member, to the extent that the activities occur while the other affiliate is a qualifying member of the partnership, and 
  (B) if any of subclauses (A)(I), (II) and (IV) applies, would be included in computing the amount prescribed to be the earnings or loss, from an active business carried on in a country other than Canada, of 
  (I) that other foreign affiliate referred to in subclause (A)(I) or (IV), if the income were earned by it, or 
  (II) the life insurance corporation referred to in subclause (A)(II), if that life insurance corporation were a foreign affiliate of the taxpayer and the income were earned by it, 
  (ii) the income or loss is derived from amounts that were paid or payable, directly or indirectly, to the particular foreign affiliate or a partnership of which the particular foreign affiliate was a member 
  (A) by a life insurance corporation that is resident in Canada and that is the taxpayer, a person who controls the taxpayer, a person controlled by the taxpayer or a person controlled by a person who controls the taxpayer, to the extent that those amounts that were paid or payable were for expenditures that are deductible in a taxation year of the life insurance corporation by the life insurance corporation in computing its income or loss for a taxation year from carrying on its life insurance business outside Canada and are not deductible in computing its income or loss for a taxation year from carrying on its life insurance business in Canada, 
  (B) by 
  (I) another foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year, to the extent that those amounts that were paid or payable are for expenditures that were deductible by that other foreign affiliate in computing the amounts prescribed to be its earnings or loss for a taxation year from an active business (other than an active business carried on in Canada), or 
  (II) a partnership of which another foreign affiliate of the taxpayer (in respect of which other foreign affiliate the taxpayer has a qualifying interest throughout the year) is a qualifying member throughout each period, in the fiscal period of the partnership that ends in the year, in which that other foreign affiliate was a member of the partnership, to the extent that those amounts that were paid or payable are for expenditures that are deductible by the partnership in computing that other foreign affiliate’s share of any income or loss of the partnership, for a fiscal period, that is included in computing the amounts prescribed to be that other foreign affiliate’s earnings or loss for a taxation year from an active business (other than an active business carried on in Canada), 
  (C) by a partnership of which the particular foreign affiliate is a qualifying member throughout each period, in the fiscal period of the partnership that ends in the year, in which the particular foreign affiliate was a member of the partnership, to the extent that those amounts that were paid or payable are for expenditures that are deductible by the partnership in computing the particular foreign affiliate’s share of any income or loss of the partnership, for a fiscal period, that is included in computing the amounts prescribed to be the particular foreign affiliate’s earnings or loss for a taxation year from an active business (other than an active business carried on in Canada), or 
  (D) by another foreign affiliate (referred to in this clause as the “second affiliate”) of the taxpayer — in respect of which the taxpayer has a qualifying interest throughout the year — to the extent that the amounts are paid or payable by the second affiliate, in respect of any particular period in the year, 
  (I) under a legal obligation to pay interest on borrowed money used for the purpose of earning income from property, or 
  (II) on an amount payable for property acquired for the purpose of gaining or producing income from property where 
  (III) the property is, throughout the particular period, excluded property of the second affiliate that is shares of the capital stock of a corporation (referred to in this clause as the “third affiliate”) which is, throughout the particular period, a foreign affiliate (other than the particular foreign affiliate) of the taxpayer in respect of which the taxpayer has a qualifying interest, and 
  (IV) in respect of each of the second affiliate and the third affiliate, for each of their taxation years (each of which is referred to in this subclause as a “relevant taxation year”) that end in the year, either 
  1 that affiliate is subject to income taxation in a country other than Canada in that relevant taxation year, or 
  2 the members or shareholders of that affiliate (which, for the purposes of this sub-subclause, includes a person that has, directly or indirectly, an interest, or for civil law a right, in a share of the capital stock of, or in an equity interest in, the affiliate) at the end of that relevant taxation year are subject to income taxation in a country other than Canada on, in aggregate, all or substantially all of the income of that affiliate for that relevant taxation year in their taxation years in which that relevant taxation year ends, 
  (V)  [Repealed, 2014, c. 39, s. 25]  
  (iii) the income or loss is derived by the particular foreign affiliate from the factoring of trade accounts receivable acquired by the particular foreign affiliate, or a partnership of which the particular foreign affiliate was a member, from another foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year to the extent that the accounts receivable arose in the course of an active business carried on in a country other than Canada by that other foreign affiliate, 
  (iv) the income or loss is derived by the particular foreign affiliate from loans or lending assets acquired by the particular foreign affiliate, or a partnership of which the particular foreign affiliate was a member, from another foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year, to the extent that the loans or lending assets arose in the course of an active business carried on in a country other than Canada by that other foreign affiliate, 
  (v) the income or loss is derived by the particular foreign affiliate from the disposition of excluded property that is not capital property, or 
  (vi) the income or loss is derived by the particular foreign affiliate under or as a result of an agreement that provides for the purchase, sale or exchange of currency and that can reasonably be considered to have been made by the particular foreign affiliate to reduce 
  (A) its risk — with respect to an amount that increases the amount required by this paragraph to be included in computing the particular foreign affiliate’s income for a taxation year from an active business or that decreases the amount required by this paragraph to be included in computing the particular foreign affiliate’s loss for a taxation year from an active business — of fluctuations in the value of the currency in which the amount was denominated, or 
  (B) its risk — with respect to an amount that decreases the amount required by this paragraph to be included in computing the particular foreign affiliate’s income for a taxation year from an active business or that increases the amount required by this paragraph to be included in computing the particular foreign affiliate’s loss for a taxation year from an active business — of fluctuations in the value of the currency in which the amount was denominated; 
  (a.1) in computing the income from a business other than an active business for a taxation year of a foreign affiliate of a taxpayer there shall be included the income of the affiliate for the year from the sale of property (which, for the purposes of this paragraph, includes the income of the affiliate for the year from the performance of services as an agent in relation to a purchase or sale of property) where 
  (i) it is reasonable to conclude that the cost to any person of the property (other than property that is designated property) is relevant in computing the income from a business carried on by the taxpayer or by a person resident in Canada with whom the taxpayer does not deal at arm’s length or is relevant in computing the income from a business carried on in Canada by a non-resident person with whom the taxpayer does not deal at arm’s length, and 
  (ii) the property was not 
  (A) manufactured, produced, grown, extracted or processed in the country 
  (I) under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and 
  (II) in which the affiliate’s business is principally carried on, 
  (B) an interest in real property, or a real right in an immovable, located in, or a foreign resource property in respect of, the country 
  (I) under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and 
  (II) in which the affiliate’s business is principally carried on, or 
  (C) an indebtedness, or a lease obligation, of a person resident in Canada or in respect of a business carried on in Canada, that was purchased and sold by the affiliate on its own account, unless more than 90% of the gross revenue of the affiliate for the year from the sale of property (other than a property the income from the sale of which is not included in computing the income from a business other than an active business of the affiliate under this paragraph because of subsection (2.31)) is derived from the sale of such property (other than a property described in subparagraph (ii) the cost of which to any person is a cost referred to in subparagraph (i)) to persons with whom the affiliate deals at arm’s length (which, for this purpose, includes a sale of property to a non-resident corporation with which the affiliate does not deal at arm’s length for sale to persons with whom the affiliate deals at arm’s length) and, where this paragraph applies to include income of the affiliate from the sale of property in the income of the affiliate from a business other than an active business, 
  (iii) the sale of such property shall be deemed to be a separate business, other than an active business, carried on by the affiliate, and 
  (iv) any income of the affiliate that pertains to or is incident to that business shall be deemed to be income from a business other than an active business; 
  (a.2) in computing the income from a business other than an active business for a taxation year of a foreign affiliate of a taxpayer 
  (i) there shall be included the income of the affiliate for the year from the insurance of specified Canadian risks (which, for the purposes of this paragraph, includes income for the year from the reinsurance of specified Canadian risks), unless more than 90% of the gross premium revenue of the affiliate for the year from the insurance of risks (net of reinsurance ceded) was in respect of the insurance of risks (other than specified Canadian risks) of persons with whom the affiliate deals at arm’s length, 
  (ii) if subparagraph (i) applies to include income of the affiliate from the insurance of specified Canadian risks, 
  (A) the insurance of those risks is deemed to be a separate business, other than an active business, carried on by the affiliate, and 
  (B) any income of the affiliate that pertains to or is incident to that business is deemed to be income from a business other than an active business, 
  (iii) there shall be included the income of the affiliate for the year in respect of the ceding of specified Canadian risks — except to the extent that the income is included because of subparagraph (i) or (ii) — which, for the purposes of this paragraph, includes 
  (A) income of the affiliate from services in respect of the ceding of specified Canadian risks, and 
  (B) except to the extent the amount is included under clause (A), the amount, if any, by which the fair market value of the consideration provided in respect of the ceding of the specified Canadian risks exceeds the affiliate’s cost in respect of those specified Canadian risks, and 
  (iv) if subparagraph (iii) applies to include income of the affiliate in respect of the ceding of specified Canadian risks, 
  (A) the ceding of those risks is deemed to be a separate business, other than an active business, carried on by the affiliate, and 
  (B) any income of the affiliate that pertains to or is incident to that business is deemed to be income from a business other than an active business; 
  (a.21) for the purposes of paragraph (a.2), one or more risks insured by a foreign affiliate of a taxpayer that, if this Act were read without reference to this paragraph, would not be specified Canadian risks (in this paragraph referred to as the 
  *foreign policy pool*) are deemed to be specified Canadian risks if  
  (i) the affiliate, or a person or partnership that does not deal at arm’s length with the affiliate, enters into one or more agreements or arrangements in respect of the foreign policy pool, 
  (ii) the affiliate’s risk of loss or opportunity for gain or profit in respect of the foreign policy pool, in combination with its risk of loss or opportunity for gain in respect of the agreements or arrangements, can reasonably be considered to be — or could reasonably be considered to be if the affiliate had entered into the agreements or arrangements entered into by the person or partnership — determined, in whole or in part, by reference to one or more criteria in respect of one or more risks insured by another person or partnership (in this paragraph referred to as the 
  *tracked policy pool*), which criteria are  
  (A) the fair market value of the tracked policy pool, 
  (B) the revenue, income, loss or cash flow from the tracked policy pool, or 
  (C) any other similar criteria, and 
  (iii) 10% or more of the tracked policy pool consists of specified Canadian risks; 
  (a.22) if the conditions in paragraph (a.21) are satisfied in respect of a foreign affiliate of a taxpayer, or a foreign affiliate of another taxpayer if that other taxpayer does not deal at arm’s length with the taxpayer, and a particular foreign affiliate of the taxpayer, or a partnership of which the particular affiliate is a member, has entered into one or more agreements or arrangements described in that paragraph, 
  (i) activities performed in connection with those agreements or arrangements are deemed to be a separate business, other than an active business, carried on by the particular affiliate to the extent that those activities can reasonably be considered to be performed for the purpose of obtaining the result described in subparagraph (a.21)(ii), and 
  (ii) any income of the particular affiliate from the business (including income that pertains to or is incident to the business) is deemed to be income from a business other than an active business; 
  (a.23) for the purposes of paragraphs (a.2), (a.21) and (a.24), 
  *specified Canadian risk* means a risk in respect of  
  (i) a person resident in Canada, 
  (ii) a property situated in Canada, or 
  (iii) a business carried on in Canada; 
  (a.24) for the purposes of paragraph (a.2), 
  (i) a risk is deemed to be a specified Canadian risk of a particular foreign affiliate of a taxpayer if 
  (A) as part of a transaction or series of transactions, the particular affiliate insured or reinsured the risk, 
  (B) the risk would not be a specified Canadian risk if this Act were read without reference to this paragraph, and 
  (C) it can reasonably be concluded that one of the purposes of the transaction or series of transactions was to avoid the application of any of paragraphs (a.2) to (a.22), and 
  (ii) if the particular affiliate — or a foreign affiliate of another taxpayer, if that other taxpayer or affiliate, or a partnership of which that other taxpayer or affiliate is a member, does not deal at arm’s length with the particular affiliate — enters into one or more agreements or arrangements in respect of the risk, 
  (A) activities performed in connection with those agreements or arrangements are deemed to be a separate business, other than an active business, carried on by the particular affiliate or other affiliate, as the case may be, and 
  (B) any income of the particular affiliate or other affiliate, as the case may be, from the business (including income that pertains to or is incident to the business) is deemed to be income from a business other than an active business; 
  (a.3) in computing the income from a business other than an active business for a taxation year of a foreign affiliate of a taxpayer there shall be included the income of the affiliate for the year derived directly or indirectly from indebtedness and lease obligations (which, for the purposes of this paragraph, includes the income of the affiliate for the year from the purchase and sale of indebtedness and lease obligations on its own account, but does not include excluded income) 
  (i) of persons resident in Canada, or 
  (ii) in respect of businesses carried on in Canada unless more than 90% of the gross revenue of the affiliate derived directly or indirectly from indebtedness and lease obligations (other than excluded revenue or revenue that is not included in computing the income from a business other than an active business of the affiliate under this paragraph because of subsection (2.31)) was derived directly or indirectly from indebtedness and lease obligations of non-resident persons with whom the affiliate deals at arm’s length and, where this paragraph applies to include income of the affiliate for the year in the income of the affiliate from a business other than an active business, 
  (iii) those activities carried out to earn such income shall be deemed to be a separate business, other than an active business, carried on by the affiliate, and 
  (iv) any income of the affiliate that pertains to or is incident to that business shall be deemed to be income from a business other than an active business; 
  (a.4) in computing the income from a business other than an active business for a taxation year of a foreign affiliate of a taxpayer there shall be included (to the extent not included under paragraph 95(2)(a.3) in such income of the affiliate for the year) that proportion of the income of the affiliate for the year derived directly or indirectly from indebtedness and lease obligations (which, for the purposes of this paragraph, includes the income of the affiliate for the year from the purchase and sale of indebtedness and lease obligations on its own account) in respect of a business carried on outside Canada by a partnership (any portion of the income or loss of which for fiscal periods of the partnership that end in the year is included or would, if the partnership had an income or loss for such fiscal periods, be included directly or indirectly in computing the income or loss of the taxpayer or a person resident in Canada with whom the taxpayer does not deal at arm’s length) that 
  (i) the total of all amounts each of which is the income or loss of the partnership for fiscal periods of the partnership that end in the year that are included directly or indirectly in computing the income or loss of the taxpayer or a person resident in Canada with whom the taxpayer does not deal at arm’s length is of 
  (ii) the total of all amounts each of which is the income or loss of the partnership for fiscal periods of the partnership that end in the year unless more than 90% of the gross revenue of the affiliate derived directly or indirectly from indebtedness and lease obligations was derived directly or indirectly from indebtedness and lease obligations of non-resident persons with whom the affiliate deals at arm’s length (other than indebtedness and lease obligations of a partnership described in this paragraph) and where this paragraph applies to include a proportion of the income of the affiliate for the year in the income of the affiliate from a business other than an active business 
  (iii) those activities carried out to earn such income of the affiliate for the year shall be deemed to be a separate business, other than an active business, carried on by the affiliate, and 
  (iv) any income of the affiliate that pertains to or is incident to that business shall be deemed to be income from a business other than an active business and for the purpose of this paragraph, where the income or loss of a partnership for a fiscal period that ends in the year is nil, the proportion of the income of the affiliate that is to be included in the income of the affiliate for the year from a business other than an active business shall be determined as if the partnership had income of $1,000,000 for that fiscal period; 
  (b) the provision, by a foreign affiliate of a taxpayer, of services or of an undertaking to provide services 
  (i) is deemed to be a separate business, other than an active business, carried on by the affiliate, and any income from that business or that pertains to or is incident to that business is deemed to be income from a business other than an active business, to the extent that the amounts paid or payable in consideration for those services or for the undertaking to provide services 
  (A) are deductible, or can reasonably be considered to relate to amounts that are deductible, in computing the income from a business carried on in Canada, by 
  (I) any taxpayer of whom the affiliate is a foreign affiliate, or 
  (II) another taxpayer who does not deal at arm’s length with 
  1 the affiliate, or 
  2 any taxpayer of whom the affiliate is a foreign affiliate, or 
  (B) are deductible, or can reasonably be considered to relate to an amount that is deductible, in computing the foreign accrual property income of a foreign affiliate of 
  (I) any taxpayer of whom the affiliate is a foreign affiliate, or 
  (II) another taxpayer who does not deal at arm’s length with 
  1 the affiliate, or 
  2 any taxpayer of whom the affiliate is a foreign affiliate, and 
  (ii) is deemed to be a separate business, other than an active business, carried on by the affiliate, and any income from that business or that pertains to or is incident to that business is deemed to be income from a business other than an active business, to the extent that the services are, or are to be, performed by 
  (A) any taxpayer of whom the affiliate is a foreign affiliate, 
  (B) a relevant person who does not deal at arm’s length with 
  (I) the affiliate, or 
  (II) any taxpayer of whom the affiliate is a foreign affiliate, 
  (C) a partnership any member of which is a person described in clause (A) or (B), or 
  (D) a partnership in which any person or partnership described in any of clauses (A) to (C) has, directly or indirectly, a partnership interest; 
  (c) if a foreign affiliate (referred to in this paragraph as the “disposing affiliate”) of a taxpayer has, at any time, disposed of capital property (other than property the adjusted cost base of which, at that time, is greater than the amount that would, in the absence of this paragraph, be the disposing affiliate’s proceeds of disposition of the property in respect of the disposition) that was shares (referred to in this paragraph as the “shares disposed of”) of the capital stock of another foreign affiliate of the taxpayer to any other corporation that was, immediately after that time, a foreign affiliate (referred to in this paragraph as the “acquiring affiliate”) of the taxpayer for consideration that includes shares of the capital stock of the acquiring affiliate, 
  (i) the cost to the disposing affiliate of any property (other than shares of the capital stock of the acquiring affiliate) receivable by the disposing affiliate as consideration for the disposition is deemed to be the fair market value of the property at that time, 
  (ii) the cost to the disposing affiliate of each share of a class of the capital stock of the acquiring affiliate that is receivable by the disposing affiliate as consideration for the disposition is deemed to be the amount determined by the formula is the total of all amounts each of which is the relevant cost base to the disposing affiliate at that time, in respect of the taxpayer, of a share disposed of, is the fair market value at that time of the consideration receivable for the disposition (other than shares of the capital stock of the acquiring affiliate), is the fair market value, immediately after that time, of the share, and is the fair market value, immediately after that time, of all shares of the capital stock of the acquiring affiliate receivable by the disposing affiliate as consideration for the disposition, 
  (iii) the disposing affiliate’s proceeds of disposition of the shares are deemed to be an amount equal to the cost to it of all shares and other property receivable by it from the acquiring affiliate as consideration for the disposition, and 
  (iv) the cost to the acquiring affiliate of the shares acquired from the disposing affiliate is deemed to be an amount equal to the disposing affiliate’s proceeds of disposition referred to in subparagraph (iii); 
  (d) where there has been a foreign merger in which the shares owned by a foreign affiliate of a taxpayer of the capital stock of a corporation that was a predecessor foreign corporation immediately before the merger were exchanged for or became shares of the capital stock of the new foreign corporation or the foreign parent corporation, subsection 87(4) applies to the foreign affiliate as if the references in that subsection to 
  (i) “amalgamation” were read as “foreign merger”, 
  (ii) “predecessor corporation” were read as “predecessor foreign corporation”, 
  (iii) “new corporation” were read as “new foreign corporation or the foreign parent corporation”, and 
  (iv) “adjusted cost bases” were read as “relevant cost bases, in respect of the taxpayer,”; 
  (d.1) if there has been a foreign merger of two or more predecessor foreign corporations to form a new foreign corporation that is, immediately after the merger, a foreign affiliate of a taxpayer and one or more of the predecessor foreign corporations (each being referred to in this paragraph as a “foreign affiliate predecessor”) was, immediately before the merger, a foreign affiliate of the taxpayer, 
  (i) each property of the new foreign corporation that was a property of a foreign affiliate predecessor immediately before the merger is deemed to have been 
  (A) disposed of by the foreign affiliate predecessor immediately before the merger for proceeds of disposition equal to the relevant cost base of the property to the foreign affiliate predecessor, in respect of the taxpayer, at that time, and 
  (B) acquired by the new foreign corporation, at that time, at a cost equal to the amount determined under clause (A), 
  (ii) the new foreign corporation is deemed to be the same corporation as, and a continuation of, each foreign affiliate predecessor for the purposes of applying 
  (A) this subsection and the definition 
  *foreign accrual property income* in subsection (1) with respect to any disposition by the new foreign corporation of any property to which subparagraph (i) applied,  
  (B) subsections 13(21.2), 18(15) and 40(3.4) in respect of any property that was disposed of, at any time before the merger, by a foreign affiliate predecessor, and 
  (C) paragraph 40(3.5)(c) in respect of any share that was deemed under that paragraph to be owned, at any time before the merger, by a foreign affiliate predecessor, and 
  (iii) for the purposes of the description of A.2 in the definition 
  *foreign accrual property income* in subsection (1), the total of all amounts each of which is the amount determined for G in respect of a foreign affiliate predecessor for its last taxation year that ends on or before the time of the merger is deemed to be the amount determined for G in respect of the new foreign corporation for its taxation year that immediately precedes its first taxation year;  
  (e) notwithstanding subsection 69(5), if at any time a foreign affiliate (referred to in this paragraph as the “shareholder affiliate”) of a taxpayer receives a property (referred to in this paragraph as the “distributed property”) from another foreign affiliate (referred to in this paragraph as the “disposing affiliate”) of the taxpayer on a liquidation and dissolution of the disposing affiliate and the distributed property is received in respect of shares of the capital stock of the disposing affiliate that are disposed of on the liquidation and dissolution, 
  (i) the distributed property is deemed to have been disposed of at that time by the disposing affiliate to the shareholder affiliate for proceeds of disposition equal to the relevant cost base to the disposing affiliate of the distributed property in respect of the taxpayer, immediately before that time, if 
  (A) the liquidation and dissolution is a designated liquidation and dissolution of the disposing affiliate, or 
  (B) the distributed property is a share of the capital stock of another foreign affiliate of the taxpayer that was, immediately before that time, excluded property of the disposing affiliate, 
  (ii) if subparagraph (i) does not apply to the distributed property, the distributed property is deemed to have been disposed of at that time by the disposing affiliate to the shareholder affiliate for proceeds of disposition equal to the distributed property’s fair market value at that time, 
  (iii) the distributed property is deemed to have been acquired, at that time, by the shareholder affiliate at a cost equal to the amount determined under subparagraph (i) or (ii) to be the disposing affiliate’s proceeds of disposition of the distributed property, 
  (iv) each share of a class of the capital stock of the disposing affiliate that is disposed of by the shareholder affiliate on the liquidation and dissolution of the disposing affiliate is deemed to be disposed of for proceeds of disposition equal to 
  (A) if the liquidation and dissolution is a designated liquidation and dissolution of the disposing affiliate 
  (I) where the amount that would, if clause (B) applied, be determined under that clause in respect of the share is greater than or equal to the adjusted cost base of the share to the shareholder affiliate immediately before the disposition, that adjusted cost base, or 
  (II) where the adjusted cost base of the share to the shareholder affiliate immediately before the disposition exceeds the amount that would, if clause (B) applied, be determined under that clause in respect of the share 
  1 if the share is not excluded property of the shareholder affiliate, that adjusted cost base, and 
  2 in any other case, the amount that would be determined under clause (B), and 
  (B) in any other case, the amount determined by the formula is the total of all amounts each of which is the cost to the shareholder affiliate of a distributed property, as determined under subparagraph (iii), received, at any time, in respect of the class, is the total of all amounts each of which is an amount owing (other than an unpaid dividend) by, or an obligation of, the disposing affiliate that was assumed or cancelled by the shareholder affiliate in consideration for the distribution of a distributed property referred to in the description of A, and is the total number of issued and outstanding shares of the class that are owned by the shareholder affiliate during the liquidation and dissolution, and 
  (v) if the liquidation and dissolution is a designated liquidation and dissolution of the disposing affiliate, 
  (A) the shareholder affiliate is deemed to be the same corporation as, and a continuation of, the disposing affiliate for the purposes of applying 
  (I) this subsection and the definition 
  *foreign accrual property income* in subsection (1) with respect to any disposition by the shareholder affiliate of any property to which clause (i)(A) applied,  
  (II) subsections 13(21.2), 18(15) and 40(3.4) in respect of any property that was disposed of, at any time before the liquidation and dissolution, by the disposing affiliate, and 
  (III) paragraph 40(3.5)(c) in respect of any share that was deemed under that paragraph to be owned, at any time before the liquidation and dissolution, by the disposing affiliate, and 
  (B) for the purposes of the description of A.2 in the definition 
  *foreign accrual property income* in subsection (1), the amount, if any, determined for G in respect of the disposing affiliate for its first taxation year that ends after the beginning of the liquidation and dissolution is to be added to the amount otherwise determined for G in respect of the shareholder affiliate for its taxation year that immediately precedes its taxation year that includes the time at which the liquidation and dissolution began;  
  (e.1)  [Repealed, 2013, c. 34, s. 70]  
  (f) except as otherwise provided in this Subdivision and except to the extent that the context otherwise requires, a foreign affiliate of a taxpayer is deemed to be at all times resident in Canada for the purposes of determining, in respect of the taxpayer for a taxation year of the foreign affiliate, each amount that is the foreign affiliate’s 
  (i) capital gain, capital loss, taxable capital gain or allowable capital loss from a disposition of a property, or 
  (ii) income or loss from a property, from a business other than an active business or from a non-qualifying business; 
  (f.1) in computing an amount described in paragraph (f) in respect of a property or a business, there is not to be included any portion of that amount that can reasonably be considered to have accrued, in respect of the property (including for the purposes of this paragraph any property for which the property was substituted) or the business, while no person or partnership that held the property or carried on the business was a specified person or partnership in respect of the taxpayer referred to in paragraph (f); 
  (f.11) in determining an amount described in paragraph (f) for a taxation year of a foreign affiliate of a taxpayer, 
  (i) if the amount is described in subparagraph (f)(i), this Act is to be 
  (A) read without reference to section 26 of the Income Tax Application Rules, and  
  (B) applied as if, in respect of any debt obligation owing by the foreign affiliate or a partnership of which the foreign affiliate is a member (which foreign affiliate or partnership is referred to in this clause as the “debtor”), each capital gain or loss of the debtor that is deemed to arise under subsection 39(2) or (3) in respect of the debt obligation were from a disposition of property that was held by the debtor throughout the period during which the debt obligation was owed by the debtor and, for greater certainty, at the time of the disposition, 
  (ii) if the amount is described in subparagraph (f)(ii), 
  (A) this Act is to be read without reference to subsections 17(1) and 18(4) and section 91, except that, where the foreign affiliate is a member of a partnership, section 91 is to be applied to determine the income or loss of the partnership and for that purpose subsection 96(1) is to be applied to determine the foreign affiliate’s share of that income or loss of the partnership, 
  (B) if the foreign affiliate has, in the taxation year, disposed of a foreign resource property in respect of a country, it is deemed to have designated, in respect of the disposition and in accordance with subparagraph 59(1)(b)(ii) for the taxation year, the amount, if any, by which 
  (I) the amount determined under paragraph 59(1)(a) in respect of the disposition exceeds 
  (II) the amount determined under subparagraph 59(1)(b)(i) in respect of the disposition, and 
  (C) this Act is to be applied as if, in respect of any debt obligation owing by the foreign affiliate or a partnership of which the foreign affiliate is a member (which foreign affiliate or partnership is referred to in this clause as the “debtor”), each amount of income or loss of the debtor — from a property, from a business other than an active business or from a non-qualifying business — in respect of the debt obligation were from such a property that was held, or such a business that was carried on, as the case may be, by the debtor throughout the period during which the debt obligation was owed by the debtor and at the time at which the debt obligation was settled or extinguished; 
  (f.12) a foreign affiliate of a taxpayer shall determine each of the following amounts using its calculating currency for a taxation year: 
  (i) subject to paragraph (f.13), each capital gain, capital loss, taxable capital gain and allowable capital loss (other than a gain or loss in respect of a debt referred to in subparagraph (i)(i) or (ii)) of the foreign affiliate for the taxation year from the disposition, at any time, of a property that, at that time, was an excluded property of the foreign affiliate, 
  (ii) its income or loss for the taxation year from each active business carried on by it in the taxation year in a country, and 
  (iii) its income or loss that is included in computing its income or loss from an active business for the taxation year because of paragraph (a); 
  (f.13) where the calculating currency of a foreign affiliate of a taxpayer is a currency other than Canadian currency, the foreign affiliate shall determine the amount included in computing its foreign accrual property income, in respect of the taxpayer for a taxation year of the foreign affiliate, attributable to its capital gain or taxable capital gain, from the disposition of an excluded property in the taxation year, in Canadian currency by converting the amount of the capital gain, or taxable capital gain, otherwise determined under subparagraph (f.12)(i) using its calculating currency for the taxation year into Canadian currency using the rate of exchange quoted by the Bank of Canada on the day on which the disposition was made, or another rate of exchange that is acceptable to the Minister; 
  (f.14) a foreign affiliate of a taxpayer is to determine using Canadian currency each amount of its income, loss, capital gain, capital loss, taxable capital gain or allowable capital loss for a taxation year, other than an amount to which paragraph (f.12), (f.13) or (f.15) applies; 
  (f.15) for the purposes of applying subparagraph (f)(i), the references in subsection 39(2) to “Canadian currency” are to be read as “the taxpayer’s calculating currency” 
  (i) in respect of a debt obligation owing by a foreign affiliate of a taxpayer, or a partnership of which the foreign affiliate is a member, that is a debt referred to in subparagraph (i)(i) or (ii), and 
  (ii) in respect of an agreement described in subparagraph (i)(iii) entered into by a foreign affiliate of a taxpayer, or a partnership of which the foreign affiliate is a member; 
  (g) income earned, a loss incurred or a capital gain or capital loss realized, as the case may be, in a taxation year by a particular foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout the taxation year or a particular foreign affiliate of a taxpayer that is a controlled foreign affiliate of the taxpayer throughout the taxation year, because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency, is deemed to be nil if it is earned, incurred or realized in reference to any of the following sources: 
  (i) a debt obligation that was owing to 
  (A) another foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year (which other foreign affiliate is referred to in this paragraph as a “qualified foreign affiliate”) by the particular affiliate, or 
  (B) the particular affiliate by a qualified foreign affiliate, 
  (ii) the redemption, acquisition or cancellation of, or a qualifying return of capital (within the meaning assigned by subsection 90(3)) in respect of, a share of the capital stock of a qualified foreign affiliate by the qualified foreign affiliate, or 
  (iii) the disposition to a qualified foreign affiliate of a share of the capital stock of another qualified foreign affiliate; 
  (g.01) any income, loss, capital gain or capital loss, derived by a foreign affiliate of a taxpayer under or as a result of an agreement that provides for the purchase, sale or exchange of currency and that can reasonably be considered to have been made by the foreign affiliate to reduce its risk (with respect to any source, any particular income, gain or loss determined in reference to which is deemed by paragraph (g) to be nil) of fluctuations in the value of currency, is, to the extent of the absolute value of the particular income, gain or loss, deemed to be nil; 
  (g.02)  [Repealed, 2013, c. 34, s. 70]  
  (g.03) if at any time a particular foreign affiliate referred to in paragraph (g) is a member of a partnership or a qualified foreign affiliate referred to in that paragraph is a member of a partnership, 
  (i) in applying this paragraph, where a debt obligation is owing at that time by a debtor to the partnership of which the particular foreign affiliate is a member, the debt obligation is deemed to be owing at that time by the debtor to the particular foreign affiliate in the proportion that the particular foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation, 
  (ii) in applying this paragraph, where a debt obligation is owing at that time to a creditor by the partnership of which the particular foreign affiliate is a member, the debt obligation is deemed to be owing at that time to the creditor by the particular foreign affiliate in the proportion that the particular foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation, 
  (iii) in applying paragraph (g) and this paragraph, where a debt obligation is owing at that time by a debtor to the partnership of which the qualified foreign affiliate is a member, the debt obligation is deemed to be owing at that time by the debtor to the qualified foreign affiliate in the proportion that the qualified foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation, 
  (iv) in applying paragraph (g) and this paragraph, where a debt obligation is owing at that time to a creditor by the partnership of which the qualified foreign affiliate is a member, the debt obligation is deemed to be owing at that time to the creditor by the qualified foreign affiliate in the proportion that the qualified foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation, and 
  (v) in computing the particular foreign affiliate’s income or loss from a partnership, any income earned, loss incurred or capital gain or capital loss realized, as the case may be, by the partnership — in respect of the portion of a debt obligation owing to or owing by the partnership that is deemed by any of subparagraphs (i) to (iv) to be a debt obligation owing to or owing by the particular foreign affiliate (referred to in this subparagraph as the “allocated debt obligation”) — because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency, that is attributable to the allocated debt obligation is deemed to be nil to the extent that paragraph (g) would, if the rules in subparagraphs (i) to (iv) were applied, have applied to the particular foreign affiliate, to deem to be nil the income earned, loss incurred or capital gain or capital loss realized, as the case may be, by the particular foreign affiliate in respect of the allocated debt obligation, because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency; 
  (g.04) if at any time a corporation resident in Canada or a partnership of which such a corporation is a member (such corporation or partnership referred to in this paragraph as the “borrowing party”) has received a loan from, or become indebted to, a creditor that is a foreign affiliate (referred to in this paragraph as a “creditor affiliate”) of a qualifying entity (in this paragraph within the meaning assigned by subsection 39(2.2)), or that is a partnership (referred to in this paragraph as a “creditor partnership”) of which such an affiliate is a member, and the loan or indebtedness is at a later time repaid, in whole or in part, then the amount of the creditor affiliate’s or creditor partnership’s capital gain or capital loss, as the case may be, determined in the absence of this paragraph, in respect of the repayment, is to be reduced  
  (i) in the case of a capital loss 
  (A) if the creditor is a creditor affiliate, by an amount, not exceeding the amount of that capital loss so determined, that is determined by the formula is the amount by which the borrowing party’s capital gain is reduced under paragraph 39(2.1)(a) in respect of that repayment, and is the total of all participating percentages, determined at the end of the taxation year of the creditor affiliate that includes the later time, of shares of the capital stock of a foreign affiliate that are owned by qualifying entities and on which an amount would be included under subsection 91(1), on the assumptions that 
  (I) the capital loss of the creditor affiliate, determined in the absence of this paragraph, in respect of the repayment of the loan or indebtedness were a capital gain of the creditor affiliate, and 
  (II) neither the creditor affiliate nor any other foreign affiliate of a qualifying entity had any other income, gain or loss for any taxation year, and 
  (B) if the creditor is a creditor partnership, by an amount, not exceeding the capital loss so determined, that is equal to the amount determined by the formula is the amount by which the borrowing party’s capital gain is reduced under paragraph 39(2.1)(a) in respect of that repayment, is the proportion that the amount of the capital loss of the creditor partnership in respect of the repayment of the loan or indebtedness, determined in the absence of this paragraph, that would be included in the determination of the income, gain or loss of the members of the creditor partnership that are foreign affiliates of qualifying entities is of the amount of the capital loss so determined, and is the total of all participating percentages, each of which is the participating percentage in respect of a share of the capital stock of a foreign affiliate of a qualifying entity, and that is owned by a qualifying entity, that is relevant in determining the amount that would be included in computing a qualifying entity’s income under subsection 91(1), on the assumptions that 
  (I) the capital loss of the creditor partnership, determined in the absence of this paragraph, in respect of the repayment of the loan or indebtedness were a capital gain of the creditor partnership, and 
  (II) neither the creditor partnership nor any foreign affiliate of a qualifying entity had any other income, gain or loss for any taxation year, and 
  (ii) in the case of a capital gain, 
  (A) if the creditor is a creditor affiliate, by an amount, not exceeding that capital gain so determined, that is equal to the amount determined by the formula is the amount by which the borrowing party is required to reduce its capital loss under paragraph 39(2.1)(b) in respect of that repayment, and is the total of all participating percentages, determined at the end of the taxation year of the creditor affiliate that includes the later time, of shares of the capital stock of a foreign affiliate that are owned by qualifying entities and on which an amount would be included under subsection 91(1), on the assumption that neither the creditor affiliate nor any foreign affiliate of a qualifying entity had any other income, gain or loss for any taxation year other than its capital gain, determined in the absence of this paragraph, in respect of the repayment of the loan or indebtedness, and 
  (B) if the creditor is a creditor partnership, by an amount, not exceeding the capital loss so determined, that is equal to the amount determined by the following formula is the amount by which the borrowing party is required to reduce its capital loss under paragraph 39(2.1)(b) in respect of that repayment, is the proportion that the amount of the capital gain of the creditor partnership in respect of the repayment of the loan or indebtedness, determined in the absence of this paragraph, that would be included in the determination of the income, gain or loss of the members of the creditor partnership that are foreign affiliates of qualifying entities is of the amount of the capital gain so determined, and is the total of all participating percentages, each of which is the participating percentage in respect of a share of the capital stock of a foreign affiliate of a qualifying entity, and that is owned by a qualifying entity, that is relevant in determining the amount that would be included in computing a qualifying entity’s income under subsection 91(1), on the assumption that neither the creditor partnership nor any foreign affiliate of a qualifying entity had any other income, gain or loss for any taxation year; 
  (g.1) in computing the foreign accrual property income of a foreign affiliate of a taxpayer the Act shall be read 
  (i) as if the expression “income, taxable income or taxable income earned in Canada, as the case may be” in the definition 
  *commercial debt obligation* in subsection 80(1) were read as “foreign accrual property income (within the meaning assigned by subsection 95(1))”, and  
  (ii) without reference to subsections 80(3) to 80(12) and 80(15) and 80.01(5) to 80.01(11) and sections 80.02 to 80.04; 
  (g.2) for the purpose of computing the foreign accrual property income of a foreign affiliate of any taxpayer resident in Canada for a taxation year of the affiliate, an election made pursuant to paragraph 86.1(2)(f) in respect of a distribution received by the affiliate in a particular taxation year of the affiliate is deemed to have been filed under that paragraph by the affiliate if 
  (i) where there is only one taxpayer resident in Canada in respect of whom the affiliate is a controlled foreign affiliate, the election is filed by the taxpayer with the taxpayer’s return of income for the taxpayer’s taxation year in which the particular year of the affiliate ends, and 
  (ii) where there is more than one taxpayer resident in Canada in respect of whom the affiliate is a controlled foreign affiliate, all of those taxpayers jointly elect in writing and each of them files the joint election with the Minister with their return of income for their taxation year in which the particular year of the affiliate ends; 
  (h)  [Repealed, 2001, c. 17, s. 73]  
  (i) any income, gain or loss of a foreign affiliate of a taxpayer or of a partnership of which a foreign affiliate of a taxpayer is a member (which foreign affiliate or partnership is referred to in this paragraph as the “debtor”), for a taxation year or fiscal period of the debtor, as the case may be, is deemed to be income, a gain or a loss, as the case may be, from the disposition of an excluded property of the debtor, if the income, gain or loss is 
  (i) derived from the settlement or extinguishment of a debt of the debtor all or substantially all of the proceeds from which 
  (A) were used to acquire property, if at all times after the time at which the debt became debt of the debtor and before the time of that settlement or extinguishment, the property (or property substituted for the property) was property of the debtor and was, or would if the debtor were a foreign affiliate of the taxpayer be, excluded property of the debtor, 
  (B) were used at all times to earn income from an active business carried on by the debtor, or 
  (C) were used by the debtor for a combination of the uses described in clause (A) or (B), 
  (ii) derived from the settlement or extinguishment of a debt of the debtor all or substantially all of the proceeds from which were used to settle or extinguish a debt referred to in subparagraph (i) or in this subparagraph, or 
  (iii) derived under or as a result of an agreement that provides for the purchase, sale or exchange of currency and that can reasonably be considered to have been made by the debtor to reduce its risk, with respect to a debt referred to in subparagraph (i) or (ii), of fluctuations in the value of the currency in which the debt was denominated; 
  (j) the adjusted cost base to a foreign affiliate of a taxpayer of an interest in a partnership at any time shall be such amount as is prescribed by regulation; and 
  (j.1) paragraph (j.2) applies if, in a particular taxation year of a foreign affiliate of a taxpayer or in a particular fiscal period of a partnership (which foreign affiliate or partnership is referred to in this paragraph and paragraph (j.2) as the “operator” and which particular taxation year or particular fiscal period is referred to in this paragraph and paragraph (j.2) as the “specified taxation year”) a member of which is, at the end of the period, a foreign affiliate of a taxpayer, 
  (i) the operator carries on a business, 
  (ii) the business includes the insuring of risks, 
  (iii) the business is not, at any time, a taxable Canadian business, 
  (iv) the business is 
  (A) an investment business, 
  (B) a non-qualifying business, or 
  (C) a business whose activities include activities deemed by paragraph (a.2) or (b) to be a separate business, other than an active business, carried on by the affiliate, and 
  (v) in respect of the investment business, non-qualifying business or separate business (each of these businesses being referred to in this subparagraph and paragraph (j.2) as a “foreign business”), as the case may be, the operator would, if it were a corporation carrying on the foreign business in Canada, be required by law to report to, and be subject to the supervision of, a regulatory authority that is the Superintendent of Financial Institutions or is a similar authority of a province; 
  (j.2) if this paragraph applies, in computing the operator’s income or loss from the foreign business for the specified taxation year and each subsequent taxation year or fiscal period in which the foreign business is carried on by the operator 
  (i) the operator is deemed to carry on the foreign business in Canada throughout that part of the specified taxation year, and of each of those subsequent taxation years or fiscal periods, in which the foreign business is carried on by the operator, and 
  (ii) for the purposes of Part XIV of the Income Tax Regulations,  
  (A) the operator is deemed to be required by law to report to, and to be subject to the supervision of, the regulatory authority referred to in subparagraph (j.1)(v), and 
  (B) if the operator is a life insurer and the foreign business is part of a life insurance business, the life insurance policies issued in the conduct of the foreign business are deemed to be life insurance policies in Canada; 
  (k) paragraph (k.1) applies if 
  (i) in a particular taxation year of a foreign affiliate of a taxpayer or in a particular fiscal period of a partnership (which foreign affiliate or partnership is referred to in this paragraph and paragraph (k.1) as the “operator” and which particular taxation year or particular fiscal period is referred to in this paragraph and paragraph (k.1) as the “specified taxation year”) a member of which is, at the end of the period, a foreign affiliate of a taxpayer, 
  (A) the operator carries on a business, 
  (B) the business is not, at any time, a taxable Canadian business, and 
  (C) the business is 
  (I) an investment business, 
  (II) a non-qualifying business, 
  (III) a business whose activities include activities deemed by any of paragraphs (a.1) to (b) to be a separate business, other than an active business, carried on by the affiliate, or 
  (IV) a business the income from which is included by paragraph (l) in computing the affiliate’s income from property for the specified taxation year, and 
  (ii) in the taxation year of the affiliate or the fiscal period of the partnership that includes the day that is immediately before the beginning of the specified taxation year, 
  (A) the affiliate or partnership carried on the business, or the activities so deemed to be a separate business, as the case may be, 
  (B) the business was not, or the activities were not, as the case may be, at any time, part of a taxable Canadian business, and 
  (C) the business was not described in any of subclauses (i)(C)(I), (II) and (IV), or the activities were not described in subclause (i)(C)(III), as the case may be; 
  (k.1) if this paragraph applies, in computing the operator’s income or loss from the investment business, non-qualifying business, separate business or business described in paragraph (l) (each of these businesses being referred to in this paragraph as a “foreign business”), as the case may be, and the operator’s capital gain or capital loss from the disposition of property used or held in the course of carrying on the foreign business, for the specified taxation year and each subsequent taxation year or fiscal period in which the foreign business is carried on by the operator 
  (i) the operator is deemed 
  (A) to begin to carry on the foreign business in Canada at the beginning of the specified taxation year, and 
  (B) to carry on the foreign business in Canada throughout that part of the specified taxation year, and of each of those subsequent taxation years or fiscal periods, in which the foreign business is carried on by the operator, 
  (ii) where, in respect of the foreign business, the operator would, if it were a corporation carrying on the foreign business in Canada, be required by law to report to, and be subject to the supervision of, a regulatory authority that is the Superintendent of Financial Institutions or a similar authority of a province, 
  (A) the operator is deemed to be required by law to report to, and to be subject to the supervision of, the regulatory authority, and 
  (B) if the operator is a life insurer and the foreign business is part of a life insurance business, the life insurance policies issued in the conduct of the foreign business are deemed to be life insurance policies in Canada, and 
  (iii) paragraphs 138(11.91)(c) to (e) apply to the operator for the specified taxation year in respect of the foreign business as if 
  (A) the operator were the insurer referred to in subsection 138(11.91), 
  (B) the specified taxation year of the operator were the particular taxation year of the insurer referred to in that subsection, 
  (C) the foreign business of the operator were the business of the insurer referred to in that subsection, and 
  (D) the reference in paragraph 138(11.91)(e) to “property owned by it at that time that is designated insurance property in respect of the business” were read as a reference to “property owned or held by it at that time that is used or held by it in the particular taxation year in the course of carrying on the insurance business”; 
  (k.2) for the purposes of paragraphs (j.1) to (k.1) and the definition 
  *taxable Canadian business* in subsection (1), any portion of a business carried on by a person or partnership that is carried on in Canada is deemed to be a business that is separate from any other portion of the business carried on by the person or partnership;  
  (l) in computing the income from property for a taxation year of a foreign affiliate of a taxpayer there shall be included the income of the affiliate for the year from a business (other than an investment business of the affiliate) the principal purpose of which is to derive income from trading or dealing in indebtedness (which for the purpose of this paragraph includes the earning of interest on indebtedness) other than 
  (i) indebtedness owing by persons with whom the affiliate deals at arm’s length who are resident in the country in which the affiliate was formed or continued and exists and is governed and in which the business is principally carried on, or 
  (ii) trade accounts receivable owing by persons with whom the affiliate deals at arm’s length, unless it is established by the taxpayer or the foreign affiliate that, throughout the period in the taxation year during which the business was carried on by the affiliate, 
  (iii) the business (other than any business conducted principally with persons with whom the affiliate does not deal at arm’s length) is carried on by the affiliate as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, the activities of which are regulated under the laws 
  (A) of each country in which the business is carried on through a permanent establishment in that country and of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, 
  (B) of the country in which the business is principally carried on, or 
  (C) if the affiliate is related to a non-resident corporation, of the country under whose laws that non-resident corporation is governed and any of exists, was (unless that non-resident corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union. 
  (iv)  [Repealed, 2018, c. 27, s. 7]  
  (m) a taxpayer has a qualifying interest in respect of a foreign affiliate of the taxpayer at any time if, at that time, the taxpayer owned 
  (i) not less than 10% of the issued and outstanding shares (having full voting rights under all circumstances) of the affiliate, and 
  (ii) shares of the affiliate having a fair market value of not less than 10% of the fair market value of all the issued and outstanding shares of the affiliate and for the purpose of this paragraph 
  (iii) where, at any time, shares of a corporation are owned or are deemed for the purposes of this paragraph to be owned by another corporation (in this paragraph referred to as the “holding corporation”), those shares shall be deemed to be owned at that time by each shareholder of the holding corporation in a proportion equal to the proportion of all such shares that 
  (A) the fair market value of the shares of the holding corporation owned at that time by the shareholder is of 
  (B) the fair market value of all the issued shares of the holding corporation outstanding at that time, 
  (iv) where, at any time, shares of a corporation are property of a partnership or are deemed for the purposes of this paragraph to be property of a partnership, those shares shall be deemed to be owned at that time by each member of the partnership in a proportion equal to the proportion of all such shares that 
  (A) the member’s share of the income or loss of the partnership for its fiscal period that includes that time is of 
  (B) the income or loss of the partnership for its fiscal period that includes that time and for the purpose of this subparagraph, where the income and loss of the partnership for its fiscal period that includes that time are nil, that proportion shall be computed as if the partnership had income for the period in the amount of $1,000,000, and 
  (v) where, at any time, a person is a holder of convertible property issued by the affiliate before June 23, 1994 the terms of which confer on the holder the right to exchange the convertible property for shares of the affiliate and the taxpayer elects in its return of income for its first taxation year that ends after 1994 to have the provisions of this subparagraph apply to the taxpayer in respect of all the convertible property issued by the affiliate and outstanding at that time, each holder shall, in respect of the convertible property held by it at that time, be deemed to have, immediately before that time, 
  (A) exchanged the convertible property for shares of the affiliate, and 
  (B) acquired shares of the affiliate in accordance with the terms and conditions of the convertible property; 
  (n) in applying paragraphs (a) and (g), paragraph (b) of the description of A in the formula in the definition 
  *foreign accrual property income* in subsection (1), subsections (2.2), (2.21) and 93.1(5) and paragraph (d) of the definition 
  *exempt earnings*, and paragraph (c) of the definition 
  *exempt loss*, in subsection 5907(1) of the Income Tax Regulations, a non-resident corporation is deemed to be, at any time, a foreign affiliate of a particular corporation resident in Canada, and a foreign affiliate of the particular corporation in respect of which the particular corporation has a qualifying interest, if at that time  
  (i) the non-resident corporation is a foreign affiliate of another corporation that is resident in Canada and that is related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the particular corporation, and 
  (ii) that other corporation has a qualifying interest in respect of the non-resident corporation; 
  (o) a particular person is a qualifying member of a partnership at a particular time if, at that time, the particular person is a member of the partnership and 
  (i) throughout the period, in the fiscal period of the partnership that includes the particular time, during which the member was a member of the partnership, the particular person is, on a regular, continuous and substantial basis 
  (A) actively engaged in those activities, of the principal business of the partnership carried on in that fiscal period by the partnership, that are other than activities connected with the provision of or the acquisition of funds required for the operation of that principal business, or 
  (B) actively engaged in those activities, of a particular business carried on in that fiscal period by the particular person (otherwise than as a member of a partnership) that is similar to the principal business carried on in that fiscal period by the partnership, that are other than activities connected with the provision of or the acquisition of funds required for the operation of the particular business, or 
  (ii) throughout the period, in the fiscal period of the partnership that includes the particular time, during which the particular person was a member of the partnership 
  (A) the total of the fair market value of all partnership interests in the partnership owned by the particular person was equal to or greater than 1% of the total of the fair market value of all partnership interests in the partnership owned by all members of the partnership, and 
  (B) the total of the fair market value of all partnership interests in the partnership owned by the particular person or persons (other than trusts) related to the particular person was equal to or greater than 10% of the total of the fair market value of all partnership interests in the partnership owned by all members of the partnership; 
  (p) a particular person is a qualifying shareholder of a corporation at any time if throughout the period, in the taxation year of the corporation that includes that time, during which the particular person was a shareholder of the corporation 
  (i) the particular person owned 1% or more of the issued and outstanding shares (having full voting rights under all circumstances) of the capital stock of the corporation, 
  (ii) the particular person, or the particular person and persons (other than trusts) related to the particular person, owned 10% or more of the issued and outstanding shares (having full voting rights under all circumstances) of the capital stock of the corporation, 
  (iii) the total of the fair market value of all the issued and outstanding shares of the capital stock of the corporation owned by the particular person is 1% or more of the total fair market value of all the issued and outstanding shares of the capital stock of the corporation, and 
  (iv) the total of the fair market value of all the issued and outstanding shares of the capital stock of the corporation owned by the particular person or by persons (other than trusts) related to the particular person is 10% or more of the total fair market value of all the issued and outstanding shares of the capital stock of the corporation; 
  (q) in applying paragraphs (o) and (p), 
  (i) where interests in any partnership or shares of the capital stock of any corporation (which interests or shares are referred to in this subparagraph as “equity interests”) are, at any time, property of a particular partnership or are deemed under this paragraph to be, at any time, property of the particular partnership, the equity interests are deemed to be owned at that time by each member of the particular partnership in a proportion equal to the proportion of the equity interests that 
  (A) the fair market value, at that time, of the member’s partnership interest in the particular partnership is of 
  (B) the fair market value, at that time, of all members’ partnership interests in the particular partnership, and 
  (ii) where interests in a partnership or shares of the capital stock of a corporation (which interests or shares are referred to in this subparagraph as “equity interests”) are, at any time, property of a non-discretionary trust (within the meaning assigned by subsection 17(15)) or are deemed under this paragraph to be, at any time, property of such a non-discretionary trust, the equity interests are deemed to be owned at that time by each beneficiary under that trust in a proportion equal to that proportion of the equity interests that 
  (A) the fair market value, at that time, of the beneficiary’s beneficial interest in the trust is of 
  (B) the fair market value, at that time, of all beneficial interests in the trust; 
  (r) in applying paragraph (a) and in applying paragraph (d) of the definition 
  *exempt earnings*, and paragraph (c) of the definition 
  *exempt loss*, in subsection 5907(1) of the Regulations, a partnership is deemed to be, at any time, a partnership of which a foreign affiliate — of a particular corporation resident in Canada and in respect of which foreign affiliate the particular corporation has a qualifying interest — is a qualifying member, if at that time  
  (i) a particular foreign affiliate — of another corporation that is resident in Canada and that is related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the particular corporation — is a member of the partnership, 
  (ii) that other corporation has a qualifying interest in respect of the particular foreign affiliate, and 
  (iii) the particular foreign affiliate is a qualifying member of the partnership; 
  (s) in applying the definition 
  *investment business* in subsection (1), a particular corporation is, at any time, a designated corporation in respect of a foreign affiliate of a taxpayer, if at that time  
  (i) a qualifying shareholder of the foreign affiliate or a person related to such a qualifying shareholder is a qualifying shareholder of the particular corporation, 
  (ii) the particular corporation 
  (A) is controlled by a qualifying shareholder of the foreign affiliate, or 
  (B) would be controlled by a particular qualifying shareholder of the foreign affiliate if the particular qualifying shareholder of the foreign affiliate owned each share of the capital stock of the particular corporation that is owned by a qualifying shareholder of the foreign affiliate or by a person related to a qualifying shareholder of the foreign affiliate, and 
  (iii) the total of all amounts each of which is the fair market value of a share of the capital stock of the particular corporation owned by a qualifying shareholder of the foreign affiliate or by a person related to a qualifying shareholder of the foreign affiliate is greater than 50% of the total fair market value of all the issued and outstanding shares of the capital stock of the particular corporation; 
  (t) in applying the definition 
  *investment business* in subsection (1) in respect of a business carried on by a foreign affiliate of a taxpayer in a taxation year, a particular partnership is, at any time, a designated partnership in respect of the foreign affiliate of the taxpayer, if at that time  
  (i) the foreign affiliate or a person related to the foreign affiliate is a qualifying member of the particular partnership, and 
  (ii) the total of all amounts — each of which is the fair market value of a partnership interest in the particular partnership held by the foreign affiliate, by a person related to the foreign affiliate or (where the foreign affiliate carries on, at that time, the business as a qualifying member of another partnership) by a qualifying member of the other partnership — is greater than 50% of the total fair market value of all partnership interests in the particular partnership owned by all members of the particular partnership; 
  (u)  [Repealed, 2013, c. 34, s. 70]  
  (v) in applying paragraph (p), 
  (i) where shares of the capital stock of any corporation (referred to in this paragraph as the “issuing corporation”) are, at any time, owned by a corporation (referred to in this paragraph as the “holding corporation”) or are deemed under this paragraph to be, at any time, owned by a corporation (referred to in this paragraph as the “holding corporation”), those shares are deemed to be owned at that time by each shareholder of the holding corporation in a proportion equal to the proportion of those shares that 
  (A) the fair market value, at that time, of the shares of the capital stock of the issuing corporation that are owned by the shareholder is of 
  (B) the fair market value, at that time, of all the issued and outstanding shares of the capital stock of the issuing corporation, and 
  (ii) a person who is deemed by subparagraph (i) to own, at any time, shares of the capital stock of a corporation is deemed to be, at that time, a shareholder of the corporation; 
  (w) where a foreign affiliate of a corporation resident in Canada carries on an active business in more than one country, 
  (i) where the business is carried on in a country other than Canada, it is deemed to carry on that business in that country only to the extent that the profit or loss from that business can reasonably be attributed to a permanent establishment situated in that country, and 
  (ii) where the business is carried on in Canada, it is deemed to carry on that business in Canada only to the extent that the income from the active business is subject to tax under this Part; 
  (x) the loss from an active business, from a non-qualifying business or from property (as the case may be) of a foreign affiliate of a taxpayer resident in Canada for a taxation year is the amount of that loss, if any, that is computed by applying the provisions in this Subdivision with respect to the computation of income from the active business, from the non-qualifying business or from property (as the case may be) of the foreign affiliate for the taxation year with any modifications that the circumstances require; 
  (y) in determining — for the purpose of paragraph (a) and for the purpose of applying subsections (2.2) and (2.21) for the purpose of applying that paragraph — whether a non-resident corporation is, at any time, a foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest, where interests in any partnership or shares of the capital stock of any corporation (which interests or shares are referred to in this paragraph as “equity interests”) are, at that time, property of a particular partnership or are deemed under this paragraph to be, at any time, property of the particular partnership, the equity interests are deemed to be owned at that time by each member of the particular partnership in a proportion equal to the proportion of the equity interests that 
  (i) the fair market value, at that time, of the member’s partnership interest in the particular partnership is of 
  (ii) the fair market value, at that time, of all members’ partnership interests in the particular partnership; and 
  (z) where a particular foreign affiliate of a taxpayer — in respect of which the taxpayer has a qualifying interest or that is a controlled foreign affiliate of the taxpayer — is a member of a partnership, the particular foreign affiliate’s foreign accrual property income or loss in respect of the taxpayer for a taxation year shall not include any income or loss of the partnership to the extent that the income or loss 
  (i) is attributable to the foreign accrual property income or loss of a foreign affiliate of the partnership that is also a foreign affiliate of the taxpayer (referred to in this paragraph as the “second foreign affiliate”) in respect of which the taxpayer has a qualifying interest or that is a controlled foreign affiliate of the taxpayer, and 
  (ii) is, because of paragraph (a) as applied in respect of the taxpayer, included in computing the income or loss from an active business of the second foreign affiliate for a taxation year. 
  
  ### Rules for the definition controlled foreign affiliate 
  
  (2.01) In applying paragraph (b) of the definition 
  *controlled foreign affiliate* in subsection (1) and in applying this subsection,  
  (a) shares of the capital stock of a corporation that are at any time owned by, or that are deemed by this subsection to be at any time owned by, another corporation are deemed to be, at that time, owned by, or property of, as the case may be, each shareholder of the other corporation in the proportion that 
  (i) the fair market value at that time of the shares of the capital stock of the other corporation that, at that time, are owned by, or are property of, the shareholder is of 
  (ii) the fair market value at that time of all the issued and outstanding shares of the capital stock of the other corporation; 
  (b) shares of the capital stock of a corporation that are, or are deemed by this subsection to be, at any time, property of a partnership, are deemed to be, at that time, owned by, or property of, as the case may be, each member of the partnership in the proportion that 
  (i) the fair market value at that time of the member’s partnership interest in the partnership is of 
  (ii) the fair market value at that time of all partnership interests in the partnership; 
  (c) shares of the capital stock of a corporation that are at any time owned by, or that are deemed by this subsection to be at any time owned by, a non-discretionary trust (within the meaning assigned by subsection 17(15)) other than an exempt trust (within the meaning assigned by subsection (1)) are deemed to be, at that time, owned by, or property of, as the case may be, each beneficiary of the trust in the proportion that 
  (i) the fair market value at that time of the beneficiary’s beneficial interest in the trust is of 
  (ii) the fair market value at that time of all beneficial interests in the trust; and 
  (d) all of the shares of the capital stock of a corporation that are at any time owned by, or that are deemed by this subsection to be at any time owned by, a particular trust (other than an exempt trust within the meaning assigned by subsection (1) or a non-discretionary trust within the meaning assigned by subsection 17(15)) are deemed to be, at that time, owned by, or property of, as the case may be, 
  (i) each beneficiary of the particular trust at that time, and 
  (ii) each settlor (within the meaning assigned by subsection 17(15)) in respect of the particular trust at that time. 
  
  ### Rule against double-counting
  
  (2.02) In applying the assumption in paragraph (b) of the definition 
  *controlled foreign affiliate* in subsection (1) in respect of a taxpayer resident in Canada to determine whether a foreign affiliate of the taxpayer is at any time a controlled foreign affiliate of the taxpayer, nothing in that paragraph or in subsection (2.01) is to be read or construed as requiring an interest, or for civil law a right, in a share of the capital stock of the foreign affiliate of the taxpayer owned at that time by the taxpayer to be taken into account more than once.  
  
  ### Rule for definition investment business 
  
  (2.1) For the purposes of the definition 
  *investment business* in subsection 95(1), a foreign affiliate of a taxpayer, the taxpayer and, where the taxpayer is a corporation all the issued shares of which are owned by a corporation described in subparagraph 95(2.1)(a)(i), such corporation described in subparagraph 95(2.1)(a)(i) shall be considered to be dealing with each other at arm’s length in respect of the entering into of agreements that provide for the purchase, sale or exchange of currency and the execution of such agreements where  
  (a) the taxpayer is 
  (i) a bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities resident in Canada, the business activities of which are subject by law to the supervision of a regulating authority such as the Superintendent of Financial Institutions or a similar authority of a province, or 
  (ii) a subsidiary wholly-owned corporation of a corporation described in subparagraph 95(2.1)(a)(i); 
  (b) the agreements are swap agreements, forward purchase or sale agreements, forward rate agreements, futures agreements, options or rights agreements or similar agreements; 
  (c) the affiliate entered into the agreements in the course of a business carried on by the affiliate, if 
  (i) the business is carried on by the affiliate principally in a country (other than Canada) and principally with persons with whom the affiliate deals at arm’s length, and 
  (ii) the business activities of the affiliate are regulated in that country; and 
  (d) the terms and conditions of such agreements are substantially the same as the terms and conditions of similar agreements made by persons dealing at arm’s length. 
  
  ### Rule for investment business definition and paragraph (2)(l) 
  
  (2.11) A taxpayer or a foreign affiliate of the taxpayer, as the case may be, is deemed not to have established that the conditions in subparagraph (a)(i) of the definition investment business in subsection (1), or in subparagraph (2)(l)(iii), have been satisfied throughout a period in a particular taxation year of the affiliate unless  
  (a) throughout the period the taxpayer is 
  (i) a particular corporation resident in Canada 
  (A) that is a bank listed in Schedule I to the Bank Act, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities that is a registered securities dealer, the business activities of which are subject to the supervision of a regulating authority such as the Superintendent of Financial Institutions, a similar regulating authority of a province or an authority of, or approved by, a province to regulate traders or dealers in securities or commodities, and  
  (B) that is not a corporation the fair market value of any share of the capital stock of which is determined primarily by reference to one or more of the fair market value of, any revenue, income or cash flow from, any profits or gains from the disposition of, or any other similar criteria in respect of, property the fair market value of which is less than 90% of the fair market value of all of the property of the corporation, 
  (ii) a corporation resident in Canada 
  (A) of which 
  (I) the particular corporation described in subparagraph (i) is a subsidiary controlled corporation, or 
  (II) a corporation described in this subparagraph is a subsidiary wholly-owned corporation, and 
  (B) that is not a corporation the fair market value of any share of the capital stock of which is determined primarily by reference to one or more of the fair market value of, any revenue, income or cash flow from, any profits or gains from the disposition of, or any other similar criteria in respect of, property the fair market value of which is less than 90% of the fair market value of all of the property of the corporation, 
  (iii) a corporation resident in Canada each of the shares of the capital stock of which is owned by a corporation that is described in this subparagraph or in subparagraph (i) or (ii), or 
  (iv) a partnership 
  (A) each member of which is a corporation described in any of subparagraphs (i) to (iii), or another partnership described in this subparagraph, or 
  (B) in respect of which the following conditions are satisfied: 
  (I) the partnership is a registered securities dealer, the business activities of which are subject to the supervision of a regulating authority described in clause (a)(i)(A), and 
  (II) the share of the total income or loss of the partnership of a majority-interest partner of the partnership that is either a corporation resident in Canada or a Canadian partnership — together with the share of each corporation resident in Canada that is affiliated with the majority-interest partner — is equal to all or substantially all of the total income or loss of the partnership; and 
  (b) either 
  (i) throughout the period the particular corporation described in subparagraph (a)(i) has, or is deemed for certain purposes to have, $2 billion or more of equity 
  (A) if the particular corporation is a bank, under the Bank Act,  
  (B) if the particular corporation is a trust company, under the Trust and Loan Companies Act, or  
  (C) if the particular corporation is an insurance corporation, under the Insurance Companies Act, or  
  (ii) more than 50% of the total of all amounts each of which is an amount of taxable capital employed in Canada (within the meaning assigned by Part I.3) of the taxpayer — or of a corporation resident in Canada that is affiliated with the taxpayer — for the taxation year of the taxpayer or of the affiliated corporation, as the case may be, that ends in the particular year is attributable to a business carried on in Canada, the activities of which are subject to the supervision of a regulating authority such as the Superintendent of Financial Institutions, a similar regulating authority of a province or an authority of, or approved by, a province to regulate traders or dealers in securities or commodities. 
  
  ### Qualifying interest throughout year
  
  (2.2) For the purposes of paragraphs (2)(a) and (g), a non-resident corporation that is not a foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout a particular taxation year is deemed to be a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout that particular taxation year if 
  (a) a person or partnership has, in that particular taxation year, acquired or disposed of shares of the capital stock of that non-resident corporation or of any other corporation and, because of that acquisition or disposition, that non-resident corporation becomes or ceases to be a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest, and 
  (b) at the beginning of that particular taxation year or at the end of that particular taxation year, the non-resident corporation is a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest. 
  
  ### Controlled foreign affiliate throughout year
  
  (2.201) For the purposes of paragraphs (2)(a) and (g), a non-resident corporation is deemed to be a controlled foreign affiliate of a taxpayer throughout a taxation year of the non-resident corporation if 
  (a) in the taxation year, a person or partnership acquires or disposes of shares of the capital stock of a corporation and, because of the acquisition or disposition, the non-resident corporation becomes or ceases to be a controlled foreign affiliate of the taxpayer; and 
  (b) at either or both of the beginning and end of the taxation year, the non-resident corporation is a controlled foreign affiliate of the taxpayer. 
  
  ### Rule re subsection (2.2)
  
  (2.21) Subsection (2.2) does not apply for the purpose of paragraph (2)(a) in respect of any income or loss referred to in that paragraph, of a particular foreign affiliate of the taxpayer, to the extent that that income or loss can reasonably be considered to have been realized or to have accrued before the earlier of 
  (a) the time at which the particular affiliate became, as determined without reference to subsection (2.2), a foreign affiliate of the taxpayer in respect of which the taxpayer had a qualifying interest, and 
  (b) the time at which the particular affiliate became, as determined without reference to subsection (2.2), a foreign affiliate of another person resident in Canada in respect of which the other person resident in Canada had a qualifying interest, where 
  (i) the taxpayer is a corporation, 
  (ii) the taxpayer did not exist at the beginning of the taxation year, 
  (iii) the particular affiliate became a foreign affiliate of the taxpayer in the taxation year because of a disposition, in the taxation year, of shares of the capital stock of the particular affiliate to the taxpayer by the other person resident in Canada, and 
  (iv) the other person resident in Canada was, immediately before that disposition, related to the taxpayer. 
  
  ### Application of paragraph (2)(a.1)
  
  (2.3) Paragraph 95(2)(a.1) does not apply to a foreign affiliate of a taxpayer in respect of a sale or exchange of property that is currency or a right to purchase, sell or exchange currency where 
  (a) the taxpayer is 
  (i) a bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities resident in Canada, the business activities of which are subject by law to the supervision of a regulating authority such as the Superintendent of Financial Institutions or a similar authority of a province, or 
  (ii) a subsidiary wholly-owned corporation of a corporation described in subparagraph 95(2.3)(a)(i); 
  (b) the sale or exchange was made by the affiliate in the course of a business conducted principally with persons with whom the affiliate deals at arm’s length, if 
  (i) the business is principally carried on in the country (other than Canada) under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, or 
  (ii) the affiliate is a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities and the activities of the business are regulated 
  (A) under the laws of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and under the laws of each country in which the business is carried on through a permanent establishment in that country, 
  (B) under the laws of the country (other than Canada) in which the business is principally carried on, or 
  (C) if the affiliate is related to a corporation, under the laws of the country under the laws of which that related corporation is governed and any of exists, was (unless that related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union; and 
  (c) the terms and conditions of the sale or exchange of such property are substantially the same as the terms and conditions of similar sales or exchanges of such property by persons dealing at arm’s length. 
  
  ### Application of paragraphs (2)(a.1) and (a.3)
  
  (2.31) Paragraphs (2)(a.1) and (a.3) do not apply to a controlled foreign affiliate (for the purposes of section 17) of an eligible Canadian bank (as defined in subsection (2.43)) in respect of activities carried out to earn income from a property, other than a specified property of the affiliate, if 
  (a) the affiliate sells the property, or performs services as an agent in relation to a purchase or sale of the property, and it is reasonable to conclude that the cost to any person of the property is relevant in computing the income from 
  (i) a business carried on by the bank or a person resident in Canada with whom the bank does not deal at arm’s length, or 
  (ii) a business carried on in Canada by a non-resident person with whom the bank does not deal at arm’s length; 
  (b) the property has a readily available fair market value and 
  (i) is listed on a recognized stock exchange, 
  (ii) would be a mark-to-market property (as defined in subsection 142.2(1)) of the bank if it were owned by the bank, or 
  (iii) is a debt obligation owing by the bank that would be a mark-to-market property (as defined in subsection 142.2(1)) of the affiliate if 
  (A) the affiliate were the taxpayer referred to in that definition, and 
  (B) the definition 
  *specified debt obligation* in subsection 142.2(1) were read without reference to its paragraph (d);  
  (c) the purchase and sale of the property by the affiliate, or services performed by the affiliate as agent in respect of the purchase or sale, are made 
  (i) on terms and conditions that are substantially the same as the terms and conditions of similar purchases or sales of, or services performed in respect of the purchase or sale of, such property by persons dealing at arm’s length, 
  (ii) in the course of a business 
  (A) that regularly includes trading or dealing in securities principally with persons with whom the affiliate deals at arm’s length, and 
  (B) that is principally carried on through a permanent establishment in a country other than Canada, and 
  (iii) for the purpose of enabling the purchase or sale of the property by a particular person who deals at arm’s length with the affiliate and the bank; and 
  (d) the affiliate is a foreign bank or a trader or dealer in securities and the activities of the business are regulated 
  (i) under the laws of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and under the laws of each country in which the business is carried on through a permanent establishment in that country, 
  (ii) under the laws of the country (other than Canada) in which the business is principally carried on, or 
  (iii) if the affiliate is related to a corporation, under the laws of the country under whose laws that related corporation is governed and any of exists, was (unless that related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all those countries are members of the European Union. 
  
  ### Definition of specified property 
  
  (2.32) For the purposes of subsection (2.31), 
  *specified property*, of a foreign affiliate, means a property that is owned by the affiliate for more than 10 days and that is  
  (a) a share of the capital stock of a corporation resident in Canada; 
  (b) a property traded on a stock exchange located in Canada and not traded on a stock exchange located in the jurisdiction in which the affiliate is resident; or 
  (c) a debt obligation 
  (i) of a corporation resident in Canada, 
  (ii) of a trust or partnership, units of which are traded on a stock exchange located in Canada, or 
  (iii) of, or guaranteed by, the Government of Canada, the government of a province, an agent of a province, a municipality in Canada or a municipal or public body performing a function of government in Canada. 
  
  ### Application of paragraph (2)(a.3)
  
  (2.4) Paragraph 95(2)(a.3) does not apply to a foreign affiliate of a taxpayer in respect of its income derived directly or indirectly from indebtedness to the extent that 
  (a) the income is derived by the affiliate in the course of a business conducted principally with persons with whom the affiliate deals at arm’s length carried on by it as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, the activities of which are regulated under the laws 
  (i) of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued and of each country in which the business is carried on through a permanent establishment in that country, 
  (ii) of the country in which the business is principally carried on, or 
  (iii) if the affiliate is related to a corporation, of the country under the laws of which that related corporation is governed and any of exists, was (unless that related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union, and 
  (b) all the following conditions are satisfied: 
  (i) the income is derived by the affiliate from trading or dealing in the indebtedness (which, for this purpose, consists of income from the actual trading or dealing in the indebtedness and interest earned by the affiliate during a short term holding period on indebtedness acquired by it for the purpose of the trading or dealing) directly or indirectly with persons (in this subsection referred to as “regular customers”) that 
  (A) deal at arm’s length with the affiliate, and 
  (B) are resident, or carry on business through a permanent establishment, in a country other than Canada, 
  (ii) the affiliate has a substantial market presence in the country, and 
  (iii) one or more persons that deal at arm’s length with the affiliate and are resident, or carry on business through a permanent establishment, in the country 
  (A) carry on a business 
  (I) that competes in the country with the business of the affiliate, and 
  (II) the activities of which are regulated under the laws of the country or, where the country is a member of the European Union, any country that is a member of the European Union, in the same manner as are the activities of the business of the affiliate, and 
  (B) have a substantial market presence in the country, and, for the purpose of this subsection, an acquisition of indebtedness from the taxpayer shall be deemed to be part of the trading or dealing in indebtedness described in paragraph 95(2.4)(b) where the indebtedness is acquired by the affiliate and sold to regular customers and the terms and conditions of the acquisition and the sale are substantially the same as the terms and conditions of similar acquisitions and sales made by the affiliate in transactions with persons with whom it deals at arm’s length. 
  
  ### Application of paragraph (2)(a.3)
  
  (2.41) Paragraph (2)(a.3) does not apply to a foreign affiliate of a taxpayer resident in Canada in respect of the foreign affiliate’s income for a taxation year derived, directly or indirectly, from indebtedness of persons resident in Canada or from indebtedness in respect of businesses carried on in Canada (referred to in this subsection as the “Canadian indebtedness”) if 
  (a) the taxpayer is, at the end of the foreign affiliate’s taxation year 
  (i) a life insurance corporation resident in Canada, the business activities of which are subject by law to the supervision of the Superintendent of Financial Institutions or a similar authority of a province, or 
  (ii) a corporation resident in Canada that is a subsidiary controlled corporation of a corporation described in subparagraph (i); 
  (b) the Canadian indebtedness is used or held by the foreign affiliate, throughout the period in the taxation year that that Canadian indebtedness was used or held by the foreign affiliate, in the course of carrying on a business (referred to in this subsection as the “foreign life insurance business”) that is a life insurance business carried on outside Canada (other than a business deemed by paragraph (2)(a.2) to be a separate business other than an active business), the activities of which are regulated 
  (i) under the laws of the country under whose laws the foreign affiliate is governed and any of exists, was (unless the foreign affiliate was continued in any jurisdiction) formed or organized, or was last continued, and 
  (ii) under the laws of the country, if any, in which the business is principally carried on; 
  (c) more than 90% of the gross premium revenue of the foreign affiliate for the taxation year in respect of the foreign life insurance business was derived from the insurance or reinsurance of risks (net of reinsurance ceded) in respect of persons 
  (i) that were non-resident at the time at which the policies in respect of those risks were issued or effected, and 
  (ii) that were at that time dealing at arm’s length with the foreign affiliate, the taxpayer and all persons that were related at that time to the foreign affiliate or the taxpayer; and 
  (d) it is reasonable to conclude that the foreign affiliate used or held the Canadian indebtedness 
  (i) to fund a liability or reserve of the foreign life insurance business, or 
  (ii) as capital that can reasonably be considered to have been required for the foreign life insurance business. 
  
  ### Exception re paragraph (2)(a.3)
  
  (2.42) If, at any time in a taxation year of a foreign affiliate of a taxpayer referred to in paragraph (2)(a.3), a life insurance corporation resident in Canada is the taxpayer referred to in paragraph (2)(a.3) or is a person who controls, or is controlled by, such a taxpayer, a particular indebtedness or a particular lease obligation of the life insurance corporation is, for the purposes of that paragraph, deemed, at that time, not to be an indebtedness or a lease obligation of a person resident in Canada, to the extent of the portion of the particular indebtedness or lease obligation that can reasonably be considered to have been issued by the life insurance corporation to the foreign affiliate 
  (a) in respect of the life insurance corporation’s life insurance business carried on outside Canada; and 
  (b) not in respect of 
  (i) the life insurance corporation’s life insurance business carried on in Canada, or 
  (ii) any other use. 
  
  ### Definitions — subsections (2.43) to (2.45)
  
  (2.43) The following definitions apply in this subsection and subsections (2.44) and (2.45).  
  *Canadian indebtedness* means indebtedness (other than upstream deposits) owed by persons resident in Canada or in respect of businesses carried on in Canada. (dettes canadiennes)   
  *eligible bank affiliate*, of an eligible Canadian bank at any time, means a foreign bank that, at that time, is a controlled foreign affiliate (for the purposes of section 17) of the eligible Canadian bank and is described in subparagraph (a)(i) of the definition 
  *investment business* in subsection (1). (filiale bancaire admissible)   
  *eligible Canadian bank* means a bank listed in Schedule I to the Bank Act. (banque canadienne admissible)   
  *eligible Canadian indebtedness*, owing to an eligible bank affiliate of an eligible Canadian bank, means bonds, debentures, notes or similar obligations of the Government of Canada, the government of a province, an agent of a province, a municipality in Canada or a municipal or public body performing a function of government in Canada, that are owing to the affiliate, other than property in respect of which paragraph (2)(a.3) does not apply because of subsection (2.31). (dettes canadiennes admissibles)   
  *eligible currency hedge*, of an eligible bank affiliate of an eligible Canadian bank, means an agreement that provides for the purchase, sale or exchange of currency and that  
  (a) can reasonably be considered to have been made by the affiliate to reduce its risk of fluctuations in the value of currency with respect to eligible Canadian indebtedness and upstream deposits owing to the affiliate; and 
  (b) cannot reasonably be considered to have been made by the affiliate to reduce its risk with respect to property other than eligible Canadian indebtedness and upstream deposits owing to the affiliate. ( couverture de change admissible)   
  *excess liquidity*, of an eligible bank affiliate of an eligible Canadian bank for a taxation year of the affiliate, means the amount, if any, by which  
  (a) the average of all amounts each of which is, in respect of a month that ends in the 12-month period that begins 60 days prior to the beginning of the year — or, if the affiliate was formed after the beginning of the period, in respect of a month that ends in the year — the amount of the affiliate’s relationship deposits for the month, expressed in the affiliate’s calculating currency for the year unless the context requires otherwise, exceeds 
  (b) the average of all amounts each of which is, in respect of a month that ends in the period — or, if the affiliate was formed after the beginning of the period, in respect of a month that ends in the year — the amount of the affiliate’s organic assets for the month, expressed in the affiliate’s calculating currency for the year unless the context requires otherwise. ( liquidités excédentaires)   
  *organic assets*, of an eligible bank affiliate of an eligible Canadian bank for a month, means the total of all amounts in respect of the affiliate each of which is  
  (a) included in the amounts reported as loans in the assets section of the consolidated monthly balance sheet accepted by the Superintendent of Financial Institutions that is filed for the month by the bank, or another corporation resident in Canada that is related to the bank at the end of the month, or 
  (b) an amount owing to the affiliate by a person that is related to the affiliate (other than an amount described in paragraph (a)) but does not include the amount of an eligible Canadian indebtedness or upstream deposit owing to the affiliate. ( actif organique)   
  *qualifying indebtedness*, owing to an eligible bank affiliate of an eligible Canadian bank, means an upstream deposit owing to, or an eligible Canadian indebtedness of, the affiliate, to the extent that it can reasonably be considered that  
  (a) the upstream deposit or the acquisition of eligible Canadian indebtedness, as the case may be, is funded by 
  (i) property transferred or lent by a person other than the bank or a person resident in Canada that was not, at the time of the transfer or loan, dealing at arm’s length with the bank, 
  (ii) a repayment of all or part of an upstream deposit owing to the affiliate, or 
  (iii) the purchase of eligible Canadian indebtedness by the bank or a person resident in Canada that was not, at the time of the transfer or loan, dealing at arm’s length with the bank; and 
  (b) the proceeds of the upstream deposit or the proceeds received by the vendor of the eligible Canadian indebtedness, as the case may be, are used for a purpose other than to fund a transfer or loan of property by the bank — or another person resident in Canada that was not, at the time of the transfer or loan, dealing at arm’s length with the bank — to the affiliate or another foreign affiliate of the bank or of the other person. ( dettes déterminées)   
  *relationship deposits*, of an eligible bank affiliate of an eligible Canadian bank for a month, means the total of all amounts included in the amounts reported as demand and notice deposits, and fixed-term deposits in the liabilities section of the consolidated monthly balance sheet accepted by the Superintendent of Financial Institutions that is filed for the month by the bank, or another corporation resident in Canada that is related to the bank at the end of the month, that are deposits (other than of a temporary nature) of the affiliate made by a person who at the end of the month  
  (a) deals at arm’s length with the affiliate; and 
  (b) is not resident in Canada. ( dépôts apparentés)   
  *total specified indebtedness*, owing to an eligible bank affiliate of an eligible Canadian bank for a taxation year of the affiliate, means the average of all amounts each of which is, in respect of a month that ends in the year, the greatest total amount at any time in the month that is the total of all amounts each of which is  
  (a) the amount of an upstream deposit owing to the affiliate; 
  (b) the amount of an eligible Canadian indebtedness owing to the affiliate; or 
  (c) the positive or negative fair market value of an eligible currency hedge of the affiliate. ( dettes désignées totales)   
  *upstream deposit*, owing to an eligible bank affiliate of an eligible Canadian bank, means indebtedness owing by the bank to the affiliate. (dépôt en amont)  
  
  ### FAPI adjustment — eligible bank affiliate
  
  (2.44) If a non-resident corporation (in this subsection referred to as the “affiliate”) is, throughout a taxation year of the affiliate, an eligible bank affiliate of an eligible Canadian bank, and the bank elects in writing under this subsection, in respect of the affiliate for the year, and files the election with the Minister on or before the filing-due date of the bank for the particular taxation year of the bank in which the year ends, 
  (a) there is to be deducted in computing the amount determined for A in the definition 
  *foreign accrual property income* in subsection (1) in respect of the affiliate for the year, the lesser of  
  (i) the amount determined, without reference to this paragraph, for A in that definition in respect of the affiliate for the year, and 
  (ii) the amount determined by the following formula, where each amount referred to in the formula is to be determined using Canadian currency: is the total of all amounts each of which is the affiliate’s income for the year that is from a qualifying indebtedness owing to, or an eligible currency hedge of, the affiliate and that would, in the absence of this subsection, be included in computing the income of the affiliate from a business other than an active business of the affiliate, is the total of all amounts each of which is the affiliate’s loss for the year that is from a qualifying indebtedness owing to, or an eligible currency hedge of, the affiliate and that would, in the absence of this subsection, be deducted in computing the income of the affiliate from a business other than an active business of the affiliate, is the total of all amounts each of which is the amount, if any, by which an amount included in computing the amount determined for A or B in respect of an upstream deposit exceeds the amount that would be the affiliate’s income, or is less than the amount that would be the affiliate’s loss, as the case may be, for the year from the upstream deposit if the interest received or receivable by the affiliate in respect of the upstream deposit were computed at an interest rate equal to the lesser of 
  (A) the rate of interest in respect of the upstream deposit, and 
  (B) the benchmark rate of interest, acceptable to the Minister, that is 
  (I) if the upstream deposit is denominated in a qualifying currency (as defined in subsection 261(1)), the average, for the year, of a daily interbank offered rate for loans denominated in that currency with a term to maturity of three months, or 
  (II) in any other case, the average, for the year, of a daily rate for Canadian dollar denominated bankers’ acceptances with a term to maturity of three months, and is the amount determined by the formula is the amount, if any, by which the amount determined for A exceeds the total of the amounts determined for B and C, is the amount, if any, by which the total specified indebtedness owing to the affiliate for the year exceeds the affiliate’s excess liquidity for the year, and is the total specified indebtedness owing to the affiliate for the year; and 
  (b) there is to be included, in computing the income of the affiliate from an active business for the year, an amount equal to the proportion of the amount computed under the formula in subparagraph (a)(ii), computed as if each amount referred to in that formula were determined using the affiliate’s calculating currency, that the amount that is required to be deducted under paragraph (a) for the year is of the amount described in subparagraph (a)(ii). 
  
  ### Investment business and excluded property
  
  (2.45) If an election is made under subsection (2.44) in respect of an eligible bank affiliate of an eligible Canadian bank for a taxation year of the affiliate, 
  (a) for the purposes of the definition 
  *investment business* in subsection (1), the bank, and any other person resident in Canada that does not deal at arm’s length with the bank, are deemed to deal at arm’s length with the affiliate in respect of the making of upstream deposits, and acquisitions of Canadian indebtedness from the bank or the other person, by the affiliate in the course of a business carried on by the affiliate in the year if the affiliate’s excess liquidity for the year is at least 90% of the total specified indebtedness owing to the affiliate for the year; and  
  (b) for the purposes of paragraph (b) of the definition 
  *excluded property* in subsection (1),  
  (i) the fair market value of each upstream deposit and Canadian indebtedness owing to, and eligible currency hedge of, the affiliate is deemed to be nil, 
  (ii) at any particular time, the lesser of the following amounts is deemed to be the fair market value of a property of the affiliate that is excluded property at that particular time: 
  (A) the total of all amounts each of which is the fair market value of an upstream deposit or Canadian indebtedness owing to, or an eligible currency hedge of, the affiliate, and 
  (B) the amount, if any, by which 
  (I) the affiliate’s relationship deposits for the calendar month that is two months prior to the particular time (or if the affiliate was formed less than two months prior to the particular time, for the calendar month that includes the particular time) exceeds 
  (II) the amount of the affiliate’s organic assets for the calendar month that is two months prior to the particular time (or if the affiliate was formed less than two months prior to the particular time, for the calendar month that includes the particular time), and 
  (iii) the amount, if any, by which the amount in clause (ii)(A) exceeds the amount in subparagraph (ii) is deemed to be the fair market value of a property of the eligible bank affiliate that is not excluded property at that time. 
  
  ### Definitions for paragraph (2)(a.3)
  
  (2.5) For the purpose of paragraph 95(2)(a.3),  
  *excluded income* and 
  *excluded revenue* for a taxation year in respect of a foreign affiliate of a taxpayer mean, respectively, income or revenue, that is  
  (a) derived directly or indirectly from a specified deposit with a prescribed financial institution, 
  (b) derived directly or indirectly from a lease obligation of a person (other than the taxpayer or a person that does not deal at arm’s length with the taxpayer) resident in Canada relating to property used by the person in the course of carrying on a business through a permanent establishment outside Canada, 
  (c) included in computing the affiliate’s income for the year from carrying on a business through a permanent establishment in Canada, or 
  (d) included in computing the affiliate’s income or loss from an active business for the year because of subparagraph (2)(a)(ii); ( revenu exclu)   
  *indebtedness* does not include obligations of a particular person under agreements with non-resident corporations providing for the purchase, sale or exchange of currency where  
  (a) the agreements are swap agreements, forward purchase or sale agreements, forward rate agreements, futures agreements, options or rights agreements, or similar agreements, 
  (b) the particular person is a bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities resident in Canada, the business activities of which are subject by law to the supervision of a regulating authority in Canada such as the Superintendent of Financial Institutions or a similar authority of a province, 
  (c) the agreements are entered into by the non-resident corporation in the course of a business conducted principally with persons with whom the non-resident corporation deals at arm’s length, if 
  (i) the business is principally carried on in the country (other than Canada) under whose laws the non-resident corporation is governed and any of exists, was (unless the non-resident corporation was continued in any jurisdiction) formed or organized, or was last continued, or 
  (ii) the non-resident corporation is a foreign affiliate of the particular person, or of a person related to the particular person, and 
  (A) the non-resident corporation is a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, and 
  (B) the activities of the business are regulated 
  (I) under the laws of the country under whose laws the non-resident corporation is governed and any of exists, was (unless the non-resident corporation was continued in any jurisdiction) formed or organized, or was last continued and under the laws of each country in which the business is carried on through a permanent establishment in that country, 
  (II) under the laws of the country (other than Canada) in which the business is principally carried, or 
  (III) if the affiliate is related to a corporation, under the laws of the country under the laws of which a corporation related to the non-resident corporation is governed and any of exists, was (unless that related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union, and 
  (d) the terms and conditions of such agreements are substantially the same as the terms and conditions of similar agreements made by persons dealings at arm’s length; ( dette)   
  *specified deposit*, of a foreign affiliate of a taxpayer, means a deposit of the affiliate made with a permanent establishment in a country other than Canada of a prescribed financial institution resident in Canada if the income from the deposit is income of the affiliate for the year that would, in the absence of paragraph (2)(a.3), be income from an active business carried on by the affiliate in a country other than Canada, other than a business the principal purpose of which is to derive income from property (including any interest, dividends, rents, royalties or similar returns, or any substitutes for any of those) or profits from the disposition of investment property. (dépôt déterminé)  
  
  ### Rule for the definition specified person or partnership 
  
  (2.6) For the purposes of paragraphs (a) to (d) of the definition 
  *specified person or partnership* in subsection (1), if a person or partnership (referred to in this subsection as the “taxpayer”) is not dealing at arm’s length with another person or partnership (referred to in this subsection as the “particular person”) at a particular time, the taxpayer is deemed to have existed and not to have dealt at arm’s length with the particular person, nor with each specified predecessor corporation of the particular person, throughout the period that began when the particular person or the specified predecessor corporation, as the case may be, came into existence and that ends at the particular time.  
  
  ### Definition of services 
  
  (3) For the purposes of paragraph 95(2)(b), 
  *services* includes the insurance of Canadian risks but does not include  
  (a) the transportation of persons or goods; 
  (b) services performed in connection with the purchase or sale of goods; 
  (c) the transmission of electronic signals or electricity along a transmission system located outside Canada; or 
  (d) the manufacturing or processing outside Canada, in accordance with the taxpayer’s specifications and under a contract between the taxpayer and the affiliate, of tangible property, or for civil law corporeal property, that is owned by the taxpayer if the property resulting from the manufacturing or processing is used or held by the taxpayer in the ordinary course of the taxpayer’s business carried on in Canada. 
  
  ### Application of paragraph (2)(b) — eligible Canadian bank
  
  (3.01) Paragraph (2)(b) does not apply to a controlled foreign affiliate (for the purposes of section 17) of an eligible Canadian bank (as defined in subsection (2.43)) in respect of services performed in connection with the purchase or sale of a property described in paragraph (2.31)(b) if 
  (a) the services have been performed by the affiliate 
  (i) under terms and conditions that are substantially the same as the terms and conditions that would have been made between persons who deal at arm’s length with each other, 
  (ii) in the course of a business 
  (A) that regularly includes trading or dealing in securities principally with persons with whom the affiliate deals at arm’s length, and 
  (B) that is principally carried on through a permanent establishment in a country other than Canada, and 
  (iii) for the purpose of enabling the acquisition or disposition of the property by a person who, at the time of the acquisition or disposition, deals at arm’s length with the affiliate and the eligible Canadian bank; and 
  (b) the affiliate is a foreign bank or a trader or dealer in securities and the activities of the business are regulated 
  (i) under the laws of the country under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and under the laws of each country in which the business is carried on through a permanent establishment in that country, 
  (ii) under the laws of the country (other than Canada) in which the business is principally carried on, or 
  (iii) if the affiliate is related to a corporation, under the laws of the country under whose laws that related corporation is governed and any of exists, was (unless that related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all those countries are members of the European Union. 
  
  ### Rules for clause (2)(b)(ii)(B)
  
  (3.02) For the purposes of clause (2)(b)(ii)(B), 
  (a) a relevant person is 
  (i) a person resident in Canada, or 
  (ii) a non-resident person if the non-resident person performs the services referred to in subparagraph (2)(b)(ii) in the course of a business (other than a treaty-protected business) carried on in Canada; and 
  (b) any portion of a business carried on by a non-resident person that is carried on in Canada is deemed to be a business that is separate from any other portion of the business carried on by the person. 
  
  ### Designated property — subparagraph (2)(a.1)(i)
  
  (3.1) Designated property referred to in subparagraph (2)(a.1)(i) is property that is described in the portion of paragraph (2)(a.1) that is before subparagraph (i) that is 
  (a) property that was sold to non-resident persons other than the affiliate, or sold to the affiliate for sale to non-resident persons, and 
  (i) that 
  (A) was — in the course of carrying on a business in Canada — manufactured, produced, grown, extracted or processed in Canada by the taxpayer, or by a person with whom the taxpayer does not deal at arm’s length, or 
  (B) was — in the course of a business carried on by a foreign affiliate of the taxpayer outside Canada — manufactured or processed from tangible property, or for civil law corporeal property, that, at the time of the manufacturing or processing, was owned by the taxpayer or by a person related to the taxpayer and used or held by the owner in the course of carrying on a business in Canada, if the manufacturing or processing was in accordance with the specifications of the owner of that tangible or corporeal property and under a contract between that owner and that foreign affiliate, 
  (ii) that was acquired, in the course of carrying on a business in Canada, by a purchaser from a vendor, if 
  (A) the purchaser is the taxpayer or is a person resident in Canada with whom the taxpayer does not deal at arm’s length, and 
  (B) the vendor is a person 
  (I) with whom the taxpayer deals at arm’s length, 
  (II) who is not a foreign affiliate of the taxpayer, and 
  (III) who is not a foreign affiliate of a person resident in Canada with whom the taxpayer does not deal at arm’s length, or 
  (iii) that was acquired by a purchaser from a vendor, if 
  (A) the purchaser is the taxpayer or is a person resident in Canada with whom the taxpayer does not deal at arm’s length, 
  (B) the vendor is a foreign affiliate of 
  (I) the taxpayer, or 
  (II) a person resident in Canada with whom the taxpayer does not deal at arm’s length, and 
  (C) that property was manufactured, produced, grown, extracted or processed in the country 
  (I) under whose laws the vendor is governed and any of exists, was (unless the vendor was continued in any jurisdiction) formed or organized, or was last continued, and 
  (II) in which the vendor’s business is principally carried on; or 
  (b) property that is an interest in real property, or a real right in an immovable, located in, or a foreign resource property in respect of, the country 
  (i) under whose laws the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued, and 
  (ii) in which the affiliate’s business is principally carried on. 
  
  ### Contract manufacturing
  
  (3.2) For the purposes of clause (2)(a.1)(ii)(A), property of a particular foreign affiliate of a taxpayer is deemed to have been manufactured by the particular affiliate in a particular country if the property is 
  (a) developed and designed by the particular affiliate in the particular country in the course of an active business carried on by the particular affiliate in the particular country; and 
  (b) manufactured, produced or processed outside the particular country by another foreign affiliate of the taxpayer, during a period throughout which the taxpayer has a qualifying interest in the other affiliate, 
  (i) under a contract between the particular affiliate and the other affiliate, and 
  (ii) in accordance with specifications provided by the particular affiliate. 
  
  ### Definitions
  
  (4) In this section,  
  *direct equity percentage* at any time of any person in a corporation is the percentage determined by the following rules:  
  (a) for each class of the issued shares of the capital stock of the corporation, determine the proportion of 100 that the number of shares of that class owned by that person at that time is of the total number of issued shares of that class at that time, and 
  (b) select the proportion determined under paragraph (a) for that person in respect of the corporation that is not less than any other proportion so determined for that person in respect of the corporation at that time, and the proportion selected under paragraph (b), when expressed as a percentage, is that person’s direct equity percentage in the corporation at that time; ( pourcentage d’intérêt direct)   
  *eligible controlled foreign affiliate*, of a taxpayer, at any time, means a foreign affiliate of the taxpayer at that time, if  
  (a) the affiliate is a controlled foreign affiliate of the taxpayer at that time and at the end of the affiliate’s taxation year that includes that time, and 
  (b) the following condition is met: is the total of all amounts each of which would be the participating percentage (determined at the end of the taxation year) of a share owned by the taxpayer of the capital stock of a corporation, in respect of the affiliate, if 
  (i) the definition relevant cost base were read without reference to the words “if the affiliate is an eligible controlled foreign affiliate of the taxpayer at that time,” in its subparagraph (b)(i), and  
  (ii) the definition participating percentage in subsection (1) were read without reference to its paragraph (a) and the portion of its paragraph (b) before subparagraph (i); (société étrangère affiliée contrôlée admissible)   
  *equity percentage* at any time of a person, in any particular corporation, is the total of  
  (a) the person’s direct equity percentage at that time in the particular corporation, and 
  (b) all percentages each of which is the product obtained when the person’s equity percentage at that time in any corporation is multiplied by that corporation’s direct equity percentage at that time in the particular corporation except that for the purposes of the definition 
  *participating percentage* in subsection 95(1), paragraph (b) shall be read as if the reference to “any corporation” were a reference to “any corporation other than a corporation resident in Canada”; (pourcentage d’intérêt)   
  *relevant cost base*, of a property at any time to a foreign affiliate of a taxpayer, in respect of the taxpayer, means the greater of  
  (a) the amount determined — or, if the taxpayer is not a corporation, the amount that would be determined if the taxpayer were a corporation resident in Canada — by the formula is the amount for which the property could be disposed of at that time that would not, in the absence of paragraph (2)(f.1), result in any amount being added to, or deducted from, any of the affiliate’s 
  (i) exempt earnings, exempt loss, taxable earnings and taxable loss (all within the meaning of subsection 5907(1) of the Income Tax Regulations), in respect of the taxpayer, for the taxation year of the affiliate that includes that time, and  
  (ii) hybrid surplus and hybrid deficit, in respect of the taxpayer, at that time, is the amount, if any, by which any income or gain from a disposition of the property would, if the property were disposed of at that time for proceeds of disposition equal to its fair market value at that time be reduced under paragraph (2)(f.1), and is the amount, if any, by which any loss from a disposition of the property would, if the property were disposed of at that time for proceeds of disposition equal to its fair market value at that time be reduced under paragraph (2)(f.1), and 
  (b) either 
  (i) if the affiliate is an eligible controlled foreign affiliate of the taxpayer at that time, the amount that the taxpayer elects, in accordance with prescribed rules, in respect of the property not exceeding the fair market value at that time of the property, or 
  (ii) in any other case, nil. ( prix de base approprié)  
  
  ### Application of s. 87(8.1)
  
  (4.1) In this section, the expressions 
  *foreign merger*, 
  *predecessor foreign corporation*, 
  *new foreign corporation* and 
  *foreign parent corporation* have the meanings assigned by subsection 87(8.1).  
  
  ### Income bonds or debentures issued by foreign affiliates
  
  (5) For the purposes of this Subdivision, an income bond or income debenture issued by a corporation (other than a corporation resident in Canada) shall be deemed to be a share of the capital stock of the corporation unless any interest or other similar periodic amount paid by the corporation on or in respect of the bond or debenture was, under the laws of the country in which the corporation was resident, deductible in computing the amount for the year on which the corporation was liable to pay income or profits tax imposed by the government of that country. 
  
  ### Where rights or shares issued, acquired or disposed of to avoid tax
  
  (6) For the purposes of this Subdivision (other than section 90), 
  (a) where any person or partnership has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to, or to acquire, shares of the capital stock of a corporation or interests in a partnership and 
  (i) it can reasonably be considered that the principal purpose for the existence of the right is to cause 2 or more corporations to be related for the purpose of paragraph 95(2)(a), those corporations shall be deemed not to be related for that purpose, or 
  (ii) it can reasonably be considered that the principal purpose for the existence of the right is to permit any person to avoid, reduce or defer the payment of tax or any other amount that would otherwise be payable under this Act, those shares or partnership interests, as the case may be, are deemed to be owned by that person or partnership; and 
  (b) where a person or partnership acquires or disposes of shares of the capital stock of a corporation or interests in a partnership, either directly or indirectly, and it can reasonably be considered that the principal purpose for the acquisition or disposition is to permit a person to avoid, reduce or defer the payment of tax or any other amount that would otherwise be payable under this Act, that acquisition or disposition is deemed not to have taken place, and where the shares or partnership interests were unissued by the corporation or partnership immediately before the acquisition, those shares or partnership interests, as the case may be, are deemed not to have been issued. 
  
  ### Stock dividends from foreign affiliates
  
  (7) For the purposes of this Subdivision and subsection 52(3), the amount of any stock dividend paid by a foreign affiliate of a corporation resident in Canada shall, in respect of the corporation, be deemed to be nil. 
  
  ### Tracking interests — interpretation
  
  (8) For the purposes of subsections (9) to (12), a particular property is a tracking interest in respect of a person or partnership (referred to in this subsection as the “tracked entity”) if 
  (a) all or part of the fair market value of the particular property — or of any payment or right to receive an amount in respect of the particular property — can reasonably be considered to be determined, directly or indirectly, by reference to one or more of the following criteria in respect of property or activities of the tracked entity (referred to in this subsection and subsections (9) to (11) as the “tracked property and activities”): 
  (i) the fair market value of property of the tracked entity, 
  (ii) any revenue, income or cash flow from property or activities of the tracked entity, 
  (iii) any profits or gains from the disposition of property of the tracked entity, and 
  (iv) any similar criteria in respect of property or activities of the tracked entity; and 
  (b) the tracked property and activities in respect of the particular property represent less than all of the property and activities of the tracked entity. 
  
  ### Tracking interests — investment business definition 
  
  (9) For the purposes of the definition investment business in subsection (1), if, at any time in a taxation year of a foreign affiliate of a taxpayer, a person or partnership holds a tracking interest in respect of the affiliate or a partnership of which the affiliate is a member, the tracked property and activities in respect of the tracking interest are, to the extent they would not otherwise be part of an investment business of the affiliate, deemed, in respect of the taxpayer,  
  (a) to be a separate business carried on by the affiliate throughout the year; and 
  (b) not to be part of any other business of the affiliate. 
  
  ### Conditions for subsection (11)
  
  (10) Subsection (11) applies in respect of a foreign affiliate of a taxpayer for a taxation year of the affiliate if, at any time in the year, 
  (a) the taxpayer holds a property that is a tracking interest in respect of the affiliate; and 
  (b) shares of a class of the capital stock of the affiliate the fair market value of which can reasonably be considered to be determined by reference to the tracked property and activities in respect of the tracking interest (referred to in subsection (11) as a “tracking class”) are held by the taxpayer or a foreign affiliate of the taxpayer. 
  
  ### Tracking class — separate corporation
  
  (11) If this subsection applies in respect of a foreign affiliate (referred to in this subsection as the “actual affiliate”) of a taxpayer for a taxation year of the actual affiliate, the following rules apply for the purpose of determining the amounts, if any, to be included under subsection 91(1), and to be deducted under subsection 91(4), by the taxpayer in respect of the year and for the purpose of applying section 233.4 in respect of the year: 
  (a) the tracked property and activities of the actual affiliate are deemed to be property and activities of a non-resident corporation (referred to in this subsection as the “separate corporation”) that is separate from the actual affiliate and not to be property or activities of the actual affiliate; 
  (b) any income, losses or gains for the year in respect of the property and activities described in paragraph (a) are deemed to be income, losses or gains of the separate corporation and not of the actual affiliate; 
  (c) all rights and obligations of the actual affiliate in respect of the property and activities described in paragraph (a) are deemed to be rights and obligations of the separate corporation and not of the actual affiliate; 
  (d) the separate corporation is deemed to have, at the end of the year, 100 issued and outstanding shares of a single class (referred to in this subsection as the “single class”) of its capital stock, having full voting rights under all circumstances; 
  (e) each shareholder of the actual affiliate is deemed to own, at the end of the year, that number of shares of the single class that is equal to the product of 100 and the amount that would be the aggregate participating percentage (as defined in subsection 91(1.3)) of that shareholder in respect of the actual affiliate for the year if  
  (i) the actual affiliate were a controlled foreign affiliate of that shareholder at the end of the year, 
  (ii) the only shares of the capital stock of the actual affiliate issued and outstanding at the end of the year were shares of tracking classes in respect of the tracked properties and activities, and 
  (iii) the only income, losses and gains of the actual affiliate for the year were those referred to in paragraph (b); and 
  (f) any amounts included under subsection 91(1), or deducted under subsection 91(4), by the taxpayer in respect of shares of the separate corporation are deemed to be amounts included under subsection 91(1), or deducted under subsection 91(4), as the case may be, by the taxpayer in respect of shares of tracking classes held by the taxpayer or a foreign affiliate of the taxpayer, as the case may be. 
  
  ### Tracking interests – controlled foreign affiliate
  
  (12) If subsection (11) does not apply in respect of a foreign affiliate of the taxpayer for a taxation year of the affiliate, the affiliate is deemed to be a controlled foreign affiliate of the taxpayer throughout the taxation year if, at any time in the year, a tracking interest in respect of the affiliate, or a partnership of which the affiliate is a member, is held by 
  (a) the taxpayer; or 
  (b) a person or partnership (each referred to in this paragraph as a “holder”), if 
  (i) the holder does not deal at arm’s length with the taxpayer at that time, 
  (ii) where either the taxpayer or the holder is a partnership and the other party is not, any member of the partnership does not deal at arm’s length, at that time, with the other party, or 
  (iii) where both the taxpayer and the holder are partnerships, the taxpayer or any member of the taxpayer does not deal at arm’s length, at that time, with the holder or any member of the holder. 
  
  # SUBDIVISION J 
  
  ## Partnerships and their Members 
  
  ### General Rules
  
  96 (1) Where a taxpayer is a member of a partnership, the taxpayer’s income, non-capital loss, net capital loss, restricted farm loss and farm loss, if any, for a taxation year, or the taxpayer’s taxable income earned in Canada for a taxation year, as the case may be, shall be computed as if 
  (a) the partnership were a separate person resident in Canada; 
  (b) the taxation year of the partnership were its fiscal period; 
  (c) each partnership activity (including the ownership of property) were carried on by the partnership as a separate person, and a computation were made of the amount of 
  (i) each taxable capital gain and allowable capital loss of the partnership from the disposition of property, and 
  (ii) each income and loss of the partnership from each other source or from sources in a particular place, for each taxation year of the partnership; 
  (d) each income or loss of the partnership for a taxation year were computed as if 
  (i) this Act were read without reference to sections 34.1 and 34.2, subsection 59(1), paragraph 59(3.2)(c.1) and subsections 66.1(1), 66.2(1) and 66.4(1), and 
  (ii) no deduction were permitted under any of section 29 of the Income Tax Application Rules, subsection 65(1) and sections 66, 66.1, 66.2, 66.21 and 66.4;  
  (e) each gain of the partnership from the disposition of land used in a farming business of the partnership were computed as if this Act were read without reference to paragraph 53(1)(i); 
  (e.1) the amount, if any, by which 
  (i) the total of all amounts determined under paragraphs 37(1)(a) to 37(1)(c.1) in respect of the partnership at the end of the taxation year exceeds 
  (ii) the total of all amounts determined under paragraphs 37(1)(d) to 37(1)(g) in respect of the partnership at the end of the year were deducted under subsection 37(1) by the partnership in computing its income for the year; 
  (f) the amount of the income of the partnership for a taxation year from any source or from sources in a particular place were the income of the taxpayer from that source or from sources in that particular place, as the case may be, for the taxation year of the taxpayer in which the partnership’s taxation year ends, to the extent of the taxpayer’s share thereof; and 
  (g) the amount, if any, by which 
  (i) the loss of the partnership for a taxation year from any source or sources in a particular place, exceeds 
  (ii) in the case of a specified member (within the meaning of the definition 
  *specified member* in subsection 248(1) if that definition were read without reference to paragraph (b) thereof) of the partnership in the year, the amount, if any, deducted by the partnership by virtue of section 37 in calculating its income for the taxation year from that source or sources in the particular place, as the case may be, and  
  (iii) in any other case, nil were the loss of the taxpayer from that source or from sources in that particular place, as the case may be, for the taxation year of the taxpayer in which the partnership’s taxation year ends, to the extent of the taxpayer’s share thereof. 
  
  ### Income allocation to former member
  
  (1.01) If, at any time in a fiscal period of a partnership, a taxpayer ceases to be a member of the partnership 
  (a) for the purposes of subsection (1), sections 34.1, 101 and 103 and paragraph 249.1(1)(b), and notwithstanding paragraph 98.1(1)(d), the taxpayer is deemed to be a member of the partnership at the end of the fiscal period; and 
  (b) for the purposes of the application of paragraph (2.1)(b), subsection 40(3.12) and subparagraphs 53(1)(e)(i) and (viii) and (2)(c)(i) to the taxpayer, the fiscal period of the partnership is deemed to end 
  (i) immediately before the time at which the taxpayer is deemed by subsection 70(5) to have disposed of the interest in the partnership, where the taxpayer ceased to be a member of the partnership because of the taxpayer’s death, and 
  (ii) immediately before the time that is immediately before the time that the taxpayer ceased to be a member of the partnership, in any other case. 
  
  ### Allocation of share of income to retiring partner
  
  (1.1) For the purposes of subsection 96(1) and sections 34.1, 34.2, 101, 103 and 249.1, 
  (a) where the principal activity of a partnership is carrying on a business in Canada and its members have entered into an agreement to allocate a share of the income or loss of the partnership from any source or from sources in a particular place, as the case may be, to any taxpayer who at any time ceased to be a member of 
  (i) the partnership, or 
  (ii) a partnership that at any time has ceased to exist or would, but for subsection 98(1), have ceased to exist, and either 
  (A) the members of that partnership, or 
  (B) the members of another partnership in which, immediately after that time, any of the members referred to in clause 96(1.1)(a)(ii)(A) became members have agreed to make such an allocation or to the taxpayer’s spouse, or common-law partner, estate or heirs or to any person referred to in subsection 96(1.3), the taxpayer, spouse, or common-law partner, estate, heirs or person, as the case may be, shall be deemed to be a member of the partnership; and 
  (b) all amounts each of which is an amount equal to the share of the income or loss referred to in this subsection allocated to a taxpayer from a partnership in respect of a particular fiscal period of the partnership shall, notwithstanding any other provision of this Act, be included in computing the taxpayer’s income for the taxation year in which that fiscal period of the partnership ends. 
  
  ### Deemed dividend of SIFT partnership
  
  (1.11) If a SIFT partnership is liable to tax for a taxation year under Part IX.1, 
  (a) paragraph (1)(f) is to be read as if the expression “the amount of the income of the partnership for a taxation year from any source or from sources in a particular place” were read as “the amount, if any, by which the income of the partnership for a taxation year from any source or from sources in a particular place exceeds, in respect of each such source, the portion of the partnership’s taxable non-portfolio earnings for the taxation year that is applicable to that source”; and 
  (b) the partnership is deemed to have received a dividend in the taxation year from a taxable Canadian corporation equal to the amount by which the partnership’s taxable non-portfolio earnings for the taxation year exceeds the tax payable by the partnership for the taxation year under Part IX.1. 
  
  ### Disposal of right to share in income, etc.
  
  (1.2) Where in a taxation year a taxpayer who has a right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1) disposes of that right, 
  (a) there shall be included in computing the taxpayer’s income for the year the proceeds of the disposition; and 
  (b) for greater certainty, the cost to the taxpayer of each property received by the taxpayer as consideration for the disposition is the fair market value of the property at the time of the disposition. 
  
  ### Deductions
  
  (1.3) Where, by virtue of subsection 96(1.1) or 96(1.2), an amount has been included in computing a taxpayer’s income for a taxation year, there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the amount so included in computing the taxpayer’s income for the year, and 
  (b) the amount, if any, by which the cost to the taxpayer of the right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1) exceeds the total of all amounts in respect of that right that were deductible by virtue of this subsection in computing the taxpayer’s income for previous taxation years. 
  
  ### Right deemed not to be capital property
  
  (1.4) For the purposes of this Act, a right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1) shall be deemed not to be capital property. 
  
  ### Disposition by virtue of death of taxpayer
  
  (1.5) Where, at the time of a taxpayer’s death, the taxpayer has a right to a share of the income or loss of a partnership under an agreement referred to in subsection 96(1.1), subsections 70(2) to 70(4) apply. 
  
  ### Members deemed carrying on business
  
  (1.6) If a partnership carries on a business in Canada at any time, each taxpayer who is deemed by paragraph (1.1)(a) to be a member of the partnership at that time is deemed to carry on the business in Canada at that time for the purposes of subsection 2(3), sections 34.1 and 150 and (subject to subsection 34.2(18)) section 34.2. 
  
  ### Gains and losses
  
  (1.7) Notwithstanding subsection (1) or section 38, if in a particular taxation year of a taxpayer, the taxpayer is a member of a partnership with a fiscal period that ends in the particular year, the amount of a taxable capital gain, allowable capital loss or allowable business investment loss of the taxpayer for the particular year determined in respect of the partnership is the amount determined by the formula is the amount of the taxpayer’s taxable capital gain, allowable capital loss or allowable business investment loss, as the case may be, for the particular year otherwise determined under this section in respect of the partnership; is the relevant fraction that applies under paragraph 38(a), (a.1), (a.2), (b) or (c) for the particular year in respect of the taxpayer; and is the fraction that was used under section 38 for the fiscal period of the partnership. 
  
  ### Application
  
  (1.71) Where the fraction referred to in the description of C in subsection (1.7) cannot be determined by a taxpayer in respect of a fiscal period of a partnership that ended before February 28, 2000, or includes February 28, 2000 or October 17, 2000, for the purposes of subsection (1.7), the fraction is deemed to be 
  (a) where the fiscal period ended before or began before February 28, 2000, 3/4; 
  (b) where the fiscal period began after February 27, 2000 and before October 18, 2000, 2/3; and 
  (c) in any other case, 1/2. 
  
  ### Loan of property
  
  (1.8) For the purposes of subsection 56(4.1) and sections 74.1 and 74.3, where an individual has transferred or lent property, either directly or indirectly, by means of a trust or by any other means whatever, to a person and the property or property substituted therefor is an interest in a partnership, the person’s share of the amount of any income or loss of the partnership for a fiscal period in which the person was a specified member of the partnership shall be deemed to be income or loss, as the case may be, from the property or substituted property. 
  
  ### Construction
  
  (2) The provisions of this Subdivision shall be read and construed as if each of the assumptions in paragraphs 96(1)(a) to 96(1)(g) were made. 
  
  ### Tiered partnerships
  
  (2.01) For the purposes of this section, a taxpayer includes a partnership. 
  
  ### Limited partnership losses
  
  (2.1) Notwithstanding subsection 96(1), where a taxpayer is, at any time in a taxation year, a limited partner of a partnership, the amount, if any, by which 
  (a) the total of all amounts each of which is the taxpayer’s share of the amount of any loss of the partnership, determined in accordance with subsection 96(1), for a fiscal period of the partnership ending in the taxation year from a business (other than a farming business) or from property exceeds 
  (b) the amount, if any, by which 
  (i) the taxpayer’s at-risk amount in respect of the partnership at the end of the fiscal period exceeds the total of 
  (ii) the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer for the taxation year, 
  (iii) the taxpayer’s share of any losses of the partnership for the fiscal period from a farming business, and 
  (iv) the taxpayer’s share of 
  (A) the foreign resource pool expenses, if any, incurred by the partnership in the fiscal period, 
  (B) the Canadian exploration expense, if any, incurred by the partnership in the fiscal period, 
  (C) the Canadian development expense, if any, incurred by the partnership in the fiscal period, and 
  (D) the Canadian oil and gas property expense, if any, incurred by the partnership in the fiscal period, shall 
  (c) not be deducted in computing the taxpayer’s income for the year, 
  (d) not be included in computing the taxpayer’s non-capital loss for the year, 
  (e) if the taxpayer is not a partnership, be deemed to be the taxpayer’s limited partnership loss in respect of the partnership for the year, and 
  (f) if the taxpayer is a partnership, reduce the taxpayer’s share of any loss of the partnership for a fiscal period of the partnership ending in the taxation year of the taxpayer from a business (other than a farming business) or from property. 
  
  ### Tiered partnerships — adjustments
  
  (2.11) The following rules apply to taxation years of a taxpayer that end after February 26, 2018: 
  (a) for the purpose of applying section 111, the taxpayer’s non-capital loss, or limited partnership loss in respect of a partnership, for a preceding taxation year shall be determined as if subsection (2.01) and paragraph (2.1)(f) applied in respect of taxation years that end before February 27, 2018; and 
  (b) in computing the adjusted cost base to the taxpayer of the taxpayer’s interest in a partnership after February 26, 2018, there shall be added an amount equal to the portion of the amount of any reduction because of paragraph (a) in a non-capital loss of the taxpayer that can reasonably be considered to relate to the amount of a loss deducted under subparagraph 53(2)(c)(i) in computing the adjusted cost base of that interest. 
  
  ### At-risk amount
  
  (2.2) For the purposes of this section and sections 111 and 127, the at-risk amount of a taxpayer, in respect of a partnership of which the taxpayer is a limited partner, at any particular time is the amount, if any, by which the total of 
  (a) the adjusted cost base to the taxpayer of the taxpayer’s partnership interest at that time, computed in accordance with subsection 96(2.3) where applicable, 
  (b) where the particular time is the end of the fiscal period of the partnership, the taxpayer’s share of the income of the partnership from a source for that fiscal period computed under the method described in subparagraph 53(1)(e)(i), and 
  (b.1) where the particular time is the end of the fiscal period of the partnership, the amount referred to in subparagraph 53(1)(e)(viii) in respect of the taxpayer for that fiscal period exceeds the total of 
  (c) all amounts each of which is an amount owing at that time to the partnership, or to a person or partnership not dealing at arm’s length with the partnership, by the taxpayer or by a person or partnership not dealing at arm’s length with the taxpayer, other than any amount deducted under subparagraph 53(2)(c)(i.3) in computing the adjusted cost base, or under section 143.2 in computing the cost, to the taxpayer of the taxpayer’s partnership interest at that time, and 
  (d) any amount or benefit that the taxpayer or a person not dealing at arm’s length with the taxpayer is entitled, either immediately or in the future and either absolutely or contingently, to receive or to obtain, whether by way of reimbursement, compensation, revenue guarantee, proceeds of disposition, loan or any other form of indebtedness or in any other form or manner whatever, granted or to be granted for the purpose of reducing the impact, in whole or in part, of any loss that the taxpayer may sustain because the taxpayer is a member of the partnership or holds or disposes of an interest in the partnership, except to the extent that the amount or benefit is included in the determination of the value of J in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6), of M in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) or of I in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) in respect of the taxpayer, or the entitlement arises  
  (i) by virtue of a contract of insurance with an insurance corporation dealing at arm’s length with each member of the partnership under which the taxpayer is insured against any claim arising as a result of a liability incurred in the ordinary course of carrying on the partnership business, 
  (ii)  [Repealed, 1996, c. 21, s. 17]  
  (iii) as a consequence of the death of the taxpayer, 
  (iv) and (v)  [Repealed, 1998, c. 19, s. 123]  
  (vi) in respect of an amount not included in the at-risk amount of the taxpayer determined without reference to this paragraph, or 
  (vii) because of an excluded obligation (as defined in subsection 6202.1(5) of the Income Tax Regulations) in relation to a share issued to the partnership by a corporation,  and, for the purposes of this subsection, 
  (e) where the amount or benefit to which the taxpayer or the person is entitled at any time is provided by way of an agreement or other arrangement under which the taxpayer or the person has a right, either immediately or in the future and either absolutely or contingently (otherwise than as a consequence of the death of the taxpayer), to acquire other property in exchange for all or any part of the partnership interest, for greater certainty the amount or benefit to which the taxpayer or the person is entitled under the agreement or arrangement is considered to be not less than the fair market value of the other property at that time, and 
  (f) where the amount or benefit to which the taxpayer or the person is entitled at any time is provided by way of a guarantee, security or similar indemnity or covenant in respect of any loan or other obligation of the taxpayer or the person, for greater certainty the amount or benefit to which the taxpayer or the person is entitled under the guarantee or indemnity at any particular time is considered to be not less than the total of the unpaid amount of the loan or obligation at that time and all other amounts outstanding in respect of the loan or obligation at that time. 
  
  ### Idem
  
  (2.3) For the purposes of subsection 96(2.2), where a taxpayer has acquired the taxpayer’s partnership interest at any time from a transferor other than the partnership, the adjusted cost base to the taxpayer of that interest shall be computed as if the cost to the taxpayer of the interest were the lesser of 
  (a) the taxpayer’s cost otherwise determined, and 
  (b) the greater of 
  (i) the adjusted cost base of that interest to the transferor immediately before that time, and 
  (ii) nil, and where the adjusted cost base of the transferor cannot be determined, it shall be deemed to be equal to the total of the amounts determined in respect of the taxpayer under paragraphs 96(2.2)(c) and 96(2.2)(d) immediately after that time. 
  
  ### Limited partner
  
  (2.4) For the purposes of this section and sections 111 and 127, a taxpayer who is a member of a partnership at a particular time is a limited partner of the partnership at that time if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection (2.5)) at that time and if, at that time or within 3 years after that time, 
  (a) by operation of any law governing the partnership arrangement, the liability of the member as a member of the partnership is limited (except by operation of a provision of a statute of Canada or a province that limits the member’s liability only for debts, obligations and liabilities of the partnership, or any member of the partnership, arising from negligent acts or omissions, from misconduct or from fault of another member of the partnership or an employee, an agent or a representative of the partnership in the course of the partnership business while the partnership is a limited liability partnership); 
  (b) the member or a person not dealing at arm’s length with the member is entitled, either immediately or in the future and either absolutely or contingently, to receive an amount or to obtain a benefit that would be described in paragraph (2.2)(d) if that paragraph were read without reference to subparagraphs (ii) and (vi); 
  (c) one of the reasons for the existence of the member who owns the interest 
  (i) can reasonably be considered to be to limit the liability of any person with respect to that interest, and 
  (ii) cannot reasonably be considered to be to permit any person who has an interest in the member to carry on that person’s business (other than an investment business) in the most effective manner; or 
  (d) there is an agreement or other arrangement for the disposition of an interest in the partnership and one of the main reasons for the agreement or arrangement can reasonably be considered to be to attempt to avoid the application of this subsection to the member. 
  
  ### Exempt interest
  
  (2.5) For the purposes of subsection 96(2.4), an exempt interest in a partnership at any time means a prescribed partnership interest or an interest in a partnership that was actively carrying on business on a regular and a continuous basis immediately before February 26, 1986 and continuously thereafter until that time or that was earning income from the rental or leasing of property immediately before February 26, 1986 and continuously thereafter until that time, where there has not after February 25, 1986 and before that time been a substantial contribution of capital to the partnership or a substantial increase in the indebtedness of the partnership and, for this purpose, an amount will not be considered to be substantial where 
  (a) the amount was used by the partnership to make an expenditure required to be made pursuant to the terms of a written agreement entered into by it before February 26, 1986, or to repay a loan, debt or contribution of capital that had been received or incurred in respect of any such expenditure, 
  (b) the amount was raised pursuant to the terms of a prospectus, preliminary prospectus or registration statement filed before February 26, 1986 with a public authority in Canada pursuant to and in accordance with the securities legislation of Canada or of any province, and, where required by law, accepted for filing by that public authority, or 
  (c) the amount was used for the activity that was carried on by the partnership on February 25, 1986 but was not used for a significant expansion of the activity and, for the purposes of this subsection, 
  (d) a partnership in respect of which paragraph 96(2.5)(b) applies shall be considered to have been actively carrying on a business on a regular and a continuous basis immediately before February 26, 1986 and continuously thereafter until the earlier of the closing date, if any, stipulated in the document referred to in that paragraph and January 1, 1987, and 
  (e) an expenditure shall not be considered to have been required to be made pursuant to the terms of an agreement where the obligation to make the expenditure is conditional in any way on the consequences under this Act relating to the expenditure and the condition has not been satisfied or waived before June 12, 1986. 
  
  ### Artificial transactions
  
  (2.6) For the purposes of paragraph 96(2.2)(c), where at any time an amount owing by a taxpayer or a person with whom the taxpayer does not deal at arm’s length is repaid and it is established, by subsequent events or otherwise, that the repayment was made as part of a series of loans or other transactions and repayments, the amount owing shall be deemed not to have been repaid. 
  
  ### Idem
  
  (2.7) For the purposes of paragraph 96(2.2)(a), where at any time a taxpayer makes a contribution of capital to a partnership and the partnership or a person or partnership with whom or which the partnership does not deal at arm’s length makes a loan to the taxpayer or to a person with whom the taxpayer does not deal at arm’s length or repays the contribution of capital, and it is established, by subsequent events or otherwise, that the loan or repayment, as the case may be, was made as part of a series of loans or other transactions and repayments, the contribution of capital shall be deemed not to have been made to the extent of the loan or repayment, as the case may be. 
  
  ### Agreement or election of partnership members
  
  (3) If a taxpayer who was a member of a partnership at any time in a fiscal period has, for any purpose relevant to the computation of the taxpayer’s income from the partnership for the fiscal period, made or executed an agreement, designation or election under or in respect of the application of any of subsections 10.1(1), 13(4), (4.2) and (16), 20(9) and 21(1) to (4), section 22, subsection 29(1), section 34, clause 37(8)(a)(ii)(B), subsections 44(1) and (6), 50(1) and 80(5) and (9) to (11), section 80.04, subsections 86.1(2), 88(3.1), (3.3) and (3.5) and 90(3), the definition relevant cost base in subsection 95(4) and subsections 97(2), 139.1(16) and (17) and 249.1(4) and (6) that, if this Act were read without reference to this subsection, would be a valid agreement, designation or election,  
  (a) the agreement, designation or election is not valid unless 
  (i) it was made or executed on behalf of the taxpayer and each other person who was a member of the partnership during the fiscal period, and 
  (ii) the taxpayer had authority to act for the partnership; 
  (b) unless the agreement, designation or election is invalid because of paragraph 96(3)(a), each other person who was a member of the partnership during the fiscal period shall be deemed to have made or executed the agreement, designation or election; and 
  (c) notwithstanding paragraph 96(3)(a), any agreement, designation or election deemed by paragraph 96(3)(b) to have been made or executed by any person shall be deemed to be a valid agreement, designation or election made or executed by that person. 
  
  ### Election
  
  (4) Any election under subsection 97(2) or 98(3) shall be made on or before the day that is the earliest of the days on or before which any taxpayer making the election is required to file a return of income pursuant to section 150 for the taxpayer’s taxation year in which the transaction to which the election relates occurred. 
  
  ### Late filing
  
  (5) Where an election referred to in subsection 96(4) was not made on or before the day on or before which the election was required by that subsection to be made and that day was after May 6, 1974, the election shall be deemed to have been made on that day if, on or before the day that is 3 years after that day, 
  (a) the election is made in prescribed form; and 
  (b) an estimate of the penalty in respect of that election is paid by the taxpayer referred to in subsection 97(2) or by the persons referred to in subsection 98(3), as the case may be, when that election is made. 
  
  ### Special cases
  
  (5.1) Where, in the opinion of the Minister, the circumstances of a case are such that it would be just and equitable 
  (a) to permit an election under subsection 97(2) or 98(3) to be made after the day that is 3 years after the day on or before which the election was required by subsection 96(4) to be made, or 
  (b) to permit an election made under subsection 97(2) to be amended, the election or amended election shall be deemed to have been made on the day on or before which the election was so required to be made if 
  (c) the election or amended election is made in prescribed form, and 
  (d) an estimate of the penalty in respect of the election or amended election is paid by the taxpayer referred to in subsection 97(2) or by the persons referred to in subsection 98(3), as the case may be, when the election or amended election is made, and where this subsection applies to the amendment of an election, that election shall be deemed not to have been effective. 
  
  ### Penalty for late-filed election
  
  (6) For the purposes of this section, the penalty in respect of an election or an amended election referred to in paragraph 96(5)(a) or 96(5.1)(c) is 
  (a) where the election or amended election is made under subsection 97(2), an amount equal to the lesser of 
  (i) 1/4 of 1% of the amount by which the fair market value of the property disposed of by the taxpayer referred to therein at the time of disposition exceeds the amount agreed on by the taxpayer and the members of the partnership in the election or amended election, for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 96(4) to be made and ending on the day the election or amended election is made, and 
  (ii) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in subparagraph 96(6)(a)(i); and 
  (b) where the election is made under subsection 98(3), an amount equal to the lesser of 
  (i) 1/4 of 1% of the amount by which 
  (A) the total of all amounts of money and the fair market value of partnership property received by the persons referred to therein as consideration for their interests in the partnership at the time that the partnership ceased to exist exceeds 
  (B) the total of each such person’s proceeds of disposition of that person’s interest in the partnership as determined under paragraph 98(3)(a), for each month or part of a month during the period commencing with the day on or before which the election is required by subsection 96(4) to be made and ending on the day the election or amended election is made, and 
  (ii) an amount, not exceeding $8,000, equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period referred to in subparagraph 96(6)(b)(i). 
  
  ### Unpaid balance of penalty
  
  (7) The Minister shall, with all due dispatch, examine each election and amended election referred to in paragraph 96(5)(a) or 96(5.1)(c), assess the penalty payable and send a notice of assessment to the taxpayer or persons, as the case may be, and the taxpayer or persons, as the case may be, shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Foreign partnerships
  
  (8) For the purposes of this Act, where at a particular time a person resident in Canada becomes a member of a partnership, or a person who is a member of a partnership becomes resident in Canada, and immediately before the particular time no member of the partnership is resident in Canada, the following rules apply for the purpose of computing the partnership’s income for fiscal periods ending after the particular time: 
  (a) where, at or before the particular time, the partnership held depreciable property of a prescribed class (other than taxable Canadian property), 
  (i) no amount shall be included in determining the amounts for any of A, C, D and F to I in the definition 
  *undepreciated capital cost* in subsection 13(21) in respect of the acquisition or disposition before the particular time of the property, and  
  (ii) where the property is the partnership’s property at the particular time, the property shall be deemed to have been acquired, immediately after the particular time, by the partnership at a capital cost equal to the lesser of its fair market value and its capital cost to the partnership otherwise determined; 
  (b) in the case of the partnership’s property that is inventory (other than inventory of a business carried on in Canada) or non-depreciable capital property (other than taxable Canadian property) of the partnership at the particular time, its cost to the partnership shall be deemed to be, immediately after the particular time, equal to the lesser of its fair market value and its cost to the partnership otherwise determined; and 
  (c) any loss in respect of the disposition of a property (other than inventory of a business carried on in Canada or taxable Canadian property) by the partnership before the particular time shall be deemed to be nil. 
  (d)  [Repealed, 2016, c. 12, s. 32]  
  
  ### Application of foreign partnership rule
  
  (9) For the purposes of applying subsection (8) and this subsection, 
  (a) where it can reasonably be considered that one of the main reasons that a member of a partnership is resident in Canada is to avoid the application of subsection (8), the member is deemed not to be resident in Canada; and 
  (b) where at any time a particular partnership is a member of another partnership, 
  (i) each person or partnership that is, at that time, a member of the particular partnership is deemed to be a member of the other partnership at that time, 
  (ii) each person or partnership that becomes a member of the particular partnership at that time is deemed to become a member of the other partnership at that time, and 
  (iii) each person or partnership that ceases to be a member of the particular partnership at that time is deemed to cease to be a member of the other partnership at that time. 
  
  ### Contribution of property to partnership
  
  97 (1) Where at any time after 1971 a partnership has acquired property from a taxpayer who was, immediately after that time, a member of the partnership, the partnership shall be deemed to have acquired the property at an amount equal to its fair market value at that time and the taxpayer shall be deemed to have disposed of the property for proceeds equal to that fair market value. 
  
  ### Rules if election by partners
  
  (2) Notwithstanding any other provision of this Act other than subsections (3) and 13(21.2), where a taxpayer at any time disposes of any property (other than an eligible derivative, as defined in subsection 10.1(5), of the taxpayer if subsection 10.1(6) applies to the taxpayer) that is a capital property, Canadian resource property, foreign resource property or inventory of the taxpayer to a partnership that immediately after that time is a Canadian partnership of which the taxpayer is a member, if the taxpayer and all the other members of the partnership jointly so elect in prescribed form within the time referred to in subsection 96(4),  
  (a) the provisions of paragraphs 85(1)(a) to 85(1)(f) apply to the disposition as if 
  (i) the reference therein to “corporation’s cost” were read as a reference to “partnership’s cost”, 
  (ii) the references therein to “other than any shares of the capital stock of the corporation or a right to receive any such shares” and to “other than shares of the capital stock of the corporation or a right to receive any such shares” were read as references to “other than an interest in the partnership”, 
  (iii) the references therein to “shareholder of the corporation” were read as references to “member of the partnership”, 
  (iv) the references therein to “the corporation” were read as references to “all the other members of the partnership”, and 
  (v) the references therein to “to the corporation” were read as references to “to the partnership”; 
  (b) in computing, at any time after the disposition, the adjusted cost base to the taxpayer of the taxpayer’s interest in the partnership immediately after the disposition, 
  (i) there shall be added the amount, if any, by which the taxpayer’s proceeds of disposition of the property exceed the fair market value, at the time of the disposition, of the consideration (other than an interest in the partnership) received by the taxpayer for the property, and 
  (ii) there shall be deducted the amount, if any, by which the fair market value, at the time of the disposition, of the consideration (other than an interest in the partnership) received by the taxpayer for the property so disposed of by the taxpayer exceeds the fair market value of the property at the time of the disposition; and 
  (c) where the property so disposed of by the taxpayer to the partnership is taxable Canadian property of the taxpayer, the interest in the partnership received by the taxpayer as consideration for the property is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer. 
  
  ### Election not available — section 88
  
  (3) Subsection (2) does not apply to a disposition of a property by a taxpayer to a particular partnership if 
  (a) as part of a transaction or event or series of transactions or events that includes the disposition 
  (i) control of a taxable Canadian corporation (in this subsection referred to as the “subsidiary”) is acquired by another taxable Canadian corporation (in this paragraph referred to as the “parent”), 
  (ii) the subsidiary is wound up under subsection 88(1) or amalgamated with one or more other corporations under subsection 87(11), and 
  (iii) the parent makes a designation under paragraph 88(1)(d) in respect of an interest in a partnership; 
  (b) the disposition occurs after the acquisition of control of the subsidiary; 
  (c) the property 
  (i) is referred to in clauses (A) to (C) of the description of B in subparagraph 88(1)(d)(ii.1), or 
  (ii) is an interest in a partnership that holds, directly or indirectly through one or more partnerships, property referred to in clauses (A) to (C) of the description of B in subparagraph 88(1)(d)(ii.1); and 
  (d) the subsidiary is the taxpayer or has, before the disposition of the property, directly or indirectly in any manner whatever, an interest in the taxpayer. 
  (3.1)  [Repealed, 1998, c. 19, s. 124]  
  
  ### Where capital cost to partner exceeds proceeds of disposition
  
  (4) Where subsection 97(2) has been applicable in respect of the acquisition of any depreciable property by a partnership from a taxpayer who was, immediately after the taxpayer disposed of the property, a member of the partnership and the capital cost to the taxpayer of the property exceeds the taxpayer’s proceeds of the disposition, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a) 
  (a) the capital cost to the partnership of the property shall be deemed to be the amount that was the capital cost thereof to the taxpayer; and 
  (b) the excess shall be deemed to have been allowed to the partnership in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the partnership of the property. 
  
  ### Acquisition of certain tools — capital cost and deemed depreciation
  
  (5) If subsection (2) has applied in respect of the acquisition at any particular time of any depreciable property by a partnership from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the “individual’s original cost”) exceeds the individ­ual’s proceeds of disposition of the property, 
  (a) the capital cost to the partnership of the property is deemed to be equal to the individual’s original cost; and 
  (b) the amount by which the individual’s original cost exceeds the individual’s proceeds of disposition in respect of the property is deemed to have been deducted by the partnership under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that particular time. 
  
  ### Disposition of partnership property
  
  98 (1) For the purposes of this Act, where, but for this subsection, at any time after 1971 a partnership would be regarded as having ceased to exist, the following rules apply: 
  (a) until such time as all the partnership property and any property substituted therefor has been distributed to the persons entitled by law to receive it, the partnership shall be deemed not to have ceased to exist, and each person who was a partner shall be deemed not to have ceased to be a partner, 
  (b) the right of each such person to share in that property shall be deemed to be an interest in the partnership, and 
  (c) notwithstanding subsection 40(3), where at the end of a fiscal period of the partnership, in respect of an interest in the partnership, 
  (i) the total of all amounts required by subsection 53(2) to be deducted in computing the adjusted cost base to the taxpayer of the interest at that time exceeds 
  (ii) the total of the cost to the taxpayer of the interest determined for the purpose of computing the adjusted cost base to the taxpayer of that interest at that time and all amounts required by subsection 53(1) to be added to the cost to the taxpayer of the interest in computing the adjusted cost base to the taxpayer of that interest at that time, the amount of the excess shall be deemed to be a gain of the taxpayer for the taxpayer’s taxation year that includes that time from a disposition at that time of that interest. 
  
  ### Deemed proceeds
  
  (2) Subject to subsections 98(3) and 98(5) and 85(3), where at any time after 1971 a partnership has disposed of property to a taxpayer who was, immediately before that time, a member of the partnership, the partnership shall be deemed to have disposed of the property for proceeds equal to its fair market value at that time and the taxpayer shall be deemed to have acquired the property at an amount equal to that fair market value. 
  
  ### Rules applicable if partnership ceases to exist
  
  (3) If at any particular time after 1971 a Canadian partnership has ceased to exist and all the partnership property has been distributed to persons who were members of the partnership immediately before that time so that immediately after that time each such person has, in each such property, an undivided interest, or for civil law an undivided right (which undivided interest or undivided right is referred to in this subsection as an “undivided interest or right”, as the case may be) that, when expressed as a percentage (referred to in this subsection as that person’s “percentage”) of all undivided interests or rights in the property, is equal to the person’s undivided interest or right, when so expressed, in each other such property, if each such person has jointly so elected in respect of the property in prescribed form and within the time referred to in subsection 96(4), the following rules apply: 
  (a) each such person’s proceeds of the disposition of the person’s interest in the partnership shall be deemed to be an amount equal to the greater of 
  (i) the adjusted cost base to the person, immediately before the particular time, of the person’s interest in the partnership, and 
  (ii) the amount of any money received by the person on the cessation of the partnership’s existence, plus the person’s percentage of the total of amounts each of which is the cost amount to the partnership of each such property immediately before its distribution; 
  (b) the cost to each such person of that person’s undivided interest or right in each such property is deemed to be an amount equal to the total of 
  (i) that person’s percentage of the cost amount to the partnership of the property immediately before its distribution, and 
  (i.1)  [Repealed, 2016, c. 12, s. 34]  
  (ii) where the amount determined under subparagraph (a)(i) exceeds the amount determined under subparagraph (a)(ii), the amount determined under paragraph (c) in respect of the person’s undivided interest or right in the property; 
  (c) the amount determined under this paragraph in respect of each such person’s undivided interest or right in each such property that was a capital property (other than depreciable property) of the partnership is such portion of the excess, if any, described in subparagraph (b)(ii) as is designated by the person in respect of the property, except that 
  (i) in no case shall the amount so designated in respect of the person’s undivided interest or right in any such property exceed the amount, if any, by which the person’s percentage of the fair market value of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution, 
  (i.1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the person’s percentage of the fair market value of the property immediately after its distribution to the person is deemed to be determined by the formula is the amount that is the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution, is the portion of the amount by which the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution as may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time 
  (A) in the case of depreciable property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such depreciable property exceeds its cost amount, 
  (B) in the case of a Canadian resource property or a foreign resource property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of such Canadian or foreign resource property, or 
  (C) in the case of other property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such other property exceeds its cost amount, and 
  (ii) in no case shall the total of amounts so designated in respect of the person’s undivided interest or right in all such capital properties (other than depreciable property) exceed the excess, if any, described in subparagraph (b)(ii); 
  (e) if the property so distributed by the partnership was depreciable property of the partnership of a prescribed class and any such person’s percentage of the amount that was the capital cost to the partnership of that property exceeds the amount determined under paragraph (b) to be the cost to the person of the person’s undivided interest or right in the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a) 
  (i) the capital cost to the person of the person’s undivided interest or right in the property is deemed to be the person’s percentage of the amount that was the capital cost to the partnership of the property, and 
  (ii) the excess is deemed to have been allowed to the person in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the person of the undivided interest or right; and 
  (f) the partnership shall be deemed to have disposed of each such property for proceeds equal to the cost amount to the partnership of the property immediately before its distribution. 
  (g)  [Repealed, 2016, c. 12, s. 34]  
  
  ### Where s. (3) does not apply
  
  (4) Subsection 98(3) is not applicable in any case in which subsection 98(5) or 85(3) is applicable. 
  
  ### Where partnership business carried on as sole proprietorship
  
  (5) Where at any particular time after 1971 a Canadian partnership has ceased to exist and within 3 months after the particular time one, but not more than one, of the persons who were, immediately before the particular time, members of the partnership (which person is in this subsection referred to as the “proprietor”, whether an individual, a trust or a corporation) carries on alone the business that was the business of the partnership and continues to use, in the course of the business, any property that was, immediately before the particular time, partnership property and that was received by the proprietor as proceeds of disposition of the proprietor’s interest in the partnership, the following rules apply: 
  (a) the proprietor’s proceeds of disposition of the proprietor’s interest in the partnership shall be deemed to be an amount equal to the greater of 
  (i) the total of the adjusted cost base to the proprietor, immediately before the particular time, of the proprietor’s interest in the partnership, and the adjusted cost base to the proprietor of each other interest in the partnership deemed by paragraph 98(5)(g) to have been acquired by the proprietor at the particular time, and 
  (ii) the total of 
  (A) the cost amount to the partnership, immediately before the particular time, of each such property so received by the proprietor, and 
  (B) the amount of any other proceeds of the disposition of the proprietor’s interest in the partnership received by the proprietor; 
  (b) the cost to the proprietor of each such property shall be deemed to be an amount equal to the total of 
  (i) the cost amount to the partnership of the property immediately before that time, and 
  (i.1)  [Repealed, 2016, c. 12, s. 34]  
  (ii) where the amount determined under subparagraph 98(5)(a)(i) exceeds the amount determined under subparagraph 98(5)(a)(ii), the amount determined under paragraph 98(5)(c) in respect of the property; 
  (c) the amount determined under this paragraph in respect of each such property so received by the proprietor that is a capital property (other than depreciable property) of the proprietor is such portion of the excess, if any, described in subparagraph 98(5)(b)(ii) as is designated by the proprietor in respect of the property, except that 
  (i) in no case shall the amount so designated in respect of any such property exceed the amount, if any, by which the fair market value of the property immediately after the particular time exceeds the cost amount to the partnership of the property immediately before that time, 
  (i.1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the fair market value of the property immediately after the particular time is deemed to be determined by the formula is the amount that is the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution to the proprietor, is the portion of the amount by which the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution to the proprietor exceeds the cost amount to the partnership of the property immediately before its distribution that may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time 
  (A) in the case of depreciable property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such depreciable property exceeds its cost amount, 
  (B) in the case of a Canadian resource property or a foreign resource property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of such Canadian or foreign resource property, or 
  (C) in the case of a property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such property exceeds its cost amount, and 
  (ii) in no case shall the total of amounts so designated in respect of all such capital properties (other than depreciable property) exceed the excess, if any, described in subparagraph 98(5)(b)(ii); 
  (e) where any such property so received by the proprietor was depreciable property of a prescribed class of the partnership and the amount that was the capital cost to the partnership of that property exceeds the amount determined under paragraph 98(5)(b) to be the cost to the proprietor of the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a) 
  (i) the capital cost to the proprietor of the property shall be deemed to be the amount that was the capital cost to the partnership of the property, and 
  (ii) the excess shall be deemed to have been allowed to the proprietor in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the proprietor of the property; 
  (f) the partnership shall be deemed to have disposed of each such property for proceeds equal to the cost amount to the partnership of the property immediately before the particular time; and 
  (g) where, at the particular time, all other persons who were members of the partnership immediately before that time have disposed of their interests in the partnership to the proprietor, the proprietor shall be deemed at that time to have acquired partnership interests from those other persons and not to have acquired any property that was property of the partnership. 
  (h)  [Repealed, 2016, c. 12, s. 34]  
  
  ### Continuation of predecessor partnership by new partnership
  
  (6) Where a Canadian partnership (in this subsection referred to as the “predecessor partnership”) has ceased to exist at any particular time after 1971 and, at or before that time, all of the property of the predecessor partnership has been transferred to another Canadian partnership (in this subsection referred to as the “new partnership”) the only members of which were members of the predecessor partnership, the new partnership shall be deemed to be a continuation of the predecessor partnership and any member’s partnership interest in the new partnership shall be deemed to be a continuation of the member’s partnership interest in the predecessor partnership. 
  
  ### Depreciable property — leasehold interests and options
  
  (7) For the purposes of paragraphs (3)(c) and (5)(c), a leasehold interest in a depreciable property and an option to acquire a depreciable property are depreciable properties. 
  
  ### Residual interest in partnership
  
  98.1 (1) Where, but for this subsection, at any time after 1971 a taxpayer has ceased to be a member of a partnership of which the taxpayer was a member immediately before that time, the following rules apply: 
  (a) until such time as all the taxpayer’s rights (other than a right to a share of the income or loss of the partnership under an agreement referred to in subsection 96(1.1)) to receive any property of or from the partnership in satisfaction of the taxpayer’s interest in the partnership immediately before the time at which the taxpayer ceased to be a member of the partnership are satisfied in full, that interest (in this section referred to as a “residual interest”) is, subject to sections 70, 110.6 and 128.1 but notwithstanding any other section of this Act, deemed not to have been disposed of by the taxpayer and to continue to be an interest in the partnership; 
  (b) where all of the taxpayer’s rights described in paragraph 98.1(1)(a) are satisfied in full before the end of the fiscal period of the partnership in which the taxpayer ceased to be a member thereof, the taxpayer shall, notwithstanding paragraph 98.1(1)(a), be deemed not to have disposed of the taxpayer’s residual interest until the end of that fiscal period; 
  (c) notwithstanding subsection 40(3), where at the end of a fiscal period of the partnership, in respect of a residual interest in the partnership, 
  (i) the total of all amounts required by subsection 53(2) to be deducted in computing the adjusted cost base to the taxpayer of the residual interest at that time exceeds 
  (ii) the total of the cost to the taxpayer of the residual interest determined for the purpose of computing the adjusted cost base to the taxpayer of that interest at that time and all amounts required by subsection 53(1) to be added to the cost to the taxpayer of the residual interest in computing the adjusted cost base to the taxpayer of that interest at that time the amount of the excess shall be deemed to be a gain of the taxpayer, for the taxpayer’s taxation year that includes that time, from a disposition at that time of that residual interest; and 
  (d) where a taxpayer has a residual interest 
  (i) by reason of paragraph (b), the taxpayer shall, except for the purposes of subsections 110.1(4) and 118.1(8), be deemed not to be a member of the partnership, and 
  (ii) in any other case, the taxpayer shall, except for the purposes of subsection 85(3), be deemed not to be a member of the partnership. 
  
  ### Continuation of original partnership
  
  (2) Where a partnership (in this subsection referred to as the “original partnership”) has or would but for subsection 98(1) have ceased to exist at a time when a taxpayer had rights described in paragraph 98.1(1)(a) in respect of that partnership and the members of another partnership agree to satisfy all or part of those rights, that other partnership shall, for the purposes of that paragraph, be deemed to be a continuation of the original partnership. 
  
  ### Transfer of interest on death
  
  98.2 Where by virtue of the death of an individual a taxpayer has acquired a property that was an interest in a partnership to which, immediately before the individual’s death, section 98.1 applied, 
  (a) the taxpayer shall be deemed to have acquired a right to receive partnership property and not to have acquired an interest in a partnership; 
  (b) the taxpayer shall be deemed to have acquired the right referred to in paragraph 98.2(a) at a cost equal to the amount determined to be the proceeds of disposition of the interest in the partnership to the deceased individual by virtue of paragraph 70(5)(a) or (6)(d), as the case may be; and 
  (c) section 43 is not applicable to the right. 
  
  ### Fiscal period of terminated partnership
  
  99 (1) Subject to subsection (2), if, at any particular time in a fiscal period of a partnership, the partnership would, if this Act were read without reference to subsection 98(1), have ceased to exist, the fiscal period is deemed to have ended immediately before the time that is immediately before that particular time. 
  
  ### Fiscal period of terminated partnership for individual member
  
  (2) Where an individual was a member of a partnership that, at any time in a fiscal period of a partnership, has or would have, but for subsection 98(1), ceased to exist, for the purposes of computing the individual’s income for a taxation year the partnership’s fiscal period may, if the individual so elects and subsection 249.1(4) does not apply in respect of the partnership, be deemed to have ended immediately before the time when the fiscal period of the partnership would have ended if the partnership had not so ceased to exist. 
  
  ### Validity of election
  
  (3) An election under subsection 99(2) is not valid unless the individual was resident in Canada at the time when the fiscal period of the partnership would, if the election were valid, be deemed to have ended. 
  
  ### Idem
  
  (4) An election under subsection 99(2) is not valid if, for the individual’s taxation year in which a fiscal period of the partnership would not, if the election were valid, be deemed to have ended but in which it would otherwise have ended, the individual elects to have applicable the rules set out in the Income Tax Application Rules that apply when two or more fiscal periods of a partnership end in the same taxation year.  
  
  ### Disposition of interest in partnership
  
  100 (1) If, as part of a transaction or event or series of transactions or events, a taxpayer disposes of an interest in a partnership and an interest in the partnership is acquired by a person or partnership described in any of paragraphs (1.1)(a) to (d), then notwithstanding paragraph 38(a), the taxpayer’s taxable capital gain for a taxation year from the disposition of the interest is deemed to be the total of 
  (a) 1/2 of such portion of the taxpayer’s capital gain for the year from the disposition as may reasonably be regarded as attributable to increases in the value of any partnership property of the partnership that is capital property (other than depreciable property) held directly by the partnership or held indirectly by the partnership through one or more other partnerships, and 
  (b) the whole of the remaining portion of that capital gain. 
  
  ### Acquisition by certain persons or partnerships
  
  (1.1) Subject to subsection (1.2), subsection (1) applies in respect of a disposition of a partnership interest by a taxpayer if the interest is acquired by 
  (a) a person exempt from tax under section 149; 
  (b) a non-resident person; 
  (c) another partnership to the extent that the interest can reasonably be considered to be held, at the time of its acquisition by the other partnership, indirectly through one or more partnerships, by a person that is 
  (i) exempt from tax under section 149, 
  (ii) a non-resident, or 
  (iii) a trust resident in Canada (other than a mutual fund trust) if 
  (A) an interest as a beneficiary (in this subsection and subsection (1.2) having the meaning assigned by subsection 108(1)) under the trust is held, directly or indirectly through one or more other partnerships, by a person that is exempt from tax under section 149 or that is a trust (other than a mutual fund trust), and 
  (B) the total fair market value of the interests as beneficiaries under the trust held by persons referred to in clause (A) exceeds 10% of the fair market value of all the interests as beneficiaries under the trust; or 
  (d) a trust resident in Canada (other than a mutual fund trust) to the extent that the trust can reasonably be considered to have a beneficiary that is 
  (i) exempt from tax under section 149, 
  (ii) a partnership, if 
  (A) an interest in the partnership is held, whether directly or indirectly through one or more other partnerships, by one or more persons that are exempt from tax under section 149 or are trusts (other than mutual fund trusts), and 
  (B) the total fair market value of the interests held by persons referred to in clause (A) exceeds 10% of the fair market value of all the interests in the partnership, or 
  (iii) another trust (other than a mutual fund trust), if 
  (A) one or more beneficiaries under the other trust are a person exempt from tax under section 149, a partnership or a trust (other than a mutual fund trust), and 
  (B) the total fair market value of the interests as beneficiaries under the other trust held by the beneficiaries referred to in clause (A) exceeds 10% of the fair market value of all the interests as beneficiaries under the other trust. 
  
  ###  De minimis 
  
  (1.2) Subsection (1) does not apply to a taxpayer’s disposition of a partnership interest to a partnership or trust described in paragraph (1.1)(c) or (d) — other than a trust under which the amount of the income or capital to be distributed at any time in respect of any interest as a beneficiary under the trust depends on the exercise by any person or partnership of, or the failure by any person or partnership to exercise, any discretionary power — if the extent to which subsection (1) would, but for this subsection, apply to the taxpayer’s disposition of the interest because of subsection (1.1) does not exceed 10% of the taxpayer’s interest. 
  
  ### Exception — non-resident person
  
  (1.3) Subsection (1) does not apply in respect of a disposition of an interest in a partnership by a taxpayer to a person referred to in paragraph (1.1)(b) if 
  (a) property of the partnership is used, immediately before and immediately after the acquisition of the interest by the non-resident person, in carrying on business through one or more permanent establishments in Canada; and 
  (b) the total fair market value of the property referred to in paragraph (a) equals at least 90% of the total fair market value of all property of the partnership. 
  
  ### Anti-avoidance — dilution
  
  (1.4) Subsection (1.5) applies in respect of a taxpayer’s interest in a partnership if 
  (a) it is reasonable to conclude that one of the purposes of a dilution, reduction or alteration of the interest was to avoid the application of subsection (1) in respect of the interest; and 
  (b) as part of a transaction or event or series of transactions or events that includes the dilution, reduction or alteration, there is 
  (i) an acquisition of an interest in the partnership by a person or partnership described in any of paragraphs (1.1)(a) to (d), or 
  (ii) an increase in, or alteration of, an interest in the partnership held by a person or partnership described in any of paragraphs (1.1)(a) to (d). 
  
  ### Deemed gain — dilution
  
  (1.5) If this subsection applies in respect of a particular interest in a partnership of a taxpayer, then for the purposes of subsection (1), 
  (a) the taxpayer is deemed to have disposed of an interest in the partnership at the time of the dilution, reduction or alteration; 
  (b) the taxpayer is deemed to have a capital gain from the disposition equal to the amount by which the fair market value of the particular interest immediately before the dilution, reduction or alteration exceeds its fair market value immediately thereafter; and 
  (c) the person or partnership referred to in paragraph (1.4)(b) is deemed to have acquired an interest in the partnership as part of the transaction or event or series of transactions or events that includes the disposition referred to in paragraph (a). 
  
  ### Gain from disposition of interest in partnership
  
  (2) In computing a taxpayer’s gain for a taxation year from the disposition of an interest in a partnership, there shall be included, in addition to the amount thereof determined under subsection 40(1), the amount, if any, by which 
  (a) the total of all amounts required by subsection 53(2) to be deducted in computing the adjusted cost base to the taxpayer, immediately before the disposition, of the interest in the partnership, exceeds 
  (b) the total of 
  (i) the cost to the taxpayer of the interest in the partnership determined for the purpose of computing the adjusted cost base to the taxpayer of that interest at that time, and 
  (ii) all amounts required by subsection 53(1) to be added to the cost to the taxpayer of that interest in computing the adjusted cost base to the taxpayer of that interest at that time. 
  
  ### Idem
  
  (2.1) Where, as a result of an amalgamation or merger, an interest in a partnership owned by a predecessor corporation has become property of the new corporation formed as a result of the amalgamation or merger and the predecessor corporation was not related to the new corporation, the predecessor corporation shall be deemed to have disposed of the interest in the partnership to the new corporation immediately before the amalgamation or merger for proceeds of disposition equal to the adjusted cost base to the predecessor corporation of the interest in the partnership at the time of the disposition and the new corporation shall be deemed to have acquired the interest in the partnership from the predecessor corporation immediately after that time at a cost equal to the proceeds of disposition. 
  
  ### Transfer of interest on death
  
  (3) Where by virtue of the death of an individual a taxpayer has acquired a property that was an interest in a partnership immediately before the individual’s death (other than an interest to which, immediately before the individual’s death, section 98.1 applied) and the taxpayer is not a member of the partnership and does not become a member of the partnership by reason of that acquisition, 
  (a) the taxpayer shall be deemed to have acquired a right to receive partnership property and not to have acquired an interest in a partnership; 
  (b) the taxpayer shall be deemed to have acquired the right referred to in paragraph 100(3)(a) at a cost equal to the amount determined to be the proceeds of disposition of the interest in the partnership to the deceased individual by virtue of paragraph 70(5)(a) or 70(6)(d), as the case may be; and 
  (c) section 43 is not applicable to the right. 
  
  ### Loss re interest in partnership
  
  (4) Notwithstanding paragraph 39(1)(b), the capital loss of a taxpayer from the disposition at any time of an interest in a partnership is deemed to be the amount of the loss otherwise determined minus the total of all amounts each of which is the amount by which the taxpayer’s share of the partnership’s loss, in respect of a share of the capital stock of a corporation that was property of a particular partnership at that time, would have been reduced under subsection 112(3.1) if the fiscal period of every partnership that includes that time had ended immediately before that time and the particular partnership had disposed of the share immediately before the end of that fiscal period for proceeds equal to its fair market value at that time. 
  
  ### Replacement of partnership capital
  
  (5) A taxpayer who pays an amount at any time in a taxation year is deemed to have a capital loss from a disposition of property for the year if 
  (a) the taxpayer disposed of an interest in a partnership before that time or, because of subsection (3), acquired before that time a right to receive property of a partnership; 
  (b) that time is after the disposition or acquisition, as the case may be; 
  (c) the amount would have been described in subparagraph 53(1)(e)(iv) had the taxpayer been a member of the partnership at that time; and 
  (d) the amount is paid pursuant to a legal obligation of the taxpayer to pay the amount. 
  
  ### Disposition of farmland by partnership
  
  101 Where a taxpayer was a member of a partnership at the end of a taxation year of the partnership in which the partnership disposed of land used in a farming business of the partnership, there may be deducted in computing the taxpayer’s income for the taxpayer’s taxation year in which the taxation year of the partnership ended, 1/2 of the total of all amounts each of which is an amount in respect of that taxation year of the taxpayer or any preceding taxation year of the taxpayer ending after 1971, equal to the taxpayer’s loss, if any, for the year from the farming business, to the extent that the loss 
  (a) was, by virtue of section 31, not deductible in computing the taxpayer’s income for the year; 
  (b) was not deducted for the purpose of computing the taxpayer’s taxable income for the taxpayer’s taxation year in which the partnership’s taxation year in which the land was disposed of ended, or for any preceding taxation year of the taxpayer; 
  (c) did not exceed that proportion of the total of 
  (i) taxes (other than income or profits taxes or taxes imposed by reference to the transfer of the property) paid by the partnership in its taxation year ending in the year or payable by it in respect of that taxation year to a province or a Canadian municipality in respect of the property, and 
  (ii) interest paid by the partnership in its taxation year ending in the year or payable by it in respect of that taxation year, pursuant to a legal obligation to pay interest on borrowed money used to acquire the property or on any amount as consideration payable for the property, (to the extent that the taxes and interest were included in computing the loss of the partnership for that taxation year from the farming business), that 
  (iii) the taxpayer’s loss from the farming business for the year is of 
  (iv) the partnership’s loss from the farming business for its taxation year ending in the year; and 
  (d) did not exceed the remainder obtained when 
  (i) the total of each of the taxpayer’s losses from the farming business for taxation years preceding the year (to the extent that those losses are included in computing the amount determined under this section in respect of the taxpayer) is deducted from 
  (ii) twice the amount of the taxpayer’s taxable capital gain from the disposition of the land. 
  
  ### Definition of 
  *Canadian partnership* 
  
  102 (1) In this Subdivision, 
  *Canadian partnership* means a partnership all of the members of which were, at any time in respect of which the expression is relevant, resident in Canada.  
  
  ### Member of a partnership
  
  (2) In this Subdivision, a reference to a person or a taxpayer who is a member of a particular partnership shall include a reference to another partnership that is a member of the particular partnership. 
  
  ### Agreement to share income, etc., so as to reduce or postpone tax otherwise payable
  
  103 (1) Where the members of a partnership have agreed to share, in a specified proportion, any income or loss of the partnership from any source or from sources in a particular place, as the case may be, or any other amount in respect of any activity of the partnership that is relevant to the computation of the income or taxable income of any of the members thereof, and the principal reason for the agreement may reasonably be considered to be the reduction or postponement of the tax that might otherwise have been or become payable under this Act, the share of each member of the partnership in the income or loss, as the case may be, or in that other amount, is the amount that is reasonable having regard to all the circumstances including the proportions in which the members have agreed to share profits and losses of the partnership from other sources or from sources in other places. 
  
  ### Agreement to share income, etc., in unreasonable proportions
  
  (1.1) Where two or more members of a partnership who are not dealing with each other at arm’s length agree to share any income or loss of the partnership or any other amount in respect of any activity of the partnership that is relevant to the computation of the income or taxable income of those members and the share of any such member of that income, loss or other amount is not reasonable in the circumstances having regard to the capital invested in or work performed for the partnership by the members thereof or such other factors as may be relevant, that share shall, notwithstanding any agreement, be deemed to be the amount that is reasonable in the circumstances. 
  
  ### Definition of 
  *losses* 
  
  (2) For the purposes of this section, the word 
  *losses* when used in the expression “profits and losses” means losses determined without reference to other provisions of this Act.  
  
  # SUBDIVISION K 
  
  ## Trusts and their Beneficiaries 
  
  ### Reference to trust or estate
  
  104 (1) In this Act, a reference to a trust or estate (in this Subdivision referred to as a “trust”) shall, unless the context otherwise requires, be read to include a reference to the trustee, executor, administrator, liquidator of a succession, heir or other legal representative having ownership or control of the trust property, but, except for the purposes of this subsection, subsection (1.1), section 150, subparagraph (b)(v) of the definition disposition in subsection 248(1) and paragraph (k) of that definition, a trust is deemed not to include an arrangement under which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property unless the trust is described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1).  
  
  ### Restricted meaning of beneficiary 
  
  (1.1) Notwithstanding subsection 248(25), for the purposes of subsection (1), paragraph (4)(a.4), subparagraph 73(1.02)(b)(ii) and paragraph 107.4(1)(e), a person or partnership is deemed not to be a beneficiary under a trust at a particular time if the person or partnership is beneficially interested in the trust at the particular time solely because of 
  (a) a right that may arise as a consequence of the terms of the will or other testamentary instrument of an individual who, at the particular time, is a beneficiary under the trust; 
  (b) a right that may arise as a consequence of the law governing the intestacy of an individual who, at that time, is a beneficiary under the trust; 
  (c) a right as a shareholder under the terms of the shares of the capital stock of a corporation that, at the particular time, is a beneficiary under the trust; 
  (d) a right as a member of a partnership under the terms of the partnership agreement, where, at the particular time, the partnership is a beneficiary under the trust; or 
  (e) any combination of rights described in paragraphs (a) to (d). 
  
  ### Taxed as individual
  
  (2) A trust shall, for the purposes of this Act, and without affecting the liability of the trustee or legal representative for that person’s own income tax, be deemed to be in respect of the trust property an individual, but where there is more than one trust and 
  (a) substantially all of the property of the various trusts has been received from one person, and 
  (b) the various trusts are conditioned so that the income thereof accrues or will ultimately accrue to the same beneficiary, or group or class of beneficiaries, such of the trustees as the Minister may designate shall, for the purposes of this Act, be deemed to be in respect of all the trusts an individual whose property is the property of all the trusts and whose income is the income of all the trusts. 
  
  ### Deemed disposition by trust
  
  (4) Every trust is, at the end of each of the following days, deemed to have disposed of each property of the trust (other than exempt property) that was capital property (other than depreciable property) or land included in the inventory of a business of the trust for proceeds equal to its fair market value (determined with reference to subsection 70(5.3)) at the end of that day and to have reacquired the property immediately after that day for an amount equal to that fair market value, and for the purposes of this Act those days are 
  (a) where the trust 
  (i) is a trust that was created by the will of a taxpayer who died after 1971 and that, at the time it was created, was a trust, 
  (i.1) is a trust that was created by the will of a taxpayer who died after 1971 to which property was transferred in circumstances to which paragraph 70(5.2)(c) (or, in the case of a transfer that occurred in a taxation year before 2007, (b) or (d), as those paragraphs read in their application to that taxation year) or (6)(d) applied, and that, immediately after any such property vested indefeasibly in the trust as a consequence of the death of the taxpayer, was a trust, 
  (ii) is a trust that was created after June 17, 1971 by a taxpayer during the taxpayer’s lifetime that, at any time after 1971, was a trust, or 
  (ii.1) is a trust (other than a trust the terms of which are described in clause (iv)(A) that elects in its return of income under this Part for its first taxation year that this subparagraph not apply) that was created after 1999 by a taxpayer during the taxpayer’s lifetime and that, at any time after 1999, was a trust under which 
  (iii) the taxpayer’s spouse or common-law partner was entitled to receive all of the income of the trust that arose before the spouse’s or common-law partner’s death and no person except the spouse or common-law partner could, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust, or 
  (iv) in the case of a trust described in subparagraph (ii.1) created by a taxpayer who had attained 65 years of age at the time the trust was created, 
  (A) the taxpayer was entitled to receive all of the income of the trust that arose before the taxpayer’s death and no person except the taxpayer could, before the taxpayer’s death, receive or otherwise obtain the use of any of the income or capital of the trust, 
  (B) the taxpayer or the taxpayer’s spouse was, in combination with the spouse or the taxpayer, as the case may be, entitled to receive all of the income of the trust that arose before the later of the death of the taxpayer and the death of the spouse and no other person could, before the later of those deaths, receive or otherwise obtain the use of any of the income or capital of the trust, or 
  (C) the taxpayer or the taxpayer’s common-law partner was, in combination with the common-law partner or the taxpayer, as the case may be, entitled to receive all of the income of the trust that arose before the later of the death of the taxpayer and the death of the common-law partner and no other person could, before the later of those deaths, receive or otherwise obtain the use of any of the income or capital of the trust, the day on which the death or the later death, as the case may be, occurs; 
  (a.1) where the trust is a pre-1972 spousal trust on January 1, 1993 and the spouse or common-law partner referred to in the definition pre-1972 spousal trust in subsection 108(1) in respect of the trust was  
  (i) in the case of a trust created by the will of a taxpayer, alive on January 1, 1976, and 
  (ii) in the case of a trust created by a taxpayer during the taxpayer’s lifetime, alive on May 26, 1976, the day that is the later of 
  (iii) the day on which that spouse or common-law partner dies, and 
  (iv) January 1, 1993; 
  (a.2) where the trust makes a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, it is reasonable to conclude that the distribution was financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual, the day on which the distribution is made (determined as if a day ends for the trust immediately after the time at which each distribution is made by the trust to a beneficiary in respect of the beneficiary’s capital interest in the trust); 
  (a.3) where property (other than property described in any of subparagraphs 128.1(4)(b)(i) to (iii)) has been transferred by a taxpayer after December 17, 1999 to the trust in circumstances to which subsection 73(1) applied, it is reasonable to conclude that the property was so transferred in anticipation that the taxpayer would subsequently cease to reside in Canada and the taxpayer subsequently ceases to reside in Canada, the first day after that transfer during which the taxpayer ceases to reside in Canada (determined as if a day ends for the trust immediately after each time at which the taxpayer ceases to be resident in Canada); 
  (a.4) where the trust is a trust to which property was transferred by a taxpayer who is an individual (other than a trust) in circumstances in which section 73 or subsection 107.4(3) applied, the transfer did not result in a change in beneficial ownership of that property and no person (other than the taxpayer) or partnership has any absolute or contingent right as a beneficiary under the trust (determined with reference to subsection (1.1)), the day on which the death of the taxpayer occurs; 
  (b) the day that is 21 years after the latest of 
  (i) January 1, 1972, 
  (ii) the day on which the trust was created, and 
  (iii) where applicable, the day determined under paragraph (a), (a.1) or (a.4) as those paragraphs applied from time to time after 1971; and 
  (c) the day that is 21 years after any day (other than a day determined under any of paragraphs (a) to (a.4)) that is, because of this subsection, a day on which the trust is deemed to have disposed of each such property. 
  
  ### Depreciable property
  
  (5) Every trust is, at the end of each day determined under subsection (4) in respect of the trust, deemed to have disposed of each property of the trust (other than exempt property) that was a depreciable property of a prescribed class of the trust for proceeds equal to its fair market value at the end of that day and to have reacquired the property immediately after that day at a capital cost (in this subsection referred to as the “deemed capital cost”) equal to that fair market value, except that 
  (a) where the amount that was the capital cost to the trust of the property immediately before the end of the day (in this paragraph referred to as the “actual capital cost”) exceeds the deemed capital cost to the trust of the property, for the purpose of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a) as they apply in respect of the property at any subsequent time, 
  (i) the capital cost to the trust of the property on its reacquisition shall be deemed to be the amount that was the actual capital cost to the trust of the property, and 
  (ii) the excess shall be deemed to have been allowed under paragraph 20(1)(a) to the trust in respect of the property in computing its income for taxation years that ended before the trust reacquired the property; 
  (b) for the purposes of this subsection, the reference to “at the end of a taxation year” in subsection 13(1) shall be read as a reference to “at the particular time a trust is deemed by subsection 104(5) to have disposed of depreciable property of a prescribed class”; and 
  (c) for the purpose of computing the excess, if any, referred to in subsection 13(1) at the end of the taxation year of a trust that included a day on which the trust is deemed by this subsection to have disposed of a depreciable property of a prescribed class, any amount that, on that day, was included in the trust’s income for the year under subsection 13(1) as it reads because of paragraph 104(5)(b), shall be deemed to be an amount included under section 13 in the trust’s income for a preceding taxation year. 
  
  ### NISA Fund No. 2
  
  (5.1) Every trust that holds an interest in a NISA Fund No. 2 that was transferred to it in circumstances to which paragraph 70(6.1)(b) applied is deemed, at the end of the day on which the spouse or common-law partner referred to in that paragraph dies, to have been paid an amount out of the fund equal to the balance at the end of that day in the fund so transferred. 
  
  ### Resource property
  
  (5.2) Where at the end of a day determined under subsection (4) in respect of a trust, the trust owns a Canadian resource property (other than an exempt property) or a foreign resource property (other than an exempt property), 
  (a) for the purposes of determining the amounts under subsection 59(1), paragraphs 59(3.2)(c) and (c.1), subsections 66(4) and 66.2(1), the definition cumulative Canadian development expense in subsection 66.2(5), the definition cumulative foreign resource expense in subsection 66.21(1), subsection 66.4(1) and the definition cumulative Canadian oil and gas property expense in subsection 66.4(5), the trust is deemed  
  (i) to have a taxation year (in this subsection referred to as the “old taxation year”) that ended at the end of that day and a new taxation year that begins immediately after that day, and 
  (ii) to have disposed, immediately before the end of the old taxation year, of each of those properties for proceeds that became receivable at that time equal to its fair market value at that time and to have reacquired, at the beginning of the new taxation year, each such property for an amount equal to that fair market value; and 
  (b) for the particular taxation year of the trust that included that day, the trust shall 
  (i) include in computing its income for the particular taxation year the amount, if any, determined under paragraph 59(3.2)(c) in respect of the old taxation year and the amount so included shall, for the purposes of the determination of B in the definition cumulative Canadian development expense in subsection 66.2(5), be deemed to have been included in computing its income for a preceding taxation year,  
  (i.1) include in computing its income for the particular taxation year the amount, if any, determined under paragraph 59(3.2)(c.1) in respect of the old taxation year and the amount so included is, for the purpose of determining the value of B in the definition cumulative foreign resource expense in subsection 66.21(1), deemed to have been included in computing its income for a preceding taxation year, and  
  (ii) deduct in computing its income for the particular taxation year the amount, if any, determined under subsection 66(4) in respect of the old taxation year and the amount so deducted shall, for the purposes of paragraph 66(4)(a), be deemed to have been deducted for a preceding taxation year. 
  (5.3) to (5.7)  [Repealed, 2013, c. 34, s. 231]  
  
  ### Trust transfers
  
  (5.8) Where capital property, land included in inventory, Canadian resource property or foreign resource property is transferred at a particular time by a trust (in this subsection referred to as the “transferor trust”) to another trust (in this subsection referred to as the “transferee trust”) in circumstances in which subsection 107(2) or 107.4(3) or paragraph (f) of the definition disposition in subsection 248(1) applies,  
  (a) for the purposes of applying subsections 104(4) to 104(5.2) after the particular time, 
  (i) subject to paragraphs (b) to (b.3), the first day (in this subsection referred to as the “disposition day”) that ends at or after the particular time that would, if this section were read without reference to paragraphs (4)(a.2) and (a.3), be determined in respect of the transferee trust is deemed to be the earliest of 
  (A) the first day ending at or after the particular time that would be determined under subsection 104(4) in respect of the transferor trust without regard to the transfer and any transaction or event occurring after the particular time, 
  (B) the first day ending at or after the particular time that would otherwise be determined under subsection 104(4) in respect of the transferee trust without regard to any transaction or event occurring after the particular time, 
  (C) the first day that ends at or after the particular time, where 
  (I) the transferor trust is a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust described in the definition pre-1972 spousal trust in subsection 108(1), and  
  (II) the spouse or common-law partner referred to in paragraph (4)(a) or in the definition pre-1972 spousal trust in subsection 108(1) is alive at the particular time,  
  (C.1) the first day that ends at or after the particular time, where 
  (I) the transferor trust is an alter ego trust, a trust to which paragraph (4)(a.4) applies or a joint spousal or common-law partner trust, and 
  (II) the taxpayer referred to in paragraph (4)(a) or (a.4), as the case may be, is alive at the particular time, and 
  (D) where 
  (I) the disposition day would, but for the application of this subsection to the transfer, be determined under paragraph 104(5.3)(a) in respect of the transferee trust, and 
  (II) the particular time is after the day that would, but for subsection 104(5.3), be determined under paragraph 104(4)(b) in respect of the transferee trust, the first day ending at or after the particular time, and 
  (ii) where the disposition day determined in respect of the transferee trust under subparagraph 104(5.8)(a)(i) is earlier than the day referred to in clause 104(5.8)(a)(i)(B) in respect of the transferee trust, subsections 104(4) to 104(5.2) do not apply to the transferee trust on the day referred to in clause 104(5.8)(a)(i)(B) in respect of the transferee trust; 
  (b) paragraph (a) does not apply in respect of the transfer where 
  (i) the transferor trust is a post-1971 spousal or common-law partner trust or a trust described in the definition pre-1972 spousal trust in subsection 108(1),  
  (ii) the spouse or common-law partner referred to in paragraph (4)(a) or in the definition pre-1972 spousal trust in subsection 108(1) is alive at the particular time, and  
  (iii) the transferee trust is a post-1971 spousal or common-law partner trust or a trust described in the definition pre-1972 spousal trust in subsection 108(1);  
  (b.1) paragraph (a) does not apply in respect of the transfer where 
  (i) the transferor trust is an alter ego trust, 
  (ii) the taxpayer referred to in paragraph (4)(a) is alive at the particular time, and 
  (iii) the transferee trust is an alter ego trust; 
  (b.2) paragraph (a) does not apply in respect of the transfer where 
  (i) the transferor trust is a joint spousal or common-law partner trust, 
  (ii) either the taxpayer referred to in paragraph (4)(a), or the spouse or common-law partner referred to in that paragraph, is alive at the particular time, and 
  (iii) the transferee trust is a joint spousal or common-law partner trust; 
  (b.3) paragraph (a) does not apply in respect of the transfer where 
  (i) the transferor trust is a trust to which paragraph (4)(a.4) applies, 
  (ii) the taxpayer referred to in paragraph (4)(a.4) is alive at the particular time, and 
  (iii) the transferee trust is a trust to which paragraph (4)(a.4) applies; and 
  (c) for the purposes of subsection 104(5.3), unless a day ending before the particular time has been determined under paragraph 104(4)(a.1) or 104(4)(b) or would, but for subsection 104(5.3), have been so determined, a day determined under subparagraph 104(5.8)(a)(i) shall be deemed to be a day determined under paragraph 104(4)(a.1) or 104(4)(b), as the case may be, in respect of the transferee trust. 
  
  ### Deduction in computing income of trust
  
  (6) Subject to subsections (7) to (7.1), for the purposes of this Part, there may be deducted in computing the income of a trust for a taxation year 
  (a) in the case of an employee trust, the amount by which the amount that would, but for this subsection, be its income for the year exceeds the amount, if any, by which 
  (i) the total of all amounts each of which is its income for the year from a business exceeds 
  (ii) the total of all amounts each of which is its loss for the year from a business; 
  (a.1) in the case of a trust governed by an employee benefit plan, such part of the amount that would, but for this subsection, be its income for the year as was paid in the year to a beneficiary; 
  (a.2) where the taxable income of the trust for the year is subject to tax under this Part because of paragraph 146(4)(c) or subsection 146.3(3.1), the part of the amount that, but for this subsection, would be the income of the trust for the year that was paid in the year to a beneficiary; 
  (a.3) in the case of a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, such part of its income for the year as became payable in the year to a beneficiary; 
  (a.4) in the case of an employee life and health trust, an amount that became payable by the trust in the year as a designated employee benefit (as defined in subsection 144.1(1)); and 
  (b) in any other case, the amount that the trust claims not exceeding the amount, if any, determined by the formula is the part of its income (determined without reference to this subsection and subsection (12)) for the year that became payable in the year to, or that was included under subsection 105(2) in computing the income of, a beneficiary, and is 
  (i) if the trust is a trust for which a day is to be determined under paragraph (4)(a) or (a.4) by reference to a death or later death, as the case may be, that has not occurred before the beginning of the year, the total of 
  (A) the part of its income (determined without reference to this subsection and subsection (12)) for the year that became payable in the year to, or that was included under subsection 105(2) in computing the income of, a beneficiary (other than an individual whose death is that death or later death, as the case may be), and 
  (B) the total of all amounts each of which 
  (I) is included in its income (determined without reference to this subsection and subsection (12)) for the year — if the year is the year in which that death or later death, as the case may be, occurs and paragraph (13.4)(b) does not apply in respect of the trust for the year — because of the application of subsection (4), (5), (5.1) or (5.2) or 12(10.2), and 
  (II) is not included in the amount determined for clause (A) for the year, and 
  (ii) if the trust is a SIFT trust for the year, the amount, if any, by which 
  (A) the amount determined for A for the trust for the year exceeds 
  (B) the amount, if any, by which the amount determined for A for the trust for the year exceeds its non-portfolio earnings for the year. 
  
  ### Non-resident beneficiary
  
  (7) No deduction may be made under subsection 104(6) in computing the income for a taxation year of a trust in respect of such part of an amount that would otherwise be its income for the year as became payable in the year to a beneficiary who was, at any time in the year, a designated beneficiary of the trust (as that expression applies for the purposes of section 210.3) unless, throughout the year, the trust was resident in Canada. 
  
  ### Trusts deemed to be resident in Canada
  
  (7.01) If a trust is deemed by subsection 94(3) to be resident in Canada for a taxation year for the purpose of computing the trust’s income for the year, the maximum amount deductible under subsection (6) in computing its income for the year is the amount, if any, by which 
  (a) the maximum amount that, if this Act were read without reference to this subsection, would be deductible under subsection (6) in computing its income for the year, exceeds 
  (b) the total of 
  (i) the portion of the trust’s designated income for the year (within the meaning assigned by section 210) that became payable in the year to a non-resident beneficiary under the trust in respect of an interest of the non-resident as a beneficiary under the trust, and 
  (ii) all amounts each of which is determined by the formula is an amount (other than an amount described in subparagraph (i)) that 
  (A) is paid or credited (having the meaning assigned by Part XIII) in the year to the trust, 
  (B) would, if this Act were read without reference to subparagraph 94(3)(a)(viii), paragraph 212(2)(b) and sections 216 and 217, be an amount as a consequence of the payment or crediting of which the trust would have been liable to tax under Part XIII, and 
  (C) becomes payable in the year by the trust to a non-resident beneficiary under the trust in respect of an interest of the non-resident as a beneficiary under the trust, and is 
  (A) 0.35, if the trust can establish to the satisfaction of the Minister that the non-resident beneficiary to whom the amount described in the description of A is payable is resident in a country with which Canada has a tax treaty under which the income tax that Canada may impose on the beneficiary in respect of the amount is limited, and 
  (B) 0.6, in any other case. 
  
  ### Limitation — amount claimed as gift
  
  (7.02) No deduction may be made under subsection (6) in computing the income for a taxation year of an estate that arose on and as a consequence of an individual’s death in respect of a payment to the extent that the payment is a gift in respect of which an amount is deducted under section 118.1 for any taxation year in computing the individual’s tax payable under this Part. 
  
  ### Capital interest greater than income interest
  
  (7.1) Where it is reasonable to consider that one of the main purposes for the existence of any term, condition, right or other attribute of an interest in a trust (other than a personal trust) is to give a beneficiary a percentage interest in the property of the trust that is greater than the beneficiary’s percentage interest in the income of the trust, no amount may be deducted under paragraph 104(6)(b) in computing the income of the trust. 
  
  ### Avoidance of s. (7.1)
  
  (7.2) Notwithstanding any other provision of this Act, where 
  (a) a taxpayer has acquired a right to or to acquire an interest in a trust, or a right to or to acquire a property of a trust, and 
  (b) it is reasonable to consider that one of the main purposes of the acquisition was to avoid the application of subsection 104(7.1) in respect of the trust, on a disposition of the right (other than pursuant to the exercise thereof), the interest or the property, there shall be included in computing the income of the taxpayer for the taxation year in which the disposition occurs the amount, if any, by which 
  (c) the proceeds of disposition of the right, interest or property, as the case may be, exceed 
  (d) the cost amount to the taxpayer of the right, interest or property, as the case may be. 
  (10) and (11)  [Repealed, 2013, c. 34, s. 231]  
  
  ### Deduction of amounts included in preferred beneficiaries’ incomes
  
  (12) There may be deducted in computing the income of a trust for a taxation year the lesser of 
  (a) the total of all amounts designated under subsection 104(14) by the trust in respect of the year, and 
  (b) the accumulating income of the trust for the year. 
  
  ### Income of beneficiary
  
  (13) There shall be included in computing the income for a particular taxation year of a beneficiary under a trust such of the following amounts as are applicable: 
  (a) in the case of a trust (other than a trust referred to in paragraph (a) of the definition trust in subsection 108(1)), such part of the amount that, but for subsections (6) and (12), would be the trust’s income for the trust’s taxation year that ended in the particular year as became payable in the trust’s year to the beneficiary; and  
  (b) in the case of a trust governed by an employee benefit plan to which the beneficiary has contributed as an employer, such part of the amount that, but for subsections (6) and (12), would be the trust’s income for the trust’s taxation year that ended in the particular year as was paid in the trust’s year to the beneficiary. 
  
  ### Amounts deemed not paid
  
  (13.1) Where a trust, in its return of income under this Part for a taxation year throughout which it was resident in Canada and not exempt from tax under Part I by reason of subsection 149(1), designates an amount in respect of a beneficiary under the trust, not exceeding the amount determined by the formula is the beneficiary’s share of the income of the trust for the year computed without reference to this Act, is the total of all amounts each of which is a beneficiary’s share of the income of the trust for the year computed without reference to this Act, is the total of all amounts each of which is an amount that, but for this subsection or subsection 104(13.2), would be included in computing the income of a beneficiary under the trust by reason of subsection 104(13) or 105(2) for the year, is the amount deducted under subsection 104(6) in computing the income of the trust for the year, and is equal to the amount determined by the trust for the year and used as the value of C for the purposes of the formula in subsection 104(13.2) or, if no amount is so determined, nil, the amount so designated shall be deemed, for the purposes of subsections 104(13) and 105(2), not to have been paid or to have become payable in the year to or for the benefit of the beneficiary or out of income of the trust. 
  
  ### Idem
  
  (13.2) Where a trust, in its return of income under this Part for a taxation year throughout which it was resident in Canada and not exempt from tax under Part I by reason of subsection 149(1), designates an amount in respect of a beneficiary under the trust, not exceeding the amount determined by the formula is the amount designated by the trust for the year in respect of the beneficiary under subsection 104(21), is the total of all amounts each of which has been designated for the year in respect of a beneficiary of the trust under subsection 104(21), and is the amount determined by the trust and used in computing all amounts each of which is designated by the trust for the year under this subsection, not exceeding the amount by which 
  (i) the total of all amounts each of which is an amount that, but for this subsection or subsection 104(13.1), would be included in computing the income of a beneficiary under the trust by reason of subsection 104(13) or 105(2) for the year exceeds 
  (ii) the amount deducted under subsection 104(6) in computing the income of the trust for the year, the amount so designated shall 
  (a) for the purposes of subsections (13) and 105(2) (except in the application of subsection (13) for the purposes of subsection (21)), be deemed not to have been paid or to have become payable in the year to or for the benefit of the beneficiary or out of income of the trust; and 
  (b) except for the purposes of subsection 104(21) as it applies for the purposes of subsections 104(21.1) and 104(21.2), reduce the amount of the taxable capital gains of the beneficiary otherwise included in computing the beneficiary’s income for the year by reason of subsection 104(21). 
  
  ### Invalid designation
  
  (13.3) Any designation made under subsection (13.1) or (13.2) by a trust in its return of income under this Part for a taxation year is invalid if the trust’s taxable income for the year, determined without reference to this subsection, is greater than nil. 
  
  ### Death of beneficiary — spousal and similar trusts
  
  (13.4) If an individual’s death occurs on a day in a particular taxation year of a trust and the death is the death or later death, as the case may be, referred to in paragraph (4)(a), (a.1) or (a.4) in respect of the trust, 
  (a) the particular year is deemed to end at the end of that day, a new taxation year of the trust is deemed to begin immediately after that day and, for the purpose of determining the trust’s fiscal period after the new taxation year began, the trust is deemed not to have established a fiscal period before the new taxation year began; 
  (b) subject to paragraph (b.1), the trust’s income (determined without reference to subsections (6) and (12)) for the particular year is, notwithstanding subsection (24), deemed 
  (i) to have become payable in the year to the individual, and 
  (ii) not 
  (A) to have become payable to another beneficiary, or 
  (B) to be included under subsection 105(2) in computing the individual’s income; 
  (b.1) paragraph (b) does not apply in respect of the trust for the particular year, unless 
  (i) the individual is resident in Canada immediately before the death, 
  (ii) the trust is, immediately before the death, a testamentary trust that 
  (A) is a post-1971 spousal or common-law partner trust, and 
  (B) was created by the will of a taxpayer who died before 2017, and 
  (iii) an election — made jointly between the trust and the legal representative administering the individual’s graduated rate estate in prescribed form — that paragraph (b) applies is filed with 
  (A) the individual’s return of income under this Part for the individual’s year, and 
  (B) the trust’s return of income under this Part for the particular year; and 
  (c) in respect of the particular year 
  (i) the references in paragraph 150(1)(c) to “year” and in subparagraph (a)(ii) of the definition balance-due day in subsection 248(1) to “taxation year” are to be read as “calendar year in which the taxation year ends”, and  
  (ii) the reference in subsection 204(2) of the Income Tax Regulations to “end of the taxation year” is to be read as “end of the calendar year in which the taxation year ends”.  
  
  ### Election by trust and preferred beneficiary
  
  (14) Where a trust and a preferred beneficiary under the trust for a particular taxation year of the trust jointly so elect in respect of the particular year in prescribed manner, such part of the accumulating income of the trust for the particular year as is designated in the election, not exceeding the allocable amount for the preferred beneficiary in respect of the trust for the particular year, shall be included in computing the income of the preferred beneficiary for the beneficiary’s taxation year in which the particular year ended and shall not be included in computing the income of any beneficiary of the trust for a subsequent taxation year. 
  (14.01) to (14.1)  [Repealed, 2014, c. 39, s. 26]  
  
  ### Allocable amount for preferred beneficiary
  
  (15) For the purpose of subsection 104(14), the allocable amount for a preferred beneficiary under a trust in respect of the trust for a taxation year is 
  (a) where the trust is an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust described in the definition pre-1972 spousal trust in subsection 108(1) at the end of the year and a beneficiary, referred to in paragraph (4)(a) or in that definition, is alive at the end of the year, an amount equal to  
  (i) if the preferred beneficiary is a beneficiary so referred to, the trust’s accumulating income for the year, and 
  (ii) in any other case, nil; 
  (b) where paragraph (a) does not apply and the preferred beneficiary’s interest in the trust is not solely contingent on the death of another beneficiary who has a capital interest in the trust and who does not have an income interest in the trust, the trust’s accumulating income for the year; and 
  (c) in any other case, nil. 
  
  ### SIFT deemed dividend
  
  (16) If an amount (in this subsection and section 122 referred to as the trust’s “non-deductible distributions amount” for the taxation year) is determined under subparagraph (ii) of the description of B in paragraph (6)(b) in respect of a SIFT trust for a taxation year 
  (a) each beneficiary under the SIFT trust to whom at any time in the taxation year an amount became payable by the trust is deemed to have received at that time a taxable dividend that was paid at that time by a taxable Canadian corporation; 
  (b) the amount of a dividend described in paragraph (a) as having been received by a beneficiary at any time in a taxation year is equal to the amount determined by the formula is the amount that became payable at that time by the SIFT trust to the beneficiary, is the total of all amounts, each of which became payable in the taxation year by the SIFT trust to a beneficiary under the SIFT trust, and is the SIFT trust’s non-deductible distributions amount for the taxation year; 
  (c) the amount of a dividend described in paragraph (a) in respect of a beneficiary under the SIFT trust is deemed for the purpose of subsection (13) not to be an amount payable to the beneficiary; and 
  (d) for the purposes of applying Part XIII in respect of each dividend described in paragraph (a), the SIFT trust is deemed to be a corporation resident in Canada that paid the dividend. 
  
  ### Trust for minor
  
  (18) Where any part of the amount that, but for subsections 104(6) and 104(12), would be the income of a trust for a taxation year throughout which it was resident in Canada 
  (a) has not become payable in the year, 
  (b) was held in trust for an individual who did not attain 21 years of age before the end of the year, 
  (c) the right to which vested at or before the end of the year otherwise than because of the exercise by any person of, or the failure of any person to exercise, any discretionary power, and 
  (d) the right to which is not subject to any future condition (other than a condition that the individual survive to an age not exceeding 40 years), notwithstanding subsection 104(24), that part of the amount is, for the purposes of subsections 104(6) and 104(13), deemed to have become payable to the individual in the year. 
  
  ### Designation in respect of taxable dividends
  
  (19) A portion of a taxable dividend received by a trust, in a particular taxation year of the trust, on a share of the capital stock of a taxable Canadian corporation is, for the purposes of this Act other than Part XIII, deemed to be a taxable dividend on the share received by a taxpayer, in the taxpayer’s taxation year in which the particular taxation year ends, and is, for the purposes of paragraphs 82(1)(b) and 107(1)(c) and (d) and section 112, deemed not to have been received by the trust, if 
  (a) an amount equal to that portion 
  (i) is designated by the trust, in respect of the taxpayer, in the trust’s return of income under this Part for the particular taxation year, and 
  (ii) may reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust) to be part of the amount that, because of paragraph (13)(a), subsection (14) or section 105, was included in computing the income for that taxation year of the taxpayer; 
  (b) the taxpayer is in the particular taxation year a beneficiary under the trust; 
  (c) the trust is, throughout the particular taxation year, resident in Canada; and 
  (d) the total of all amounts each of which is an amount designated, under this subsection, by the trust in respect of a beneficiary under the trust in the trust’s return of income under this Part for the particular taxation year is not greater than the total of all amounts each of which is the amount of a taxable dividend, received by the trust in the particular taxation year, on a share of the capital stock of a taxable Canadian corporation. 
  
  ### Designation in respect of non-taxable dividends
  
  (20) The portion of the total of all amounts, each of which is the amount of a dividend (other than a taxable dividend) paid on a share of the capital stock of a corporation resident in Canada to a trust during a taxation year of the trust throughout which the trust was resident in Canada, that can reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be part of an amount that became payable in the year to a particular beneficiary under the trust shall be designated by the trust in respect of the particular beneficiary in the return of the trust’s income for the year for the purposes of subclause 53(2)(h)(i.1)(B)(II), paragraphs 107(1)(c) and 107(1)(d) and subsections 112(3.1), 112(3.2), 112(3.31) and 112(4.2). 
  
  ### Designation in respect of taxable capital gains
  
  (21) For the purposes of sections 3 and 111, except as they apply for the purposes of section 110.6, and subject to paragraph 132(5.1)(b), an amount in respect of a trust’s net taxable capital gains for a particular taxation year of the trust is deemed to be a taxable capital gain, for the taxation year of a taxpayer in which the particular taxation year ends, from the disposition by the taxpayer of capital property if 
  (a) the amount 
  (i) is designated by the trust, in respect of the taxpayer, in the trust’s return of income under this Part for the particular taxation year, and 
  (ii) may reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust) to be part of the amount that, because of paragraph (13)(a), subsection (14) or section 105, was included in computing the income for that taxation year of the taxpayer; 
  (b) the taxpayer is 
  (i) in the particular taxation year, a beneficiary under the trust, and 
  (ii) resident in Canada, unless the trust is, throughout the particular taxation year, a mutual fund trust; 
  (c) the trust is, throughout the particular taxation year, resident in Canada; and 
  (d) the total of all amounts each of which is an amount designated, under this subsection, by the trust in respect of a beneficiary under the trust in the trust’s return of income under this Part for the particular taxation year is not greater than the trust’s net taxable capital gains for the particular taxation year. 
  
  ### Late, amended or revoked designation
  
  (21.01) A trust that has filed its return of income for its taxation year that includes February 22, 1994 may subsequently designate an amount under subsection 104(21), or amend or revoke a designation made under that subsection where the designation, amendment or revocation 
  (a) is made solely because of an increase or decrease in the net taxable capital gains of the trust for the year that results from an election or revocation to which subsection 110.6(25), 110.6(26) or 110.6(27) applies; and 
  (b) is filed with the Minister, with an amended return of income for the year, when the election or revocation referred to in paragraph 104(21.01)(a) is filed with the Minister. 
  
  ### Late, amended or revoked designation
  
  (21.02) A designation, amendment or revocation under subsection 104(21.01) that affects an amount determined in respect of a beneficiary under subsection 104(21.2) may be made only where the trust 
  (a) designates an amount, or amends or revokes a designation made, under subsection 104(21.2) in respect of the beneficiary; and 
  (b) files the designation, amendment or revocation referred to in paragraph 104(21.02)(a) with the Minister when required by paragraph 104(21.01)(b). 
  
  ### Late, amended or revoked designation
  
  (21.03) Where a trust designates an amount, or amends or revokes a designation, under subsection 104(21) or 104(21.2) in accordance with subsection 104(21.01), 
  (a) the designation or amended designation, as the case may be, is deemed to have been made in the trust’s return of income for the trust’s taxation year that includes February 22, 1994; and 
  (b) the designation that was revoked is deemed, other than for the purposes of this subsection and subsections 104(21.01) and 104(21.02), never to have been made. 
  (21.1)  [Repealed, 2013, c. 34, s. 231]  
  
  ### Beneficiaries’ taxable capital gain
  
  (21.2) Where, for the purposes of subsection (21), a personal trust or a trust referred to in subsection 7(2) designates an amount in respect of a beneficiary in respect of its net taxable capital gains for a taxation year (in this subsection referred to as the “designation year”), 
  (a) the trust shall in its return of income under this Part for the designation year designate an amount in respect of its eligible taxable capital gains, if any, for the designation year in respect of the beneficiary equal to the amount determined in respect of the beneficiary under each of subparagraphs 104(21.2)(b)(i) and 104(21.2)(b)(ii); and 
  (b) the beneficiary is, for the purposes of section 120.4 and for the purposes of sections 3, 74.3 and 111 as they apply for the purposes of section 110.6, 
  (i) deemed to have disposed of the capital property referred to in clause (ii)(A), (B) or (C) if a taxable capital gain is determined in respect of the beneficiary for the beneficiary’s taxation year in which the designation year ends under those clauses, and 
  (ii) deemed to have a taxable capital gain for the beneficiary’s taxation year in which the designation year ends 
  (A) from a disposition of a capital property that is qualified farm or fishing property (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula and 
  (B) from a disposition of a capital property that is a qualified small business corporation share (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula is the lesser of 
  (I) the amount determined by the formula is the total of amounts designated under subsection (21) for the designation year by the trust, and is the total of amounts designated under subsection (13.2) for the designation year by the trust, and 
  (II) the trust’s eligible taxable capital gains for the designation year, is the amount, if any, by which the amount designated under subsection (21) for the designation year by the trust in respect of the beneficiary exceeds the amount designated under subsection (13.2) for the year by the trust in respect of the beneficiary for the taxation year, is the amount, if any, that would be determined under paragraph 3(b) for the designation year in respect of the trust’s capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties of the trust, is the total of all amounts each of which is the amount determined for B for the designation year in respect of a beneficiary under the trust, is the total of the amounts determined for C and F for the designation year in respect of the beneficiary, and is the amount, if any, that would be determined under paragraph 3(b) for the designation year in respect of the trust’s capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified small business corporation shares of the trust, other than qualified farm property, qualified fishing property or qualified farm or fishing property,  [Repealed, 2014, c. 39, s. 26]  
  (C)  [Repealed, 2014, c. 39, s. 26]  and for the purposes of section 110.6, those capital properties shall be deemed to have been disposed of by the beneficiary in that taxation year of the beneficiary. 
  
  ### Beneficiaries QFFP taxable capital gain
  
  (21.21) If clause (21.2)(b)(ii)(A) applies to deem, for the purposes of section 110.6, the beneficiary under a trust to have a taxable capital gain (referred to in this subsection as the “QFFP taxable capital gain”) from a disposition of capital property that is qualified farm or fishing property of the beneficiary, for the beneficiary’s taxation year that ends on or after April 21, 2015, and in which the designation year of the trust ends, for the purposes of subsection 110.6(2.2), the beneficiary is, if the trust complies with the requirements of subsection (21.22), deemed to have a taxable capital gain from the disposition of qualified farm or fishing property of the beneficiary on or after April 21, 2015 equal to the amount determined by the formula is the amount of the QFFP taxable capital gain; is, if the designation year of the trust ends on or after April 21, 2015, the amount that would be determined in respect of the trust for the designation year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm or fishing properties of the trust that were disposed of by the trust on or after April 21, 2015; and is, if the designation year of the trust ends on or after April 21, 2015, the amount that would be determined in respect of the trust for the designation year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm or fishing properties. 
  
  ### Trusts to designate amounts
  
  (21.22) A trust shall determine and designate, in its return of income under this Part for a designation year of the trust, the amount that is determined under subsection (21.21) to be the beneficiary’s taxable capital gain from the disposition on or after April 21, 2015 of qualified farm or fishing property of the beneficiary. 
  (21.23) and (21.24)  [Repealed, 2014, c. 39, s. 26]  
  
  ### Net taxable capital gains of trust determined
  
  (21.3) For the purposes of this section, the net taxable capital gains of a trust for a taxation year is the amount, if any, determined by the formula is the total of all amounts each of which is a taxable capital gain of the trust for the year from the disposition of a capital property that was held by the trust immediately before the disposition, is the total of all amounts each of which is deemed by subsection (21) to be a taxable capital gain of the trust for the year, is the total of all amounts each of which is an allowable capital loss (other than an allowable business investment loss) of the trust for the year from the disposition of a capital property, and is the amount, if any, deducted under paragraph 111(1)(b) in computing the trust’s taxable income for the year. 
  (21.4) to (21.7)  [Repealed, 2013, c. 34, s. 231]  
  
  ### Designation in respect of foreign source income
  
  (22) For the purposes of this subsection, subsection (22.1) and section 126, an amount in respect of a trust’s income for a particular taxation year of the trust from a source in a country other than Canada is deemed to be income of a taxpayer, for the taxation year of the taxpayer in which the particular taxation year ends, from that source if 
  (a) the amount 
  (i) is designated by the trust, in respect of the taxpayer, in the trust’s return of income under this Part for the particular taxation year, and 
  (ii) may reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust) to be part of the amount that, because of paragraph (13)(a) or subsection (14), was included in computing the income for that taxation year of the taxpayer; 
  (b) the taxpayer is in the particular taxation year a beneficiary under the trust; 
  (c) the trust is, throughout the particular taxation year, resident in Canada; and 
  (d) the total of all amounts each of which is an amount designated, under this subsection in respect of that source, by the trust in respect of a beneficiary under the trust in the trust’s return of income under this Part for the particular taxation year is not greater than the trust’s income for the particular taxation year from that source. 
  
  ### Foreign tax deemed paid by beneficiary
  
  (22.1) Where a taxpayer is a beneficiary under a trust, for the purposes of this subsection and section 126, the taxpayer shall be deemed to have paid as business-income tax or non-business-income tax, as the case may be, for a particular taxation year in respect of a source the amount determined by the formula is the amount that, but for subsection 104(22.3), would be the business-income tax or non-business-income tax, as the case may be, paid by the trust in respect of the source for a taxation year (in this subsection referred to as “that year”) of the trust that ends in the particular year; is the amount deemed, because of a designation under subsection 104(22) for that year by the trust, to be the taxpayer’s income from the source; and is the trust’s income for that year from the source. 
  
  ### Recalculation of trust’s foreign source income
  
  (22.2) For the purpose of section 126, there shall be deducted in computing a trust’s income from a source for a taxation year the total of all amounts deemed, because of designations under subsection 104(22) by the trust for the year, to be income of beneficiaries under the trust from that source. 
  
  ### Recalculation of trust’s foreign tax
  
  (22.3) For the purpose of section 126, there shall be deducted in computing the business-income tax or non-business-income tax paid by a trust for a taxation year in respect of a source the total of all amounts deemed, because of designations under subsection 104(22) by the trust for the year, to be paid by beneficiaries under the trust as business-income tax or non-business-income tax, as the case may be, in respect of the source. 
  
  ### Definitions
  
  (22.4) For the purposes of subsections 104(22) to 104(22.3), the expressions 
  *business-income tax* and 
  *non-business-income tax* have the meanings assigned by subsection 126(7).  
  
  ### Deceased beneficiary of graduated rate estate
  
  (23) In the case of a trust that is a graduated rate estate, 
  (a) and (b)  [Repealed, 2013, c. 34, s. 231]  
  (c) the income of a person for a taxation year from the trust shall be deemed to be the person’s benefits from or under the trust for the taxation year or years of the trust that ended in the year determined as provided by this section and section 105; and 
  (d) where an individual having income from the trust died after the end of a taxation year of the trust but before the end of the calendar year in which the taxation year ended, the individual’s income from the trust for the period commencing immediately after the end of the taxation year and ending at the time of death shall be included in computing the individual’s income for the individual’s taxation year in which the individual died unless the individual’s legal representative has elected otherwise, in which case the legal representative shall file a separate return of income for the period under this Part and pay the tax for the period under this Part as if 
  (i) the individual were another person, 
  (ii) the period were a taxation year, 
  (iii) that other person’s only income for the period were the individual’s income from the trust for that period, and 
  (iv) subject to sections 114.2 and 118.93, that other person were entitled to the deductions to which the individual was entitled under sections 110, 118 to 118.7 and 118.9 for the period in computing the individual’s taxable income or tax payable under this Part, as the case may be, for the period. 
  (e)  [Repealed, 2014, c. 39, s. 26]  
  
  ### Amount payable
  
  (24) For the purposes of subsections (6), (7), (7.01), (13), (16) and (20), subparagraph 53(2)(h)(i.1) and subsections 94(5.2) and (8), an amount is deemed not to have become payable to a beneficiary in a taxation year unless it was paid in the year to the beneficiary or the beneficiary was entitled in the year to enforce payment of it. 
  
  ### Pension benefits
  
  (27) If a trust, in a taxation year in which it is resident in Canada and is the graduated rate estate of an individual, receives a superannuation or pension benefit or a benefit out of or under a foreign retirement arrangement and designates, in its return of income for the year under this Part, an amount in respect of a beneficiary under the trust equal to the portion (in this subsection referred to as the “beneficiary’s share”) of the benefit that 
  (a) may reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be part of the amount that, by reason of subsection 104(13), was included in computing the income for a particular taxation year of the beneficiary, and 
  (b) was not designated by the trust in respect of any other beneficiary under the trust, the following rules apply: 
  (c) where 
  (i) the benefit is an amount described in subparagraph (a)(i) of the definition pension income in subsection 118(7), and  
  (ii) the beneficiary was a spouse or common-law partner of the individual, the beneficiary’s share of the benefit shall be deemed, for the purposes of subsections 118(3) and 118(7), to be a payment described in subparagraph (a)(i) of the definition pension income in subsection 118(7) that is included in computing the beneficiary’s income for the particular year,  
  (d) where the benefit 
  (i) is a single amount (as defined in subsection 147.1(1)), other than an amount that relates to an actuarial surplus, paid by a registered pension plan to the trust as a consequence of the individual’s death and the individual was, at the time of death, a spouse or common-law partner of the beneficiary, or 
  (ii) would be an amount included in the total determined under paragraph 60(j) in respect of the beneficiary for the taxation year of the beneficiary in which the benefit was received by the trust if the benefit had been received by the beneficiary at the time it was received by the trust, the beneficiary’s share of the benefit is, for the purposes of paragraph 60(j), an eligible amount in respect of the beneficiary for the particular year, and 
  (e) where the benefit is a single amount (as defined in subsection 147.1(1)) paid by a registered pension plan to the trust as a consequence of the individual’s death, 
  (i) if the beneficiary was, immediately before the death, a child or grandchild of the individual who, because of mental or physical infirmity, was financially dependent on the individual for support, the beneficiary’s share of the benefit (other than any portion of it that relates to an actuarial surplus) is deemed, for the purposes of paragraph 60(l), to be an amount from a registered pension plan included in computing the beneficiary’s income for the particular year as a payment described in clause 60(l)(v)(B.01), and 
  (ii) if the beneficiary was, at the time of the death, under 18 years of age and a child or grandchild of the individual, the beneficiary’s share of the benefit (other than any portion of it that relates to an actuarial surplus) is deemed, for the purposes of paragraph 60(l), to be an amount from a registered pension plan included in computing the beneficiary’s income for the particular year as a payment described in subclause 60(l)(v)(B.1)(II). 
  
  ### DPSP benefits
  
  (27.1) Where 
  (a) a trust, in a taxation year (in this subsection referred to as the “trust year”) in which it is resident in Canada and is the graduated rate estate of an individual, receives an amount from a deferred profit sharing plan as a consequence of the individual’s death, 
  (b) the individual was an employee of an employer who participated in the plan on behalf of the individual, and 
  (c) the amount is not part of a series of periodic payments, such portion of the amount as 
  (d) is included under subsection 147(10) in computing the income of the trust for the trust year, 
  (e) can reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be part of the amount that was included under subsection (13) in computing the income for a particular taxation year of a beneficiary under the trust who was, at the time of the death, the individual’s spouse or common-law partner, and 
  (f) is designated by the trust in respect of the beneficiary in the trust’s return of income under this Part for the trust year is, for the purposes of paragraph 60(j), an eligible amount inrespect of the beneficiary for the particular year. 
  
  ### Death benefit
  
  (28) If the graduated rate estate of an individual receives an amount on or after the individual’s death in recognition of the individual’s service in an office or employment, the portion of the amount that can reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be paid or payable at any time to a beneficiary under the estate is deemed 
  (a) to be an amount received by the beneficiary at that time on or after the death in recognition of the individual’s service in an office or employment; and 
  (b) except for purposes of this subsection, not to have been received by the estate. 
  (29)  [Repealed, 2003, c. 28, s. 11(2)]  
  
  ### Tax under Part XII.2
  
  (30) For the purposes of this Part, there shall be deducted in computing the income of a trust for a taxation year the tax paid by the trust for the year under Part XII.2. 
  
  ### Idem
  
  (31) The amount in respect of a taxation year of a trust that is deemed under subsection 210.2(3) to have been paid by a beneficiary under the trust on account of the beneficiary’s tax under this Part shall, for the purposes of subsection 104(13), be deemed to be an amount in respect of the income of the trust for the year that has become payable by the trust to the beneficiary at the end of the year. 
  
  ### Benefits under trust
  
  105 (1) The value of all benefits to a taxpayer during a taxation year from or under a trust, irrespective of when created, shall, subject to subsection 105(2), be included in computing the taxpayer’s income for the year except to the extent that the value 
  (a) is otherwise required to be included in computing the taxpayer’s income for a taxation year; or 
  (b) has been deducted under paragraph 53(2)(h) in computing the adjusted cost base of the taxpayer’s interest in the trust or would be so deducted if that paragraph 
  (i) applied in respect of the taxpayer’s interest in the trust, and 
  (ii) were read without reference to clause 53(2)(h)(i.1)(B). 
  
  ### Upkeep, etc.
  
  (2) Such part of an amount paid by a trust out of income of the trust for the upkeep, maintenance or taxes of or in respect of property that, under the terms of the trust arrangement, is required to be maintained for the use of a tenant for life or a beneficiary as is reasonable in the circumstances shall be included in computing the income of the tenant for life or other beneficiary from the trust for the taxation year for which it was paid. 
  
  ### Income interest in trust
  
  106 (1) Where an amount in respect of a taxpayer’s income interest in a trust has been included in computing the taxpayer’s income for a taxation year by reason of subsection 106(2) or 104(13), except to the extent that an amount in respect of that income interest has been deducted in computing the taxpayer’s taxable income pursuant to subsection 112(1) or 138(6), there may be deducted in computing the taxpayer’s income for the year the lesser of 
  (a) the amount so included in computing the taxpayer’s income for the year, and 
  (b) the amount, if any, by which the cost to the taxpayer of the income interest exceeds the total of all amounts in respect of the interest that were deductible under this subsection in computing the taxpayer’s income for previous taxation years. 
  
  ### Cost of income interest in a trust
  
  (1.1) The cost to a taxpayer of an income interest of the taxpayer in a trust is deemed to be nil unless 
  (a) any part of the interest was acquired by the taxpayer from a person who was the beneficiary in respect of the interest immediately before that acquisition; or 
  (b) the cost of any part of the interest would otherwise be determined not to be nil under paragraph 128.1(1)(c) or (4)(c). 
  
  ### Disposition by taxpayer of income interest
  
  (2) Where in a taxation year a taxpayer disposes of an income interest in a trust, 
  (a) except where subsection (3) applies to the disposition, there shall be included in computing the taxpayer’s income for the year the amount, if any, by which 
  (i) the proceeds of disposition exceed 
  (ii) where that interest includes a right to enforce payment of an amount by the trust, the amount in respect of that right that has been included in computing the taxpayer’s income for a taxation year because of subsection 104(13); 
  (b) any taxable capital gain or allowable capital loss of the taxpayer from the disposition shall be deemed to be nil; and 
  (c) for greater certainty, the cost to the taxpayer of each property received by the taxpayer as consideration for the disposition is the fair market value of the property at the time of the disposition. 
  
  ### Proceeds of disposition of income interest
  
  (3) For greater certainty, where at any time any property of a trust has been distributed by the trust to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s income interest in the trust, the trust shall be deemed to have disposed of the property for proceeds of disposition equal to the fair market value of the property at that time. 
  
  ### Disposition by taxpayer of capital interest
  
  107 (1) Where a taxpayer has disposed of all or any part of the taxpayer’s capital interest in a trust, 
  (a) where the trust is a personal trust or a prescribed trust, for the purpose of computing the taxpayer’s capital gain, if any, from the disposition, the adjusted cost base to the taxpayer of the interest or the part of the interest, as the case may be, immediately before the disposition is, unless any part of the interest has ever been acquired for consideration and, at the time of the disposition, the trust is non-resident, deemed to be the greater of 
  (i) its adjusted cost base, otherwise determined, to the taxpayer immediately before the disposition, and 
  (ii) the amount, if any, by which 
  (A) its cost amount to the taxpayer immediately before the disposition exceeds 
  (B) the total of all amounts deducted under paragraph 53(2)(g.1) in computing its adjusted cost base to the taxpayer immediately before the disposition; 
  (b)  [Repealed, 2001, c. 17, s. 80]  
  (c) where the taxpayer is not a mutual fund trust, the taxpayer’s loss from the disposition is deemed to be the amount, if any, by which the amount of that loss otherwise determined exceeds the amount, if any, by which 
  (i) the total of all amounts each of which was received or would, but for subsection 104(19), have been received by the trust on a share of the capital stock of a corporation before the disposition (and, where the trust is a unit trust, after 1987) and 
  (A) where the taxpayer is a corporation, 
  (I) was a taxable dividend designated under subsection 104(19) by the trust in respect of the taxpayer, to the extent of the amount of the dividend that was deductible under section 112 or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, or 
  (II) was an amount designated under subsection 104(20) by the trust in respect of the taxpayer, 
  (B) where the taxpayer is another trust, was an amount designated under subsection 104(19) or 104(20) by the trust in respect of the taxpayer, and 
  (C) where the taxpayer is not a corporation, trust or partnership, was an amount designated under subsection 104(20) by the trust in respect of the taxpayer exceeds 
  (ii) the portion of the total determined under subparagraph 107(1)(c)(i) that can reasonably be considered to have resulted in a reduction, under this paragraph, of the taxpayer’s loss otherwise determined from a previous disposition of an interest in the trust; 
  (d) where the taxpayer is a partnership, the share of a person (other than another partnership or a mutual fund trust) of any loss of the partnership from the disposition is deemed to be the amount, if any, by which that loss otherwise determined exceeds the amount, if any, by which 
  (i) the total of all amounts each of which is a dividend that was received or would, but for subsection 104(19), have been received by the trust on a share of the capital stock of a corporation before the disposition (and, where the trust is a unit trust, after 1987) and 
  (A) where the person is a corporation, 
  (I) was a taxable dividend that was designated under subsection 104(19) by the trust in respect of the taxpayer, to the extent of the amount of the dividend that was deductible under section 112 or subsection 115(1) or 138(6) in computing the person’s taxable income or taxable income earned in Canada for any taxation year, or 
  (II) was a dividend designated under subsection 104(20) by the trust in respect of the taxpayer and was an amount received by the person, 
  (B) where the person is an individual other than a trust, was a dividend designated under subsection 104(20) by the trust in respect of the taxpayer and was an amount received by the person, and 
  (C) where the person is another trust, was a dividend designated under subsection 104(19) or 104(20) by the trust in respect of the taxpayer and was an amount received by the person (or that would have been received by the person if this Act were read without reference to subsection 104(19)), exceeds 
  (ii) the portion of the total determined under subparagraph 107(1)(d)(i) that can reasonably be considered to have resulted in a reduction, under this paragraph, of the person’s loss otherwise determined from a previous disposition of an interest in the trust; and 
  (e) if the capital interest is not a capital property of the taxpayer, notwithstanding the definition 
  *cost amount* in subsection 108(1), its cost amount is deemed to be the amount, if any, by which  
  (i) the amount that would, if this Act were read without reference to this paragraph and the definition 
  *cost amount* in subsection 108(1), be its cost amount  exceeds 
  (ii) the total of all amounts, each of which is an amount in respect of the capital interest that has become payable to the taxpayer before the disposition and that would be described in subparagraph 53(2)(h)(i.1) if that subparagraph were read without reference to its subclause (B)(I). 
  
  ### Cost of capital interest in a trust
  
  (1.1) The cost to a taxpayer of a capital interest of the taxpayer in a personal trust or a prescribed trust is deemed to be, 
  (a) where the taxpayer elected under subsection 110.6(19) in respect of the interest and the trust does not elect under that subsection in respect of any property of the trust, the taxpayer’s cost of the interest determined under paragraph 110.6(19)(a); and 
  (b) in any other case, nil, unless 
  (i) any part of the interest was acquired by the taxpayer from a person who was the beneficiary in respect of the interest immediately before that acquisition, or 
  (ii) the cost of any part of the interest would otherwise be determined not to be nil under section 48 as it read in its application before 1993 or under paragraph 111(4)(e) or 128.1(1)(c) or (4)(c). 
  
  ### Deemed fair market value — non-capital property
  
  (1.2) For the purpose of section 10, the fair market value at any time of a capital interest in a trust is deemed to be equal to the amount that is the total of 
  (a) the amount that would, if this Act were read without reference to this subsection, be its fair market value at that time, and 
  (b) the total of all amounts, each of which is an amount that would be described, in respect of the capital interest, in subparagraph 53(2)(h)(i.1) if that subparagraph were read without reference to its subclause (B)(I), that has become payable to the taxpayer before that time. 
  
  ### Distribution by personal trust
  
  (2) Subject to subsections (2.001), (2.002) and (4) to (5), if at any time a property of a personal trust or a prescribed trust is distributed (otherwise than as a SIFT trust wind-up event) by the trust to a taxpayer who was a beneficiary under the trust and there is a resulting disposition of all or any part of the taxpayer’s capital interest in the trust, 
  (a) the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its cost amount to the trust immediately before that time; 
  (b) subject to subsection (2.2), the taxpayer is deemed to have acquired the property at a cost equal to the total of its cost amount to the trust immediately before that time and the specified percentage of the amount, if any, by which 
  (i) the adjusted cost base to the taxpayer of the capital interest or part of it, as the case may be, immediately before that time (determined without reference to paragraph (1)(a)) exceeds 
  (ii) the cost amount to the taxpayer of the capital interest or part of it, as the case may be, immediately before that time; 
  (b.1) for the purpose of paragraph (b), the specified percentage is, 
  (i) where the property is capital property (other than depreciable property), 100%, and 
  (ii)  [Repealed, 2016, c. 12, s. 36]  
  (iii) in any other case, 50%; 
  (c) the taxpayer’s proceeds of disposition of the capital interest in the trust (or of the part of it) disposed of by the taxpayer on the distribution are deemed to be equal to the amount, if any, by which 
  (i) the cost at which the taxpayer would be deemed by paragraph (b) to have acquired the property if the specified percentage referred to in that paragraph were 100% exceeds 
  (ii) the total of all amounts each of which is an eligible offset at that time of the taxpayer in respect of the capital interest or the part of it; 
  (d) where the property so distributed was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by this section to have acquired the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a) 
  (i) the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and 
  (ii) the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the taxpayer of the property. 
  (d.1)  [Repealed, 2010, c. 12, s. 10]  
  (e)  [Repealed, 1994, c. 7, Sch. VIII, s. 43]  
  (f)  [Repealed, 2016, c. 12, s. 36]  
  
  ### No rollover on election by a trust
  
  (2.001) Where a trust makes a distribution of a property to a beneficiary of the trust in full or partial satisfaction of the beneficiary’s capital interest in the trust and so elects in prescribed form filed with the Minister with the trust’s return of income for its taxation year in which the distribution occurred, subsection (2) does not apply to the distribution if 
  (a) the trust is resident in Canada at the time of the distribution; 
  (b) the property is taxable Canadian property; or 
  (c) the property is capital property used in, or property described in the inventory of, a business carried on by the trust through a 
  *permanent establishment* (as defined by regulation) in Canada immediately before the time of the distribution.  
  
  ### No rollover on election by a beneficiary
  
  (2.002) Where a non-resident trust makes a distribution of a property (other than a property described in paragraph (2.001)(b) or (c)) to a beneficiary of the trust in full or partial satisfaction of the beneficiary’s capital interest in the trust and the beneficiary makes an election under this subsection in prescribed form filed with the Minister with the beneficiary’s return of income for the beneficiary’s taxation year in which the distribution occurred, 
  (a) subsection (2) does not apply to the distribution; and 
  (b) for the purpose of subparagraph (1)(a)(ii), the cost amount of the interest to the beneficiary is deemed to be nil. 
  
  ### Distribution of principal residence
  
  (2.01) Where property that would, if a personal trust had designated the property under paragraph (c.1) of the definition 
  *principal residence* in section 54, be a principal residence (within the meaning of that definition) of the trust for a taxation year, is at any time (in this subsection referred to as “that time”) distributed by the trust to a taxpayer in circumstances in which subsection (2) applies and the trust so elects in its return of income for the taxation year that includes that time,  
  (a) the trust shall be deemed to have disposed of the property immediately before the particular time that is immediately before that time for proceeds of disposition equal to the fair market value of the property at that time; and 
  (b) the trust shall be deemed to have reacquired the property at the particular time at a cost equal to that fair market value. 
  
  ### Other distributions
  
  (2.1) Where at any time a property of a trust is distributed by the trust to a beneficiary under the trust, there would, if this Act were read without reference to paragraphs (h) and (i) of the definition 
  *disposition* in subsection 248(1), be a resulting disposition of all or any part of the beneficiary’s capital interest in the trust (which interest or part, as the case may be, is in this subsection referred to as the “former interest”) and the rules in subsections (2) and (3.1) and sections 88.1 and 132.2 do not apply in respect of the distribution,  
  (a) the trust is deemed to have disposed of the property for proceeds equal to its fair market value at that time; 
  (b) the beneficiary is deemed to have acquired the property at a cost equal to the proceeds determined under paragraph (a); 
  (c) unless the trust is a mutual fund trust, the beneficiary’s proceeds of disposition of the portion of the former interest disposed of by the beneficiary on the distribution are deemed to be equal to the amount, if any, by which 
  (i) the proceeds determined under paragraph (a) (other than the portion, if any, of the proceeds that is a payment to which paragraph (h) or (i) of the definition 
  *disposition* in subsection 248(1) applies)  exceed the total of 
  (ii) where the property is not a Canadian resource property or foreign resource property, the amount, if any, by which 
  (A) the fair market value of the property at that time exceeds the total of 
  (B) the cost amount to the trust of the property immediately before that time, and 
  (C) the portion, if any, of the excess that would be determined under this subparagraph if this subparagraph were read without reference to this clause that represents a payment to which paragraph (h) or (i) of the definition 
  *disposition* in subsection 248(1) applies, and  
  (iii) all amounts each of which is an eligible offset at that time of the taxpayer in respect of the former interest; 
  (d) notwithstanding paragraphs (a) to (c), where the trust is non-resident at that time, the property is not described in paragraph (2.001)(b) or (c) and, if this Act were read without reference to this paragraph, there would be no income, loss, taxable capital gain or allowable capital loss of a taxpayer in respect of the property because of the application of subsection 75(2) to the disposition at that time of the property, 
  (i) the trust is deemed to have disposed of the property for proceeds equal to the cost amount of the property, 
  (ii) the beneficiary is deemed to have acquired the property at a cost equal to the fair market value of the property, and 
  (iii) the beneficiary’s proceeds of disposition of the portion of the former interest disposed of by the beneficiary on the distribution are deemed to be equal to the amount, if any, by which 
  (A) the fair market value of the property exceeds the total of 
  (B) the portion, if any, of the amount of the distribution that is a payment to which paragraph (h) or (i) of the definition 
  *disposition* in subsection 248(1) applies, and  
  (C) all amounts each of which is an eligible offset at that time of the taxpayer in respect of the former interest; and 
  (e) where the trust is a mutual fund trust, the distribution occurs in a taxation year of the trust before its 2003 taxation year, the trust has elected under subsection (2.11) in respect of the year and the trust so elects in respect of the distribution in prescribed form filed with the trust’s return of income for the year, 
  (i) this subsection shall be read without reference to paragraph (c), and 
  (ii) the beneficiary’s proceeds of disposition of the portion of the former interest disposed of by the beneficiary on the distribution are deemed to be equal to the amount determined under paragraph (a). 
  
  ### Gains not distributed to beneficiaries
  
  (2.11) If a trust that is resident in Canada for a taxation year makes in the taxation year one or more distributions to which subsection (2.1) applies and the trust elects in prescribed form filed with the trust’s return for the year or a preceding taxation year to have one of the following paragraphs apply, the income of the trust for the year (determined without reference to subsection 104(6)) shall, for the purposes of subsections 104(6) and (13), be computed without regard 
  (a) if the election is to have this paragraph apply, to all of those distributions (other than distributions of cash denominated in Canadian dollars) to non-resident persons (including a partnership other than a Canadian partnership); and 
  (b) if the election is to have this paragraph apply, to all of those distributions (other than distributions of cash denominated in Canadian dollars). 
  
  ### Election — subsection (2.11)
  
  (2.12) An election made under subsection (2.11) by a mutual fund trust is deemed, for the trust’s 2003 and subsequent taxation years, not to have been made if 
  (a) the election is made after December 20, 2000 and applies to any taxation year that ends before 2003; and 
  (b) the proceeds of disposition of a beneficiary’s interest in the trust have been determined under paragraph (2.1)(e). 
  
  ### Flow-through entity
  
  (2.2) Where at any time before 2005 a beneficiary under a trust described in paragraph (h), (i) or (j) of the definition 
  *flow-through entity* in subsection 39.1(1) received a distribution of property from the trust in satisfaction of all or a portion of the beneficiary’s interests in the trust and the beneficiary files with the Minister on or before the beneficiary’s filing-due date for the taxation year that includes that time an election in respect of the property in prescribed form, there shall be included in the cost to the beneficiary of a particular property (other than money) received by the beneficiary as part of the distribution of property the least of  
  (a) the amount, if any, by which the beneficiary’s exempt capital gains balance (as defined in subsection 39.1(1)) in respect of the trust for the beneficiary’s taxation year that includes that time exceeds the total of all amounts each of which is 
  (i) an amount by which a capital gain is reduced under section 39.1 in the year because of the beneficiary’s exempt capital gains balance in respect of the trust, 
  (ii) twice an amount by which a taxable capital gain is reduced under section 39.1 in the year because of the beneficiary’s exempt capital gains balance in respect of the trust, or 
  (iii) an amount included in the cost to the beneficiary of another property received by the beneficiary at or before that time in the year because of this subsection, 
  (b) the amount by which the fair market value of the particular property at that time exceeds the adjusted cost base to the trust of the particular property immediately before that time, and 
  (c) the amount designated in respect of the particular property in the election. 
  
  ### Application of subsection (3.1)
  
  (3) Subsection (3.1) applies to a trust’s distribution of property to a taxpayer if 
  (a) the distribution is a SIFT trust wind-up event to which section 88.1 does not apply; 
  (b) the property is a share and the only shares distributed on any SIFT trust wind-up event of the trust are of a single class of the capital stock of a taxable Canadian corporation; and 
  (c) where the trust is a SIFT wind-up entity, the distribution occurs no more than 60 days after the earlier of 
  (i) the first SIFT trust wind-up event of the trust, and 
  (ii) the first distribution to the trust that is a SIFT trust wind-up event of another trust. 
  
  ### SIFT trust wind-up event
  
  (3.1) If this subsection applies to a trust’s distribution of property, the following rules apply: 
  (a) the trust is deemed to have disposed of the property for proceeds of disposition equal to the adjusted cost base to the trust of the property immediately before the distribution; 
  (b) the taxpayer is deemed to have disposed of the taxpayer’s interest as a beneficiary under the trust for proceeds of disposition equal to the cost amount to the taxpayer of the interest immediately before the distribution; 
  (c) the taxpayer is deemed to have acquired the property at a cost equal to 
  (i) if, at all times at which the trust makes a distribution that is a SIFT trust wind-up event, the taxpayer is the only beneficiary under the trust and is a SIFT wind-up entity or a taxable Canadian corporation, the adjusted cost base to the trust of the property immediately before the distribution, and 
  (ii) in any other case, the cost amount to the taxpayer of the taxpayer’s interest as a beneficiary under the trust immediately before the distribution; 
  (d) if the taxpayer’s interest as a beneficiary under the trust was immediately before the disposition taxable Canadian property of the taxpayer, the property is deemed to be, at any time that is within 60 months after the distribution, taxable Canadian property of the taxpayer; and 
  (e) if a liability of the trust becomes as a consequence of the distribution a liability of the corporation described in paragraph (3)(b) in respect of the distribution, and the amount payable by the corporation on the maturity of the liability is the same as the amount that would have been payable by the trust on its maturity, 
  (i) the transfer of the liability by the trust to the corporation is deemed not to have occurred, and 
  (ii) the liability is deemed 
  (A) to have been incurred or issued by the corporation at the time at which, and under the agreement under which, it was incurred or issued by the trust, and 
  (B) not to have been incurred or issued by the trust. 
  
  ### Trusts in favour of spouse, common-law partner or self
  
  (4) Subsection (2.1) applies (and subsection (2) does not apply) at any time to property distributed to a beneficiary by a trust described in paragraph 104(4)(a) where 
  (a) the beneficiary is not 
  (i) in the case of a post-1971 spousal or common-law partner trust, the spouse or common-law partner referred to in paragraph 104(4)(a), 
  (ii) in the case of an alter ego trust, the taxpayer referred to in paragraph 104(4)(a), and 
  (iii) in the case of a joint spousal or common-law partner trust, the taxpayer, spouse or common-law partner referred to in paragraph 104(4)(a); and 
  (b) the distribution of the property occurs on or before the earlier of 
  (i) a reacquisition, in respect of any property of the trust, that occurs immediately after the day described by paragraph 104(4)(a), and 
  (ii) the cessation of the trust’s existence. 
  
  ### Where subsection 75(2) applicable to trust
  
  (4.1) Subsection (2.1) applies (and subsection (2) does not apply) in respect of a distribution of any property of a particular personal trust or prescribed trust (other than an excluded property of the particular trust) by the particular trust to a taxpayer who was a beneficiary under the particular trust where 
  (a) the distribution was in satisfaction of all or any part of the taxpayer’s capital interest in the particular trust; 
  (b) subsection 75(2) was applicable (determined without its reference to “while the person is resident in Canada” and as if subsection 75(3) as it read before March 21, 2013 were read without reference to its paragraph (c.2)), or subsection 94(8.2) was applicable (determined without reference to paragraph 94(8.1)(a)), at a particular time in respect of any property of 
  (i) the particular trust, or 
  (ii) a trust the property of which included a property that, through one or more dispositions to which subsection 107.4(3) applied, became a property of the particular trust, and the property was not, at any time after the particular time and before the distribution, the subject of a disposition for proceeds of disposition equal to the fair market value of the property at the time of the disposition; 
  (c) the taxpayer was neither 
  (i) the person (other than a trust described in subparagraph (b)(ii)) from whom the particular trust directly or indirectly received the property, or property for which the property was substituted, nor 
  (ii) an individual in respect of whom subsection 73(1) would be applicable on the transfer of capital property from the person described in subparagraph (i); and 
  (d) the person described in subparagraph (c)(i) was in existence at the time the property was distributed. 
  
  ### Distribution of property received on qualifying disposition
  
  (4.2) Subsection (2.1) applies (and subsection (2) does not apply) at any time to property distributed after December 20, 2002 to a beneficiary by a personal trust or a trust prescribed for the purpose of subsection (2), if 
  (a) at a particular time before December 21, 2002 there was a qualifying disposition (within the meaning assigned by subsection 107.4(1)) of the property, or of other property for which the property is substituted, by a particular partnership or a particular corporation, as the case may be, to a trust; and 
  (b) the beneficiary is neither the particular partnership nor the particular corporation. 
  
  ### Distribution to non-resident
  
  (5) Subsection (2.1) applies (and subsection (2) does not apply) in respect of a distribution of a property (other than a share of the capital stock of a non-resident-owned investment corporation or property described in any of subparagraphs 128.1(4)(b)(i) to (iii)) by a trust to a non-resident taxpayer (including a partnership other than a Canadian partnership) in satisfaction of all or part of the taxpayer’s capital interest in the trust. 
  
  ### Instalment interest
  
  (5.1) If, solely because of the application of subsection (5), paragraphs (2)(a) to (c) do not apply to a distribution in a taxation year of taxable Canadian property by a trust, in applying sections 155 and 156 and subsections 156.1(1) to (3) and 161(2), (4) and (4.01) and any regulations made for the purposes of those provisions, the trust’s tax payable under this Part for the year is deemed to be the lesser of 
  (a) the trust’s tax payable under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, and 
  (b) the amount that would be determined under paragraph (a) if subsection (5) did not apply to each distribution in the year of taxable Canadian property to which the rules in subsection (2) do not apply solely because of the application of subsection (5). 
  
  ### Loss reduction
  
  (6) Notwithstanding any other provision of this Act, where a person or partnership (in this subsection referred to as the “vendor”) has disposed of property and would, but for this subsection, have had a loss from the disposition, the vendor’s loss otherwise determined in respect of the disposition shall be reduced by such portion of that loss as may reasonably be considered to have accrued during a period in which 
  (a) the property or property for which it was substituted was held by a trust; and 
  (b) either 
  (i) the trust was non-resident and the property (or property for which it was substituted) was not taxable Canadian property of the trust, or 
  (ii) neither the vendor — nor a person that would, if section 251.1 were read without reference to the definition 
  *controlled* in subsection 251.1(3), be affiliated with the vendor — had a capital interest in the trust.  
  
  ### Distribution by certain employment-related trusts
  
  107.1 If at any time any property of an employee life and health trust, an employee trust, a trust governed by an employee benefit plan or a trust described in paragraph (a.1) of the definition 
  *trust* in subsection 108(1) has been distributed by the trust to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s interest in the trust, the following rules apply:  
  (a) in the case of an employee life and health trust, an employee trust or a trust described in paragraph (a.1) of the definition 
  *trust* in subsection 108(1),  
  (i) the trust shall be deemed to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time, and 
  (ii) the taxpayer shall be deemed to have acquired the property at a cost equal to its fair market value at that time; 
  (b) in the case of a trust governed by an employee benefit plan, 
  (i) the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its cost amount to the trust immediately before that time, and 
  (ii) the taxpayer shall be deemed to have acquired the property at a cost equal to the greater of 
  (A) its fair market value at that time, and 
  (B) the adjusted cost base to the taxpayer of the taxpayer’s interest or part thereof, as the case may be, immediately before that time; 
  (c) the taxpayer shall be deemed to have disposed of the taxpayer’s interest or part thereof, as the case may be, for proceeds of disposition equal to the adjusted cost base to the taxpayer of that interest or part thereof immediately before that time; and 
  (d) where the property was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by this section to have acquired the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), 
  (i) the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and 
  (ii) the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the taxpayer of the property. 
  
  ### Distribution by a retirement compensation arrangement
  
  107.2 Where, at any time, any property of a trust governed by a retirement compensation arrangement has been distributed by the trust to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s interest in the trust, for the purposes of this Part and Part XI.3, the following rules apply: 
  (a) the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its fair market value at that time; 
  (b) the trust shall be deemed to have paid to the taxpayer as a distribution an amount equal to that fair market value; 
  (c) the taxpayer shall be deemed to have acquired the property at a cost equal to that fair market value; 
  (d) the taxpayer shall be deemed to have disposed of the taxpayer’s interest or part thereof, as the case may be, for proceeds of disposition equal to the adjusted cost base to the taxpayer of that interest or part thereof immediately before that time; and 
  (e) where the property was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by this section to have acquired the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), 
  (i) the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and 
  (ii) the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing the taxpayer’s income for taxation years before the acquisition by the taxpayer of the property. 
  
  ### Treatment of beneficiaries under qualifying environmental trusts
  
  107.3 (1) Where a taxpayer is a beneficiary under a qualifying environmental trust in a taxation year of the trust (in this subsection referred to as the “trust’s year”) that ends in a particular taxation year of the taxpayer, 
  (a) subject to paragraph 107.3(1)(b), the taxpayer’s income, non-capital loss and net capital loss for the particular year shall be computed as if the amount of the income or loss of the trust for the trust’s year from any source or from sources in a particular place were the income or loss of the taxpayer from that source or from sources in that particular place for the particular year, to the extent of the portion thereof that can reasonably be considered to be the taxpayer’s share of such income or loss; and 
  (b) if the taxpayer is non-resident at any time in the particular year and an income or loss described in paragraph 107.3(1)(a) or an amount to which paragraph 12(1)(z.1) or (z.2) applies would not otherwise be included in computing the taxpayer’s taxable income or taxable income earned in Canada, as the case may be, notwithstanding any other provision of this Act, the income, the loss or the amount shall be attributed to the carrying on of business in Canada by the taxpayer through a fixed place of business located in the province in which the site to which the trust relates is situated. 
  
  ### Transfers to beneficiaries
  
  (2) Where property of a qualifying environmental trust is transferred at any time to a beneficiary under the trust in satisfaction of all or any part of the beneficiary’s interest as a beneficiary under the trust, 
  (a) the trust shall be deemed to have disposed of the property at that time for proceeds of disposition equal to its fair market value at that time; and 
  (b) the beneficiary shall be deemed to have acquired the property at that time at a cost equal to its fair market value at that time. 
  
  ### Ceasing to be qualifying environmental trust
  
  (3) If at any time a trust ceases to be a qualifying environmental trust, 
  (a) for the purposes of subsections 111(5.5) and 149(10), the trust is deemed to cease at that time to be exempt from tax under this Part on its taxable income; 
  (b) each beneficiary under the trust immediately before that time is deemed to receive at that time from the trust an amount equal to the percentage of the fair market value of the properties of the trust immediately after that time that can reasonably be considered to be the beneficiary’s interest in the trust; and 
  (c) each beneficiary under the trust is deemed to acquire immediately after that time an interest in the trust at a cost equal to the amount deemed by paragraph (b) to be received by the beneficiary from the trust. 
  
  ### Application
  
  (4) Subsection 104(13) and sections 105 to 107 do not apply to a trust with respect to a taxation year during which it is a qualifying environmental trust. 
  
  ### Qualifying disposition
  
  107.4 (1) In this section, a 
  *qualifying disposition* of a property means a disposition of the property before December 21, 2002 by a person or partnership, and a disposition of property after December 20, 2002 by an individual, (which person, partnership or individual is referred to in this subsection as the “contributor”) as a result of a transfer of the property to a particular trust where  
  (a) the disposition does not result in a change in the beneficial ownership of the property; 
  (b) the proceeds of disposition would, if this Act were read without reference to this section and sections 69 and 73, not be determined under any provision of this Act; 
  (c) the particular trust is resident in Canada at the time of the transfer; 
  (d)  [Repealed, 2013, c. 34, s. 235]  
  (e) unless the contributor is a trust, there is immediately after the disposition no absolute or contingent right of a person or partnership (other than the contributor or, where the property was co-owned, each of the joint contributors) as a beneficiary (determined with reference to subsection 104(1.1)) under the particular trust; 
  (f) the contributor is not an individual (other than a trust described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1)), if the particular trust is described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1);  
  (g) the disposition is not part of a series of transactions or events 
  (i) that begins after December 17, 1999 and that includes the subsequent acquisition, for consideration given to a personal trust, of a capital interest or an income interest in the trust, 
  (ii) that begins after December 17, 1999 and that includes the disposition of all or part of a capital interest or an income interest in a personal trust, other than a disposition solely as a consequence of a distribution from a trust to a person or partnership in satisfaction of all or part of that interest, or 
  (iii) that begins after June 5, 2000 and that includes the transfer to the particular trust of particular property as consideration for the acquisition of a capital interest in the particular trust, if the particular property can reasonably be considered to have been received by the particular trust in order to fund a distribution (other than a distribution that is proceeds of disposition of a capital interest in the particular trust); 
  (h) the disposition is not, and is not part of, a transaction 
  (i) that occurs after December 17, 1999, and 
  (ii) that includes the giving to the contributor, for the disposition, of any consideration (other than consideration that is an interest of the contributor as a beneficiary under the particular trust or that is the assumption by the particular trust of debt for which the property can, at the time of the disposition, reasonably be considered to be security); 
  (i) subsection 73(1) does not apply to the disposition and would not apply to the disposition if 
  (i) no election had been made under that subsection, and 
  (ii) section 73 were read without reference to subsection 73(1.02); and 
  (j) if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust. 
  
  ### Application of paragraph (1)(a)
  
  (2) For the purpose of paragraph (1)(a), 
  (a) except where paragraph (b) applies, where a trust (in this paragraph and subsection (2.1) referred to as the “transferor trust”), in a period that does not exceed one day, disposes of one or more properties in the period to one or more other trusts, there is deemed to be no resulting change in the beneficial ownership of those properties if 
  (i) the transferor trust receives no consideration for the disposition, and 
  (ii) as a consequence of the disposition, the value of each beneficiary’s beneficial ownership at the beginning of the period under the transferor trust in each particular property of the transferor trust (or group of two or more properties of the transferor trust that are identical to each other) is the same as the value of the beneficiary’s beneficial ownership at the end of the period under the transferor trust and the other trust or trusts in each particular property (or in property that was immediately before the disposition included in the group of identical properties referred to above); and 
  (b) where a trust (in this paragraph referred to as the “transferor”) governed by a registered retirement savings plan or by a registered retirement income fund transfers a property to a trust (in this paragraph referred to as the “transferee”) governed by a registered retirement savings plan or by a registered retirement income fund, the transfer is deemed not to result in a change in the beneficial ownership of the property if the annuitant of the plan or fund that governs the transferor is also the annuitant of the plan or fund that governs the transferee. 
  
  ### Fractional interests
  
  (2.1) For the purpose of applying paragraph (2)(a) in respect of a transfer by a transferor trust of property that includes a share and money, the other trust or trusts referred to in that paragraph may receive, in lieu of a transfer of a fractional interest in a share that would otherwise be required, a disproportionate amount of money or interest in the share (the value of which does not exceed the lesser of $200 and the fair market value of the fractional interest). 
  
  ### Tax consequences of qualifying dispositions
  
  (3) Where at a particular time there is a qualifying disposition of a property by a person or partnership (in this subsection referred to as the “transferor”) to a trust (in this subsection referred to as the “transferee trust”), 
  (a) the transferor’s proceeds of disposition of the property are deemed to be 
  (i) where the transferor so elects in writing and files the election with the Minister on or before the transferor’s filing-due date for its taxation year that includes the particular time, or at any later time that is acceptable to the Minister, the amount specified in the election that is not less than the cost amount to the transferor of the property immediately before the particular time and not more than the fair market value of the property at the particular time, and 
  (ii) in any other case, the cost amount to the transferor of the property immediately before the particular time; 
  (b) the transferee trust’s cost of the property is deemed to be the amount, if any, by which 
  (i) the proceeds determined under paragraph (a) in respect of the qualifying disposition exceed 
  (ii) the amount by which the transferor’s loss otherwise determined from the qualifying disposition would be reduced because of subsection 100(4), paragraph 107(1)(c) or (d) or any of subsections 112(3) to (4.2), if the proceeds determined under paragraph (a) were equal to the fair market value of the property at the particular time; 
  (c)  [Repealed, 2005, c. 30, s. 4]  
  (d) if the property was depreciable property of a prescribed class of the transferor and its capital cost to the transferor exceeds the cost at which the transferee trust is deemed by this subsection to have acquired the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (i) the capital cost of the property to the transferee trust is deemed to be the amount that was the capital cost of the property to the transferor, and 
  (ii) the excess is deemed to have been allowed to the transferee trust in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the particular time; 
  (e)  [Repealed, 2016, c. 12, s. 37]  
  (f) if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the transferor by this paragraph or any of paragraphs 44.1(2)(c), 51(1)(f), 85(1)(i) and 85.1(1)(a), subsection 85.1(5), paragraph 85.1(8)(b), subsections 87(4) and (5) and paragraphs 97(2)(c) and 107(3.1)(d), the property is also deemed to be, at any time that is within 60 months after the transaction or event, taxable Canadian property of the transferee trust; 
  (g) where the transferor is a related segregated fund trust (in this paragraph having the meaning assigned by section 138.1), 
  (i) paragraph 138.1(1)(i) does not apply in respect of a disposition of an interest in the transferor that occurs in connection with the qualifying disposition, and 
  (ii) in computing the amount determined under paragraph 138.1(1)(i) in respect of a subsequent disposition of an interest in the transferee trust where the interest is deemed to exist in connection with a particular life insurance policy, the acquisition fee (as defined by subsection 138.1(6)) in respect of the particular policy shall be determined as if each amount determined under any of paragraphs 138.1(6)(a) to (d) in respect of the policyholder’s interest in the transferor had been determined in respect of the policyholder’s interest in the transferee trust; 
  (h) if the transferor is a trust to which property had been transferred by an individual (other than a trust), 
  (i) where subsection 73(1) applied in respect of the property so transferred and it is reasonable to consider that the property was so transferred in anticipation of the individual ceasing to be resident in Canada, for the purposes of paragraph 104(4)(a.3) and the application of this paragraph to a disposition by the transferee trust after the particular time, the transferee trust is deemed after the particular time to be a trust to which the individual had transferred property in anticipation of the individual ceasing to reside in Canada and in circumstances to which subsection 73(1) applied, and 
  (ii) for the purposes of paragraph (j) of the definition 
  *excluded right or interest* in subsection 128.1(10) and the application of this paragraph to a disposition by the transferee trust after the particular time, where the property so transferred was transferred in circumstances to which this subsection would apply if subsection (1) were read without reference to paragraphs (1)(h) and (i), the transferee trust is deemed after the particular time to be a trust an interest in which was acquired by the individual as a consequence of a qualifying disposition;  
  (i) if the transferor is a trust (other than a personal trust or a trust prescribed for the purposes of subsection 107(2)), the transferee trust is deemed to be neither a personal trust nor a trust prescribed for the purposes of subsection 107(2); 
  (j) if the transferor is a trust and a taxpayer disposes of all or part of a capital interest in the transferor because of the qualifying disposition and, as a consequence, acquires a capital interest or part of it in the transferee trust 
  (i) the taxpayer is deemed to dispose of the capital interest or part of it in the transferor for proceeds equal to the cost amount to the taxpayer of that interest or part of it immediately before the particular time, and 
  (ii) the taxpayer is deemed to acquire the capital interest or part of it in the transferee trust at a cost equal to the amount, if any, by which 
  (A) that cost amount exceeds 
  (B) the amount by which the taxpayer’s loss otherwise determined from the disposition referred to in subparagraph (i) would be reduced because of paragraph 107(1)(c) or (d) if the proceeds under that subparagraph were equal to the fair market value of the capital interest or part of it in the transferor immediately before the particular time; 
  (k) where the transferor is a trust, a taxpayer’s beneficial ownership in the property ceases to be derived from the taxpayer’s capital interest in the transferor because of the qualifying disposition and no part of the taxpayer’s capital interest in the transferor was disposed of because of the qualifying disposition, there shall, immediately after the particular time, be added to the cost otherwise determined of the taxpayer’s capital interest in the transferee trust, the amount determined by the formula is the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time, is the fair market value immediately before the particular time of the taxpayer’s capital interest in the transferor, is the fair market value at the particular time of the taxpayer’s capital interest in the transferor (determined as if the only property disposed of at the particular time were the particular property), and is the lesser of 
  (i) the amount, if any, by which the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time exceeds the fair market value of the taxpayer’s capital interest in the transferor immediately before the particular time, and 
  (ii) the maximum amount by which the taxpayer’s loss from a disposition of a capital interest otherwise determined could have been reduced because of paragraph 107(1)(c) or (d) if the taxpayer’s capital interest in the transferor had been disposed of immediately before the particular time; 
  (l) where paragraph (k) applies to the qualifying disposition in respect of a taxpayer, the amount that would be determined under that paragraph in respect of the qualifying disposition if the amount determined for D in that paragraph were nil shall, immediately after the particular time, be deducted in computing the cost otherwise determined of the taxpayer’s capital interest in the transferor; 
  (m) where paragraphs (j) and (k) do not apply in respect of the qualifying disposition, the transferor is deemed to acquire the capital interest or part of it in the transferee trust that is acquired as a consequence of the qualifying disposition 
  (i) where the transferee trust is a personal trust, at a cost equal to nil, and 
  (ii) in any other case, at a cost equal to the excess determined under paragraph (b) in respect of the qualifying disposition; and 
  (n) if the transferor is a trust and a taxpayer disposes of all or part of an income interest in the transferor because of the qualifying disposition and, as a consequence, acquires an income interest or a part of an income interest in the transferee trust, for the purpose of subsection 106(2), the taxpayer is deemed not to dispose of any part of the income interest in the transferor at the particular time. 
  
  ### Fair market value of vested interest in trust
  
  (4) Where 
  (a) a particular capital interest in a trust is held by a beneficiary at any time, 
  (b) the particular interest is vested indefeasibly at that time, 
  (c) the trust is not described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1), and  
  (d) interests under the trust are not ordinarily disposed of for consideration that reflects the fair market value of the net assets of the trust, the fair market value of the particular interest at that time is deemed to be not less than the amount determined by the formula is the total fair market value at that time of all properties of the trust, is the total of all amounts each of which is the amount of a debt owing by the trust at that time or the amount of any other obligation of the trust to pay any amount that is outstanding at that time, is the fair market value at that time of the particular interest (determined without reference to this subsection), and is the total fair market value at that time of all interests as beneficiaries under the trust (determined without reference to this subsection). 
  
  ### Definitions
  
  108 (1) In this Subdivision,  
  *accumulating income* of a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were computed  
  (a) without reference to paragraphs 104(4)(a) and (a.1) and subsections 104(5.1), (5.2) and (12) and 107(4), 
  (b) as if the greatest amount that the trust was entitled to claim under subsection 104(6) in computing its income for the year were so claimed, and 
  (c) without reference to subsection 12(10.2), except to the extent that that subsection applies to amounts paid to a trust to which paragraph 70(6.1)(b) applies and before the death of the spouse or common-law partner referred to in that paragraph; ( revenu accumulé)   
  *beneficiary* under a trust includes a person beneficially interested therein; (bénéficiaire)   
  *capital interest* of a taxpayer in a trust means all rights of the taxpayer as a beneficiary under the trust, and after 1999 includes a right (other than a right acquired before 2000 and disposed of before March 2000) to enforce payment of an amount by the trust that arises as a consequence of any such right, but does not include an income interest in the trust; (participation au capital)   
  *cost amount* to a taxpayer at any time of a capital interest or part of it, as the case may be, in a trust, means (notwithstanding subsection 248(1) and except for the purposes of subsection 107(3.1) and section 107.4 and except in respect of a capital interest in a trust that is at that time a foreign affiliate of the taxpayer),  
  (a) where any money or other property of the trust has been distributed by the trust to the taxpayer in satisfaction of all or part of the taxpayer’s capital interest (whether on the winding-up of the trust or otherwise), the total of 
  (i) the money so distributed, and 
  (ii) all amounts each of which is the cost amount to the trust, immediately before the distribution, of each such other property, 
  (a.1) where that time (in this paragraph referred to as the “particular time”) is immediately before the time that is immediately before the time of the death of the taxpayer and subsection 104(4) or (5) deems the trust to dispose of property at the end of the day that includes the particular time, the amount that would be determined under paragraph (b) if the taxpayer had died on a day that ended immediately before the time that is immediately before the particular time, and 
  (b) in any other case, the amount determined by the formula is the total of 
  (i) all money of the trust on hand immediately before that time, and 
  (ii) all amounts each of which is the cost amount to the trust, immediately before that time, of each other property of the trust, is the total of all amounts each of which is the amount of any debt owing by the trust, or of any other obligation of the trust to pay any amount, that was outstanding immediately before that time, is the fair market value at that time of the capital interest or part thereof, as the case may be, in the trust, and is the fair market value at that time of all capital interests in the trust; ( coût indiqué)   
  *eligible offset* at any time of a taxpayer in respect of all or part of the taxpayer’s capital interest in a trust is the portion of any debt or obligation that is assumed by the taxpayer and that can reasonably be considered to be applicable to property distributed at that time in satisfaction of the interest or part of the interest, as the case may be, if the distribution is conditional upon the assumption by the taxpayer of the portion of the debt or obligation; (montant de réduction admissible)   
  *eligible real property gain* [Repealed, 1995, c. 3, s. 31]   
  *eligible real property loss* [Repealed, 1995, c. 3, s. 31]   
  *eligible taxable capital gains,* of a trust for a taxation year, means the lesser of  
  (a) its annual gains limit (within the meaning assigned by subsection 110.6(1)) for the year, and 
  (b) the amount determined by the formula is its cumulative gains limit (within the meaning assigned by subsection 110.6(1)) at the end of the year, and is the total of all amounts designated under subsection 104(21.2) by the trust in respect of beneficiaries for taxation years before that year; ( gains en capital imposables admissibles)   
  *excluded property*, of a trust, means property owned by the trust at, and distributed by the trust after, the end of 2016, if  
  (a) the trust is not in its first taxation year that begins after 2016 a trust described in subparagraph (c.1)(iii.1) of the definition principal residence in section 54, and  
  (b) the property is a property that would be the trust’s principal residence (as defined in section 54) for the taxation year in which the distribution occurs if  
  (i) that definition were read without reference to its subparagraph (c.1)(iii.1), and 
  (ii) the trust designated the property under that definition as its principal residence for the taxation year; ( bien exclu)   
  *exempt property* of a taxpayer at any time means property any income or gain from the disposition of which by the taxpayer at that time would, because the taxpayer is non-resident or because of a provision contained in a tax treaty, not cause an increase in the taxpayer’s tax payable under this Part; (bien exonéré)   
  *income interest* of a taxpayer in a trust means a right (whether immediate or future and whether absolute or contingent) of the taxpayer as a beneficiary under a personal trust to, or to receive, all or any part of the income of the trust and, after 1999, includes a right (other than a right acquired before 2000 and disposed of before March 2000) to enforce payment of an amount by the trust that arises as a consequence of any such right; (participation au revenu)   inter vivos trust means a trust other than a testamentary trust; (fiducie non testamentaire)   
  *non-qualifying real property* [Repealed, 1995, c. 3, s. 31]   
  *pre-1972 spousal trust* at a particular time means a trust that was  
  (a) created by the will of a taxpayer who died before 1972, or 
  (b) created before June 18, 1971 by a taxpayer during the taxpayer’s lifetime that throughout the period beginning at the time it was created and ending at the earliest of January 1, 1993, the day on which the taxpayer’s spouse or common-law partner died and the particular time, was a trust under which the taxpayer’s spouse or common-law partner was entitled to receive all of the income of the trust that arose before the spouse’s or common-law partner’s death, unless a person other than the spouse or common-law partner received or otherwise obtained the use of any of the income or capital of the trust before the end of that period; ( fiducie au profit du conjoint antérieure à 1972)   
  *preferred beneficiary* under a trust for a particular taxation year of the trust means a beneficiary under the trust at the end of the particular year who is resident in Canada at that time if  
  (a) the beneficiary is 
  (i) an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary’s year”) that ends in the particular year, or 
  (ii) an individual 
  (A) who attained the age of 18 years before the end of the beneficiary’s year, was a dependant (within the meaning assigned by subsection 118(6)) of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and 
  (B) whose income (computed without reference to subsection 104(14)) for the beneficiary’s year does not exceed the amount determined for F in subsection 118(1.1) for the year, and 
  (b) the beneficiary is 
  (i) the settlor of the trust, 
  (ii) the spouse or common-law partner or former spouse or common-law partner of the settlor of the trust, or 
  (iii) a child, grandchild or great grandchild of the settlor of the trust or the spouse or common-law partner of any such person; ( bénéficiaire privilégié)   
  *qualified farm property* [Repealed, 2014, c. 39, s. 28]   
  *qualified fishing property* [Repealed, 2014, c. 39, s. 28]   
  *qualified small business corporation share* [Repealed, 2014, c. 39, s. 28]   
  *settlor*,  
  (a) in relation to a testamentary trust, means the individual referred to in the definition 
  *testamentary trust* in this subsection, and  
  (b) in relation to an inter vivos trust,  
  (i) if the trust was created by the transfer, assignment or other disposition of property thereto (in this definition referred to as property “contributed”) by not more than one individual and the fair market value of such of the property of the trust as was contributed by the individual at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual, and 
  (ii) if the trust was created by the contribution of property thereto jointly by an individual and the individual’s spouse or common-law partner and by no other person and the fair market value of such of the property of the trust as was contributed by them at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual and the spouse or common-law partner; ( auteur ou disposant)   
  *testamentary trust*, in a taxation year, means a trust that arose on and as a consequence of the death of an individual (including a trust referred to in subsection 248(9.1)), other than  
  (a) a trust created by a person other than the individual, 
  (b) a trust created after November 12, 1981 if, before the end of the taxation year, property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof, 
  (c) a trust created before November 13, 1981 if 
  (i) after June 28, 1982 property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof, or 
  (ii) before the end of the taxation year, the total fair market value of the property owned by the trust that was contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property exceeds the total fair market value of the property owned by the trust that was contributed by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property, and for the purposes of this subparagraph the fair market value of any property shall be determined as at the time it was acquired by the trust, and 
  (d) a trust that, at any time after December 20, 2002 and before the end of the taxation year, incurs a debt or any other obligation owed to, or guaranteed by, a beneficiary or any other person or partnership (which beneficiary, person or partnership is referred to in this paragraph as the “specified party”) with whom any beneficiary of the trust does not deal at arm’s length, other than a debt or other obligation 
  (i) incurred by the trust in satisfaction of the specified party’s right as a beneficiary under the trust 
  (A) to enforce payment of an amount of the trust’s income or capital gains payable at or before that time by the trust to the specified party, or 
  (B) to otherwise receive any part of the capital of the trust, 
  (ii) owed to the specified party, if the debt or other obligation arose because of a service (for greater certainty, not including any transfer or loan of property) rendered by the specified party to, for or on behalf of the trust, 
  (iii) owed to the specified party, if 
  (A) the debt or other obligation arose because of a payment made by the specified party for or on behalf of the trust, 
  (B) in exchange for the payment (and in full settlement of the debt or other obligation), the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the specified party within 12 months after the payment was made (or, if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), and 
  (C) it is reasonable to conclude that the specified party would have been willing to make the payment if the specified party dealt at arm’s length with the trust, except where the trust is the individual’s estate and that payment was made within the first 12 months after the individual’s death (or, if written application has been made to the Minister by the estate within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), or 
  (iv) incurred by the trust before October 24, 2012 if, in full settlement of the debt or other obligation the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the person or partnership to whom the debt or other obligation is owed within 12 months after the day on which the Technical Tax Amendments Act, 2012 receives royal assent (or if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances); (fiducie testamentaire)   
  *trust* includes an inter vivos trust and a testamentary trust but in subsections 104(4), (5), (5.2), (12), (13.1), (13.2), (14) and (15) and sections 105 to 107 does not include  
  (a) an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a foreign retirement arrangement, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA, 
  (a.1) a trust (other than a trust described in paragraph (a) or (d), a trust to which subsection 7(2) or (6) applies or a trust prescribed for the purpose of subsection 107(2)) all or substantially all of the property of which is held for the purpose of providing benefits to individuals each of whom is provided with benefits in respect of, or because of, an office or employment or former office or employment of any individual, 
  (b) a related segregated fund trust (within the meaning assigned by section 138.1), 
  (c) a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, 
  (d) an RCA trust (within the meaning assigned by subsection 207.5(1)), 
  (e) a trust each of the beneficiaries under which was at all times after it was created a trust referred to in paragraph (a), (b) or (d) or a person who is a beneficiary of the trust only because of being a beneficiary under a trust referred to in any of those paragraphs, or 
  (e.1) a cemetery care trust or a trust governed by an eligible funeral arrangement, and, in applying subsections 104(4), (5), (5.2), (12), (14) and (15) at any time, does not include 
  (f) a trust that, at that time, is a unit trust, or 
  (g) a trust all interests in which, at that time, have vested indefeasibly, other than 
  (i) an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust to which paragraph 104(4)(a.4) applies, 
  (ii)  [Repealed, 2013, c. 34, s. 236]  
  (iii) a trust that has, in its return of income under this Part for its first taxation year that ends after 1992, elected that this paragraph not apply, 
  (iv) a trust that is at that time resident in Canada where the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust who at that time are non-resident is more than 20% of the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust, 
  (v) a trust under the terms of which, at that time, all or part of a person’s interest in the trust is to be terminated with reference to a period of time (including a period of time determined with reference to the person’s death), otherwise than as a consequence of terms of the trust under which an interest in the trust is to be terminated as a consequence of a distribution to the person (or the person’s estate) of property of the trust if the fair market value of the property to be distributed is required to be commensurate with the fair market value of that interest immediately before the distribution, or 
  (vi) a trust that, before that time and after December 17, 1999, has made a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, if the distribution can reasonably be considered to have been financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual. ( fiducie)  
  
  ### Testamentary trust not disqualified
  
  (1.1) For the purpose of the definition 
  *testamentary trust* in subsection (1), a contribution to a particular trust does not include  
  (a) a qualifying expenditure (within the meaning of section 118.04, 118.041 or 122.92) of a beneficiary under the trust; or  
  (b) an amount paid to, or on behalf of, the trust by another trust if 
  (i) the trust is an individual’s graduated rate estate (determined without regard to the payment and this subsection), 
  (ii) paragraph 104(13.4)(b) applies to the other trust, for a taxation year that ends at a time determined by reference to the individual’s death, because of a joint election made under subparagraph 104(13.4)(b.1)(iii) by the other trust and the legal representative administering the estate, 
  (iii) the payment is on account of the tax payable by the individual, for the individual’s taxation year that includes the day on which the individual dies, under 
  (A) this Part, or 
  (B) the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and 
  (iv) the amount of the payment does not exceed the amount by which that tax payable is greater than it would have been if paragraph 104(13.4)(b) did not apply to the other trust in respect of the taxation year referred to in subparagraph (ii). 
  
  ### When trust is a unit trust
  
  (2) For the purposes of this Act, a trust is a unit trust at any particular time if, at that time, it was an inter vivos trust the interest of each beneficiary under which was described by reference to units of the trust, and  
  (a) the issued units of the trust included 
  (i) units having conditions attached thereto that included conditions requiring the trust to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the units, or fractions or parts thereof, that are fully paid, or 
  (ii) units qualified in accordance with prescribed conditions relating to the redemption of the units by the trust, and the fair market value of such of the units as had conditions attached thereto that included such conditions or as were so qualified, as the case may be, was not less than 95% of the fair market value of all of the issued units of the trust (such fair market values being determined without regard to any voting rights attaching to units of the trust); 
  (b) each of the following conditions was satisfied: 
  (i) throughout the taxation year that includes the particular time (in this paragraph referred to as the “current year”), the trust was resident in Canada, 
  (ii) throughout the period or periods (in this paragraph referred to as the “relevant periods”) that are in the current year and throughout which the conditions in paragraph (a) are not satisfied in respect of the trust, its only undertaking was 
  (A) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable), 
  (B) the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or 
  (C) any combination of the activities described in clauses (A) and (B), 
  (iii) throughout the relevant periods at least 80% of its property consisted of any combination of 
  (A) shares, 
  (B) any property that, under the terms or conditions of which or under an agreement, is convertible into, is exchangeable for or confers a right to acquire, shares, 
  (C) cash, 
  (D) bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations, 
  (E) marketable securities, 
  (F) real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and 
  (G) rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada, 
  (iv) either 
  (A) not less than 95% of its income for the current year (computed without regard to subsections 39(2), 49(2.1) and 104(6)) was derived from, or from the disposition of, investments described in subparagraph (iii), or 
  (B) not less than 95% of its income for each of the relevant periods (computed without regard to subsections 39(2), 49(2.1) and 104(6) and as though each of those periods were a taxation year) was derived from, or from the disposition of, investments described in subparagraph (iii), 
  (v) throughout the relevant periods, not more than 10% of its property consisted of bonds, securities or shares in the capital stock of any one corporation or debtor other than Her Majesty in right of Canada or a province or a Canadian municipality, and 
  (vi) where the trust would not be a unit trust at the particular time if this paragraph were read without reference to this subparagraph and subparagraph (iii) were read without reference to clause (F), the units of the trust are listed at any time in the current year or in the following taxation year on a designated stock exchange in Canada, or 
  (c) the fair market value of the property of the trust at the end of 1993 was primarily attributable to real property or an interest in real property — or to immovables or a real right in immovables — and the trust was a unit trust throughout any calendar year that ended before 1994 and the fair market value of the property of the trust at the particular time is primarily attributable to property described in paragraph (a) or (b) of the definition 
  *qualified investment* in section 204, real property or an interest in real property — or immovables or a real right in immovables — or any combination of those properties.  
  
  ### Income of a trust in certain provisions
  
  (3) For the purposes of the definition income interest in subsection (1), subclause (c.1)(iii.1)(D)(II) of the definition principal residence in section 54 and the definitions lifetime benefit trust in subsection 60.011(1) and exempt foreign trust in subsection 94(1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definition pre-1972 spousal trust in subsection (1) and paragraphs 70(6)(b) and (6.1)(b), 73(1.01)(c) and 104(4)(a), the income of a trust is its income computed without reference to the provisions of this Act, minus any dividends included in that income  
  (a) that are amounts not included by reason of section 83 in computing the income of the trust for the purposes of the other provisions of this Act; 
  (b) that are described in subsection 131(1); or 
  (c) to which subsection 131(1) applies by reason of subsection 130(2). 
  
  ### Trust not disqualified
  
  (4) For the purposes of the definition pre-1972 spousal trust in subsection (1), subparagraphs 70(6)(b)(ii) and (6.1)(b)(ii) and paragraphs 73(1.01)(c) and 104(4)(a), if a trust was created by a taxpayer whether by the taxpayer’s will or otherwise, no person is deemed to have received or otherwise obtained or to be entitled to receive or otherwise obtain the use of any income or capital of the trust solely because of  
  (a) the payment, or provision for payment, as the case may be, by the trust of 
  (i) any estate, legacy, succession or inheritance duty payable, in consequence of the death of the taxpayer, or a spouse or common-law partner of the taxpayer who is a beneficiary under the trust, in respect of any property of, or interest in, the trust, or 
  (ii) any income or profits tax payable by the trust in respect of any income of the trust; or 
  (b) the inhabiting at any time by an individual of a housing unit that is, or is in respect of, property that is owned at that time by the trust, if 
  (i) the property is described in the definition principal residence in section 54 in respect of the trust for the trust’s taxation year that includes that time, and  
  (ii) the individual is 
  (A) the taxpayer, or 
  (B) the taxpayer’s 
  (I) spouse or common-law partner, 
  (II) former spouse or common-law partner, or 
  (III) child. 
  
  ### Interpretation
  
  (5) Except as otherwise provided in this Part, 
  (a) an amount included in computing the income for a taxation year of a beneficiary of a trust under subsection 104(13) or (14) or section 105 shall be deemed to be income of the beneficiary for the year from a property that is an interest in the trust and not from any other source, and 
  (b) an amount deductible in computing the amount that would, but for subsections 104(6) and (12), be the income of a trust for a taxation year shall not be deducted by a beneficiary of the trust in computing the beneficiary’s income for a taxation year, but, for greater certainty, nothing in this subsection shall affect the application of subsection 56(4.1), sections 74.1 to 75 and 120.4 and subsection 160(1.2) of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952.  
  
  ### Variation of trusts
  
  (6) Where at any time the terms of a trust are varied 
  (a) for the purposes of subsections 104(4), (5) and (5.2) and subject to paragraph (b), the trust is, at and after that time, deemed to be the same trust as, and a continuation of, the trust immediately before that time; 
  (b) for greater certainty, paragraph (a) does not affect the application of paragraph 104(4)(a.1); and 
  (c) for the purposes of paragraph 53(2)(h), subsection 107(1), paragraph (j) of the definition 
  *excluded right or interest* in subsection 128.1(10) and the definition 
  *personal trust* in subsection 248(1), no interest of a beneficiary under the trust before it was varied is considered to be consideration for the interest of the beneficiary in the trust as varied.  
  
  ### Interests acquired for consideration
  
  (7) For the purposes of paragraph 53(2)(h), subparagraph (c)(i) of the definition 
  *exempt amount* in subsection 94(1), subsection 107(1), paragraph (j) of the definition 
  *excluded right or interest* in subsection 128.1(10) and paragraph (b) of the definition 
  *personal trust* in subsection 248(1),  
  (a) an interest in a trust is deemed not to be acquired for consideration solely because it was acquired in satisfaction of any right as a beneficiary under the trust to enforce payment of an amount by the trust; and 
  (b) if all the beneficial interests in a particular trust acquired by way of the transfer, assignment or other disposition of property to the particular trust were acquired by 
  (i) one person, or 
  (ii) two or more persons who would be related to each other if 
  (A) a trust and another person were related to each other, where the other person is a beneficiary under the trust or is related to a beneficiary under the trust, and 
  (B) a trust and another trust were related to each other, where a beneficiary under the trust is a beneficiary under the other trust or is related to a beneficiary under the other trust, any beneficial interest in the particular trust acquired by such a person is deemed to have been acquired for no consideration. 
  
  # DIVISION C 
  
  ## Computation of Taxable Income 
  
  ### Definitions
  
  110 (0.1) The following definitions apply in this section.  
  *consolidated financial statements* has the same meaning as in subsection 233.8(1). (états financiers consolidés)   
  *specified person*, at any time, means a qualifying person that meets the following conditions:  
  (a) it is not a Canadian-controlled private corporation; 
  (b) if the qualifying person is a member of a group that annually prepares consolidated financial statements, the total consolidated group revenue reflected in the last consolidated financial statements of the group presented to shareholders or unitholders — of the member of the group that would be the ultimate parent entity, as defined in subsection 233.8(1), of the group if the group were a multinational enterprise group, as defined in subsection 233.8(1) — before that time exceeds $500 million; and  
  (c) if paragraph (b) does not apply, it has gross revenue in excess of $500 million based on 
  (i) the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before that time, 
  (ii) if subparagraph (i) does not apply, the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before the end of the last fiscal period referred to in subparagraph (i), and 
  (iii) if subparagraph (i) does not apply and financial statements were not presented as described in subparagraph (ii), the amounts that would have been reflected in the annual financial statements of the qualifying person for the last fiscal period of the qualifying person that ended before that time, if such statements had been prepared in accordance with generally accepted accounting principles. ( personne déterminée)   
  *vesting year*, of a security to be acquired under an agreement, means  
  (a) if the agreement specifies the calendar year in which the taxpayer’s right to acquire the security first becomes exercisable (otherwise than as a consequence of an event that is not reasonably foreseeable at the time the agreement is entered into), that calendar year; and 
  (b) in any other case, the calendar year in which the right to acquire the security would become exercisable if the agreement had specified that all identical rights to acquire securities become exercisable on a pro rata basis over the period that 
  (i) begins on the day that the agreement was entered into, and 
  (ii) ends on the day that is the earlier of 
  (A) the day that is 60 months after the day the agreement is entered into, and 
  (B) the last day that the right to acquire the security could become exercisable under the agreement. ( année de dévolution)  
  
  ### Deductions permitted
  
  (1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such of the following amounts as are applicable 
  
  ### Employee options
  
  (d) an amount equal to 1/2 of the amount of the benefit deemed by subsection 7(1) to have been received by the taxpayer in the year in respect of a security (other than a security that is a non-qualified security) that a particular qualifying person has agreed after February 15, 1984 to sell or issue under an agreement, in respect of the transfer or other disposition of rights under the agreement or as a result of the death of the taxpayer because the taxpayer immediately before death owned a right to acquire the security under the agreement, if 
  (i) the security was acquired under the agreement 
  (A) by the taxpayer or a person not dealing at arm’s length with the taxpayer in circumstances described in paragraph 7(1)(c), or 
  (B) in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, within the first taxation year of the graduated rate estate of the taxpayer, by 
  (I) the graduated rate estate of the taxpayer, 
  (II) a person who is a beneficiary (as defined in subsection 108(1)) under the graduated rate estate of the taxpayer, or  
  (III) a person in whom the rights of the taxpayer under the agreement have vested as a result of the death, 
  (i.1) the security 
  (A) is a prescribed share at the time of its sale or issue, as the case may be, 
  (B) would have been a prescribed share if it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement, 
  (B.1) in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, would have been a prescribed share if it were issued or sold to the taxpayer immediately before the death of the taxpayer, 
  (C) would have been a unit of a mutual fund trust at the time of its sale or issue if those units issued by the trust that were not identical to the security had not been issued, 
  (D) would have been a unit of a mutual fund trust if 
  (I) it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement, and 
  (II) those units issued by the trust that were not identical to the security had not been issued, or 
  (E) in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, would have been a unit of a mutual fund trust if 
  (I) it were issued or sold to the taxpayer immediately before the death of the taxpayer, and 
  (II) those units issued by the trust that were not identical to the security had not been issued, 
  (ii) where rights under the agreement were not acquired by the taxpayer as a result of a disposition of rights to which subsection 7(1.4) applied, 
  (A) the amount payable by the taxpayer to acquire the security under the agreement is not less than the amount by which 
  (I) the fair market value of the security at the time the agreement was made exceeds 
  (II) the amount, if any, paid by the taxpayer to acquire the right to acquire the security, and 
  (B) at the time immediately after the agreement was made, the taxpayer was dealing at arm’s length with 
  (I) the particular qualifying person, 
  (II) each other qualifying person that, at the time, was an employer of the taxpayer and was not dealing at arm’s length with the particular qualifying person, and 
  (III) the qualifying person of which the taxpayer had, under the agreement, a right to acquire a security, and 
  (iii) where rights under the agreement were acquired by the taxpayer as a result of one or more dispositions to which subsection 7(1.4) applied, 
  (A) the amount payable by the taxpayer to acquire the security under the agreement is not less than the amount that was included, in respect of the security, in the amount determined under subparagraph 7(1.4)(c)(ii) with respect to the most recent of those dispositions, 
  (B) at the time immediately after the agreement the rights under which were the subject of the first of those dispositions (in this subparagraph referred to as the “original agreement”) was made, the taxpayer was dealing at arm’s length with 
  (I) the qualifying person that made the original agreement, 
  (II) each other qualifying person that, at the time, was an employer of the taxpayer and was not dealing at arm’s length with the qualifying person that made the original agreement, and 
  (III) the qualifying person of which the taxpayer had, under the original agreement, a right to acquire a security, 
  (C) the amount that was included, in respect of each particular security that the taxpayer had a right to acquire under the original agreement, in the amount determined under subparagraph 7(1.4)(c)(iv) with respect to the first of those dispositions was not less than the amount by which 
  (I) the fair market value of the particular security at the time the original agreement was made exceeded 
  (II) the amount, if any, paid by the taxpayer to acquire the right to acquire the security, and 
  (D) for the purpose of determining if the condition in paragraph 7(1.4)(c) was satisfied with respect to each of the particular dispositions following the first of those dispositions, 
  (I) the amount that was included, in respect of each particular security that could be acquired under the agreement the rights under which were the subject of the particular disposition, in the amount determined under subparagraph 7(1.4)(c)(iv) with respect to the particular disposition was not less than 
  (II) the amount that was included, in respect of the particular security, in the amount determined under subparagraph 7(1.4)(c)(ii) with respect to the last of those dispositions preceding the particular disposition; 
  
  ### Charitable donation of employee option securities
  
  (d.01) subject to subsection (2.1), if the taxpayer disposes of a security acquired in the year by the taxpayer under an agreement referred to in subsection 7(1) by making a gift of the security to a qualified donee, an amount in respect of the disposition of the security equal to 1/2 of the lesser of the benefit deemed by paragraph 7(1)(a) to have been received by the taxpayer in the year in respect of the acquisition of the security and the amount that would have been that benefit had the value of the security at the time of its acquisition by the taxpayer been equal to the value of the security at the time of the disposition, if 
  (i) the security is a security described in subparagraph 38(a.1)(i), 
  (ii)  [Repealed, 2002, c. 9, s. 33(1)]  
  (iii) the gift is made in the year and on or before the day that is 30 days after the day on which the taxpayer acquired the security, and 
  (iv) the taxpayer is entitled to a deduction under paragraph (d) in respect of the acquisition of the security; 
  
  ### Idem
  
  (d.1) where the taxpayer 
  (i) is deemed, under paragraph 7(1)(a) by virtue of subsection 7(1.1), to have received a benefit in the year in respect of a share acquired by the taxpayer after May 22, 1985, 
  (ii) has not disposed of the share (otherwise than as a consequence of the taxpayer’s death) or exchanged the share within two years after the date the taxpayer acquired it, and 
  (iii) has not deducted an amount under paragraph 110(1)(d) in respect of the benefit in computing the taxpayer’s taxable income for the year, an amount equal to 1/2 of the amount of the benefit; 
  
  ### Prospector’s and grubstaker’s shares
  
  (d.2) where the taxpayer has, under paragraph 35(1)(d), included an amount in the taxpayer’s income for the year in respect of a share received after May 22, 1985, an amount equal to 1/2 of that amount unless that amount is exempt from income tax in Canada by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada; 
  
  ### Employer’s shares
  
  (d.3) where the taxpayer has, under subsection 147 (10.4), included an amount in computing the taxpayer’s income for the year, an amount equal to 1/2 of that amount; 
  
  ### Employer deduction — non-qualified securities
  
  (e) an amount equal to the amount of the benefit in respect of employment with the taxpayer deemed by subsection 7(1) to have been received by an individual in the year in respect of a non-qualified security that the taxpayer (or a qualifying person that does not deal at arm’s length with the taxpayer) has agreed to sell or issue under an agreement with the individual, if 
  (i) the taxpayer is a qualifying person, 
  (ii) at the time the agreement was entered into, the individual was an employee of the taxpayer, 
  (iii) the amount is not claimed as a deduction in computing the taxable income of another qualifying person, 
  (iv) an amount would have been deductible in computing the taxable income of the individual under paragraph (d) if the security were not a non-qualified security, 
  (v) in the case of an individual who is not resident in Canada throughout the year, the benefit deemed by subsection 7(1) to have been received by the individual was included in computing the taxable income earned in Canada of the individual for the year, and 
  (vi) the notification requirements in subsection (1.9) are met in respect of the security; 
  
  ### Deductions for payments
  
  (f) any social assistance payment made on the basis of a means, needs or income test and included because of clause 56(1)(a)(i)(A) or paragraph 56(1)(u) in computing the taxpayer’s income for the year or any amount that is 
  (i) an amount exempt from income tax in Canada because of a provision contained in a tax convention or agreement with another country that has the force of law in Canada, 
  (ii) compensation received under an employees’ or workers’ compensation law of Canada or a province in respect of an injury, disability or death, except any such compensation received by a person as the employer or former employer of the person in respect of whose injury, disability or death the compensation was paid, 
  (iii) income from employment with a prescribed international organization, 
  (iv) the taxpayer’s income from employment with a prescribed international non-governmental organization, where the taxpayer 
  (A) was not, at any time in the year, a Canadian citizen, 
  (B) was a non-resident person immediately before beginning that employment in Canada, and 
  (C) if the taxpayer is resident in Canada, became resident in Canada solely for the purpose of that employment, or 
  (v) the lesser of 
  (A) the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed international operational mission (as determined by the Minister of National Defence, the Minister of Public Safety and Emergency Preparedness or by a person designated by either Minister), and 
  (B) the employment income that would have been so earned by the taxpayer if the taxpayer had been paid at the maximum rate of pay that applied, from time to time during the mission, to a Lieutenant-Colonel (General Service Officers) of the Canadian Forces, to the extent that it is included in computing the taxpayer’s income for the year; 
  
  ### Financial assistance
  
  (g) any amount that 
  (i) is received by the taxpayer in the year under a program referred to in subparagraph 56(1)(r)(ii) or (iii), a program established under the authority of the Department of Employment and Social Development Act or a prescribed program,  
  (ii) is financial assistance for the payment of tuition fees of the taxpayer that are not included in computing an amount deductible under subsection 118.5(1) in computing the taxpayer’s tax payable under this Part for any taxation year, 
  (iii) is included in computing the taxpayer’s income for the year, and 
  (iv) is not otherwise deductible in computing the taxpayer’s taxable income for the year; 
  (h) 35 per cent of the total of all benefits (in this paragraph referred to as “U.S. social security benefits”) that are received by the taxpayer in the taxation year and to which paragraph 5 of Article XVIII of the Convention between Canada and the United States of America with respect to Taxes on Income and on Capital as set out in Schedule I to the Canada-United States Tax Convention Act, 1984, S.C. 1984, c. 20, applies, if  
  (i) the taxpayer has continuously during a period that begins before 1996 and ends in the taxation year, been resident in Canada, and has received U.S. social security benefits in each taxation year that ends in that period, or 
  (ii) in the case where the benefits are payable to the taxpayer in respect of a deceased individual, 
  (A) the taxpayer was, immediately before the deceased individual’s death, the deceased individual’s spouse or common-law partner, 
  (B) the taxpayer has continuously during a period that begins at the time of the deceased individual’s death and ends in the taxation year, been resident in Canada, 
  (C) the deceased individual was, in respect of the taxation year in which the deceased individual died, a taxpayer described in subparagraph (i), and 
  (D) in each taxation year that ends in a period that begins before 1996 and that ends in the taxation year, the taxpayer, the deceased individual, or both of them, received U.S. social security benefits. 
  (i)  [Repealed, 1994, c. 7, Sch. II, s. 78(3)]  
  (j)  [Repealed, 2017, c. 20, s. 8]  
  
  ### Part VI.1 tax
  
  (k) the amount determined by multiplying the taxpayer’s tax payable under subsection 191.1(1) for the year by 
  (i) if the taxation year ends before 2010, 3, 
  (ii) if the taxation year ends after 2009 and before 2012, 3.2, and 
  (iii) if the taxation year ends after 2011, 3.5. 
  
  ### Election by particular qualifying person
  
  (1.1) For the purpose of computing the taxable income of a taxpayer for a taxation year, paragraph (1)(d) shall be read without reference to its subparagraph (i) in respect of a right granted to the taxpayer under an agreement to sell or issue securities referred to in subsection 7(1) if 
  (a) the particular qualifying person elects in prescribed form that neither the particular qualifying person nor any person not dealing at arm’s length with the particular qualifying person will deduct in computing its income for a taxation year any amount (other than a designated amount described in subsection (1.2)) in respect of a payment to or for the benefit of a taxpayer for the taxpayer’s transfer or disposition of that right; 
  (b) the particular qualifying person files the election with the Minister; 
  (c) the particular qualifying person provides the taxpayer or, if the taxpayer is deceased, the graduated rate estate of the taxpayer, with evidence in writing of the election; and 
  (d) the taxpayer or, if the taxpayer is deceased, the graduated rate estate of the taxpayer, files the evidence with the Minister with the taxpayer’s return of income for the year in which a deduction under paragraph (1)(d) is claimed. 
  
  ### Designated amount
  
  (1.2) For the purposes of subsections (1.1) and (1.44), an amount is a designated amount if the following conditions are met: 
  (a) the amount would otherwise be deductible in computing the income of the particular qualifying person in the absence of subsections (1.1) and (1.44); 
  (b) the amount is payable to a person 
  (i) with whom the particular qualifying person deals at arm’s length, and 
  (ii) who is neither an employee of the particular qualifying person nor of any person not dealing at arm’s length with the particular qualifying person; and 
  (c) the amount is payable in respect of an arrangement entered into for the purpose of managing the particular qualifying person’s financial risk associated with a potential increase in value of the securities under the agreement described in subsection (1.1) or (1.44). 
  
  ### Determination of non-qualified securities
  
  (1.3) Subsection (1.31) applies to a taxpayer in respect of an agreement if 
  (a) a particular qualifying person agrees to sell or issue securities of the particular qualifying person (or another qualifying person that does not deal at arm’s length with the particular qualifying person) to the taxpayer under the agreement; 
  (b) at the time the agreement is entered into (in this subsection and subsection (1.31) referred to as the “relevant time”), the taxpayer is an employee of the particular qualifying person or of a qualifying person that does not deal at arm’s length with the particular qualifying person; and 
  (c) at the relevant time, any of the following persons is a specified person: 
  (i) the particular qualifying person, 
  (ii) the other qualifying person, if any, referred to in paragraph (a), or 
  (iii) the other qualifying person, if any, referred to in paragraph (b). 
  
  ### Annual vesting limit
  
  (1.31) If this subsection applies to a taxpayer in respect of an agreement, the securities to be sold or issued under the agreement, for each vesting year of those securities, are deemed to be non-qualified securities for the purposes of this section in the proportion determined by the formula is the amount determined by the formula is the total of all amounts each of which is the fair market value at the relevant time of each security under the agreement that has that same vesting year, and is the lesser of 
  (a) $200,000, and 
  (b) the total of all amounts each of which is an amount determined for C in respect of securities that have that same vesting year under agreements (other than the agreement) entered into at or before the relevant time with the particular qualifying person referred to in subsection (1.3) (or another qualifying person that does not deal at arm’s length with the particular qualifying person), other than 
  (i) securities designated under subsection (1.4), 
  (ii) old securities (within the meaning of subsection 7(1.4)), 
  (iii) securities where the right to acquire those securities is an old right (within the meaning of subsection (1.7)), and 
  (iv) securities in respect of which 
  (A) the right to acquire those securities has expired, or has been cancelled, before the relevant time, and 
  (B) no amount is deductible under paragraph (1)(d) in computing the taxable income of the taxpayer for any year; and is the amount determined for C. 
  
  ### Non-qualified security designation
  
  (1.4) If subsection (1.31) applies to a taxpayer in respect of an agreement and the particular qualifying person referred to in paragraph (1.3)(a) designates one or more securities to be sold or issued under the agreement as non-qualified securities, the following rules apply: 
  (a) those securities are deemed to be non-qualified securities for the purposes of this section; and 
  (b) the particular qualifying person may not elect under subsection (1.1) in respect of a right to acquire those securities. 
  
  ### Ordering of acquisition of securities
  
  (1.41) If a taxpayer acquires a security under an agreement and the acquired security could be a security that is not a non-qualified security, the security is to be considered a security that is not a non-qualified security for the purposes of this section. 
  
  ### Ordering of simultaneous agreements — subsection (1.31)
  
  (1.42) If two or more agreements to sell or issue options are entered into at the same time and the particular qualifying person referred to in subsection (1.3) designates the order of the agreements, then the agreements are deemed to have been entered into in that order for the purposes of paragraph (b) of the description of D in subsection (1.31). 
  
  ### Application of subsection (1.44)
  
  (1.43) Subsection (1.44) applies in respect of a taxpayer’s right to acquire a security under an agreement if 
  (a) subsection (1.31) applies to the taxpayer in respect of the agreement; 
  (b) the security is not a non-qualified security; and 
  (c) a payment is made to or for the benefit of the taxpayer for the taxpayer’s transfer or disposition of the right. 
  
  ### Cash-out — securities not designated as non-qualified
  
  (1.44) If this subsection applies in respect of a taxpayer’s right to acquire a security under an agreement 
  (a) no qualifying person may deduct, in computing its income for a taxation year, an amount (other than a designated amount described in subsection (1.2)) in respect of the payment referred to in paragraph (1.43)(c); and 
  (b) paragraph (1)(d) shall, in respect of the right, be read without reference to its subparagraph (i). 
  
  ### Determination of amounts relating to employee security options
  
  (1.5) For the purpose of paragraph (1)(d), 
  (a) the amount payable by a taxpayer to acquire a security under an agreement referred to in subsection 7(1) shall be determined without reference to any change in the value of a currency of a country other than Canada, relative to Canadian currency, occurring after the agreement was made; 
  (b) the fair market value of a security at the time an agreement in respect of the security was made shall be determined on the assumption that all specified events associated with the security that occurred after the agreement was made and before the sale or issue of the security or the disposition of the taxpayer’s rights under the agreement in respect of the security, as the case may be, had occurred immediately before the agreement was made; and 
  (c) in determining the amount that was included, in respect of a security that a qualifying person has agreed to sell or issue to a taxpayer, in the amount determined under subparagraph 7(1.4)(c)(ii) for the purpose of determining if the condition in paragraph 7(1.4)(c) was satisfied with respect to a particular disposition, an assumption shall be made that all specified events associated with the security that occurred after the particular disposition and before the sale or issue of the security or the taxpayer’s subsequent disposition of rights under the agreement in respect of the security, as the case may be, had occurred immediately before the particular disposition. 
  
  ### Meaning of specified event 
  
  (1.6) For the purpose of subsection (1.5), a specified event associated with a security is 
  (a) where the security is a share of the capital stock of a corporation, 
  (i) a subdivision or consolidation of shares of the capital stock of the corporation, 
  (ii) a reorganization of share capital of the corporation, and 
  (iii) a stock dividend of the corporation; and 
  (b) where the security is a unit of a mutual fund trust, 
  (i) a subdivision or consolidation of the units of the trust, and 
  (ii) an issuance of units of the trust as payment, or in satisfaction of a person’s right to enforce payment, out of the trust’s income (determined before the application of subsection 104(6)) or out of the trust’s capital gains. 
  
  ### Reduction in exercise price
  
  (1.7) If the amount payable by a taxpayer to acquire securities under an agreement referred to in subsection 7(1) is reduced at any particular time and the conditions in subsection (1.8) are satisfied in respect of the reduction, 
  (a) the rights (referred to in this subsection and subsection (1.8) as the “old rights”) that the taxpayer had under the agreement immediately before the particular time are deemed to have been disposed of by the taxpayer immediately before the particular time; 
  (b) the rights (referred to in this subsection and subsection (1.8) as the “new rights”) that the taxpayer has under the agreement at the particular time are deemed to be acquired by the taxpayer at the particular time; and 
  (c) the taxpayer is deemed to receive the new rights as consideration for the disposition of the old rights. 
  
  ### Conditions for subsection (1.7) to apply
  
  (1.8) The following are the conditions in respect of the reduction: 
  (a) that the taxpayer would not be entitled to a deduction under paragraph (1)(d) if the taxpayer acquired securities under the agreement immediately after the particular time and this section were read without reference to subsection (1.7); and 
  (b) that the taxpayer would be entitled to a deduction under paragraph (1)(d) if the taxpayer 
  (i) disposed of the old rights immediately before the particular time, 
  (ii) acquired the new rights at the particular time as consideration for the disposition, and 
  (iii) acquired securities under the agreement immediately after the particular time. 
  
  ### Notification — non-qualified security
  
  (1.9) If a security to be issued or sold under an agreement between an employee and a qualifying person is a non-qualified security, the employer of the employee shall 
  (a) notify the employee in writing that the security is a non-qualified security no later than 30 days after the day that the agreement is entered into; and 
  (b) notify the Minister in prescribed form that the security is a non-qualified security on or before the filing-due date for the taxation year of the qualifying person that includes the time that the agreement is entered into. 
  
  ### Charitable gifts
  
  (2) Where an individual is, during a taxation year, a member of a religious order and has, as such, taken a vow of perpetual poverty, the individual may deduct in computing the individual’s taxable income for the year an amount equal to the total of the individual’s superannuation or pension benefits and the individual’s earned income for the year (within the meaning assigned by section 63) if, of the individual’s income, that amount is paid in the year to the order. 
  
  ### Charitable donation — proceeds of disposition of employee option securities
  
  (2.1) Where a taxpayer, in exercising a right to acquire a security that a particular qualifying person has agreed to sell or issue to the taxpayer under an agreement referred to in subsection 7(1), directs a broker or dealer appointed or approved by the particular qualifying person (or by a qualifying person that does not deal at arm’s length with the particular qualifying person) to immediately dispose of the security and pay all or a portion of the proceeds of disposition of the security to a qualified donee, 
  (a) if the payment is a gift, the taxpayer is deemed, for the purpose of paragraph (1)(d.01), to have disposed of the security by making a gift of the security to the qualified donee at the time the payment is made; and 
  (b) the amount deductible under paragraph (1)(d.01) by the taxpayer in respect of the disposition of the security is the amount determined by the formula is the amount that would be deductible under paragraph (1)(d.01) in respect of the disposition of the security if this subsection were read without reference to this paragraph, is the amount of the payment, and is the amount of the proceeds of disposition of the security. 
  
  ### Deduction for gifts
  
  110.1 (1) For the purpose of computing the taxable income of a corporation for a taxation year, there may be deducted such of the following amounts as the corporation claims 
  
  ### Charitable gifts
  
  (a) the total of all amounts each of which is the eligible amount of a gift (other than a gift described in paragraph (c) or (d)) made by the corporation in the year or in any of the five preceding taxation years to a qualified donee, not exceeding the lesser of the corporation’s income for the year and the amount determined by the formula is the corporation’s income for the year computed without reference to subsection 137(2), is the total of all amounts, each of which is that proportion of the corporation’s taxable capital gain for the taxation year in respect of a gift made by the corporation in the taxation year (in respect of which gift an eligible amount is described in this paragraph for the taxation year) that the eligible amount of the gift is of the corporation’s proceeds of disposition in respect of the gift, is the total of all amounts each of which is a taxable capital gain of the corporation for the year, because of subsection 40(1.01), from a disposition of a property in a preceding taxation year, and is the total of all amounts each of which is determined in respect of the corporation’s depreciable property of a prescribed class and equal to the lesser of 
  (A) the amount included under subsection 13(1) in respect of the class in computing the corporation’s income for the year, and 
  (B) the total of all amounts each of which is determined in respect of a disposition that is the making of a gift of property of the class by the corporation in the year (in respect of which gift an eligible amount is described in this paragraph for the taxation year) equal to the lesser of 
  (I) that proportion, of the amount by which the proceeds of disposition of the property exceeds any outlays and expenses, to the extent that they were made or incurred by the corporation for the purpose of making the disposition, that the eligible amount of the gift is of the corporation’s proceeds of disposition in respect of the gift, and 
  (II) that proportion, of the capital cost to the corporation of the property, that the eligible amount of the gift is of the corporation’s proceeds of disposition in respect of the gift; 
  (a.1)  [Repealed, 2017, c. 20, s. 9]  
  (b)  [Repealed, 2014, c. 39, s. 29]  
  
  ### Gifts to institutions
  
  (c) the total of all amounts each of which is the eligible amount of a gift (other than a gift described in paragraph (d)) of an object that the Canadian Cultural Property Export Review Board has determined meets the criterion set out in paragraph 29(3)(b) of the Cultural Property Export and Import Act, which gift was made by the corporation in the year or in any of the five preceding taxation years to an institution or a public authority in Canada that was, at the time the gift was made, designated under subsection 32(2) of that Act either generally or for a specified purpose related to that object; and  
  
  ### Ecological gifts
  
  (d) the total of all amounts each of which is the eligible amount of a gift of land (including a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a personal servitude (the rights to which the land is subject and which has a term of not less than 100 years) or a real servitude) if 
  (i) the fair market value of the gift is certified by the Minister of the Environment, 
  (ii) the land is certified by that Minister, or by a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister or the designated person, important to the preservation of Canada’s environmental heritage, and 
  (iii) the gift was made by the corporation in the year or in any of the 10 preceding taxation years to a qualified donee that is 
  (A) Her Majesty in right of Canada or of a province, 
  (B) a municipality in Canada that is approved by that Minister or the designated person in respect of the gift, 
  (C) a municipal or public body performing a function of government in Canada that is approved by that Minister or the designated person in respect of the gift, or 
  (D) a registered charity (other than a private foundation) one of the main purposes of which is, in the opinion of that Minister, the conservation and protection of Canada’s environmental heritage, and that is approved by that Minister or the designated person in respect of the gift. 
  
  ### Limitation on deductibility
  
  (1.1) For the purpose of determining the amount deductible under subsection 110.1(1) in computing a corporation’s taxable income for a taxation year, 
  (a) an amount in respect of a gift is deductible only to the extent that it exceeds amounts in respect of the gift deducted under that subsection in computing the corporation’s taxable income for preceding taxation years; and 
  (b) no amount in respect of a gift made in a particular taxation year is deductible under any of paragraphs 110.1(1)(a) to (d) until amounts deductible under that paragraph in respect of gifts made in taxation years preceding the particular year have been deducted. 
  
  ### Where control acquired
  
  (1.2) Notwithstanding paragraph 88(1)(e.6), if control of a particular corporation is acquired at any time by a person or group of persons, 
  (a) no amount is deductible under any of paragraphs (1)(a) to (d) in computing any corporation’s taxable income for a taxation year that ends on or after that time in respect of a gift made by the particular corporation before that time; and 
  (b) no amount is deductible under any of paragraphs (1)(a) to (d) in computing any corporation’s taxable income for a taxation year that ends on or after that time in respect of a gift made by any corporation on or after that time if the property that is the subject of the gift was acquired by the particular corporation under an arrangement under which it was expected that control of the particular corporation would be so acquired by a person or group of persons, other than a qualified donee that received the gift, and the gift would be so made. 
  
  ### Proof of gift
  
  (2) An eligible amount of a gift shall not be included for the purpose of determining a deduction under subsection (1) unless the making of the gift is evidenced by filing with the Minister 
  (a) a receipt for the gift that contains prescribed information; 
  (b) in the case of a gift described in paragraph (1)(c), the certificate issued under subsection 33(1) of the Cultural Property Export and Import Act ; and  
  (c) in the case of a gift described in paragraph (1)(d), both certificates referred to in that paragraph. 
  
  ### Where subsection (3) applies
  
  (2.1) Subsection (3) applies in circumstances where 
  (a) a corporation makes a gift at any time of 
  (i) capital property to a qualified donee, or 
  (ii) in the case of a corporation not resident in Canada, real or immovable property situated in Canada to a prescribed donee who provides an undertaking, in a form satisfactory to the Minister, to the effect that the property will be held for use in the public interest; and 
  (b) the fair market value of the property otherwise determined at that time exceeds 
  (i) in the case of depreciable property of a prescribed class, the lesser of the undepreciated capital cost of that class at the end of the taxation year of the corporation that includes that time (determined without reference to the proceeds of disposition designated in respect of the property under subsection (3)) and the adjusted cost base to the corporation of the property immediately before that time, and 
  (ii) in any other case, the adjusted cost base to the corporation of the property immediately before that time. 
  
  ### Gifts of capital property
  
  (3) If this subsection applies in respect of a gift by a corporation of property, and the corporation designates an amount in respect of the gift in its return of income under section 150 for the year in which the gift is made, the amount so designated is deemed to be its proceeds of disposition of the property and, for the purpose of subsection 248(31), the fair market value of the gift, but the amount so designated may not exceed the fair market value of the property otherwise determined and may not be less than the greater of 
  (a) in the case of a gift made after December 20, 2002, the amount of the advantage, if any, in respect of the gift, and 
  (b) the amount determined under subparagraph (2.1)(b)(i) or (ii), as the case may be, in respect of the property. 
  
  ### Gifts made by partnership
  
  (4) If at the end of a fiscal period of a partnership a corporation is a member of the partnership, its share of any amount that would, if the partnership were a person, be the eligible amount of a gift made by the partnership to any donee is, for the purpose of this section, deemed to be the eligible amount of a gift made to that donee by the corporation in its taxation year in which the fiscal period of the partnership ends. 
  
  ### Ecological gifts
  
  (5) For the purposes of applying subparagraph 69(1)(b)(ii), this section and section 207.31 in respect of a gift described in paragraph (1)(d) that is made by a taxpayer, the amount that is the fair market value (or, for the purpose of subsection (3), the fair market value otherwise determined) of the gift at the time the gift was made and, subject to subsection (3), the taxpayer’s proceeds of disposition of the gift, is deemed to be the amount determined by the Minister of the Environment to be 
  (a) where the gift is land, the fair market value of the gift; or 
  (b) where the gift is a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a real or personal servitude, the greater of 
  (i) the fair market value otherwise determined of the gift, and 
  (ii) the amount by which the fair market value of the land is reduced as a result of the making of the gift. 
  
  ### Non-qualifying securities
  
  (6) Subsections 118.1(13) to (14) and (16) to (20) apply to a corporation as if the references in those subsections to an individual were read as references to a corporation and as if a non-qualifying security of a corporation included a share (other than a share listed on a designated stock exchange) of the capital stock of the corporation. 
  
  ### Corporation ceasing to exist
  
  (7) If, but for this subsection, a corporation (other than a corporation that was a predecessor corporation in an amalgamation to which subsection 87(1) applied or a corporation that was wound up in a winding-up to which subsection 88(1) applied) would be deemed by subsection 118.1(13) to have made a gift after the corporation ceased to exist, for the purpose of this section, the corporation is deemed to have made the gift in its last taxation year, except that the amount of interest payable under any provision of this Act is the amount that it would be if this subsection did not apply to the gift. 
  (8) and (9)  [Repealed, 2017, c. 20, s. 9]  
  
  ### Options
  
  (10) Subject to subsections (12) and (13), if a corporation has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing an amount under any of paragraphs (1)(a) to (d) in respect of the corporation for any year. 
  
  ### Application of subsection (12)
  
  (11) Subsection (12) applies if 
  (a) an option to acquire a property of a corporation is granted to a qualified donee; 
  (b) the option is exercised so that the property is disposed of by the corporation and acquired by the qualified donee at a particular time; and 
  (c) either 
  (i) the amount that is 80% of the fair market value of the property at the particular time is greater than or equal to the total of 
  (A) the consideration received by the corporation from the qualified donee for the property, and 
  (B) the consideration received by the corporation from the qualified donee for the option, or 
  (ii) the corporation establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the corporation with the intention to make a gift to the qualified donee. 
  
  ### Granting of an option
  
  (12) If this subsection applies, notwithstanding subsection 49(3), 
  (a) the corporation is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and 
  (b) there shall be included in the total referred to in paragraph (1)(a), for the corporation’s taxation year that includes the particular time, the amount by which the property’s fair market value exceeds the total described in subparagraph (11)(c)(i). 
  
  ### Disposition of an option
  
  (13) If an option to acquire a particular property of a corporation is granted to a qualified donee and the option is disposed of by the qualified donee (otherwise than by the exercise of the option) at a particular time 
  (a) the corporation is deemed to have disposed of a property at the particular time 
  (i) the adjusted cost base of which to the corporation immediately before the particular time is equal to the consideration, if any, paid by the qualified donee for the option, and 
  (ii) the proceeds of disposition of which are equal to the lesser of the fair market value of the particular property at the particular time and the fair market value of any consideration (other than a non-qualifying security of any person) received by the qualified donee for the option; and 
  (b) there shall be included in the total referred to in paragraph (1)(a) for the corporation’s taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the qualified donee for the option. 
  
  ### Returned property
  
  (14) Subsection (15) applies if a qualified donee has issued to a corporation a receipt referred to in subsection (2) in respect of a transfer of a property (in this subsection and subsection (15) referred to as the “original property”) and a particular property that is 
  (a) the original property is later transferred to the corporation (unless that later transfer is reasonable consideration or remuneration for property acquired by or services rendered to a person); or 
  (b) any other property that may reasonably be considered compensation for or a substitute for, in whole or in part, the original property, is later transferred to the corporation. 
  
  ### Returned property
  
  (15) If this subsection applies, then 
  (a) irrespective of whether the transfer of the original property by the corporation to the qualified donee referred to in subsection (14) was a gift, the corporation is deemed not to have disposed of the original property at the time of that transfer nor to have made a gift; 
  (b) if the particular property is identical to the original property, the particular property is deemed to be the original property; and 
  (c) if the particular property is not the original property, then 
  (i) the corporation is deemed to have disposed of the original property at the time that the particular property is transferred to the corporation for proceeds of disposition equal to the greater of the fair market value of the particular property at that time and the fair market value of the original property at the time that it was transferred by the corporation to the donee, and 
  (ii) if the transfer of the original property by the corporation would be a gift if this section were read without reference to paragraph (a), the corporation is deemed to have, at the time of that transfer, transferred to the donee a property that is the subject of a gift having a fair market value equal to the amount, if any, by which the fair market value of the original property at the time of that transfer exceeds the fair market value of the particular property at the time that it is transferred to the corporation. 
  
  ### Information return
  
  (16) If subsection (15) applies in respect of a transfer of property to a corporation and that property has a fair market value greater than $50, the transferor must file an information return containing prescribed information with the Minister not later than 90 days after the day on which the property was transferred and provide a copy of the return to the corporation. 
  
  ### Reassessment
  
  (17) If subsection (15) applies in respect of a transfer of property to a corporation, the Minister may reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to the transfer. 
  
  ## Lump-sum Payments 
  
  ### Definitions
  
  110.2 (1) The definitions in this subsection apply in this section and section 120.31.  
  *eligible taxation year*, in respect of a qualifying amount received by an individual, means a taxation year  
  (a) that ended after 1977 and before the year in which the individual received the qualifying amount; 
  (b) throughout which the individual was resident in Canada; 
  (c) that did not end in a calendar year in which the individual became a bankrupt; and 
  (d) that was not included in an averaging period, within the meaning assigned by section 119 (as it read in its application to the 1987 taxation year), pursuant to an election that was made and not revoked by the individual under that section. ( année d’imposition admissible)   
  *qualifying amount* received by an individual in a taxation year means an amount (other than the portion of the amount that can reasonably be considered to be received as, on account of, in lieu of payment of or in satisfaction of, interest) that is included in computing the individual’s income for the year and is  
  (a) an amount 
  (i) that is received pursuant to an order or judgment of a competent tribunal, an arbitration award or a contract by which the payor and the individual terminate a legal proceeding, and 
  (ii) that is 
  (A) included in computing the individual’s income from an office or employment, or 
  (B) received as, on account of, in lieu of payment of or in satisfaction of, damages in respect of the individual’s loss of an office or employment, 
  (b) a superannuation or pension benefit (other than a benefit referred to in clause 56(1)(a)(i)(B)) received on account of, in lieu of payment of or in satisfaction of, a series of periodic payments (other than payments that would have otherwise been made in the year or in a subsequent taxation year), 
  (c) an amount described in paragraph 6(1)(f) or (f.1), subparagraph 56(1)(a)(iv) or paragraph 56(1)(b), or 
  (d) a prescribed amount or benefit, except to the extent that the individual may deduct for the year an amount under paragraph 8(1)(b), (n) or (n.1), 60(n) or (o.1) or 110(1)(f) in respect of the amount so included. ( montant admissible)   
  *specified portion*, in relation to an eligible taxation year, of a qualifying amount received by an individual means the portion of the qualifying amount that relates to the year, to the extent that the individual’s eligibility to receive the portion existed in the year. (partie déterminée)  
  
  ### Deduction for lump-sum payments
  
  (2) There may be deducted in computing the taxable income of an individual (other than a trust) for a particular taxation year the total of all amounts each of which is a specified portion of a qualifying amount received by the individual in the particular year, if that total is $3,000 or more. 
  110.4  [Repealed, 2000, c. 19, s. 18]  
  
  ### Additions for foreign tax deductions
  
  110.5 There shall be added to a corporation’s taxable income otherwise determined for a taxation year such amount as the corporation may claim to the extent that the addition thereof 
  (a) increases any amount deductible by the corporation under subsection 126(1) or (2) for the year; and 
  (b) does not increase an amount deductible by the corporation under any of sections 125, 125.1, 127, 127.2 and 127.3 for the year. 
  
  ### Definitions
  
  110.6 (1) For the purposes of this section,  
  *annual gains limit* of an individual for a taxation year means the amount determined by the formula  is the lesser of 
  (a) the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses, and 
  (b) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties, qualified farm or fishing properties and qualified small business corporation shares, and is the total of 
  (a) the amount, if any, by which 
  (i) the individual’s net capital losses for other taxation years deducted under paragraph 111(1)(b) in computing the individual’s taxable income for the year exceeds 
  (ii) the amount, if any, by which the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses exceeds the amount determined for A in respect of the individual for the year, and 
  (b) all of the individual’s allowable business investment losses for the year; ( plafond annuel des gains)   
  *child* has the meaning assigned by subsection 70(10); (enfant)   
  *cumulative gains limit* of an individual at the end of a taxation year means the amount, if any, by which  
  (a) the total of all amounts determined in respect of the individual for the year or preceding taxation years that end after 1984 for A in the definition 
  *annual gains limit*  exceeds the total of 
  (b) all amounts determined in respect of the individual for the year or preceding taxation years that end after 1984 for B in the definition 
  *annual gains limit*,  
  (c) the amount, if any, deducted under paragraph 3(e) in computing the individual’s income for the 1985 taxation year, 
  (d) all amounts deducted under this section in computing the individual’s taxable incomes for preceding taxation years, and 
  (e) the individual’s cumulative net investment loss at the end of the year; ( plafond des gains cumulatifs)   
  *cumulative net investment loss* of an individual at the end of a taxation year means the amount, if any, by which  
  (a) the total of all amounts each of which is the investment expense of the individual for the year or a preceding taxation year ending after 1987 exceeds 
  (b) the total of all amounts each of which is the investment income of the individual for the year or a preceding taxation year ending after 1987; ( perte nette cumulative sur placements)   
  *eligible real property gain* [Repealed, 1995, c. 3, s. 32]   
  *eligible real property loss* [Repealed, 1995, c. 3, s. 32]   
  *interest in a family farm or fishing partnership*, of an individual (other than a trust that is not a personal trust) at any time, means a partnership interest owned by the individual at that time if  
  (a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to 
  (i) property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by 
  (A) the partnership, 
  (B) the individual, 
  (C) if the individual is a personal trust, a beneficiary of the trust, 
  (D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), 
  (E) a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or 
  (F) a partnership, a partnership interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), 
  (ii) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), 
  (iii) a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or 
  (iv) properties described in any of subparagraphs (i) to (iii), and 
  (b) at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in subparagraph (a)(iv); ( participation dans une société de personnes agricole ou de pêche familiale)   
  *interest in a family farm partnership* [Repealed, 2014, c. 39, s. 30]   
  *interest in a family fishing partnership* [Repealed, 2014, c. 39, s. 30]   
  *investment expense* of an individual for a taxation year means the total of  
  (a) all amounts deducted in computing the individual’s income for the year from property (except to the extent that the amounts were otherwise taken into account in computing the individual’s investment expense or investment income for the year) other than any amounts deducted under 
  (i) paragraph 20(1)(c), 20(1)(d), 20(1)(e) or 20(1)(e.1) of this Act or paragraph 20(1)(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of borrowed money that was used by the individual, or that was used to acquire property that was used by the individual,  
  (A) to make a payment as consideration for an income-averaging annuity contract, 
  (B) to pay a premium under a registered retirement savings plan, or 
  (C) to make a contribution to a pooled registered pension plan, registered pension plan or deferred profit sharing plan, or 
  (ii) paragraph 20(1)(j) or subsection 65(1), 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2), 
  (b) the total of 
  (i) all amounts deducted under paragraph 20(1)(c), 20(1)(d), 20(1)(e), 20(1)(e.1), 20(1)(f) or 20(1)(bb) of this Act or paragraph 20(1)(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 in computing the individual’s income for the year from a partnership of which the individual was a specified member in the fiscal period of the partnership ending in the year, and  
  (ii) all amounts deducted under subparagraph 20(1)(e)(vi) in computing the individual’s income for the year in respect of an expense incurred by a partnership of which the individual was a specified member in the fiscal period of the partnership ending immediately before it ceased to exist, 
  (c) the total of 
  (i) all amounts (other than allowable capital losses) deducted in computing the individual’s income for the year in respect of the individual’s share of the amount of any loss of a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, and 
  (ii) all amounts each of which is an amount deducted under paragraph 111(1)(e) in computing the individual’s taxable income for the year, 
  (d) 50% of the total of all amounts each of which is an amount deducted under subsection 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2) in computing the individual’s income for the year in respect of expenses 
  (i) incurred and renounced under subsection 66(12.6), (12.601), (12.62) or (12.64) by a corporation, or 
  (ii) incurred by a partnership of which the individual was a specified member in the fiscal period of the partnership in which the expense was incurred, and 
  (e) the total of all amounts each of which is the amount of the individual’s loss for the year from 
  (i) property, or 
  (ii) renting or leasing a rental property (within the meaning assigned by subsection 1100(14) of the Income Tax Regulations) or a property described in Class 31 or 32 of Schedule II to the Income Tax Regulations  owned by the individual or by a partnership of which the individual was a member, other than a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, and 
  (f) the amount, if any, by which the total of the individual’s net capital losses for other taxation years deducted under paragraph 111(1)(b) in computing the individual’s taxable income for the year exceeds the amount determined in respect of the individual for the year under paragraph (a) of the description of B in the definition 
  *annual gains limit* ; (frais de placement)   
  *investment income* of an individual for a taxation year means the total of  
  (a) all amounts included in computing the individual’s income for the year from property (other than an amount included under subsection 15(2) or paragraph 56(1)(d) of this Act or paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada 1952), including, for greater certainty, any amount so included under subsection 13(1) in respect of a property any income from which would be income from property (except to the extent that the amount was otherwise taken into account in computing the individual’s investment income or investment expense for the year),  
  (b) all amounts (other than taxable capital gains) included in computing the individual’s income for the year in respect of the individual’s share of the income of a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year, including, for greater certainty, the individual’s share of all amounts included under subsection 13(1) in computing the income of the partnership, 
  (c) 50% of all amounts included under subsection 59(3.2) in computing the individual’s income for the year, 
  (d) all amounts each of which is the amount of the individual’s income for the year from 
  (i) a property, or 
  (ii) renting or leasing a rental property (within the meaning assigned by subsection 1100(14) of the Income Tax Regulations) or a property described in Class 31 or 32 of Schedule II to the Income Tax Regulations  owned by the individual or by a partnership of which the individual was a member (other than a partnership of which the individual was a specified member in the partnership’s fiscal period ending in the year), including, for greater certainty, any amount included under subsection 13(1) in computing the individual’s income for the year in respect of a rental property of the individual or the partnership or in respect of a property any income from which would be income from property, 
  (e) the amount, if any, by which 
  (i) the total of all amounts (other than amounts in respect of income-averaging annuity contracts or annuity contracts purchased under deferred profit sharing plans or plans referred to in subsection 147(15) as revoked plans) included under paragraph 56(1)(d) of this Act or paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the individual’s income for the year  exceeds 
  (ii) the total of all amounts deducted under paragraph 60(a) in computing the individual’s income for the year, and 
  (f) the amount, if any, by which the total of all amounts included under paragraph 3(b) in respect of capital gains and capital losses in computing the individual’s income for the year exceeds the amount determined in respect of the individual for the year for A in the definition 
  *annual gains limit* ; (revenu de placements)   
  *non-qualifying real property* [Repealed, 1995, c. 3, s. 32]   
  *qualified farm or fishing property*, of an individual (other than a trust that is not a personal trust) at any time, means a property that is owned at that time by the individual, the spouse or common-law partner of the individual or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner and that is  
  (a) real or immovable property or a fishing vessel that was used in the course of carrying on a farming or fishing business in Canada by, 
  (i) the individual, 
  (ii) if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust, 
  (iii) a spouse, common-law partner, child or parent of an individual referred to in subparagraph (i) or (ii), 
  (iv) a corporation, a share of the capital stock of which is a share of the capital stock of a family farm or fishing corporation of an individual referred to in any of subparagraphs (i) to (iii), or 
  (v) a partnership, an interest in which is an interest in a family farm or fishing partnership of an individual referred to in any of subparagraphs (i) to (iii), 
  (b) a share of the capital stock of a family farm or fishing corporation of the individual or the individual’s spouse or common-law partner, 
  (c) an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner, or 
  (d) a property included in Class 14.1 of Schedule II to the Income Tax Regulations, used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on a farming or fishing business in Canada; (bien agricole ou de pêche admissible)   
  *qualified farm property* [Repealed, 2014, c. 39, s. 30]   
  *qualified fishing property* [Repealed, 2014, c. 39, s. 30]   
  *qualified small business corporation share* of an individual (other than a trust that is not a personal trust) at any time (in this definition referred to as the “determination time”) means a share of the capital stock of a corporation that,  
  (a) at the determination time, is a share of the capital stock of a small business corporation owned by the individual, the individual’s spouse or common-law partner or a partnership related to the individual, 
  (b) throughout the 24 months immediately preceding the determination time, was not owned by anyone other than the individual or a person or partnership related to the individual, and 
  (c) throughout that part of the 24 months immediately preceding the determination time while it was owned by the individual or a person or partnership related to the individual, was a share of the capital stock of a Canadian-controlled private corporation more than 50% of the fair market value of the assets of which was attributable to 
  (i) assets used principally in an active business carried on primarily in Canada by the corporation or by a corporation related to it, 
  (ii) shares of the capital stock or indebtedness of one or more other corporations that were connected (within the meaning of subsection 186(4) on the assumption that each of the other corporations was a 
  *payer corporation* within the meaning of that subsection) with the corporation where  
  (A) throughout that part of the 24 months immediately preceding the determination time that ends at the time the corporation acquired such a share or indebtedness, the share or indebtedness was not owned by anyone other than the corporation, a person or partnership related to the corporation or a person or partnership related to such a person or partnership, and 
  (B) throughout that part of the 24 months immediately preceding the determination time while such a share or indebtedness was owned by the corporation, a person or partnership related to the corporation or a person or partnership related to such a person or partnership, it was a share or indebtedness of a Canadian-controlled private corporation more than 50% of the fair market value of the assets of which was attributable to assets described in subparagraph (iii), or 
  (iii) assets described in either of subparagraph (i) or (ii) except that 
  (d) where, for any particular period of time in the 24-month period ending at the determination time, all or substantially all of the fair market value of the assets of a particular corporation that is the corporation or another corporation that was connected with the corporation cannot be attributed to assets described in subparagraph (i), shares or indebtedness of corporations described in clause (B), or any combination thereof, the reference in clause (B) to “more than 50%” shall, for the particular period of time, be read as a reference to “all or substantially all” in respect of each other corporation that was connected with the particular corporation and, for the purpose of this paragraph, a corporation is connected with another corporation only where 
  (i) the corporation is connected (within the meaning of subsection 186(4) on the assumption that the corporation was a 
  *payer corporation* within the meaning of that subsection) with the other corporation, and  
  (ii) the other corporation owns shares of the capital stock of the corporation and, for the purpose of this subparagraph, the other corporation shall be deemed to own the shares of the capital stock of any corporation that are owned by a corporation any shares of the capital stock of which are owned or are deemed by this subparagraph to be owned by the other corporation, 
  (e) where, at any time in the 24-month period ending at the determination time, the share was substituted for another share, the share shall be considered to have met the requirements of this definition only where the other share 
  (i) was not owned by any person or partnership other than a person or partnership described in paragraph (b) throughout the period beginning 24 months before the determination time and ending at the time of substitution, and 
  (ii) was a share of the capital stock of a corporation described in paragraph (c) throughout that part of the period referred to in subparagraph (i) during which such share was owned by a person or partnership described in paragraph (b), and 
  (f) where, at any time in the 24-month period ending at the determination time, a share referred to in subparagraph (ii) is substituted for another share, that share shall be considered to meet the requirements of subparagraph (ii) only where the other share 
  (i) was not owned by any person or partnership other than a person or partnership described in clause (A) throughout the period beginning 24 months before the determination time and ending at the time of substitution, and 
  (ii) was a share of the capital stock of a corporation described in paragraph (c) throughout that part of the period referred to in subparagraph (i) during which the share was owned by a person or partnership described in clause (A); ( action admissible de petite entreprise)   
  *share of the capital stock of a family farm corporation* [Repealed, 2014, c. 39, s. 30]   
  *share of the capital stock of a family farm or fishing corporation*, of an individual (other than a trust that is not a personal trust) at any time, means a share of the capital stock of a corporation owned by the individual at that time if  
  (a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property owned by the corporation was attributable to 
  (i) property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), was actively engaged on a regular and continuous basis, by 
  (A) the corporation, 
  (B) the individual, 
  (C) if the individual is a personal trust, a beneficiary of the trust, 
  (D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), 
  (E) another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or 
  (F) a partnership, an interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of such a beneficiary, 
  (ii) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to property described in subparagraph (iv), 
  (iii) a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or 
  (iv) properties described in any of subparagraphs (i) to (iii), and 
  (b) at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to property described in subparagraph (a)(iv). ( action du capital-actions d’une société agricole ou de pêche familiale)   
  *share of the capital stock of a family fishing corporation* [Repealed, 2014, c. 39, s. 30]  
  
  ### Value of NISA
  
  (1.1) For the purposes of the definitions 
  *qualified small business corporation share* and 
  *share of the capital stock of a family farm or fishing corporation* in subsection (1), the fair market value of a net income stabilization account is deemed to be nil.  
  (1.2)  [Repealed, 2014, c. 39, s. 30]  
  
  ### Farming or fishing property — conditions
  
  (1.3) For the purpose of applying the definition 
  *qualified farm or fishing property*, in subsection (1), of an individual, at any time, a property owned at that time by the individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner, will not be considered to have been used in the course of carrying on a farming or fishing business in Canada, unless  
  (a) the following apply in respect of the property or property for which the property was substituted (in this paragraph referred to as “the property”), 
  (i) the property was owned throughout the period of at least 24 months immediately preceding that time by one or more of 
  (A) the individual, or a spouse, common-law partner, child or parent of the individual, 
  (B) a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner, 
  (C) if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or 
  (D) a personal trust from which the individual or a child or parent of the individual acquired the property, and 
  (ii) either 
  (A) in at least two years while the property was owned by one or more persons or partnerships referred to in subparagraph (i), 
  (I) the gross revenue of a person (in this subclause referred to as the “operator”) referred to in subparagraph (i) from the farming or fishing business referred to in subclause (II) for the period during which the property was owned by a person or partnership described in subparagraph (i) exceeded the income of the operator from all other sources for that period, and 
  (II) the property was used principally in a farming or fishing business carried on in Canada in which an individual referred to in subparagraph (i), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or 
  (B) throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph (i), the property was used by a corporation referred to in subparagraph (a)(iv) of the definition 
  *qualified farm or fishing property* in subsection (1) or by a partnership referred to in subparagraph (a)(v) of that definition in a farming or fishing business in which an individual referred to in any of subparagraphs (a)(i) to (iii) of that definition was actively engaged on a regular and continuous basis; or  
  (b)  [Repealed, 2013, c. 34, s. 240]  
  (c) if the property or property for which the property was substituted was last acquired by the individual or partnership before June 18, 1987 or after June 17, 1987 under an agreement in writing entered into before that date, 
  (i) in the year the property was disposed of by the individual, the property was used principally in the course of carrying on the business of farming in Canada by 
  (A) the individual, or a spouse, common-law partner, child or parent of the individual, 
  (B) a beneficiary referred to in subparagraph (a)(ii) of the definition 
  *qualified farm or fishing property* in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,  
  (C) a corporation referred to in subparagraph (a)(iv) of the definition 
  *qualified farm or fishing property* in subsection (1),  
  (D) a partnership referred to in subparagraph (a)(v) of the definition 
  *qualified farm or fishing property* in subsection (1), or  
  (E) a personal trust from which the individual acquired the property, or 
  (ii) in at least five years during which the property was owned by a person described in any of clauses (A) to (E), the property was used principally in the course of carrying on the business of farming in Canada by 
  (A) the individual, or a spouse, common-law partner, child or parent of the individual, 
  (B) a beneficiary referred to in subparagraph (a)(ii) of the definition 
  *qualified farm or fishing property* in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,  
  (C) a corporation referred to in subparagraph (a)(iv) of the definition 
  *qualified farm or fishing property* in subsection (1),  
  (D) a partnership referred to in subparagraph (a)(v) of the definition 
  *qualified farm or fishing property* in subsection (1), or  
  (E) a personal trust from which the individual acquired the property. 
  
  ### Capital gains deduction — qualified farm or fishing property
  
  (2) In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of qualified farm or fishing property in the year or a preceding taxation year (or who disposed of before 2014 property that was qualified farm property or qualified fishing property at the time of disposition), there may be deducted such amount as the individual may claim not exceeding the least of 
  (a) the amount determined by the formula is the total of all amounts each of which is an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that ended 
  (i) before 1988, or 
  (ii) after October 17, 2000, is the total of all amounts each of which is 
  (i) 3/4 of an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that ended after 1987 and before 1990 (other than amounts deducted under this section for a taxation year in respect of an amount that was included in computing an individual’s income for that year because of subparagraph 14(1)(a)(v) as that subparagraph applied for taxation years that ended before February 28, 2000), or 
  (ii) 3/4 of an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that began after February 27, 2000 and ended before October 18, 2000, is 2/3 of the total of all amounts each of which is an amount deducted under this section in computing the individual’s taxable income 
  (i) for a preceding taxation year that ended after 1989 and before February 28, 2000, or 
  (ii) in respect of an amount that was included because of subparagraph 14(1)(a)(v) (as that subparagraph applied for taxation years that ended before February 28, 2000) in computing the individual’s income for a taxation year that began after 1987 and ended before 1990, is the product obtained when the reciprocal of the fraction determined for E that applied to the taxpayer for a preceding taxation year that began before and included February 28, 2000 or October 17, 2000 is multiplied by the amount deducted under this subsection in computing the individual’s taxable income for that preceding year, and is 
  (i) in the case of a taxation year that includes February 28, 2000 or October 17, 2000, the amount determined by the formula is the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year, is the amount by which the amount determined in respect of the taxpayer for the year under paragraph 3(b) exceeds the amount determined for F, and is the total of 
  (A) the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year multiplied by 
  (I) where that amount is determined by reference to paragraph 14(1.1)(a), the reciprocal of the fraction obtained by multiplying the fraction 3/4 by the fraction in paragraph 14(1)(b) that applies to the taxpayer for the taxation year, 
  (II) where that amount is determined by reference to paragraph 14(1.1)(b), and the taxation year does not end after February 27, 2000 and before October 18, 2000, 2, and 
  (III) where that amount is determined by reference to paragraph 14(1.1)(b), and the taxation year ends after February 27, 2000 and before October 18, 2000, 3/2, and 
  (B) the amount determined for G multiplied by the reciprocal of the fraction in paragraph 38(a) that applies to the taxpayer for the taxation year, and 
  (ii) in any other case, 1, 
  (b) the individual’s cumulative gains limit at the end of the year, 
  (c) the individual’s annual gains limit for the year, and 
  (d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties. 
  
  ### Capital gains deduction — qualified small business corporation shares
  
  (2.1) In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of a share of a corporation in the year or a preceding taxation year and after June 17, 1987 that, at the time of disposition, was a qualified small business corporation share of the individual, there may be deducted such amount as the individual may claim not exceeding the least of 
  (a) the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year, 
  (b) the amount, if any, by which the individual’s cumulative gains limit at the end of the year exceeds the amount deducted under subsection 110.6(2) in computing the individual’s taxable income for the year, 
  (c) the amount, if any, by which the individual’s annual gains limit for the year exceeds the amount deducted under subsection 110.6(2) in computing the individual’s taxable income for the year, and 
  (d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) (to the extent that that amount is not included in computing the amount determined under paragraph (2)(d) in respect of the individual) in respect of capital gains and capital losses if the only properties referred to in paragraph 3(b) were qualified small business corporation shares of the individual. 
  
  ### Additional deduction — qualified farm or fishing property
  
  (2.2) In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of qualified farm or fishing property in the year or a preceding taxation year and after April 20, 2015, there may be deducted an amount claimed by the individual that does not exceed the least of 
  (a) the amount, if any, by which $500,000 exceeds the total of 
  (i) $400,000 adjusted for each year after 2014 in the manner set out by section 117.1, and 
  (ii) the total of all amounts each of which is an amount deducted under this subsection in computing the individual’s taxable income for a preceding taxation year that ended after 2014, 
  (b) the amount, if any, by which the individual’s cumulative gains limit at the end of the year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the year, 
  (c) the amount, if any, by which the individual’s annual gains limit for the year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the year, and 
  (d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm or fishing properties disposed of by the individual after April 20, 2015. 
  
  ### Additional deduction — ordering rule
  
  (2.3) Subsection (2.2) does not apply in computing the taxable income for a taxation year of an individual unless the individual has claimed the maximum amount that could be claimed under subsections (2) and (2.1) for the taxation year. 
  (3)  [Repealed, 1995, c. 3, s. 32]  
  
  ### Maximum capital gains deduction
  
  (4) Notwithstanding subsections (2) and (2.1), the total amount that may be deducted under this section in computing an individual’s income for a taxation year shall not exceed the total of the amount determined by the formula in paragraph (2)(a) and the amount that may be deducted under subsection (2.2), in respect of the individual for the year. 
  
  ### Deemed resident in Canada
  
  (5) For the purposes of subsections (2) to (2.2), an individual is deemed to have been resident in Canada throughout a particular taxation year if 
  (a) the individual was resident in Canada at any time in the particular taxation year; and 
  (b) the individual was resident in Canada throughout the immediately preceding taxation year or throughout the immediately following taxation year. 
  
  ### Failure to report capital gain
  
  (6) Notwithstanding subsections (2) to (2.2), no amount may be deducted under this section in respect of a capital gain of an individual for a particular taxation year in computing the individual’s taxable income for the particular taxation year or any subsequent year, if 
  (a) the individual knowingly or under circumstances amounting to gross negligence 
  (i) fails to file the individual’s return of income for the particular taxation year within one year after the taxpayer’s filing-due date for the particular taxation year, or 
  (ii) fails to report the capital gain in the individual’s return of income for the particular taxation year; and 
  (b) the Minister establishes the facts justifying the denial of such an amount under this section. 
  
  ### Deduction not permitted
  
  (7) Notwithstanding subsections (2) to (2.2), no amount may be deducted under this section in computing an individual’s taxable income for a taxation year in respect of a capital gain of the individual for the taxation year if the capital gain is from a disposition of property which disposition is part of a series of transactions or events 
  (a) that includes a dividend received by a corporation to which dividend subsection 55(2) does not apply but would apply if this Act were read without reference to paragraph 55(3)(b); or 
  (b) in which any property is acquired by a corporation or partnership for consideration that is significantly less than the fair market value of the property at the time of acquisition (other than an acquisition as the result of an amalgamation or merger of corporations or the winding-up of a corporation or partnership or a distribution of property of a trust in satisfaction of all or part of a corporation’s capital interest in the trust). 
  
  ### Deduction not permitted
  
  (8) Notwithstanding subsections (2) to (2.2), if an individual has a capital gain for a taxation year from the disposition of a property and it can reasonably be concluded, having regard to all the circumstances, that a significant part of the capital gain is attributable to the fact that dividends were not paid on a share (other than a prescribed share) or that dividends paid on such a share in the taxation year or in any preceding taxation year were less than 90% of the average annual rate of return on that share for that year, no amount in respect of that capital gain shall be deducted under this section in computing the individual’s taxable income for the year. 
  
  ### Average annual rate of return
  
  (9) For the purpose of subsection 110.6(8), the average annual rate of return on a share (other than a prescribed share) of a corporation for a taxation year is the annual rate of return by way of dividends that a knowledgeable and prudent investor who purchased the share on the day it was issued would expect to receive in that year, other than the first year after the issue, in respect of the share if 
  (a) there was no delay or postponement of the payment of dividends and no failure to pay dividends in respect of the share; 
  (b) there was no variation from year to year in the amount of dividends payable in respect of the share (other than where the amount of dividends payable is expressed as an invariant percentage of or by reference to an invariant difference between the dividend expressed as a rate of interest and a generally quoted market interest rate); and 
  (c) the proceeds to be received by the investor on the disposition of the share are the same amount the corporation received as consideration on the issue of the share. 
  
  ### Where deduction not permitted
  
  (11) Where it is reasonable to consider that one of the main reasons for an individual acquiring, holding or having an interest in a partnership or trust (other than an interest in a personal trust) or a share of an investment corporation, mortgage investment corporation or mutual fund corporation, or for the existence of any terms, conditions, rights or other attributes of the interest or share, is to enable the individual to receive or have allocated to the individual a percentage of any capital gain or taxable capital gain of the partnership, trust or corporation that is larger than the individual’s percentage of the income of the partnership, trust or corporation, as the case may be, notwithstanding any other provision of this Act, 
  (a) no amount may be deducted under this section by the individual in respect of any such gain allocated or distributed to the individual after November 21, 1985; and 
  (b) where the individual is a trust, any such gain allocated or distributed to it after November 21, 1985 shall not be included in computing its eligible taxable capital gain (within the meaning assigned by subsection 108(1)). 
  (12)  [Repealed, 2014, c. 39, s. 30]  
  
  ### Determination under para. 3(b)
  
  (13) For the purposes of this section, the amount determined under paragraph 3(b) in respect of an individual for a period throughout which the individual was not resident in Canada is nil. 
  
  ### Related persons, etc.
  
  (14) For the purposes of the definition 
  *qualified small business corporation share* in subsection 110.6(1),  
  (a) a taxpayer shall be deemed to have disposed of shares that are identical properties in the order in which the taxpayer acquired them; 
  (b) in determining whether a corporation is a small business corporation or a Canadian-controlled private corporation at any time, a right referred to in paragraph 251(5)(b) shall not include a right under a purchase and sale agreement relating to a share of the capital stock of a corporation; 
  (c) a personal trust shall be deemed 
  (i) to be related to a person or partnership for any period throughout which the person or partnership was a beneficiary of the trust, and 
  (ii) in respect of shares of the capital stock of a corporation, to be related to the person from whom it acquired those shares where, at the time the trust disposed of the shares, all of the beneficiaries (other than registered charities) of the trust were related to that person or would have been so related if that person were living at that time; 
  (d) a partnership shall be deemed to be related to a person for any period throughout which the person was a member of the partnership; 
  (d.1) a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership; 
  (e) where a corporation acquires shares of a class of the capital stock of another corporation from any person, it shall be deemed in respect of those shares to be related to the person where all or substantially all the consideration received by that person from the corporation in respect of those shares was common shares of the capital stock of the corporation; 
  (f) shares issued after June 13, 1988 by a corporation to a particular person or partnership shall be deemed to have been owned immediately before their issue by a person who was not related to the particular person or partnership unless the shares were issued 
  (i) as consideration for other shares, 
  (ii) as part of a transaction or series of transactions in which the person or partnership disposed of property to the corporation that consisted of 
  (A) all or substantially all the assets used in an active business carried on by that person or the members of that partnership, or 
  (B) an interest in a partnership all or substantially all the assets of which were used in an active business carried on by the members of the partnership, or 
  (iii) as payment of a stock dividend; and 
  (g) where, immediately before the death of an individual, or, in the case of a deemed transfer under subsection 248(23), immediately before the time that is immediately before the death of an individual, a share would, but for paragraph (a) of the definition 
  *qualified small business corporation share* in subsection 110.6(1), be a qualified small business corporation share of the individual, the share shall be deemed to be a qualified small business corporation share of the individual if it was a qualified small business corporation share of the individual at any time in the 12-month period immediately preceding the death of the individual.  
  
  ### Value of assets of corporations
  
  (15) For the purposes of the definitions 
  *qualified small business corporation share* and 
  *share of the capital stock of a family farm or fishing corporation* in subsection (1), the definition 
  *share of the capital stock of a family farm or fishing corporation* in subsection 70(10) and the definition 
  *small business corporation* in subsection 248(1),  
  (a) where a person (in this subsection referred to as the “insured”), whose life was insured under an insurance policy owned by a particular corporation, owned shares of the capital stock (in this subsection referred to as the “subject shares”) of the particular corporation, any corporation connected with the particular corporation or with which the particular corporation is connected or any corporation connected with any such corporation or with which any such corporation is connected (within the meaning of subsection 186(4) on the assumption that the corporation referred to in this subsection was a payer corporation within the meaning of that subsection), 
  (i) the fair market value of the life insurance policy shall, at any time before the death of the insured, be deemed to be its cash surrender value (within the meaning assigned by subsection 148(9)) at that time, and 
  (ii) the total fair market value of assets — other than assets described in any of subparagraphs (c)(i) to (iii) of the definition 
  *qualified small business corporation share* in subsection (1), any of subparagraphs (a)(i) to (iii) of the definition 
  *share of the capital stock of a family farm or fishing corporation* in subsection (1) or any of paragraphs (a) to (c) of the definition 
  *small business corporation* in subsection 248(1), as the case may be — of any of those corporations that are  
  (A) the proceeds, the right to receive the proceeds or attributable to the proceeds, of the life insurance policy of which the particular corporation was a beneficiary, and 
  (B) used, directly or indirectly, within the 24-month period beginning at the time of the death of the insured or, where written application therefor is made by the particular corporation within that period, within such longer period as the Minister considers reasonable in the circumstances, to redeem, acquire or cancel the subject shares owned by the insured immediately before the death of the insured, not in excess of the fair market value of the assets immediately after the death of the insured, shall, until the later of 
  (C) the redemption, acquisition or cancellation, and 
  (D) the day that is 60 days after the payment of the proceeds under the policy, be deemed not to exceed the cash surrender value (within the meaning assigned by subsection 148(9)) of the policy immediately before the death of the insured; and 
  (b) the fair market value of an asset of a particular corporation that is a share of the capital stock or indebtedness of another corporation with which the particular corporation is connected shall be deemed to be nil and, for the purpose of this paragraph, a particular corporation is connected with another corporation only where 
  (i) the particular corporation is connected (within the meaning assigned by paragraph (d) of the definition 
  *qualified small business corporation share* in subsection 110.6(1)) with the other corporation, and  
  (ii) the other corporation is not connected (within the meaning of subsection 186(4) as determined without reference to subsection 186(2) and on the assumption that the other corporation is a payer corporation within the meaning of subsection 186(4)) with the particular corporation, except that this paragraph applies only in determining whether a share of the capital stock of another corporation with which the particular corporation is connected is a qualified small business corporation share or a share of the capital stock of a family farm or fishing corporation and in determining whether the other corporation is a small business corporation. 
  
  ### Personal trust
  
  (16) For the purposes of the definition 
  *qualified small business corporation share* in subsection 110.6(1) and of paragraph 110.6(14)(c), a personal trust shall be deemed to include a trust described in subsection 7(2).  
  
  ### Order of deduction
  
  (17) For the purpose of clause 110.6(2)(a)(iii)(A), amounts deducted under this section in computing an individual’s taxable income for a taxation year that ended before 1990 shall be deemed to have first been deducted in respect of amounts that were included in computing the individual’s income under this Part for the year because of subparagraph 14(1)(a)(v) before being deducted in respect of any other amounts that were included in computing the individual’s income under this Part for the year. 
  (18)  [Repealed, 1995, c. 3, s. 32]  
  
  ### Election for property owned on February 22, 1994
  
  (19) Subject to subsection 110.6(20), where an individual (other than a trust) or a personal trust (each of which is referred to in this subsection and subsections 110.6(20) to 110.6(29) as the “elector”), elects in prescribed form to have the provisions of this subsection apply in respect of 
  (a) a capital property (other than an interest in a trust referred to in any of paragraphs (f) to (j) of the definition 
  *flow-through entity* in subsection 39.1(1)) owned at the end of February 22, 1994 by the elector, the property shall be deemed, except for the purposes of sections 7 and 35 and subparagraph 110(1)(d.1)(ii),  
  (i) to have been disposed of by the elector at that time for proceeds of disposition equal to the greater of 
  (A) the amount determined by the formula is the amount designated in respect of the property in the election, and is the amount, if any, that would, if the disposition were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, and 
  (B) the adjusted cost base to the elector of the property immediately before the disposition, and 
  (ii) to have been reacquired by the elector immediately after that time at a cost equal to 
  (A) where the property is an interest in or a share of the capital stock of a flow-through entity (within the meaning assigned by subsection 39.1(1)) of the elector, the cost to the elector of the property immediately before the disposition referred to in subparagraph 110.6(19)(a)(i), 
  (B) where an amount would, if the disposition referred to in subparagraph 110.6(19)(a)(i) were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, the lesser of 
  (I) the elector’s proceeds of disposition of the property determined under subparagraph 110.6(19)(a)(i), and 
  (II) the amount determined by the formula is the amount, if any, by which the fair market value of the property at that time exceeds the amount that would, if the disposition referred to in subparagraph 110.6(19)(a)(i) were a disposition for the purpose of section 7 or 35, be included under that section as a result of the disposition in computing the income of the elector, and is the amount that would be determined by the formula in subclause 110.6(19)(a)(ii)(C)(II) in respect of the property if clause 110.6(19)(a)(ii)(C) applied to the property, and 
  (C) in any other case, the lesser of 
  (I) the designated amount, and 
  (II) the amount, if any, by which the fair market value of the property at that time exceeds the amount determined by the formula is the designated amount, and is the fair market value of the property at that time; 
  (b) a business carried on by the elector (otherwise than as a member of a partnership) on February 22, 1994, 
  (i) the amount that would be determined under subparagraph 14(1)(a)(v) at the end of that day in respect of the elector if 
  (A) all the eligible capital property owned at that time by the elector in respect of the business were disposed of by the elector immediately before that time for proceeds of disposition equal to the amount designated in the election in respect of the business, and 
  (B) the fiscal period of the business ended at that time shall be deemed to be a taxable capital gain of the elector for the taxation year in which the fiscal period of the business that includes that time ends from the disposition of a particular property and, for the purposes of this section, the particular property shall be deemed to have been disposed of by the elector at that time, and 
  (ii) for the purpose of paragraph 14(3)(b), the amount of the taxable capital gain determined under subparagraph 110.6(19)(b)(i) shall be deemed to have been claimed, by a person who does not deal at arm’s length with each person or partnership that does not deal at arm’s length with the elector, as a deduction under this section in respect of a disposition at that time of the eligible capital property; and 
  (c) an interest owned at the end of February 22, 1994 by the elector in a trust referred to in any of paragraphs (f) to (j) of the definition 
  *flow-through entity* in subsection 39.1(1), the elector shall be deemed to have a capital gain for the year from the disposition on February 22, 1994 of property equal to the lesser of  
  (i) the total of amounts designated in elections made under this subsection by the elector in respect of interests in the trust, and 
  (ii) 4/3 of the amount that would, if all of the trust’s capital properties were disposed of at the end of February 22, 1994 for proceeds of disposition equal to their fair market value at that time and that portion of the trust’s capital gains and capital losses or its net taxable capital gains, as the case may be, arising from the dispositions as can reasonably be considered to represent the elector’s share thereof were allocated to or designated in respect of the elector, be the increase in the annual gains limit of the elector for the 1994 taxation year as a result of the dispositions. 
  
  ### Application of subsection (19)
  
  (20) Subsection 110.6(19) applies to a property or to a business, as the case may be, of an elector only if 
  (a) where the elector is an individual (other than a trust), 
  (i) its application to all of the properties in respect of which elections were made under that subsection by the elector or a spouse or common-law partner of the elector and to all the businesses in respect of which elections were made under that subsection by the elector 
  (A) would result in an increase in the amount deductible under subsection 110.6(3) in computing the taxable income of the elector or a spouse or common-law partner of the elector, and 
  (B) in respect of each of the 1994 and 1995 taxation years, 
  (I) where no part of the taxable capital gain resulting from an election by the elector is included in computing the income of a spouse of the elector, would not result in the amount determined under paragraph 110.6(3)(a) for the year in respect of the elector being exceeded by the lesser of the amounts determined under paragraphs 110.6(3)(b) and 110.6(3)(c) for the year in respect of the elector, and 
  (II) where no part of the taxable capital gain resulting from an election by the elector is included in computing the income of the elector, would not result in the amount determined under paragraph 110.6(3)(a) for the year in respect of a spouse or common-law partner of the elector being exceeded by the lesser of the amounts determined under paragraphs 110.6(3)(b) and 110.6(3)(c) for the year in respect of the spouse or common-law partner, 
  (ii) the amount designated in the election in respect of the property exceeds 11/10 of its fair market value at the end of February 22, 1994, or 
  (iii) the amount designated in the election in respect of the business is $1.00 or exceeds 11/10 of the fair market value at the end of February 22, 1994 of all the eligible capital property owned at that time by the elector in respect of the business; and 
  (b) where the elector is a personal trust, its application to all of the properties in respect of which an election was made under that subsection by the elector would result in 
  (i) an increase in the amount deemed by subsection 104(21.2) to be a taxable capital gain of an individual (other than a trust) who was a beneficiary under the trust at the end of February 22, 1994 and resident in Canada at any time in the individual’s taxation year in which the trust’s taxation year that includes that day ends, or 
  (ii) where subsection 110.6(12) applies to the trust for the trust’s taxation year that includes that day, an increase in the amount deductible under that subsection in computing the trust’s taxable income for that year. 
  
  ### Effect of election on non-qualifying real property
  
  (21) Where an elector is deemed by subsection 110.6(19) to have disposed of a non-qualifying real property, 
  (a) in computing the elector’s taxable capital gain from the disposition, there shall be deducted the amount determined by the formula is the elector’s capital gain from the disposition, and is the elector’s eligible real property gain from the disposition; and 
  (b) in determining at any time after the disposition the capital cost to the elector of the property where it is a depreciable property and the adjusted cost base to the elector of the property in any other case (other than where the property was at the end of February 22, 1994 an interest in or a share of the capital stock of a flow-through entity within the meaning assigned by subsection 39.1(1)), there shall be deducted 4/3 of the amount determined under paragraph 110.6(21)(a) in respect of the property. 
  
  ### Adjusted cost base
  
  (22) Where an elector is deemed by paragraph 110.6(19)(a) to have reacquired a property, there shall be deducted in computing the adjusted cost base to the elector of the property at any time after the reacquisition the amount, if any, by which 
  (a) the amount determined by the formula is the amount designated in the election under subsection 110.6(19) in respect of the property, and is the fair market value of the property at the end of February 22, 1994 exceeds 
  (b) where the property is an interest in or a share of the capital stock of a flow-through entity (within the meaning assigned by subsection 39.1(1)), 4/3 of the axable capital gain that would have resulted from the election if the amount designated in the election were equal to the fair market value of the property at the end of February 22, 1994 and, in any other case, the fair market value of the property at the end of February 22, 1994. 
  
  ### Disposition of partnership interest
  
  (23) Where an elector is deemed by subsection 110.6(19) to have disposed of an interest in a partnership, in computing the adjusted cost base to the elector of the interest immediately before the disposition 
  (a) there shall be added the amount determined by the formula is the total of all amounts each of which is the elector’s share of the partnership’s income (other than a taxable capital gain from the disposition of a property) from a source or from sources in a particular place for its fiscal period that includes February 22, 1994, is the total of all amounts each of which is the elector’s share of the partnership’s loss (other than an allowable capital loss from the disposition of a property) from a source or from sources in a particular place for that fiscal period, is the number of days in the period that begins the first day of that fiscal period and ends February 22, 1994, is the number of days in that fiscal period, and is 4/3 of the amount that would be determined under paragraph 3(b) in computing the elector’s income for the taxation year in which that fiscal period ends if the elector had no taxable capital gains or allowable capital losses other than those arising from dispositions of property by the partnership that occurred before February 23, 1994; and 
  (b) there shall be deducted the amount that would be determined under paragraph 110.6(23)(a) if the formula in that paragraph were read as 
  
  ### Time for election
  
  (24) An election made under subsection 110.6(19) shall be filed with the Minister 
  (a) where the elector is an individual (other than a trust), 
  (i) if the election is in respect of a business of the elector, on or before the individual’s filing-due date for the taxation year in which the fiscal period of the business that includes February 22, 1994 ends, and 
  (ii) in any other case, on or before the individual’s balance-due day for the 1994 taxation year; and 
  (b) where the elector is a personal trust, on or before March 31 of the calendar year following the calendar year in which the taxation year of the trust that includes February 22, 1994 ends. 
  
  ### Revocation of election
  
  (25) Subject to subsection 110.6(28), an elector may revoke an election made under subsection 110.6(19) by filing a written notice of the revocation with the Minister before 1998. 
  
  ### Late election
  
  (26) Where an election made under subsection 110.6(19) is filed with the Minister after the day (referred to in this subsection and subsections 110.6(27) and 110.6(29) as the “election filing date”) on or before which the election is required by subsection 110.6(24) to have been filed and on or before the day that is 2 years after the election filing date, the election shall be deemed for the purposes of this section (other than subsection 110.6(29)) to have been filed on the election filing date if an estimate of the penalty in respect of the election is paid by the elector when the election is filed with the Minister. 
  
  ### Amended election
  
  (27) Subject to subsection 110.6(28), an election under subsection 110.6(19) in respect of a property or a business is deemed to be amended and the election, as amended, is deemed for the purpose of this section (other than subsection 110.6(29)) to have been filed on the election filing date if 
  (a) an amended election in prescribed form in respect of the property or the business is filed with the Minister before 1998; and 
  (b) an estimate of the penalty, if any, in respect of the amended election is paid by the elector when the amended election is filed with the Minister. 
  
  ### Election that cannot be revoked or amended
  
  (28) An election under subsection 110.6(19) cannot be revoked or amended where the amount designated in the election exceeds 11/10 of 
  (a) if the election is in respect of a property other than an interest in a partnership, the fair market value of the property at the end of February 22, 1994; 
  (b) if the election is in respect of an interest in a partnership, the greater of $1 and the fair market value of the property at the end of February 22, 1994; and 
  (c) if the election is in respect of a business, the greater of $1 and the fair market value at the end of February 22, 1994 of all the eligible capital property owned at that time by the elector in respect of the business. 
  
  ### Amount of penalty
  
  (29) The penalty in respect of an election to which subsection 110.6(26) or 110.6(27) applies is the amount determined by the formula is the number of months each of which is a month all or part of which is during the period that begins the day after the election filing date and ends the day the election or amended election is filed with the Minister; and is the total of all amounts each of which is the taxable capital gain of the elector or a spouse or common-law partner of the elector that results from the application of subsection 110.6(19) to the property or the business in respect of which the election is made less, where subsection 110.6(27) applies to the election, the total of all amounts each of which would, if the Act were read without reference to subsections 110.6(20) and 110.6(27), be the taxable capital gain of the elector or a spouse or common-law partner of the elector that resulted from the application of subsection 110.6(19) to the property or the business. 
  
  ### Unpaid balance of penalty
  
  (30) The Minister shall, with all due dispatch, examine each election to which subsection 110.6(26) or 110.6(27) applies, assess the penalty payable and send a notice of assessment to the elector who made the election, and the elector shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Reserve limit
  
  (31) If an amount is included in an individual’s income for a particular taxation year because of subparagraph 40(1)(a)(ii) in respect of a disposition of property in a preceding taxation year that, at the time of the disposition, is qualified farm or fishing property, a qualified small business corporation share, qualified farm property or qualified fishing property, the total of all amounts deductible by the individual for the particular year under this section is reduced by the amount, if any, determined by the formula is the total of all amounts each of which is an amount deductible under this section by the individual for the particular year or a preceding taxation year, computed without reference to this subsection; and is the total of all amounts each of which is an amount that would be deductible under this section by the individual for the particular year or a preceding taxation year if the individual had not for any preceding taxation year claimed a reserve under subparagraph 40(1)(a)(iii) and had claimed, for each taxation year ending before the particular year, the amount that would have been deductible under this section. 
  (32)  [Repealed, 2013, c. 40, s. 46]  
  
  ### Residing in prescribed zone
  
  110.7 (1) Where, throughout a period (in this section referred to as the “qualifying period”) of not less than 6 consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a prescribed northern zone or prescribed intermediate zone for the year and files for the year a claim in prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year 
  (a) the total of all amounts each of which is the amount, in respect of a particular period during the taxation year, determined by the formula is the specified percentage for the particular area in which the taxpayer resided during the particular period, and is the total trip costs to the taxpayer in respect of trips that begin during the particular period; and 
  (b) the lesser of 
  (i) 20% of the taxpayer’s income for the year, and 
  (ii) the total of all amounts each of which is the product obtained by multiplying the specified percentage for a particular area for the year in which the taxpayer so resided by the total of 
  (A) $11.00 multiplied by the number of days in the year included in the qualifying period in which the taxpayer resided in the particular area, and 
  (B) $11.00 multiplied by the number of days in the year included in that portion of the qualifying period throughout which the taxpayer maintained and resided in a self-contained domestic establishment in the particular area (except any day included in computing a deduction claimed under this paragraph by another person who resided on that day in the establishment). 
  
  ### Specified percentage
  
  (2) For the purpose of subsection 110.7(1), the specified percentage for a particular area for a taxation year is 
  (a) where the area is a prescribed northern zone for the year, 100%; and 
  (b) where the area is a prescribed intermediate zone for the year, 50%. 
  
  ### Restriction
  
  (3) The total of all amounts determined under paragraph (1)(a) for all taxpayers in a taxation year in respect of an individual shall not be in respect of more than two trips made by the individual that begin in the year (other than trips to obtain medical services that are not available in the locality in which the taxpayer resided). 
  
  ### Additional restrictions
  
  (3.1) For the purpose of paragraph (1)(a), an amount may only be included in the amount determined for B for a particular area for a taxation year if 
  (a) the amount is not otherwise deducted in computing the income for any taxation year of any individual (except by an employer under section 9 if it is included in an employee’s income); 
  (b) the amount is not included in determining an amount deducted under subsection 118.2(1) for any taxation year; 
  (c) the amount is in respect of trips made by the taxpayer or an eligible family member of the taxpayer that begin during the part of the year in which the taxpayer resided in the particular area; and 
  (d) neither the taxpayer nor an eligible family member of the taxpayer is at any time entitled to a reimbursement or any form of assistance (other than a reimbursement or assistance included in computing the income of the taxpayer or the eligible family member) in respect of trips to which paragraph (c) applies. 
  
  ### Additional restriction
  
  (3.2) If all amounts determined under paragraph 7304(2)(a) of the Income Tax Regulations are nil in respect of trips (beginning in the taxation year) made by an individual, the total of all amounts determined for B in paragraph (1)(a) in the taxation year for all taxpayers in respect of the individual must not exceed the standard amount for the individual for the taxation year.  
  
  ### Deemed standard amount
  
  (3.3) If an employer-provided travel benefit was claimed by a taxpayer in respect of an individual in respect of the taxation year, the standard amount for the individual is deemed to be nil for the taxation year. 
  
  ### Board and lodging allowances, etc.
  
  (4) The amount determined under subparagraph (1)(b)(ii) for a particular area for a taxpayer for a taxation year shall not exceed the amount by which the amount otherwise determined under that subparagraph for the particular area for the year exceeds the value of, or an allowance in respect of expenses incurred by the taxpayer for, the taxpayer’s board and lodging in the particular area (other than at a work site described in paragraph 67.1(2)(e)) that 
  (a) would, but for subparagraph 6(6)(a)(i), be included in computing the taxpayer’s income for the year; and 
  (b) can reasonably be considered to be attributable to that portion of the qualifying period that is in the year and during which the taxpayer maintained a self-contained domestic establishment as the taxpayer’s principal place of residence in an area other than a prescribed northern zone or a prescribed intermediate zone for the year. 
  
  ### Idem
  
  (5) Where on any day an individual resides in more than one particular area referred to in subsection 110.7(1), for the purpose of that subsection, the individual shall be deemed to reside in only one such area on that day. 
  
  ### Definitions
  
  (6) The following definitions apply in this section.  
  *eligible family member* of a taxpayer, at any time, means a member of the taxpayer’s household who is at that time  
  (a) the taxpayer’s spouse or common-law partner; 
  (b) a child of the taxpayer (including a child of the taxpayer’s spouse or common-law partner) under the age of 18; or 
  (c) another individual who is 
  (i) related to the taxpayer, 
  (ii) wholly dependent for support on the taxpayer, the taxpayer’s spouse or common-law partner, or both of them, and 
  (iii) except in the case of a parent or grandparent of the taxpayer, so dependent by reason of mental or physical infirmity. ( membre de la famille admissible)   
  *employer-provided travel benefits*, to a taxpayer in respect of a trip made by the taxpayer or their eligible family member, means the total amount of  
  (a) the value of travel assistance, if any, provided to the taxpayer in respect of the taxpayer’s employment in respect of travel expenses for the trip; and 
  (b) the amount, if any, received by the taxpayer in respect of the taxpayer’s employment in respect of travel expenses for the trip. ( avantages relatifs aux voyages tirés de l’emploi)   
  *standard amount*, for an individual for a taxation year and subject to subsection (3.3), means $1,200. (montant forfaitaire)   
  *trip cost* has the meaning prescribed by regulation. (frais de voyage)  
  
  ### Losses deductible
  
  111 (1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such portion as the taxpayer may claim of the taxpayer’s 
  
  ### Non-capital losses
  
  (a) non-capital losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year; 
  
  ### Net capital losses
  
  (b) net capital losses for taxation years preceding and the three taxation years immediately following the year; 
  
  ### Restricted farm losses
  
  (c) restricted farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year, but no amount is deductible for the year in respect of restricted farm losses except to the extent of the taxpayer’s incomes for the year from all farming businesses carried on by the taxpayer; 
  
  ### Farm losses
  
  (d) farm losses for the 20 taxation years immediately preceding and the 3 taxation years immediately following the year; and 
  
  ### Limited partnership losses
  
  (e) limited partnership losses in respect of a partnership for taxation years preceding the year, but no amount is deductible for the year in respect of a limited partnership loss except to the extent of the amount by which 
  (i) the taxpayer’s at-risk amount in respect of the partnership (within the meaning assigned by subsection 96(2.2)) at the end of the last fiscal period of the partnership ending in the taxation year exceeds 
  (ii) the total of all amounts each of which is 
  (A) the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer for the taxation year, 
  (B) the taxpayer’s share of any losses of the partnership for that fiscal period from a business or property, or 
  (C) the taxpayer’s share of 
  (I) the foreign resource pool expenses, if any, incurred by the partnership in that fiscal period, 
  (II) the Canadian exploration expense, if any, incurred by the partnership in that fiscal period, 
  (III) the Canadian development expense, if any, incurred by the partnership in that fiscal period, and 
  (IV) the Canadian oil and gas property expense, if any, incurred by the partnership in that fiscal period. 
  
  ### Net capital losses
  
  (1.1) Notwithstanding paragraph 111(1)(b), the amount that may be deducted under that paragraph in computing a taxpayer’s taxable income for a particular taxation year is the total of 
  (a) the lesser of 
  (i) the amount, if any, determined under paragraph 3(b) in respect of the taxpayer for the particular year, and 
  (ii) the total of all amounts each of which is an amount determined by the formula is the amount claimed under paragraph 111(1)(b) for the particular year by the taxpayer in respect of a net capital loss for a taxation year (in this paragraph referred to as the “loss year”), is the fraction that would be used for the particular year under section 38 in respect of the taxpayer if the taxpayer had a capital loss for the particular year, and is the fraction required to be used under section 38 in respect of the taxpayer for the loss year; 
  (b) where the taxpayer is an individual, the least of 
  (i) $2,000, 
  (ii) the taxpayer’s pre-1986 capital loss balance for the particular year, and 
  (iii) the amount, if any, by which 
  (A) the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year exceeds 
  (B) the total of the amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(1.1)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(1.1)(a) for the particular year; and 
  (c) the amount, if any, that the Minister determines to be reasonable in the circumstances for the particular year and after considering the application to the taxpayer of subsections 104(21.6), 130.1(4), 131(1) and 138.1(3.2) as they read in their application to the taxpayer’s last taxation year that began before November 2011. 
  
  ### Year of death
  
  (2) Where a taxpayer dies in a taxation year, for the purpose of computing the taxpayer’s taxable income for that year and the immediately preceding taxation year, the following rules apply: 
  (a) paragraph 111(1)(b) shall be read as follows: 
  “111(1)(b) the taxpayer’s net capital losses for all taxation years not claimed for the purpose of computing the taxpayer’s taxable income for any other taxation year;”; and 
  (b) paragraph 111(1.1)(b) shall be read as follows: 
  “111(1.1)(b) the amount, if any, by which 
  (i) the amount claimed under paragraph 111(1)(b) in respect of the taxpayer’s net capital losses for the particular year exceeds the total of 
  (ii) all amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph 111(2)(a)(ii), would be required to be claimed under paragraph 111(1)(b) for the particular year to produce the amount determined under paragraph 111(2)(a) for the particular year, and 
  (iii) all amounts each of which is an amount deducted under section 110.6 in computing the taxpayer’s taxable income for a taxation year, except to the extent that, where the particular year is the year in which the taxpayer died, the amount, if any, by which the amount determined under subparagraph 111(2)(b)(i) in respect of the taxpayer for the immediately preceding taxation year exceeds the amount so determined under subparagraph 111(2)(b)(ii).” 
  
  ### Limitation on deductibility
  
  (3) For the purposes of subsection 111(1), 
  (a) an amount in respect of a non-capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year is deductible, and an amount in respect of a net capital loss for a taxation year may be claimed, in computing the taxable income of a taxpayer for a particular taxation year only to the extent that it exceeds the total of 
  (i) amounts deducted under this section in respect of that non-capital loss, restricted farm loss, farm loss or limited partnership loss in computing taxable income for taxation years preceding the particular taxation year, 
  (i.1) the amount that was claimed under paragraph 111(1)(b) in respect of that net capital loss for taxation years preceding the particular taxation year, and 
  (ii) amounts claimed in respect of that loss under paragraph 186(1)(c) for the year in which the loss was incurred or under paragraph 186(1)(d) for the particular taxation year and taxation years preceding the particular taxation year, and 
  (b) no amount is deductible in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss, as the case may be, for a taxation year until 
  (i) in the case of a non-capital loss, the deductible non-capital losses, 
  (ii) in the case of a net capital loss, the deductible net capital losses, 
  (iii) in the case of a restricted farm loss, the deductible restricted farm losses, 
  (iv) in the case of a farm loss, the deductible farm losses, and 
  (v) in the case of a limited partnership loss, the deductible limited partnership losses, for preceding taxation years have been deducted. 
  
  ### Loss restriction event — capital losses
  
  (4) Notwithstanding subsection (1), and subject to subsection (5.5), if at any time (in this subsection referred to as “that time”) a taxpayer is subject to a loss restriction event, 
  (a) no amount in respect of a net capital loss for a taxation year that ended before that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends after that time; 
  (b) no amount in respect of a net capital loss for a taxation year that ends after that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends before that time; 
  (c) in computing the adjusted cost base to the taxpayer at and after that time of each capital property, other than a depreciable property, of the taxpayer immediately before that time, there is to be deducted the amount, if any, by which the adjusted cost base to the taxpayer of the property immediately before that time exceeds its fair market value immediately before that time; 
  (d) each amount required by paragraph (c) to be deducted in computing the adjusted cost base to the taxpayer of a property is deemed to be a capital loss of the taxpayer for the taxation year that ended immediately before that time from the disposition of the property; 
  (e) if the taxpayer designates — in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the taxpayer — a property that was a capital property of the taxpayer immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the taxpayer or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply), 
  (i) the taxpayer is deemed to have disposed of the property at the time that is immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of 
  (A) the fair market value of the property immediately before that time, and 
  (B) the greater of the adjusted cost base to the taxpayer of the property immediately before the disposition and such amount as is designated by the taxpayer in respect of the property, 
  (ii) subject to subparagraph (iii), the taxpayer is deemed to have reacquired the property at that time at a cost equal to those proceeds of disposition, and 
  (iii) if the property is depreciable property of the taxpayer the capital cost of which to the taxpayer immediately before the disposition exceeds those proceeds of disposition, for the purposes of sections 13 and 20 and any regulations made for the purposes of paragraph 20(1)(a), 
  (A) the capital cost of the property to the taxpayer at that time is deemed to be the amount that was its capital cost immediately before the disposition, and 
  (B) the excess is deemed to have been allowed to the taxpayer in respect of the property under regulations made for the purposes of paragraph 20(1)(a) in computing the taxpayer’s income for taxation years that ended before that time; and 
  (f) for the purposes of the definition 
  *capital dividend account* in subsection 89(1), each amount that because of paragraph (d) or (e) is a capital loss or gain of the taxpayer from a disposition of a property for the taxation year that ended immediately before that time is deemed to be a capital loss or gain, as the case may be, of the taxpayer from the disposition of the property immediately before the time that a capital property of the taxpayer in respect of which paragraph (e) would be applicable would be deemed by that paragraph to have been disposed of by the taxpayer.  
  
  ### Loss restriction event — non-capital losses and farm losses
  
  (5) If at any time a taxpayer is subject to a loss restriction event, 
  (a) no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ended before that time is deductible by the taxpayer for a taxation year that ends after that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended before that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends after that time 
  (i) only if that business was carried on by the taxpayer for profit or with a reasonable expectation of profit throughout the particular year, and 
  (ii) only to the extent of the total of the taxpayer’s income for the particular year from 
  (A) that business, and 
  (B) if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services; and 
  (b) no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ends after that time is deductible by the taxpayer for a taxation year that ended before that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended after that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends before that time 
  (i) only if throughout the taxation year and in the particular year that business was carried on by the taxpayer for profit or with a reasonable expectation of profit, and 
  (ii) only to the extent of the taxpayer’s income for the particular year from 
  (A) that business, and 
  (B) if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services. 
  
  ### Loss restriction event — UCC computation
  
  (5.1) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event and, if this Act were read without reference to subsection 13(24), the undepreciated capital cost to the taxpayer of depreciable property of a prescribed class immediately before that time would have exceeded the total of 
  (a) the fair market value of all the property of that class immediately before that time, and 
  (b) the amount in respect of property of that class otherwise allowed under regulations made under paragraph 20(1)(a) or deductible under subsection 20(16) in computing the taxpayer’s income for the taxation year that ended immediately before that time, the excess is to be deducted in computing the taxpayer’s income for the taxation year that ended immediately before that time and is deemed to have been allowed in respect of property of that class under regulations made under paragraph 20(1)(a). 
  (5.2)  [Repealed, 2016, c. 12, s. 40]  
  
  ### Loss restriction event — doubtful debts and bad debts
  
  (5.3) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event, 
  (a) no amount may be deducted under paragraph 20(1)(l) in computing the taxpayer’s income for the taxation year that ended immediately before that time; and 
  (b) in respect of each debt owing to the taxpayer immediately before that time 
  (i) the amount that is the greatest amount that would, but for this subsection and subsection 26(2) of this Act and subsection 33(1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, have been deductible under paragraph 20(1)(l)  
  (A) is deemed to be a separate debt, and 
  (B) notwithstanding any other provision of this Act, is to be deducted as a bad debt under paragraph 20(1)(p) in computing the taxpayer’s income for its taxation year that ended immediately before that time, and 
  (ii) the amount by which the debt exceeds that separate debt is deemed to be a separate debt incurred at the same time and under the same circumstances as the debt was incurred. 
  
  ### Non-capital loss
  
  (5.4) Where, at any time, control of a corporation has been acquired by a person or persons, such portion of the corporation’s non-capital loss for a taxation year ending before that time as 
  111(5.4)(a) was not deductible in computing the corporation’s income for a taxation year ending before that time, and 
  (b) can reasonably be considered to be a non-capital loss of a subsidiary corporation (in this subsection referred to as the “former subsidiary corporation”) from carrying on a particular business (in this subsection referred to as the “former subsidiary corporation’s loss business”) that was deemed by subsection 88(1.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on November 12, 1981 to be the non-capital loss of the corporation for the taxation year of the corporation in which the former subsidiary corporation’s loss year ended  shall be deemed to be a non-capital loss of the corporation from carrying on the former subsidiary corporation’s loss business. 
  
  ### Loss restriction event — special rules
  
  (5.5) If at any time a taxpayer is subject to a loss restriction event, 
  (a) paragraphs (4)(c) to (f) and subsections (5.1) to (5.3) do not apply to the taxpayer in respect of the loss restriction event if at that time the taxpayer becomes or ceases to be exempt from tax under this Part on its taxable income; and 
  (b) if it can reasonably be considered that the main reason that the taxpayer is subject to the loss restriction event is to cause paragraph (4)(d) or any of subsections (5.1) to (5.3) to apply with respect to the loss restriction event, the following do not apply with respect to the loss restriction event: 
  (i) that provision and paragraph (4)(e), and 
  (ii) if that provision is paragraph (4)(d), paragraph (4)(c). 
  
  ### Limitation
  
  (6) For the purposes of this section and paragraph 53(1)(i), any loss of a taxpayer for a taxation year from a farming business shall, after the taxpayer disposes of the land used in that farming business and to the extent that the amount of the loss is required by paragraph 53(1)(i) to be added in computing the adjusted cost base to the taxpayer of the land immediately before the disposition, be deemed not to be a loss. 
  
  ### Idem
  
  (7) For the purposes of this section, any loss of a taxpayer for a taxation year from a farming business shall, to the extent that the loss is included in the amount of any deduction permitted by section 101 in computing the taxpayer’s income for any subsequent taxation year, be deemed not to be a loss of the taxpayer for the purpose of computing the taxpayer’s taxable income for that subsequent year or any taxation year subsequent thereto. 
  (7.1) to (7.2)  [Repealed, 2013, c. 34, s. 241]  
  
  ### Non-capital losses of employee life and health trusts
  
  (7.3) Paragraph (1)(a) does not apply in computing the taxable income of a trust for a taxation year if the trust is, in the year, an employee life and health trust. 
  
  ### Non-capital losses of employee life and health trusts
  
  (7.4) For the purposes of computing the taxable income of an employee life and health trust for a taxation year, there may be deducted such portion as the trust may claim of the trust’s non-capital losses for the seven taxation years immediately preceding and the three taxation years immediately following the year. 
  
  ### Non-capital losses of employee life and health trusts
  
  (7.5) Notwithstanding paragraph (1)(a) and subsection (7.4), no amount in respect of the trust’s non-capital losses for a taxation year in which the trust was an employee life and health trust may be deducted in computing the trust’s taxable income for another taxation year (referred to in this subsection as the “specified year”) if 
  (a) the trust was not an employee life and health trust for the specified year; or 
  (b) the trust is an employee life and health trust that, because of the application of subsection 144.1(3), is not permitted to deduct any amount under subsection 104(6) for the specified year. 
  
  ### Definitions
  
  (8) In this section,  
  *exchange rate*, at any time in respect of a currency of a country other than Canada, means the rate of exchange between that currency and Canadian currency quoted by the Bank of Canada on the day that includes that time or, if that day is not a business day, on the day that immediately precedes that day, or a rate of exchange acceptable to the Minister; (taux de change)   
  *farm loss* of a taxpayer for a taxation year means the amount determined by the formula  is the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is the taxpayer’s loss for the year from a farming or fishing business exceeds 
  (ii) the total of all amounts each of which is the taxpayer’s income for the year from a farming or fishing business, and 
  (b) the amount that would be the taxpayer’s non-capital loss for the year if the amount determined for D in the definition 
  *non-capital loss* in this subsection were nil, and   [Repealed, 2000, c. 19, s. 19]  is the total of all amounts by which the farm loss of the taxpayer for the year is required to be reduced because of section 80; ( perte agricole)   
  *foreign currency debt* means a debt obligation denominated in a currency of a country other than Canada; (dette en monnaie étrangère)   
  *net capital loss* of a taxpayer for a taxation year means the amount determined by the formula  is the amount, if any, determined under subparagraph 3(b)(ii) in respect of the taxpayer for the year, is the lesser of the total determined under subparagraph 3(b)(i) in respect of the taxpayer for the year and the amount determined for A in respect of the taxpayer for the year, is the least of 
  (a) the amount of the allowable business investment losses of the taxpayer for the taxpayer’s tenth preceding taxation year, 
  (b) the amount, if any, by which the amount of the non-capital loss of the taxpayer for the taxpayer’s tenth preceding taxation year exceeds the total of all amounts in respect of that non-capital loss deducted in computing the taxpayer’s taxable income or claimed by the taxpayer under paragraph 186(1)(c) or (d) for the year or for any preceding taxation year, and 
  (c) if the taxpayer was subject to a loss restriction event before the end of the year and after the end of the taxpayer’s tenth preceding taxation year, nil, and is the total of all amounts by which the net capital loss of the taxpayer for the year is required to be reduced because of section 80; ( perte en capital nette)   
  *non-capital loss* of a taxpayer for a taxation year means, at any time, the amount determined by the formula  is the amount determined by the formula is the total of all amounts each of which is 
  (a) the taxpayer’s loss for the year from an office, employment, business or property, 
  (a.1) an amount deductible under paragraph 104(6)(a.4) in computing the taxpayer’s income for the year, 
  (b) an amount deducted under paragraph (1)(b) or section 110.6, or deductible under any of paragraphs 110(1)(d) to (g) and (k), section 112 and subsections 113(1) and 138(6), in computing the taxpayer’s taxable income for the year, or 
  (c) if that time is before the taxpayer’s eleventh following taxation year, the taxpayer’s allowable business investment loss for the year, and is the amount determined under paragraph 3(c) in respect of the taxpayer for the year, is the amount, if any, determined in respect of the taxpayer for the year under section 110.5 or subparagraph 115(1)(a)(vii),  [Repealed, 2000, c. 19, s. 19]  is the amount that would be the taxpayer’s farm loss for the year if the amount determined for B in the definition 
  *farm loss* in this subsection were zero,  is the total of all amounts deducted under subsection 111(10) in respect of the taxpayer for the year, and is the total of all amounts by which the non-capital loss of the taxpayer for the year is required to be reduced because of section 80; ( perte autre qu’une perte en capital)   
  *pre-1986 capital loss balance* of an individual for a particular taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount determined by the formula is the individual’s net capital loss for a taxation year ending before 1985, and is the total of all amounts claimed under this section by the individual in respect of that loss in computing the individual’s taxable income for taxation years preceding the particular taxation year, and is the amount determined by the formula is the lesser of 
  (a) the amount of the individual’s net capital loss for the 1985 taxation year, and 
  (b) the amount, if any, by which the amount determined under subparagraph 3(e)(ii) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of the individual for the 1985 taxation year exceeds the amount deductible by reason of paragraph 3(e) of that Act in computing the individual’s taxable income for the 1985 taxation year, andI is the total of all amounts claimed under this section by the individual in respect of the individual’s net capital loss for the 1985 taxation year in computing the individual’s taxable income for taxation years preceding the particular taxation year, and  is the total of all amounts claimed under this section by the individual in respect of the individual’s net capital loss for the 1985 taxation year in computing the individual’s taxable income for taxation years preceding the particular taxation year, is the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for taxation years that ended before 1988 or begin after October 17, 2000, is 3/4 of the total of all amounts each of which is an amount deducted under section 110.6 in computing the individual’s taxable income for a taxation year, preceding the particular year, that 
  (a) ended after 1987 and before 1990, or 
  (b) began after February 27, 2000 and ended before October 18, 2000, is 2/3 of the total of all amounts deducted under section 110.6 in computing the individual’s taxable income for taxation years, preceding the particular year, that ended after 1989 and before February 28, 2000, and is the amount determined by the formula is the amount deducted by the individual under section 110.6 for a taxation year of the individual, preceding the particular year, that includes February 28, 2000 or October 17, 2000, and is the fraction in paragraph 38(a) that applies to the individual for the individual’s taxation year referred to in the description of J. ( solde des pertes en capital subies avant 1986)  
  
  ### Exception
  
  (9) In this section, a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for a taxation year during which the taxpayer was not resident in Canada shall be determined as if 
  (a) in the part of the year throughout which the taxpayer was non-resident, if section 114 applies to the taxpayer in respect of the year, and 
  (b) throughout the year, in any other case, the taxpayer had no income other than income described in any of subparagraphs 115(1)(a)(i) to (vi), the taxpayer’s only taxable capital gains, allowable capital losses and allowable business investment losses were from dispositions of taxable Canadian property (other than treaty-protected property) and the taxpayer’s only other losses were losses from the duties of an office or employment performed by the taxpayer in Canada and businesses (other than treaty-protected businesses) carried on by the taxpayer in Canada. 
  
  ### Fuel tax rebate loss abatement
  
  (10) Where in a particular taxation year a taxpayer received an amount (in this subsection referred to as a “rebate”) as a fuel tax rebate under subsection 68.4(2) or (3.1) of the Excise Tax Act, in computing the taxpayer’s non-capital loss for a taxation year (in this subsection referred to as the “loss year”) that is one of the 7 taxation years preceding the particular year, there shall be deducted the lesser of  
  (a) the amount determined by the formula is the total of all rebates received by the taxpayer in the particular year, is the total of all amounts, in respect of rebates received by the taxpayer in the particular year, repaid by the taxpayer under subsection 68.4(7) of that Act, and is the total of all amounts, in respect of rebates received in the particular year, deducted under this subsection in computing the taxpayer’s non-capital losses for other taxation years; and 
  (b) such amount as the taxpayer claims, not exceeding the portion of the taxpayer’s non-capital loss for the loss year (determined without reference to this subsection) that would be deductible in computing the taxpayer’s taxable income for the particular year if the taxpayer had sufficient income for the particular year from businesses carried on by the taxpayer in the particular year. 
  
  ### Fuel tax rebate — partnerships
  
  (11) Where a taxpayer was a member of a partnership at any time in a fiscal period of the partnership during which it received a fuel tax rebate under subsection 68.4(2), (3) or (3.1) of the Excise Tax Act, the taxpayer is deemed  
  (a) to have received at that time as a rebate under subsection 68.4(2), 68.4(3) or 68.4(3.1), as the case may be, of that Act an amount equal to that proportion of the amount of the rebate received by the partnership that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act; and 
  (b) to have paid as a repayment under subsection 68.4(7) of that Act an amount equal to that proportion of all amounts repaid under subsection 68.4(7) of that Act in respect of the rebate that the member’s share of the partnership’s income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act. 
  
  ### Foreign currency debt on loss restriction event
  
  (12) For the purposes of subsection (4), if at any time a taxpayer owes a foreign currency debt in respect of which the taxpayer would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the taxpayer is deemed to own at the time (in this subsection referred to as the “measurement time”) that is immediately before that time a property 
  (a) the adjusted cost base of which at the measurement time is the amount determined by the formula is the amount of principal owed by the taxpayer under the foreign currency debt at the measurement time, calculated, for greater certainty, using the exchange rate applicable at the measurement time, is the portion of any gain, previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A, and is the portion of any capital loss previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A; and 
  (b) the fair market value of which is the amount that would be the amount of the principal owed by the taxpayer under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing. 
  
  ### Order of applying provisions
  
  111.1 In computing an individual’s taxable income for a taxation year, the provisions of this Division shall be applied in the following order: sections 110, 110.2, 111, 110.6 and 110.7. 
  
  ### Deduction of taxable dividends received by corporation resident in Canada
  
  112 (1) Where a corporation in a taxation year has received a taxable dividend from 
  (a) a taxable Canadian corporation, or 
  (b) a corporation resident in Canada (other than a non-resident-owned investment corporation or a corporation exempt from tax under this Part) and controlled by it, an amount equal to the dividend may be deducted from the income of the receiving corporation for the year for the purpose of computing its taxable income. 
  
  ### Dividends received from non-resident corporation
  
  (2) Where a taxpayer that is a corporation has, in a taxation year, received a dividend from a corporation (other than a foreign affiliate of the taxpayer) that was taxable under subsection 2(3) for the year and that has, throughout the period from June 18, 1971 to the time when the dividend was received, carried on a business in Canada through a permanent establishment as defined by regulation, an amount equal to that proportion of the dividend that the paying corporation’s taxable income earned in Canada for the immediately preceding year is of the whole of the amount that its taxable income for that year would have been if it had been resident in Canada throughout that year, may be deducted from the income of the receiving corporation for the taxation year for the purpose of computing its taxable income. 
  
  ### No deduction permitted
  
  (2.1) No deduction may be made under subsection (1) or (2) in computing the taxable income of a specified financial institution in respect of a dividend received by it on a share that was, at the time the dividend was received, a term preferred share, other than a dividend on a share of the capital stock of a corporation that was not acquired in the ordinary course of the business carried on by the institution, and for the purposes of this subsection, if a restricted financial institution received the dividend on a share of the capital stock of a mutual fund corporation or an investment corporation at any time after the mutual fund or investment corporation has elected under subsection 131(10) not to be a restricted financial institution, the share is deemed to be a term preferred share acquired in the ordinary course of business. 
  
  ### Guaranteed shares
  
  (2.2) No deduction may be made under subsection (1), (2) or 138(6) in computing the taxable income of a particular corporation in respect of a dividend received on a share of the capital stock of a corporation that was issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 where 
  (a) a person or partnership (in this subsection and subsection (2.21) referred to as the “guarantor”) that is a specified financial institution or a specified person in relation to a specified financial institution, but that is not the issuer of the share or an individual other than a trust, is, at or immediately before the time the dividend was received, obligated, either absolutely or contingently and either immediately or in the future, to effect any undertaking (in this subsection and subsections (2.21) and (2.22) referred to as a “guarantee agreement”), including any guarantee, covenant or agreement to purchase or repurchase the share and including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the particular corporation or any specified person in relation to the particular corporation given to ensure that 
  (i) any loss that the particular corporation or a specified person in relation to the particular corporation may sustain by reason of the ownership, holding or disposition of the share or any other property is limited in any respect, or 
  (ii) the particular corporation or a specified person in relation to the particular corporation will derive earnings by reason of the ownership, holding or disposition of the share or any other property; and 
  (b) the guarantee agreement was given as part of a transaction or event or a series of transactions or events that included the issuance of the share. 
  
  ### Exceptions
  
  (2.21) Subsection (2.2) does not apply to a dividend received by a particular corporation on 
  (a) a share that is at the time the dividend is received a share described in paragraph (e) of the definition term preferred share in subsection 248(1);  
  (b) a grandfathered share, a taxable preferred share issued before December 16, 1987 or a prescribed share; 
  (c) a taxable preferred share issued after December 15, 1987 and of a class of the capital stock of a corporation that is listed on a designated stock exchange where all guarantee agreements in respect of the share were given by one or more of the issuer of the share and persons that are related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the issuer unless, at the time the dividend is paid to the particular corporation, dividends in respect of more than 10 per cent of the issued and outstanding shares to which the guarantee agreement applies are paid to the particular corporation or the particular corporation and specified persons in relation to the particular corporation; or 
  (d) a share 
  (i) that was not acquired by the particular corporation in the ordinary course of its business, 
  (ii) in respect of which the guarantee agreement was not given in the ordinary course of the guarantor’s business, and 
  (iii) the issuer of which is, at the time the dividend is paid, related (otherwise than because of a right referred to in paragraph 251(5)(b)) to both the particular corporation and the guarantor. 
  
  ### Interpretation
  
  (2.22) For the purposes of subsections (2.2) and (2.21), 
  (a) where a guarantee agreement in respect of a share is given at any particular time after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, otherwise than under a written arrangement to do so entered into before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, the share is deemed to have been issued at the particular time and the guarantee agreement is deemed to have been given as part of a series of transactions that included the issuance of the share; and 
  (b)  specified person has the meaning assigned by paragraph (h) of the definition taxable preferred share in subsection 248(1).  
  
  ### Where no deduction permitted
  
  (2.3) No deduction may be made under subsection (1) or (2) or 138(6) in computing the taxable income of a particular corporation in respect of a dividend received on a share of the capital stock of a corporation where there is, in respect of the share, a dividend rental arrangement of the particular corporation, a partnership of which the particular corporation is directly or indirectly a member or a trust under which the particular corporation is a beneficiary. 
  
  ### Dividend rental arrangements — exception
  
  (2.31) Subsection (2.3) does not apply to a dividend received on a share where there is, in respect of the share, a dividend rental arrangement of a person or partnership (referred to in this subsection and subsection (2.32) as the taxpayer) throughout a particular period during which the synthetic equity arrangement referred to in paragraph (c) of the definition dividend rental arrangement in subsection 248(1) is in effect if  
  (a) the dividend rental arrangement is a dividend rental arrangement because of that paragraph; and 
  (b) the taxpayer establishes that, throughout the particular period, no tax-indifferent investor or group of tax-indifferent investors, each member of which is affiliated with every other member, has all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share. 
  
  ### Representations
  
  (2.32) A taxpayer is considered to have satisfied the condition described in paragraph (2.31)(b) in respect of a share if 
  (a) the taxpayer or the connected person referred to in paragraph (a) of the definition 
  *synthetic equity arrangement* in subsection 248(1) (either of which is referred to in this subsection as the synthetic equity arrangement party) obtains accurate representations in writing from its counterparty, or from each member of a group comprised of all its counterparties each of which is affiliated with each other (each member of this group of counterparties is referred to in this subsection as an affiliated counterparty), with respect to the synthetic equity arrangement, as appropriate, that  
  (i) it is not a tax-indifferent investor and it does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), and 
  (ii) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated; 
  (b) the synthetic equity arrangement party obtains accurate representations in writing from its counterparty, or from each affiliated counterparty, with respect to the synthetic equity arrangement that the counterparty, or each affiliated counterparty, as appropriate 
  (i) is not a tax-indifferent investor and does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), 
  (ii) has entered into one or more specified synthetic equity arrangements that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit, in respect of the share, in one of the following circumstances: 
  (A) in the case of a counterparty, that counterparty 
  (I) has entered into a specified synthetic equity arrangement with its own counterparty (a counterparty of a counterparty or of an affiliated counterparty is referred to in this subsection as a specified counterparty), or  
  (II) has entered into a specified synthetic equity arrangement with each member of a group of its own counterparties each member of which is affiliated with each other member (each member of this group of counterparties is referred to in this subsection as an affiliated specified counterparty), or  
  (B) in the case of an affiliated counterparty, each affiliated counterparty 
  (I) has entered into a specified synthetic equity arrangement with the same specified counterparty, or 
  (II) has entered into a specified synthetic equity arrangement with an affiliated specified counterparty that is part of the same group of affiliated specified counterparties, and 
  (iii) has obtained accurate representations in writing from each of its specified counterparties, or from each member of the group of affiliated specified counterparties referred to in subclause (A)(II) or (B)(II), as appropriate, that 
  (A) it is not a tax-indifferent investor and it does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), and 
  (B) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated; 
  (c) the synthetic equity arrangement party obtains accurate representations in writing from its counterparty, or from each affiliated counterparty, with respect to the synthetic equity arrangement that the counterparty, or each affiliated counterparty, as appropriate 
  (i) is not a tax-indifferent investor and does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), 
  (ii) has entered into specified synthetic equity arrangements 
  (A) that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share, 
  (B) where no single specified counterparty or group of affiliated specified counterparties has been provided with all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share, and 
  (C) where each specified counterparty or affiliated specified counterparty deals at arm’s length with each other (other than in the case of affiliated specified counterparties, within the same group, of affiliated specified counterparties), and 
  (iii) has obtained accurate representations in writing from each of its specified counterparties, or from each of its affiliated specified counterparties, that 
  (A) it is a person resident in Canada and it does not reasonably expect to cease to be resident in Canada during the particular period referred to in subsection (2.31), and 
  (B) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated; or 
  (d) where a person or partnership is a party to a synthetic equity arrangement chain in respect of the share, the person or partnership 
  (i) has obtained all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share under the synthetic equity arrangement chain, 
  (ii) has entered into one or more specified synthetic equity arrangements that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share, and 
  (iii) obtains accurate representations in writing of the type described in paragraph (a), (b) or (c), as if it were a synthetic equity arrangement party, from each of its counterparties where each such counterparty deals at arm’s length with that person or partnership. 
  
  ### End of particular period
  
  (2.33) If, at a time during a particular period referred to in subsection (2.31), a counterparty, specified counterparty, affiliated counterparty or affiliated specified counterparty reasonably expects to become a tax-indifferent investor or — if it has provided a representation described by subparagraph (2.32)(a)(ii) or clause (2.32)(b)(iii)(B) or (c)(iii)(B) in respect of a share — that all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share will be eliminated, the particular period for which it has provided a representation in respect of the share is deemed to end at that time. 
  
  ### Interpretation
  
  (2.34) For greater certainty, each reference in subsection (2.32) to a “counterparty”, a “specified counterparty”, an “affiliated counterparty” or an “affiliated specified counterparty” is to be read as referring only to a person or partnership that obtains all or any portion of the risk of loss or opportunity for gain or profit in respect of the share. 
  
  ### Where no deduction permitted
  
  (2.4) No deduction may be made under subsection 112(1) or 112(2) or subsection 138(6) in computing the taxable income of a particular corporation in respect of a dividend received on a share (in this subsection referred to as the “subject share”), other than an exempt share, of the capital stock of another corporation where 
  (a) any person or partnership was obligated, either absolutely or contingently, to effect an undertaking, including any guarantee, covenant or agreement to purchase or repurchase the subject share, under which an investor is entitled, either immediately or in the future, to receive or obtain any amount or benefit for the purpose of reducing the impact, in whole or in part, of any loss that an investor may sustain by virtue of the ownership, holding or disposition of the subject share, and any property is used, in whole or in part, either directly or indirectly in any manner whatever, to secure the undertaking; or 
  (b) the consideration for which the subject share was issued or any other property received, either directly or indirectly, by an issuer from an investor, or any property substituted therefor, is or includes 
  (i) an obligation of an investor to make payments that are required to be included, in whole or in part, in computing the income of the issuer, other than an obligation of a corporation that, immediately before the subject share was issued, would be related to the corporation that issued the subject share if this Act were read without reference to paragraph 251(5)(b), or 
  (ii) any right to receive payments that are required to be included, in whole or in part, in computing the income of the issuer where that right is held on condition that it or property substituted therefor may revert or pass to an investor or a person or partnership to be determined by an investor, where that obligation or right was acquired by the issuer as part of a transaction or event or a series of transactions or events that included the issuance or acquisition of the subject share, or a share for which the subject share was substituted. 
  
  ### Application of s. (2.4)
  
  (2.5) Subsection 112(2.4) applies only in respect of a dividend on a share where, having regard to all the circumstances, it may reasonably be considered that the share was issued or acquired as part of a transaction or event or a series of transactions or events that enabled any corporation to earn investment income, or any income substituted therefor, and, as a result, the amount of its taxes payable under this Act for a taxation year is less than the amount that its taxes payable under this Act would be for the year if that investment income were the only income of the corporation for the year and all other taxation years and no amount were deductible under subsections 127(5) and 127.2(1) in computing its taxes payable under this Act. 
  
  ### Definitions
  
  (2.6) For the purposes of this subsection and subsection 112(2.4),  
  *exempt share* means  
  (a) a prescribed share, 
  (b) a share of the capital stock of a corporation issued before 5:00 p.m. Eastern Standard Time, November 27, 1986, other than a share held at that time 
  (i) by the issuer, or 
  (ii) by any person or partnership where the issuer may become entitled to receive any amount after that time by way of subscription proceeds or contribution of capital with respect to that share pursuant to an agreement made before that time, or 
  (c) a share that was, at the time the dividend referred to in subsection 112(2.4) was received, a share described in paragraph (e) of the definition term preferred share in subsection 248(1) during the applicable period referred to in that paragraph; (action exclue)   
  *investor* means the particular corporation referred to in subsection 112(2.4) and a person with whom that corporation does not deal at arm’s length and any partnership or trust of which that corporation, or a person with whom that corporation does not deal at arm’s length, is a member or beneficiary, but does not include the other corporation referred to in that subsection; (investisseur)   
  *issuer* means the other corporation referred to in subsection 112(2.4) and a person with whom that corporation does not deal at arm’s length and any partnership or trust of which that corporation, or a person with whom that corporation does not deal at arm’s length, is a member or beneficiary, but does not include the particular corporation referred to in that subsection. (émetteur)  
  
  ### Change in agreement or condition
  
  (2.7) For the purposes of the definition exempt share in subsection 112(2.6), where at any time after 5:00 p.m. Eastern Standard Time, November 27, 1986 the terms or conditions of a share of the capital stock of a corporation have been changed or any agreement in respect of the share has been changed or entered into by the corporation, the share shall be deemed to have been issued at that time.  
  
  ### Loss sustained by investor
  
  (2.8) For the purposes of paragraph 112(2.4)(a), any loss that an investor may sustain by virtue of the ownership, holding or disposition of the subject share referred to in that paragraph shall be deemed to include any loss with respect to an obligation or share that was issued or acquired as part of a transaction or event or a series of transactions or events that included the issuance or acquisition of the subject share, or a share for which the subject share was substituted. 
  
  ### Related corporations
  
  (2.9) For the purposes of subparagraph 112(2.4)(b)(i), where it may reasonably be considered having regard to all the circumstances that a corporation has become related to any other corporation for the purpose of avoiding any limitation on the deduction of a dividend under subsection 112(1), 112(2) or 138(6), the corporation shall be deemed not to be related to the other corporation. 
  
  ### Loss on share that is capital property
  
  (3) Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a taxpayer (other than a trust) from the disposition of a share that is capital property of the taxpayer (other than a share that is property of a partnership) is deemed to be the amount of the loss determined without reference to this subsection minus, 
  (a) where the taxpayer is an individual, the lesser of 
  (i) the total of all amounts each of which is a dividend received by the taxpayer on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and 
  (ii) the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share; and 
  (b) where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is 
  (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, 
  (ii) a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or 
  (iii) a life insurance capital dividend. 
  
  ### Loss on share that is capital property — excluded dividends
  
  (3.01) A qualified dividend shall not be included in the total determined under subparagraph (3)(a)(i) or paragraph (3)(b) if the taxpayer establishes that 
  (a) it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition. 
  
  ### Loss on share held by partnership
  
  (3.1) Subject to subsections 112(5.5) and 112(5.6), where a taxpayer (other than a partnership or a mutual fund trust) is a member of a partnership, the taxpayer’s share of any loss of the partnership from the disposition of a share that is held by a particular partnership as capital property is deemed to be that share of the loss determined without reference to this subsection minus, 
  (a) where the taxpayer is an individual, the lesser of 
  (i) the total of all amounts each of which is a dividend received by the taxpayer on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and 
  (ii) that share of the loss determined without reference to this subsection minus all taxable dividends received by the taxpayer on the share; 
  (b) where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is 
  (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, 
  (ii) a dividend in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, or 
  (iii) a life insurance capital dividend; and 
  (c) where the taxpayer is a trust, the total of all amounts each of which is 
  (i) a taxable dividend, or 
  (ii) a life insurance capital dividend received on the share and designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary that was a corporation, partnership or trust. 
  
  ### Loss on share held by partnership — excluded dividends
  
  (3.11) A qualified dividend shall not be included in the total determined under subparagraph (3.1)(a)(i) or paragraph (3.1)(b) or (c) if the taxpayer establishes that 
  (a) it was received when the particular partnership, the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the particular partnership held throughout the 365-day period that ended immediately before the disposition. 
  
  ### Loss on share held by partnership — excluded dividends
  
  (3.12) A taxable dividend received on a share and designated under subsection 104(19) by a particular trust in respect of a beneficiary that was a partnership or trust shall not be included in the total determined under paragraph 112(3.1)(c) where the particular trust establishes that the dividend was received by an individual (other than a trust). 
  
  ### Loss on share held by trust
  
  (3.2) Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a trust (other than a mutual fund trust) from the disposition of a share of the capital stock of a corporation that is capital property of the trust is deemed to be the amount of the loss determined without reference to this subsection minus the total of 
  (a) the amount, if any, by which the lesser of 
  (i) the total of all amounts each of which is a dividend received by the trust on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and 
  (ii) the loss determined without reference to this subsection minus the total of all amounts each of which is the amount of a taxable dividend 
  (A) received by the trust on the share, 
  (B) received on the share and designated under subsection 104(19) by the trust in respect of a beneficiary who is an individual (other than a trust), or 
  (C) that is a qualified dividend received on the share and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that 
  (I) it owned the share throughout the 365-day period that ended immediately before the disposition, and 
  (II) the dividend was received while the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received exceeds 
  (iii) if the trust is an individual’s graduated rate estate, the share was acquired as a consequence of the individual’s death and the disposition occurs during the trust’s first taxation year, 1/2 of the lesser of 
  (A) the loss determined without reference to this subsection, and 
  (B) the individual’s capital gain from the disposition of the share immediately before the individual’s death, and 
  (b) the total of all amounts each of which is 
  (i) a taxable dividend, or 
  (ii) a life insurance capital dividend received on the share and designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary that was a corporation, partnership or trust. 
  
  ### Loss on share held by trust — special cases
  
  (3.3) Notwithstanding subsection 112(3.2), where a trust has at any time acquired a share of the capital stock of a corporation because of subsection 104(4), the amount of any loss of the trust from a disposition after that time is deemed to be the amount of the loss determined without reference to subsection 112(3.2) and this subsection minus the total of 
  (a) the amount, if any, by which the lesser of 
  (i) the total of all amounts each of which is a dividend received after that time by the trust on the share in respect of which an election was made under subsection 83(2) where subsection 83(2.1) does not deem the dividend to be a taxable dividend, and 
  (ii) the loss determined without reference to subsection 112(3.2) and this subsection minus the total of all amounts each of which is the amount of a taxable dividend 
  (A) received by the trust on the share after that time, 
  (B) received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary who is an individual (other than a trust), or 
  (C) that is a qualified dividend received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that 
  (I) it owned the share throughout the 365-day period that ended immediately before the disposition, and 
  (II) the dividend was received when the trust, the beneficiary and persons not dealing at arm’s length with the beneficiary owned in total less than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received exceeds 
  (iii) 1/2 of the lesser of 
  (A) the loss from the disposition, determined without reference to subsection 112(3.2) and this subsection, and 
  (B) the trust’s capital gain from the disposition immediately before that time of the share because of subsection 104(4), and 
  (b) the total of all amounts each of which is a taxable dividend received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or trust. 
  
  ### Loss on share held by trust — excluded dividends
  
  (3.31) A qualified dividend received by a trust shall not be included under subparagraph (3.2)(a)(i) or (b)(ii) or (3.3)(a)(i) if the trust establishes that the dividend 
  (a) was received, 
  (i) in any case where the dividend was designated under subsection 104(19) or 104(20) by the trust, when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, or 
  (ii) in any other case, when the trust and persons with whom the trust was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, and 
  (b) was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition. 
  
  ### Loss on share held by trust — excluded dividends
  
  (3.32) A qualified dividend that is a taxable dividend received on the share and that is designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or trust, shall not be included under paragraph (3.2)(b) or (3.3)(b) if the trust establishes that the dividend was received by an individual (other than a trust), or 
  (a) was received when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition. 
  
  ### Loss on share that is not capital property
  
  (4) Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a taxpayer (other than a trust) from the disposition of a share of the capital stock of a corporation that is property (other than capital property) of the taxpayer is deemed to be the amount of the loss determined without reference to this subsection minus, 
  (a) where the taxpayer is an individual and the corporation is resident in Canada, the total of all dividends received by the individual on the share; 
  (b) where the taxpayer is a partnership, the total of all dividends received by the partnership on the share; and 
  (c) where the taxpayer is a corporation, the total of all amounts received by the taxpayer on the share each of which is 
  (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section, section 113 or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, or 
  (ii) a dividend (other than a taxable dividend). 
  
  ### Loss on share that is not capital property — excluded dividends
  
  (4.01) A qualified dividend shall not be included in the total determined under paragraph (4)(a), (b) or (c) if the taxpayer establishes that 
  (a) it was received when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the taxpayer owned throughout the 365-day period that ended immediately before the disposition. 
  
  ### Fair market value of shares held as inventory
  
  (4.1) For the purpose of section 10, the fair market value at any time of a share of the capital stock of a corporation is deemed to be equal to the fair market value of the share at that time, plus 
  (a) where the shareholder is a corporation, the total of all amounts received by the shareholder on the share before that time each of which is 
  (i) a taxable dividend, to the extent of the amount of the dividend that was deductible under this section, section 113 or subsection 115(1) or 138(6) in computing the shareholder’s taxable income or taxable income earned in Canada for any taxation year, or 
  (ii) a dividend (other than a taxable dividend); 
  (b) where the shareholder is a partnership, the total of all amounts each of which is a dividend received by the shareholder on the share before that time; and 
  (c) where the shareholder is an individual and the corporation is resident in Canada, the total of all amounts each of which is a dividend received by the shareholder on the share before that time (or, where the shareholder is a trust, that would have been so received if this Act were read without reference to subsection 104(19)). 
  
  ### Fair market value of shares held as inventory — excluded dividends
  
  (4.11) A qualified dividend shall not be included in the total determined under paragraph (4.1)(a), (b) or (c) if the shareholder establishes that 
  (a) it was received while the shareholder and persons with whom the shareholder was not dealing at arm’s length did not hold in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the shareholder held throughout the 365-day period that ended at the time referred to in subsection 112(4.1). 
  
  ### Loss on share held by trust
  
  (4.2) Subject to subsections 112(5.5) and 112(5.6), the amount of any loss of a trust from the disposition of a share that is property (other than capital property) of the trust is deemed to be the amount of the loss determined without reference to this subsection minus 
  (a) the total of all amounts each of which is a dividend received by the trust on the share, to the extent that the amount was not designated under subsection 104(20) in respect of a beneficiary of the trust; and 
  (b) the total of all amounts each of which is a dividend received on the share that was designated under subsection 104(19) or 104(20) by the trust in respect of a beneficiary of the trust. 
  
  ### Loss on share held by trust — excluded dividends
  
  (4.21) A qualified dividend shall not be included in the total determined under paragraph (4.2)(a) if the taxpayer establishes that 
  (a) it was received when the trust and persons with whom the trust was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition. 
  
  ### Loss on share held by trust — excluded dividends
  
  (4.22) A qualified dividend shall not be included in the total determined under paragraph (4.2)(b) if the taxpayer establishes that 
  (a) it was received when the trust, the beneficiary and persons with whom the beneficiary was not dealing at arm’s length did not own in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; and 
  (b) it was received on a share that the trust owned throughout the 365-day period that ended immediately before the disposition. 
  (4.3)  [Repealed, 1998, c. 19, s. 131]  
  
  ### Disposition of share by financial institution
  
  (5) Subsection 112(5.2) applies to the disposition of a share by a taxpayer in a taxation year where 
  (a) the taxpayer is a financial institution in the year; 
  (b) the share is a mark-to-market property for the year; and 
  (c) the taxpayer received 
  (i) a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, or 
  (ii) a dividend on the share under subsection 84(3). 
  
  ### Share held for less than one year
  
  (5.1) Subsection 112(5.2) applies to the disposition of a share by a taxpayer in a taxation year where 
  (a) the disposition is an actual disposition; 
  (b) the taxpayer did not hold the share throughout the 365-day period that ended immediately before the disposition; and 
  (c) the share was a mark-to-market property of the taxpayer for a taxation year that begins after October 1994 and in which the taxpayer was a financial institution. 
  
  ### Adjustment re dividends
  
  (5.2) Subject to subsection 112(5.3), where subsection 112(5) or 112(5.1) provides that this subsection applies to the disposition of a share by a taxpayer at any time, the taxpayer’s proceeds of disposition shall be deemed to be the amount determined by the formula is the taxpayer’s proceeds determined without reference to this subsection, is 
  (a) if the taxpayer received a dividend under subsection 84(3) in respect of the share, the total determined under subparagraph (b)(ii), and 
  (b) in any other case, the lesser of 
  (i) the loss, if any, from the disposition of the share that would be determined before the application of this subsection if the cost of the share to any taxpayer were determined without reference to 
  (A) paragraphs 87(2)(e.2) and (e.4), 88(1)(c), 138(11.5)(e) and 142.5(2)(b), 
  (B) subsection 85(1), where the provisions of that subsection are required by paragraph 138(11.5)(e) to be applied, and 
  (C) paragraph 142.6(1)(d), and 
  (ii) the total of all amounts each of which is 
  (A) where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer’s taxable income or taxable income earned in Canada for any taxation year, 
  (B) where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership, 
  (C) where the taxpayer is a trust, an amount designated under subsection 104(19) in respect of a taxable dividend on the share, or 
  (D) a dividend (other than a taxable dividend) received by the taxpayer on the share, is the total of all amounts each of which is the amount by which 
  (a) the taxpayer’s proceeds of disposition on a deemed disposition of the share before that time were increased because of this subsection, 
  (b) where the taxpayer is a corporation or trust, a loss of the taxpayer on a deemed disposition of the share before that time was reduced because of subsection 112(3), 112(3.2), 112(4) or 112(4.2), or 
  (c) where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before that time was reduced because of subsection (3.1) or (4), and is the total of all amounts each of which is the amount by which the taxpayer’s proceeds of disposition on a deemed disposition of the share before that time were decreased because of this subsection. 
  
  ### Subsection (5.2) — excluded dividends
  
  (5.21) A dividend, other than a dividend received under subsection 84(3), shall not be included in the total determined under subparagraph (b)(ii) of the description of B in subsection (5.2) unless 
  (a) the dividend was received when the taxpayer and persons with whom the taxpayer did not deal at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received; or 
  (b) the share was not held by the taxpayer throughout the 365-day period that ended immediately before the disposition. 
  
  ### Adjustment not applicable
  
  (5.3) For the purpose of determining the cost of a share to a taxpayer on a deemed reacquisition of the share after a deemed disposition of the share, the taxpayer’s proceeds of disposition shall be determined without regard to subsection 112(5.2). 
  
  ### Deemed dispositions
  
  (5.4) Where a taxpayer disposes of a share at any time, 
  (a) for the purpose of determining whether subsection 112(5.2) applies to the disposition, the conditions in subsections 112(5) and 112(5.1) shall be applied without regard to a deemed disposition and reacquisition of the share before that time; and 
  (b) total amounts under subsection 112(5.2) in respect of the disposition shall be determined from the time when the taxpayer actually acquired the share. 
  
  ### Stop-loss rules not applicable
  
  (5.5) Subsections 112(3) to 112(4) and 112(4.2) do not apply to the disposition of a share by a taxpayer in a taxation year that begins after October 1994 where 
  (a) the share is a mark-to-market property for the year and the taxpayer is a financial institution in the year; or 
  (b) subsection 112(5.2) applies to the disposition. 
  
  ### Stop-loss rules restricted
  
  (5.6) In determining whether any of subsections 112(3) to 112(4) and 112(4.2) apply to reduce a loss of a taxpayer from the disposition of a share, this Act shall be read without reference to paragraphs 112(3.01)(b) and 112(3.11)(b), subclauses 112(3.2)(a)(ii)(C)(I) and 112(3.3)(a)(ii)(C)(I) and paragraphs 112(3.31)(b), 112(3.32)(b), 112(4.01)(b), 112(4.21)(b) and 112(4.22)(b) where 
  (a) the disposition occurs 
  (i) because of subsection 142.5(2) in a taxation year that includes October 31, 1994, or 
  (ii) because of paragraph 142.6(1)(b) after October 30, 1994; or 
  (b) the share was a mark-to-market property of the taxpayer for a taxation year that begins after October 1994 in which the taxpayer was a financial institution. 
  
  ### Meaning of certain expressions
  
  (6) For the purposes of this section, 
  (a) “dividend” and “taxable dividend” do not include a capital gains dividend (within the meaning assigned by subsection 131(1)) or any dividend received by a taxpayer on which the taxpayer was required to pay tax under Part VII of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on March 31, 1977;  
  (b) one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length; and 
  (c)  financial institution and mark-to-market property have the meanings assigned by subsection 142.2(1).  
  
  ### Interpretation — qualified dividend
  
  (6.1) For the purposes of this section, a dividend on a share is a qualified dividend to the extent that 
  (a) it is a dividend other than a dividend received under subsection 84(3); or 
  (b) it is received under subsection 84(3) and, 
  (i) if the share is held by an individual other than a trust, the dividend is received by the individual, 
  (ii) if the share is held by a corporation, the dividend is received by the corporation while it is a private corporation, and is paid by another private corporation, 
  (iii) if the share is held by a trust, 
  (A) the dividend is received by the trust, 
  (B) the dividend is designated under subsection 104(19) by the trust in respect of a beneficiary and 
  (I) the beneficiary is an individual other than a trust, 
  (II) the beneficiary is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, 
  (III) the beneficiary is another trust that does not designate the dividend under subsection 104(19), or 
  (IV) the beneficiary is a partnership all of the members of which are, when the dividend is received, a person described by any of subclauses (I) to (III), or 
  (C) the dividend is designated by the trust under subsection 104(19) in respect of a beneficiary that is another trust or a partnership and the trust establishes that the dividend is received by a person described by any of subclauses (B)(I) to (III), and 
  (iv) if the share is held by a partnership, 
  (A) the dividend is included in the income of a member of a partnership and 
  (I) the member is an individual, or 
  (II) the member is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, or 
  (B) the dividend is designated under subsection 104(19) by a member of a partnership that is a trust in respect of a beneficiary described by any of subclauses (iii)(B)(I) to (IV) or is described by clause (iii)(C). 
  
  ### Rules where shares exchanged
  
  (7) Where a share (in this subsection referred to as the “new share”) has been acquired in exchange for another share (in this subsection referred to as the “old share”) in a transaction to which section 51, 85.1, 86 or 87 applies, for the purposes of the application of any of subsections 112(3) to 112(3.32) in respect of a disposition of the new share, the new share is deemed to be the same share as the old share, except that 
  (a) any dividend received on the old share is deemed for those purposes to have been received on the new share only to the extent of the proportion of the dividend that 
  (i) the shareholder’s adjusted cost base of the new share immediately after the exchange is of 
  (ii) the shareholder’s adjusted cost base of all new shares immediately after the exchange acquired in exchange for the old share; and 
  (b) the amount, if any, by which a loss from the disposition of the new share is reduced because of the application of this subsection shall not exceed the proportion of the shareholder’s adjusted cost base of the old share immediately before the exchange that 
  (i) the shareholder’s adjusted cost base of the new share immediately after the exchange is of 
  (ii) the shareholder’s adjusted cost base of all new shares, immediately after the exchange, acquired in exchange for the old share. 
  
  ### Synthetic disposition  — holding period
  
  (8) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, for the purposes of paragraphs (3.01)(b) and (3.11)(b), subclauses (3.2)(a)(ii)(C)(I) and (3.3)(a)(ii)(C)(I) and paragraphs (3.31)(b), (3.32)(b), (4.01)(b), (4.11)(b), (4.21)(b), (4.22)(b), (5.1)(b) and (5.21)(b) and subsection (9), the taxpayer is deemed not to own the property during the synthetic disposition period. 
  
  ### Exception
  
  (9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement. 
  
  ### Exception
  
  (9.1) Subsection (8) does not apply for the purpose of paragraph (5.21)(b) in respect of a dividend received on a share, referred to in paragraph (a) of the description of B in subsection (5.2), during a synthetic disposition period of a synthetic disposition arrangement in respect of that share. 
  
  ### Synthetic equity arrangements — ordering
  
  (10) For the purposes of subsections (3), (3.1), (4), (4.1) and (5.2), if a synthetic equity arrangement is in respect of a number of shares that are identical properties (referred to in this subsection as identical shares) that is less than the total number of such identical shares owned by a person or partnership at that time and in respect of which there is no other synthetic equity arrangement, the synthetic equity arrangement is deemed to be in respect of those identical shares in the order in which the person or partnership acquired them.  
  
  ### Interest in a partnership — cost reduction
  
  (11) In computing the cost to a taxpayer, at any time, of an interest in a partnership that is property (other than capital property) of the taxpayer, there is to be deducted an amount equal to the total of all amounts each of which is the taxpayer’s share of any loss of the partnership from the disposition by the partnership, or another partnership of which the partnership is directly or indirectly a member, of a share of the capital stock of a corporation (referred to in this subsection and subsection (12) as the “partnership loss”) in a fiscal period of the partnership that includes that time or a prior fiscal period, computed without reference to subsections (3.1), (4) and (5.2), to the extent that the taxpayer’s share of the partnership loss has not previously reduced the taxpayer’s cost of the interest in the partnership because of the application of this subsection. 
  
  ### Application
  
  (12) For the purposes of subsection (11), if a taxpayer disposes of an interest in a partnership at any particular time, the taxpayer’s share of a partnership loss is to be computed as if 
  (a) the fiscal period of each partnership of which the taxpayer is directly or indirectly a member had ended immediately before the time that is immediately before the particular time; 
  (b) any share of the capital stock of a corporation that was property of a partnership referred to in paragraph (a) at the particular time had been disposed of by the relevant partnership immediately before the end of that fiscal period for proceeds equal to its fair market value at the particular time; and 
  (c) each member of a partnership referred to in paragraph (a) were allocated a share of any loss (computed without reference to subsections (3.1), (4) and (5.2)) in respect of dispositions described in paragraph (b) determined by reference to the member’s specified proportion for the fiscal period referred to in paragraph (a). 
  
  ### Application
  
  (13) For the purposes of subsection (11), if a taxpayer (referred to as the “transferee” in this subsection) acquires an interest in a partnership at any time from another taxpayer (referred to as the “transferor” in this subsection), in computing the cost of the partnership interest to the transferee there is to be added an amount equal to the total of all amounts each of which is an amount deducted from the transferor’s cost of the partnership interest because of subsection (11), other than an amount to which subsection (3.1) would apply. 
  
  ### Deduction in respect of dividend received from foreign affiliate
  
  113 (1) Where in a taxation year a corporation resident in Canada has received a dividend on a share owned by it of the capital stock of a foreign affiliate of the corporation, there may be deducted from the income for the year of the corporation for the purpose of computing its taxable income for the year, an amount equal to the total of 
  (a) an amount equal to such portion of the dividend as is prescribed to have been paid out of the exempt surplus, as defined by regulation (in this Part referred to as “exempt surplus”) of the affiliate, 
  (a.1) an amount equal to the total of 
  (i) one-half of the portion of the dividend that is prescribed to have been paid out of the hybrid surplus, as defined by regulation (in this Part referred to as “hybrid surplus”), of the affiliate, and 
  (ii) the lesser of 
  (A) the total of 
  (I) the product obtained when the foreign tax prescribed to be applicable to the portion of the dividend referred to in subparagraph (i) is multiplied by the amount by which 
  1 the corporation’s relevant tax factor for the year exceeds 
  2 one-half, and 
  (II) the product obtained when 
  1 the non-business-income tax paid by the corporation applicable to the portion of the dividend referred to in subparagraph (i) is multiplied by 
  2 the corporation’s relevant tax factor for the year, and 
  (B) the amount determined under subparagraph (i), 
  (b) an amount equal to the lesser of 
  (i) the product obtained when the foreign tax prescribed to be applicable to such portion of the dividend as is prescribed to have been paid out of the taxable surplus, as defined by regulation (in this Part referred to as “taxable surplus”) of the affiliate is multiplied by the amount by which 
  (A) the corporation’s relevant tax factor for the year exceeds 
  (B) one, and 
  (ii) that portion of the dividend, 
  (c) an amount equal to the lesser of 
  (i) the product obtained when 
  (A) the non-business-income tax paid by the corporation applicable to such portion of the dividend as is prescribed to have been paid out of the taxable surplus of the affiliate is multiplied by 
  (B) the corporation’s relevant tax factor for the year, and 
  (ii) the amount by which such portion of the dividend as is prescribed to have been paid out of the taxable surplus of the affiliate exceeds the deduction in respect thereof referred to in paragraph 113(1)(b), and 
  (d) an amount equal to such portion of the dividend as is prescribed to have been paid out of the pre-acquisition surplus of the affiliate, and for the purposes of this subsection and Subdivision I of Division B, the corporation may make such elections as may be prescribed. 
  
  ### Additional deduction
  
  (2) Where, at any particular time in a taxation year ending after 1975, a corporation resident in Canada has received a dividend on a share owned by it at the end of its 1975 taxation year of the capital stock of a foreign affiliate of the corporation, there may be deducted from the income for the year of the corporation for the purpose of computing its taxable income for the year, an amount in respect of the dividend equal to the lesser of 
  (a) the amount, if any, by which the amount of the dividend so received exceeds the total of 
  (i) the deduction in respect of the dividend permitted by subsection 91(5) in computing the corporation’s income for the year, and 
  (ii) the deduction in respect of the dividend permitted by subsection 113(1) from the income for the year of the corporation for the purpose of computing its taxable income, and 
  (b) the amount, if any, by which 
  (i) the adjusted cost base to the corporation of the share at the end of its 1975 taxation year exceeds the total of 
  (iii) such amounts in respect of dividends received by the corporation on the share after the end of its 1975 taxation year and before the particular time as are deductible under paragraph 113(1)(d) in computing the taxable income of the corporation for taxation years ending after 1975, 
  (iii.1) the total of all amounts received by the corporation on the share after the end of its 1975 taxation year and before the particular time 
  (A) on a reduction, before August 20, 2011, of the paid-up capital of the foreign affiliate in respect of the share, or 
  (B) on a reduction, after August 19, 2011, of the paid-up capital of the foreign affiliate in respect of the share that is a qualifying return of capital (within the meaning assigned by subsection 90(3)) in respect of the share, and 
  (iv) the total of all amounts deducted under this subsection in respect of dividends received by the corporation on the share before the particular time. 
  
  ### Definitions
  
  (3) In this section,  
  *non-business-income tax* paid by a taxpayer has the meaning assigned by subsection 126(7); (impôt sur le revenu ne provenant pas d’une entreprise)   
  *relevant tax factor* has the meaning assigned by subsection 95(1). (facteur fiscal approprié)  
  
  ### Portion of dividend deemed paid out of exempt surplus
  
  (4) Such portion of any dividend received at any time in a taxation year by a corporation resident in Canada on a share owned by it of the capital stock of a foreign affiliate of the corporation, that was received after the 1971 taxation year of the affiliate and before the affiliate’s 1976 taxation year, as exceeds the amount deductible in respect of the dividend under paragraph 113(1)(d) in computing the corporation’s taxable income for the year shall, for the purposes of paragraph 113(1)(a), be deemed to be the portion of the dividend prescribed to have been paid out of the exempt surplus of the affiliate. 
  
  ### Individual resident in Canada for only part of year
  
  114 Notwithstanding subsection 2(2), the taxable income for a taxation year of an individual who is resident in Canada throughout part of the year and non-resident throughout another part of the year is the amount, if any, by which 
  (a) the amount that would be the individual’s income for the year if the individual had no income or losses, for the part of the year throughout which the individual was non-resident, other than 
  (i) income or losses described in paragraphs 115(1)(a) to (c), and 
  (ii) income that would have been included in the individual’s taxable income earned in Canada for the year under subparagraph 115(1)(a)(v) if the part of the year throughout which the individual was non-resident were the whole taxation year, exceeds the total of 
  (b) the deductions permitted by subsection 111(1) and, to the extent that they relate to amounts included in computing the amount determined under paragraph (a), the deductions permitted by any of paragraphs 110(1)(d) to (d.2) and (f), and 
  (c) any other deduction permitted for the purpose of computing taxable income to the extent that 
  (i) it can reasonably be considered to be applicable to the part of the year throughout which the individual was resident in Canada, or 
  (ii) if all or substantially all of the individual’s income for the part of the year throughout which the individual was non-resident is included in the amount determined under paragraph (a), it can reasonably be considered to be applicable to that part of the year. 
  114.1  [Repealed, 2001, c. 17, s. 89]  
  
  ### Deductions in separate returns
  
  114.2 Where a separate return of income with respect to a taxpayer is filed under subsection 70(2), 104(23) or 150(4) for a particular period and another return of income under this Part with respect to the taxpayer is filed for a period ending in the calendar year in which the particular period ends, for the purpose of computing the taxable income under this Part of the taxpayer in those returns, the total of all deductions claimed in all those returns under section 110 shall not exceed the total that could be deducted under that section for the year with respect to the taxpayer if no separate returns were filed under subsections 70(2), 104(23) and 150(4). 
  
  # DIVISION D 
  
  ## Taxable Income Earned in Canada by Non-Residents 
  
  ### Non-resident’s taxable income in Canada
  
  115 (1) For the purposes of this Act, the taxable income earned in Canada for a taxation year of a person who at no time in the year is resident in Canada is the amount, if any, by which the amount that would be the non-resident person’s income for the year under section 3 if 
  (a) the non-resident person had no income other than 
  (i) incomes from the duties of offices and employments performed by the non-resident person in Canada and, if the person was resident in Canada at the time the person performed the duties, outside Canada, 
  (ii) incomes from businesses carried on by the non-resident person in Canada which, in the case of the Canadian banking business of an authorized foreign bank, is, subject to this Part, the profit from that business computed using the bank’s branch financial statements (within the meaning assigned by subsection 20.2(1), 
  (iii) taxable capital gains from dispositions described in paragraph 115(1)(b), 
  (iii.1) the amount by which the amount required by paragraph 59(3.2)(c) to be included in computing the non-resident person’s income for the year exceeds any portion of that amount that was included in computing the non-resident person’s income from a business carried on by the non-resident person in Canada, 
  (iii.2) amounts required by section 13 to be included in computing the non-resident person’s income for the year in respect of dispositions of properties to the extent that those amounts were not included in computing the non-resident person’s income from a business carried on by the non-resident person in Canada, 
  (iii.21) the total of all amounts, each of which is an amount included under subparagraph 56(1)(r)(v) or section 56.3 in computing the non-resident person’s income for the year, 
  (iii.22) the total of all amounts, each of which is an amount included under subparagraph 56(1)(r)(iv.1) in computing the non-resident person’s income for the year, 
  (iii.3) in any case where, in the year, the non-resident person carried on a business in Canada described in any of paragraphs (a) to (g) of the definition 
  *principal-business corporation* in subsection 66(15), all amounts in respect of a Canadian resource property that would be required to be included in computing the non-resident person’s income for the year under this Part if the non-resident person were resident in Canada at any time in the year, to the extent that those amounts are not included in computing the non-resident person’s income by virtue of subparagraph 115(1)(a)(ii) or 115(1)(a)(iii.1),  
  (iv) the amount, if any, by which any amount required by subsection 106(2) to be included in computing the non-resident person’s income for the year as proceeds of the disposition of an income interest in a trust resident in Canada exceeds the amount in respect of that income interest that would, if the non-resident person had been resident in Canada throughout the year, be deductible under subsection 106(1) in computing the non-resident person’s income for the year, 
  (iv.1) the amount, if any, by which any amount required by subsection 96(1.2) to be included in computing the non-resident person’s income for the year as proceeds of the disposition of a right to a share of the income or loss under an agreement referred to in paragraph 96(1.1)(a) exceeds the amount in respect of that right that would, if the non-resident person had been resident in Canada throughout the year, be deductible under subsection 96(1.3) in computing the non-resident person’s income for the year, 
  (v) in the case of a non-resident person described in subsection 115(2), the total determined under paragraph 115(2)(e) in respect of the non-resident person, 
  (vi) the amount that would have been required to be included in computing the non-resident person’s income in respect of a life insurance policy in Canada by virtue of subsection 148(1) or 148(1.1) if the non-resident person had been resident in Canada throughout the year, and 
  (vii) in the case of an authorized foreign bank, the amount claimed by the bank to the extent that the inclusion of the amount in income 
  (A) increases any amount deductible by the bank under subsection 126(1) for the year, and 
  (B) does not increase an amount deductible by the bank under section 127 for the year, 
  (b) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were taxable capital gains and allowable capital losses from dispositions, other than dispositions deemed under subsection 218.3(2), of taxable Canadian properties (other than treaty-protected properties), and 
  (b.1)  [Repealed, 2001, c. 17, s. 90(4)]  
  (c) the only losses for the year referred to in paragraph 3(d) were losses from duties of an office or employment performed by the person in Canada and businesses (other than treaty-protected businesses) carried on by the person in Canada and allowable business investment losses in respect of property any gain from the disposition of which would, because of this subsection, be included in computing the person’s taxable income earned in Canada, exceeds the total of 
  (d) the deductions permitted by subsection 111(1) and, to the extent that they relate to amounts included in computing the amount determined under any of paragraphs (a) to (c), the deductions permitted by any of paragraphs 110(1)(d) to (d.2), (e) and (f) and subsection 110.1(1), 
  (e) the deductions permitted by any of subsections 112(1) and (2) and 138(6) in respect of a dividend received by the non-resident person, to the extent that the dividend is included in computing the non-resident person’s taxable income earned in Canada for the year, 
  (e.1) the deduction permitted by subsection (4.1), and 
  (f) where all or substantially all of the non-resident person’s income for the year is included in computing the non-resident person’s taxable income earned in Canada for the year, such of the other deductions permitted for the purpose of computing taxable income as may reasonably be considered wholly applicable. 
  
  ### Idem
  
  (2) Where, in a taxation year, a non-resident person was 
  (a) a student in full-time attendance at an educational institution in Canada that is a university, college or other educational institution providing courses at a post-secondary school level in Canada, 
  (b) a student attending, or a teacher teaching at, an educational institution outside Canada that is a university, college or other educational institution providing courses at a post-secondary school level, who in any preceding taxation year ceased to be resident in Canada in the course of or subsequent to moving to attend or to teach at the institution, 
  (b.1) an individual who in any preceding taxation year ceased to be resident in Canada in the course of or subsequent to moving to carry on research or any similar work under a grant received by the individual to enable the individual to carry on the research or work, 
  (c) an individual 
  (i) who had, in any previous year, ceased to be resident in Canada, 
  (ii) who received, in the taxation year, salary or wages or other remuneration in respect of an office or employment that was paid to the individual directly or indirectly by a person resident in Canada, and 
  (iii) who was, under an agreement or a convention with one or more countries that has the force of law in Canada, entitled to an exemption from an income tax otherwise payable in any of those countries in respect of the salary or wages or other remuneration, or 
  (c.1) a person who received in the year an amount, under a contract, that was or will be deductible in computing the income of a taxpayer subject to tax under this Part and the amount can, irrespective of when the contract was entered into or the form or legal effect of the contract, reasonably be regarded as having been received, in whole or in part, 
  (i) as consideration or partial consideration for entering into a contract of service or an agreement to perform a service where any such service is to be performed in Canada, or for undertaking not to enter into such a contract or agreement with another party, or 
  (ii) as remuneration or partial remuneration from the duties of an office or employment or as compensation or partial compensation for services to be performed in Canada, the following rules apply: 
  (d) for the purposes of subsection 2(3) the non-resident person shall be deemed to have been employed in Canada in the year, 
  (e) for the purposes of subparagraph 115(1)(a)(v), the total determined under this paragraph in respect of the non-resident person is the total of 
  (i) any remuneration in respect of an office or employment that was paid to the non-resident person directly or indirectly by a person resident in Canada and was received by the non-resident person in the year, except to the extent that the remuneration is attributable to the duties of an office or employment performed by the non-resident person anywhere outside Canada and 
  (A) is subject to an income or profits tax imposed by the government of a country other than Canada, or 
  (B) is paid in connection with the selling of property, the negotiating of contracts or the rendering of services for the non-resident person’s employer, or a foreign affiliate of the employer, or any other person with whom the employer does not deal at arm’s length, in the ordinary course of a business carried on by the employer, that foreign affiliate or that person, 
  (ii) amounts that would be required by paragraph 56(1)(n) or 56(1)(o) to be included in computing the non-resident person’s income for the year if the non-resident person were resident in Canada throughout the year and the reference in the applicable paragraph to “received by the taxpayer in the year” were read as a reference to “received by the taxpayer in the year from a source in Canada”, 
  (iii)  [Repealed, 1994, c. 7, Sch. VII, s. 5(2)]  
  (iv) amounts that would be required by paragraph 56(1)(q) to be included in computing the non-resident person’s income for the year if the non-resident person were resident in Canada throughout the year, and 
  (v) amounts described in paragraph 115(2)(c.1) received by the non-resident person in the year, except to the extent that they are otherwise required to be included in computing the non-resident person’s taxable income earned in Canada for the year, and 
  (f) there may be deducted in computing the taxable income of the non-resident person for the year the amount that would be deductible in computing the non-resident person’s income for the year by virtue of section 62 if 
  (i) the definition 
  *eligible relocation* in subsection 248(1) were read without reference to subparagraph (a)(i) of that definition, and  
  (ii) the amounts described in subparagraph 62(1)(c)(ii) were the amounts described in subparagraph (e)(ii) of this subsection. 
  (iii)  [Repealed, 1999, c. 22, s. 29(4)].  
  
  ### Non-resident actors
  
  (2.1) Notwithstanding subsection (1), where a non-resident person is liable to tax under subsection 212(5.1), or would if this Act were read without reference to subsection 212(5.2) be so liable, in respect of an amount paid, credited or provided in a particular taxation year, the amount shall not be included in computing the non-resident person’s taxable income earned in Canada for any taxation year unless a valid election is made under subsection 216.1(1) in respect of the non-resident person for the particular year. 
  
  ### Deferred payment by actor’s corporation
  
  (2.2) Where a corporation is liable to tax under subsection 212(5.1) in respect of a corporation payment (within the meaning assigned by subsection 212(5.2)) made in a taxation year in respect of an actor and, in a subsequent year, the corporation makes an actor payment (within the meaning assigned by subsection 212(5.2)) to or for the benefit of the actor, the amount of the actor payment is not deductible in computing the income of the corporation for any taxation year and is not included in computing the taxable income earned in Canada of the actor for any taxation year. 
  
  ### Non-resident persons  —  2010 Olympic and Paralympic Winter Games
  
  (2.3) Notwithstanding subsection (1), no amount is to be included in computing the taxable income earned in Canada for any taxation year of a non-resident person, in respect of any amount paid or payable to that person in respect of activities performed in Canada by that person in connection with the 2010 Olympic Winter Games or the 2010 Paralympic Winter Games, after 2009 and before April 2010, if that person is 
  (a) an athlete who represents a country other than Canada; 
  (b) a member of an officially registered support staff associated with a team from a country other than Canada; 
  (c) a person who serves as a games official; 
  (d) the International Olympic Committee; 
  (e) the International Paralympic Committee; 
  (f) an international sports federation that is a member of the General Association of International Sports Federations; 
  (g) an accredited foreign media organization; or 
  (h) an individual, other than a trust, who is an employee, an officer or a member of a person described in any one or more of paragraphs (a) to (g), or who provides services under contract with one or more persons described in those paragraphs. 
  
  ### Non-resident employed as aircraft pilot
  
  (3) For the purpose of applying subparagraph (1)(a)(i) to a non-resident person employed as an aircraft pilot, income of the non-resident person that is attributable to a flight (including a leg of a flight) and paid directly or indirectly by a person resident in Canada is attributable to duties performed in Canada in the following proportions: 
  (a) all of the income attributable to the flight if the flight departs from a location in Canada and arrives at a location in Canada; 
  (b) one-half of the income attributable to the flight if the flight departs from a location in Canada and arrives at a location outside Canada; 
  (c) one-half of the income attributable to the flight if the flight departs from a location outside Canada and arrives at a location in Canada; and 
  (d) none of the income attributable to the flight if the flight departs from a location outside Canada and arrives at a location outside Canada. 
  
  ### Non-resident’s income from Canadian resource property
  
  (4) Where a non-resident person ceases at any particular time in a taxation year to carry on such of the businesses described in any of paragraphs (a) to (g) of the definition 
  *principal business corporation* in subsection 66(15) as were carried on by the non-resident person immediately before that time at one or more fixed places of business in Canada and either does not commence after that time and during the year to carry on any business so described at a fixed place of business in Canada or disposes of Canadian resource property at any time in the year during which the non-resident person was not carrying on any business so described at a fixed place of business in Canada, the following rules apply:  
  (a) the taxation year of the non-resident person that would otherwise have included the particular time shall be deemed to have ended at that time and a new taxation year shall be deemed to have commenced immediately thereafter; 
  (b) the non-resident person or any partnership of which the non-resident person was a member immediately after the particular time shall be deemed, for the purpose only of computing the non-resident person’s income earned in Canada for the taxation year that is deemed to have ended, to have disposed immediately before the particular time of each Canadian resource property that was owned by the non-resident person or by the partnership immediately after the particular time and to have received therefor immediately before the particular time proceeds of disposition equal to the fair market value thereof at the particular time; and 
  (c) the non-resident person or any partnership of which the non-resident person was a member immediately after the particular time shall be deemed, for the purpose only of computing the non-resident person’s income earned in Canada for a taxation year commencing after the particular time, to have reacquired immediately after the particular time, at a cost equal to the amount deemed by paragraph 115(4)(b) to have been received by the non-resident person or the partnership as the proceeds of disposition therefor, each property deemed by that paragraph to have been disposed of. 
  
  ### Foreign resource pool expenses
  
  (4.1) Where a taxpayer ceases at any time after February 27, 2000 to be resident in Canada, a particular taxation year of the taxpayer ends after that time and the taxpayer was non-resident throughout the period (in this subsection referred to as the “non-resident period”) that begins at that time and ends at the end of the particular year, 
  (a) in computing the taxpayer’s taxable income earned in Canada for the particular year, there may be deducted each amount that would be permitted to be deducted in computing the taxpayer’s income for the particular year under subsection 66(4) or 66.21(4) if 
  (i) subsection 66(4) were read without reference to the words “who is resident throughout a taxation year in Canada” and as if the amount determined under subparagraph 66(4)(b)(ii) were nil, and 
  (ii) subsection 66.21(4) were read without reference to the words “throughout which the taxpayer is resident in Canada” and as if the amounts determined under subparagraph 66.21(4)(a)(ii) and paragraph 66.21(4)(b) were nil; and 
  (b) an amount deducted under this subsection in computing the taxpayer’s taxable income earned in Canada for the particular year is deemed, for the purpose of applying subsection 66(4) or 66.21(4), as the case may be, to a subsequent taxation year, to have been deducted in computing the taxpayer’s income for the particular year. 
  
  ### Interpretation of 
  *partnership* 
  
  (5) For the purposes of subsection 115(4), 
  *partnership* does not include a prescribed partnership.  
  
  ### Application of s. 138(12)
  
  (6) The definitions in subsection 138(12) apply to this section. 
  
  ### Competent authority agreements
  
  115.1 (1) Notwithstanding any other provision of this Act, where the Minister and another person have, under a provision contained in a tax convention or agreement with another country that has the force of law in Canada, entered into an agreement with respect to the taxation of the other person, all determinations made in accordance with the terms and conditions of the agreement shall be deemed to be in accordance with this Act. 
  
  ### Transfer of rights and obligations
  
  (2) Where rights and obligations under an agreement described in subsection 115.1(1) have been transferred to another person with the concurrence of the Minister, that other person shall be deemed, for the purpose of subsection 115.1(1), to have entered into the agreement with the Minister. 
  
  ## Non-Residents with Canadian Investment Service Providers 
  
  ### Definitions
  
  115.2 (1) The definitions in this subsection apply in this section.  
  *Canadian investor*, at any time in respect of a non-resident person, means a person that the non-resident person knows, or ought to know after reasonable inquiry, is at that time resident in Canada. (investisseur canadien)   
  *Canadian service provider* means a corporation resident in Canada, a trust resident in Canada or a Canadian partnership. (fournisseur de services canadien)   
  *designated investment services* provided to a person or partnership means any one or more of the services described in the following paragraphs:  
  (a) investment management and advice with respect to qualified investments, regardless of whether the manager has discretionary authority to buy or sell; 
  (b) purchasing and selling qualified investments, exercising rights incidental to the ownership of qualified investments such as voting, conversion and exchange, and entering into and executing agreements with respect to such purchasing and selling and the exercising of such rights; 
  (c) investment administration services, such as receiving, delivering and having custody of investments, calculating and reporting investment values, receiving subscription amounts from, and paying distributions and proceeds of disposition to, investors in and beneficiaries of the person or partnership, record keeping, accounting and reporting to the person or partnership and its investors and beneficiaries; and 
  (d) in the case of a corporation, trust or partnership the only undertaking of which is the investing of its funds in qualified investments, marketing investments in the corporation, trust or partnership to non-resident investors. ( services de placement déterminés)   
  *promoter* of a corporation, trust or partnership means a particular person or partnership that initiates or directs the founding, organization or substantial reorganization of the corporation, trust or partnership, and a person or partnership that is affiliated with the particular person or partnership. (promoteur)   
  *qualified investment* of a person or partnership means  
  (a) a share of the capital stock of a corporation, or an interest in a partnership, trust, entity, fund or organization, other than a share or an interest 
  (i) that is either 
  (A) not listed on a designated stock exchange, or 
  (B) listed on a designated stock exchange, if the person or partnership, together with all persons with whom the person or partnership does not deal at arm’s length, owns 25% or more of the issued shares of any class of the capital stock of the corporation or of the total value of interests in the partnership, entity, trust, fund or organization, as the case may be, and 
  (ii) of which more than 50% of the fair market value is derived from one or more of 
  (A) real or immovable property situated in Canada, 
  (B) Canadian resource property, and 
  (C) timber resource property; 
  (b) indebtedness; 
  (c) annuities; 
  (d) commodities or commodities futures purchased or sold, directly or indirectly in any manner whatever, on a commodities or commodities futures exchange; 
  (e) currency; and 
  (f) options, interests, rights and forward and futures agreements in respect of property described in any of paragraphs (a) to (e) or this paragraph, and agreements under which obligations are derived from interest rates, from the price of property described in any of those paragraphs, from payments made in respect of such a property by its issuer to holders of the property, or from an index reflecting a composite measure of such rates, prices or payments, whether or not the agreement creates any rights in or obligations regarding the referenced property itself. ( placement admissible)   
  *qualified non-resident* [Repealed, 2002, c. 9, s. 35]  
  
  ### Not carrying on business in Canada
  
  (2) For the purposes of subsections 115(1) and 150(1), Part XIV and section 805 of the Income Tax Regulations, a non-resident person is not considered to be carrying on business in Canada at any particular time solely because of the provision to the person, or to a partnership of which the person is a member, at the particular time of designated investment services by a Canadian service provider if  
  (a) in the case of services provided to a non-resident individual other than a trust, the individual is not affiliated at the particular time with the Canadian service provider; 
  (b) in the case of services provided to a non-resident person that is a corporation or trust, 
  (i) the person has not, before the particular time, directly or through its agents, 
  (A) directed any promotion of investments in itself principally at Canadian investors, or 
  (B) sold an investment in itself that is outstanding at the particular time to a person who was a Canadian investor at the time of the sale and who is a Canadian investor at the particular time, 
  (ii) the person has not, before the particular time, directly or through its agents, filed any document with a public authority in Canada in accordance with the securities legislation of Canada or of any province in order to permit the distribution of interests in the person to persons resident in Canada, and 
  (iii) when the particular time is more than one year after the time at which the person was created, the total of the fair market value, at the particular time, of investments in the person that are beneficially owned by persons and partnerships (other than a designated entity in respect of the Canadian service provider) that are affiliated with the Canadian service provider does not exceed 25% of the fair market value, at the particular time, of all investments in the person; and 
  (c) in the case of services provided to a partnership of which the non-resident person is a member, 
  (i) the particular time is not more than one year after the partnership was formed, 
  (ii) where the non-resident person is, or is affiliated with, a person or partnership described in clause (A) or (B), the total of the fair market value of all investments in the partnership at the particular time is not less than four times the total of the fair market value of each investment in the partnership beneficially owned at the particular time by 
  (A) a person or partnership (other than a designated entity in respect of the Canadian service provider), more than 25% of the total of the fair market value, at the particular time, of investments in which are beneficially owned by persons and partnerships (other than a designated entity in respect of the Canadian service provider) that are affiliated with the Canadian service provider, or 
  (B) a person or partnership (other than a designated entity in respect of the Canadian service provider) that is affiliated with the Canadian service provider, or 
  (iii) at the particular time, the non-resident person is not affiliated with the Canadian service provider and is not affiliated with any person or partnership (other than the partnership to which the services are provided) described in clause (ii)(A) or (B). 
  
  ### Interpretation
  
  (3) For the purposes of this subsection and subparagraphs (2)(b)(iii) and (c)(ii), 
  (a) the fair market value of an investment in a corporation, trust or partnership shall be determined without regard to any voting rights attaching to that investment; and 
  (b) a person or partnership is, at a particular time, a designated entity in respect of a Canadian service provider if the total of the fair market value at the particular time, of investments in the entity that are beneficially owned by persons and partnerships (other than another designated entity in respect of the Canadian service provider) that are affiliated with the Canadian service provider does not exceed 25% of the fair market value, at the particular time, of all investments in the entity. 
  
  ### Transfer pricing
  
  (4) For the purpose of section 247, where subsection (2) applies in respect of services provided to a person that is a corporation or trust or to a partnership, if the Canadian service provider referred to in that subsection does not deal at arm’s length with the promoter of the person or of the partnership, the service provider is deemed not to deal at arm’s length with the person or partnership. 
  (5)  [Repealed, 2013, c. 34, s. 244]  
  
  ### Disposition by non-resident person of certain property
  
  116 (1) If a non-resident person proposes to dispose of any taxable Canadian property (other than property described in subsection (5.2) and excluded property) the non-resident person may, at any time before the disposition, send to the Minister a notice setting out 
  (a) the name and address of the person to whom he proposes to dispose of the property (in this section referred to as the “proposed purchaser”); 
  (b) a description of the property sufficient to identify it; 
  (c) the estimated amount of the proceeds of disposition to be received by the non-resident person for the property; and 
  (d) the amount of the adjusted cost base to the non-resident person of the property at the time of the sending of the notice. 
  
  ### Certificate in respect of proposed disposition
  
  (2) Where a non-resident person who has sent to the Minister a notice under subsection 116(1) in respect of a proposed disposition of any property has 
  (a) paid to the Receiver General, as or on account of tax under this Part payable by the non-resident person for the year, 25% of the amount, if any, by which the estimated amount set out in the notice in accordance with paragraph 116(1)(c) exceeds the amount set out in the notice in accordance with paragraph 116(1)(d), or 
  (b) furnished the Minister with security acceptable to the Minister in respect of the proposed disposition of the property, the Minister shall forthwith issue to the non-resident person and the proposed purchaser a certificate in prescribed form in respect of the proposed disposition, fixing therein an amount (in this section referred to as the “certificate limit”) equal to the estimated amount set out in the notice in accordance with paragraph 116(1)(c). 
  
  ### Notice to Minister
  
  (3) Every non-resident person who in a taxation year disposes of any taxable Canadian property of that person (other than property described in subsection 116(5.2) and excluded property) shall, not later than 10 days after the disposition, send to the Minister, by registered mail, a notice setting out 
  (a) the name and address of the person to whom the non-resident person disposed of the property (in this section referred to as the “purchaser”), 
  (b) a description of the property sufficient to identify it, and 
  (c) a statement of the proceeds of disposition of the property and the amount of its adjusted cost base to the non-resident person immediately before the disposition, unless the non-resident person has, at any time before the disposition, sent to the Minister a notice under subsection 116(1) in respect of any proposed disposition of that property and 
  (d) the purchaser was the proposed purchaser referred to in that notice, 
  (e) the estimated amount set out in that notice in accordance with paragraph 116(1)(c) is equal to or greater than the proceeds of disposition of the property, and 
  (f) the amount set out in that notice in accordance with paragraph 116(1)(d) does not exceed the adjusted cost base to the non-resident person of the property immediately before the disposition. 
  
  ### Certificate in respect of property disposed of
  
  (4) Where a non-resident person who has sent to the Minister a notice under subsection 116(3) in respect of a disposition of any property has 
  (a) paid to the Receiver General, as or on account of tax under this Part payable by the non-resident person for the year, 25% of the amount, if any, by which the proceeds of disposition of the property exceed the adjusted cost base to the non-resident person of the property immediately before the disposition, or 
  (b) furnished the Minister with security acceptable to the Minister in respect of the disposition of the property, the Minister shall forthwith issue to the non-resident person and the purchaser a certificate in prescribed form in respect of the disposition. 
  
  ### Liability of purchaser
  
  (5) Where in a taxation year a purchaser has acquired from a non-resident person any taxable Canadian property (other than depreciable property or excluded property) of the non-resident person, the purchaser, unless 
  (a) after reasonable inquiry the purchaser had no reason to believe that the non-resident person was not resident in Canada, 
  (a.1) subsection (5.01) applies to the acquisition, or 
  (b) a certificate under subsection 116(4) has been issued to the purchaser by the Minister in respect of the property, is liable to pay, and shall remit to the Receiver General within 30 days after the end of the month in which the purchaser acquired the property, as tax under this Part for the year on behalf of the non-resident person, 25% of the amount, if any, by which 
  (c) the cost to the purchaser of the property so acquired exceeds 
  (d) the certificate limit fixed by the certificate, if any, issued under subsection 116(2) in respect of the disposition of the property by the non-resident person to the purchaser, and is entitled to deduct or withhold from any amount paid or credited by the purchaser to the non-resident person or otherwise recover from the non-resident person any amount paid by the purchaser as such a tax. 
  
  ### Treaty-protected property
  
  (5.01) This subsection applies to the acquisition of a property by a person (referred to in this subsection as the “purchaser”) from a non-resident person if 
  (a) the purchaser concludes after reasonable inquiry that the non-resident person is, under a tax treaty that Canada has with a particular country, resident in the particular country; 
  (b) the property would be treaty-protected property of the non-resident person if the non-resident person were, under the tax treaty referred to in paragraph (a), resident in the particular country; and 
  (c) the purchaser provides notice under subsection (5.02) in respect of the acquisition. 
  
  ### Notice by purchaser in respect of an acquisition of property
  
  (5.02) A person (referred to in this subsection as the “purchaser”) who acquires property from a non-resident person provides notice under this subsection in respect of the acquisition if the purchaser sends to the Minister, on or before the day that is 30 days after the date of the acquisition, a notice setting out 
  (a) the date of the acquisition; 
  (b) the name and address of the non-resident person; 
  (c) a description of the property sufficient to identify it; 
  (d) the amount paid or payable, as the case may be, by the purchaser for the property; and 
  (e) the name of the country with which Canada has concluded a tax treaty under which the property is a treaty-protected property for the purposes of subsection (5.01) or (6.1), as the case may be. 
  
  ### Gifts, etc.
  
  (5.1) If a non-resident person has disposed of or proposes to dispose of a life insurance policy in Canada, a Canadian resource property or a taxable Canadian property other than 
  (a) excluded property, or 
  (b) property that has been transferred or distributed on or after the non-resident person’s death and as a consequence thereof to any person by way of gift inter vivos or to a person with whom the non-resident person was not dealing at arm’s length for no proceeds of disposition or for proceeds of disposition less than the fair market value of the property at the time the non-resident person so disposed of it or proposes to dispose of it, as the case may be, the following rules apply:  
  (c) the reference in paragraph 116(1)(c) to “the proceeds of disposition to be received by the non-resident person for the property” shall be read as a reference to “the fair market value of the property at the time the non-resident person proposes to dispose of it”, 
  (d) the references in subsections 116(3) and (4) to “the proceeds of disposition of the property” shall be read as references to “the fair market value of the property immediately before the disposition”, 
  (e) the references in subsection 116(5) to “the cost to the purchaser of the property so acquired” shall be read as references to “the fair market value of the property at the time it was so acquired”, and 
  (f) the reference in subsection 116(5.3) to “the amount payable by the taxpayer for the property so acquired” shall be read as a reference to “the fair market value of the property at the time it was so acquired”. 
  
  ### Certificates for dispositions
  
  (5.2) If a non-resident person has, in respect of a disposition, or a proposed disposition, in a taxation year to a taxpayer of property (other than excluded property) that is a life insurance policy in Canada, a Canadian resource property, a property (other than capital property) that is real property, or an immovable, situated in Canada, a timber resource property, depreciable property that is a taxable Canadian property or any interest in, or for civil law any right in, or any option in respect of, a property to which this subsection applies (whether or not that property exists), 
  (a) paid to the Receiver General, as or on account of tax under this Part payable by the non-resident person for the year, such amount as is acceptable to the Minister in respect of the disposition or proposed disposition of the property, or 
  (b) furnished the Minister with security acceptable to the Minister in respect of the disposition or proposed disposition of the property, the Minister shall forthwith issue to the non-resident person and to the taxpayer a certificate in prescribed form in respect of the disposition or proposed disposition fixing therein an amount equal to the proceeds of disposition, proposed proceeds of disposition or such other amount as is reasonable in the circumstances. 
  
  ### Liability of purchaser in certain cases
  
  (5.3) Where in a taxation year a taxpayer has acquired from a non-resident person property referred to in subsection 116(5.2), 
  (a) the taxpayer, unless subsection (5.01) applies to the acquisition or unless after reasonable inquiry the taxpayer had no reason to believe that the non-resident person was not resident in Canada, is liable to pay, as tax under this Part for the year on behalf of the non-resident person, 50% of the amount, if any, by which 
  (i) the amount payable by the taxpayer for the property so acquired exceeds 
  (ii) the amount fixed in the certificate, if any, issued under subsection 116(5.2) in respect of the disposition of the property by the non-resident person to the taxpayer and is entitled to deduct or withhold from any amount paid or credited by the taxpayer to the non-resident person or to otherwise recover from the non-resident person any amount paid by the taxpayer as such a tax; and 
  (b) the taxpayer shall, within 30 days after the end of the month in which the taxpayer acquired the property, remit to the Receiver General the tax for which the taxpayer is liable under paragraph 116(5.3)(a). 
  
  ### Presumption
  
  (5.4) Where there has been a disposition by a non-resident of a life insurance policy in Canada by virtue of subsection 148(2) or any of paragraphs (a) to (c) and (e) of the definition 
  *disposition* in subsection 148(9), the insurer under the policy shall, for the purposes of subsections 116(5.2) and (5.3) be deemed to be the taxpayer who acquired the property for an amount equal to the proceeds of disposition as determined under section 148.  
  
  ### Definition of 
  *excluded property* 
  
  (6) For the purposes of this section, 
  *excluded property* of a non-resident person means  
  (a) a property that is a taxable Canadian property solely because a provision of this Act deems it to be a taxable Canadian property; 
  (a.1) a property (other than real or immovable property situated in Canada, a Canadian resource property or a timber resource property) that is described in an inventory of a business carried on in Canada by the person; 
  (b) a security that is 
  (i) listed on a recognized stock exchange, and 
  (ii) either 
  (A) a share of the capital stock of a corporation, or 
  (B) SIFT wind-up entity equity; 
  (c) a unit of a mutual fund trust; 
  (d) a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation; 
  (e) property of a non-resident insurer that 
  (i) is licensed or otherwise authorized under the laws of Canada or a province to carry on an insurance business in Canada, and 
  (ii) carries on an insurance business, within the meaning of subsection 138(1) of the Act, in Canada; 
  (f) property of an authorized foreign bank that carries on a Canadian banking business; 
  (g) an option in respect of property referred to in any of paragraphs (a) to (f) whether or not such property is in existence; 
  (h) an interest, or for civil law a right, in property referred to in any of paragraphs (a) to (g); and 
  (i) a property that is, at the time of its disposition, a treaty-exempt property of the person. 
  
  ### Treaty-exempt property
  
  (6.1) For the purpose of subsection (6), a property is a treaty-exempt property of a non-resident person, at the time of the non-resident person’s disposition of the property to another person (referred to in this subsection as the “purchaser”), if 
  (a) it is, at that time, a treaty-protected property of the non-resident person; and 
  (b) where the purchaser and the non-resident person are related at that time, the purchaser provides notice under subsection (5.02) in respect of the disposition. 
  
  ### Application of s. 138(12)
  
  (7) The definitions in subsection 138(12) apply to this section. 
  
  ### Exception — underused housing tax
  
  (8) If, in the absence of this subsection, the Minister would be required to issue a certificate under subsection (2), (4) or (5.2) in respect of a disposition, or a proposed disposition, of property that is residential property, as defined in section 2 of the Underused Housing Tax Act, the Minister may decline to issue the certificate if  
  (a) the Minister is not satisfied that all returns that the non-resident person is required to file under section 7 of that Act in respect of the property have been filed; 
  (b) the Minister is not satisfied that all taxes and other amounts payable under that Act by the non-resident person have been paid; or 
  (c) the following conditions are met: 
  (i) the Minister has reasonable grounds to believe that, for the calendar year immediately preceding the calendar year in which the property is or is expected to be disposed of, the non-resident person will be required to file a return under section 7 of that Act in respect of the property or will become liable to pay an amount of tax under subsection 6(3) of that Act in respect of the property, and 
  (ii) the return has not been filed or the amount of tax has not been paid. 
  
  # DIVISION E 
  
  ## Computation of Tax 
  
  # SUBDIVISION A 
  
  ## Rules Applicable to Individuals 
  
  ### Tax payable under this Part
  
  117 (1) For the purposes of this Division, except section 120 (other than subparagraph (a)(ii) of the definition 
  *tax otherwise payable under this Part* in subsection 120(4)), tax payable under this Part, tax otherwise payable under this Part and tax under this Part shall be computed as if this Part were read without reference to Division E.1.  
  
  ### Rates for taxation years after 2015
  
  (2) The tax payable under this Part by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be (in this Subdivision referred to as the “amount taxable”) for a taxation year is 
  (a) 15% of the amount taxable, if the amount taxable is equal to or less than the amount determined for the taxation year in respect of $45,282; 
  (b) if the amount taxable is greater than $45,282, but is equal to or less than $90,563, the maximum amount determinable in respect of the taxation year under paragraph (a), plus 20.5% of the amount by which the amount taxable exceeds $45,282 for the year; 
  (c) if the amount taxable is greater than $90,563, but is equal to or less than $140,388, the maximum amount determinable in respect of the taxation year under paragraph (b), plus 26% of the amount by which the amount taxable exceeds $90,563 for the year; 
  (d) if the amount taxable is greater than $140,388, but is equal to or less than $200,000, the maximum amount determinable in respect of the taxation year under paragraph (c), plus 29% of the amount by which the amount taxable exceeds $140,388 for the year; and 
  (e) if the amount taxable is greater than $200,000, the maximum amount determinable in respect of the taxation year under paragraph (d), plus 33% of the amount by which the amount taxable exceeds $200,000 for the year. 
  
  ### Adjustment to tax payable – advance payment
  
  (2.1) The tax payable under this Part on the individual’s taxable income for a taxation year, as computed under subsection (2), is deemed to be the total of the amount otherwise computed under that subsection and, except for the purposes of sections 118 to 118.9, 120.2, 121 and Subdivision C, the lesser of 
  (a) the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsections 122.7(2) and (3), and 
  (b) the amount that 
  (i) if the individual is an eligible individual for the purposes of subsection 122.7(2), is the total of all amounts deemed to have been paid  
  (A) on account of the individual’s tax payable under this Part for the taxation year under subsection 122.72(1) or (3), and 
  (B) on account of tax payable under this Part for the taxation year under subsection 122.72(1) or (3), if subsection 122.72(1) were read without reference to subsection 122.7(3), of a person who is the individual’s cohabiting spouse or common-law partner (as defined in subsection 122.7(1)) at the end of the taxation year, and  
  (ii) in any other case, is the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsection 122.72(1) or (3), if subsection 122.72(1) were read without reference to subsection 122.7(2). 
  
  ### Minimum thresholds for 2004
  
  (3) Each of the amounts of $30,754, $61,509 and $100,000 referred to in subsection (2) is deemed, for the purposes of applying subsection (2) to the 2004 taxation year, to be the greater of 
  (a) the amount that would be used for the 2004 taxation year if this section were read without reference to this subsection, and 
  (b) in the case of 
  (i) the amount of $30,754, $35,000, 
  (ii) the amount of $61,509, $70,000, and 
  (iii) the amount of $100,000, $113,804. 
  (6)  [Repealed, 2000, c. 19, s. 22]  
  (7)  [Repealed, 1994, c. 7, Sch. VII, s. 6]  
  
  ## Annual Adjustment of Deductions and Other Amounts 
  
  ### Annual adjustment
  
  117.1 (1) Each specified amount in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used for the year under the provision for which the amount is relevant is the total of 
  (a) the amount that would, but for subsection (3), be the amount to be used under the relevant provision for the preceding taxation year, and 
  (b) the product obtained by multiplying 
  (i) the amount referred to in paragraph (a) by 
  (ii) the amount, adjusted in such manner as may be prescribed and rounded to the nearest one-thousandth, or, where the result obtained is equidistant from two consecutive one-thousandths, to the higher thereof, that is determined by the formula is the Consumer Price Index for the 12 month period that ended on September 30 next before that year, and is the Consumer Price Index for the 12 month period immediately preceding the period mentioned in the description of A. 
  (1.1)  [Repealed, 2017, c. 20, s. 11]  
  
  ### Annual adjustment — amounts
  
  (2) For the purposes of subsection (1), each of the following amounts is a specified amount in relation to tax payable under this Part or Part I.2 for a taxation year: 
  (a) the amount of $300 referred to in subparagraph 6(1)(b)(v.1); 
  (b) the amount of $1,000 referred to in the formula in paragraph 8(1)(s); 
  (c) the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a); 
  (d) each of the amounts expressed in dollars in subsection 117(2); 
  (e) each of the amounts expressed in dollars in the description of B in subsection 118(1); 
  (f) the amount of $12,298 in the description of A in subsection 118(1.1); 
  (g) the amount of $15,000 in paragraph (d) of the description of F in subsection 118(1.1); 
  (h) each of the amounts expressed in dollars in subsection 118(2); 
  (i) the amount of $1,000 referred to in subsection 118(10); 
  (j) the amount of $15,000 referred to in subsection 118.01(2); 
  (k) each of the amounts expressed in dollars in subsection 118.2(1); 
  (l) each of the amounts expressed in dollars in subsection 118.3(1); 
  (m) each of the amounts expressed in dollars in subsection 122.5(3); 
  (n) the amount of $2,500 referred to in subsection 122.51(1); 
  (o) each of the amounts expressed in dollars in subsection 122.51(2); 
  (p) the amount of $14,000 referred to in subsection 122.7(1.3); 
  (q) the amounts of $1,395 and $2,403 in the description of A, and each of the amounts expressed in dollars in the description of B, in subsection 122.7(2); 
  (r) the amount of $720 in the description of C, and each of the amounts expressed in dollars in the description of D, in subsection 122.7(3); 
  (s) the amount of $10,000 in the description of B in subsection 122.91(2); and 
  (t) each of the amounts expressed in dollars in Part I.2. 
  
  ### Rounding
  
  (3) Where an amount referred to in this section, when adjusted as provided in this section, is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the higher thereof. 
  
  ### Consumer Price Index
  
  (4) In this section, the Consumer Price Index for any 12 month period is the result arrived at by 
  (a) aggregating the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act, adjusted in such manner as is prescribed, for each month in that period;  
  (b) dividing the aggregate obtained under paragraph 117.1(4)(a) by twelve; and 
  (c) rounding the result obtained under paragraph 117.1(4)(b) to the nearest one-thousandth or, where the result obtained is equidistant from two consecutive one-thousandths, to the higher thereof. 
  
  ### Personal credits
  
  118 (1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula is the appropriate percentage for the year, and is the total of, 
  
  ### Married or common-law partnership status
  
  (a) in the case of an individual who at any time in the year is a married person or a person who is in a common-law partnership who supports the individual’s spouse or common-law partner and is not living separate and apart from the spouse or common-law partner by reason of a breakdown of their marriage or common-law partnership, an amount equal to the total of 
  (i) the basic personal amount of the individual for the year, and 
  (ii) the amount determined by the formula is 
  (A) $2,150 if the spouse or common-law partner is dependent on the individual by reason of mental or physical infirmity, and 
  (B) in any other case, nil, is the basic personal amount of the individual for the year, and is the income of the individual’s spouse or common-law partner for the year or, if the individual and the individual’s spouse or common-law partner are living separate and apart at the end of the year because of a breakdown of their marriage or common-law partnership, the spouse’s or common-law partner’s income for the year while married to, or in a common-law partnership with, the individual and not so separated, 
  
  ### Wholly dependent person
  
  (b) in the case of an individual who does not claim a deduction for the year because of paragraph 118(1)(a) and who, at any time in the year, 
  (i) is 
  (A) a person who is unmarried and who does not live in a common-law partnership, or 
  (B) a person who is married or in a common-law partnership, who neither supported nor lived with their spouse or common-law partner and who is not supported by that spouse or common-law partner, and 
  (ii) whether alone or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is 
  (A) except in the case of a child of the individual, resident in Canada, 
  (B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case may be, 
  (C) related to the individual, and 
  (D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity, an amount equal to the total of 
  (iii) the basic personal amount of the individual for the year, and 
  (iv) the amount determined by the formula is 
  (A) $2,150 if 
  (I) the dependent person is, at the end of the taxation year, 18 years of age or older and is, at any time in the year, dependent on the individual by reason of mental or physical infirmity, or 
  (II) the dependent person is a person, other than a child of the individual in respect of whom paragraph (b.1) applies, who, at the end of the taxation year, is under the age of 18 years and who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the dependent person’s personal needs and care, when compared to persons of the same age, and is so dependent on the individual at any time in the year, and 
  (B) in any other case, nil, is the basic personal amount of the individual for the year, and is the dependent person’s income for the year, 
  
  ### Caregiver amount for infirm child
  
  (b.1) $2,150 for each child, who is under the age of 18 years at the end of the taxation year, of the individual and who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the child’s personal needs and care, when compared to children of the same age if 
  (i) the child ordinarily resides throughout the taxation year with the individual together with another parent of the child, or 
  (ii) except if subparagraph (i) applies, the individual 
  (A) may deduct an amount under paragraph (b) in respect of the child, or 
  (B) could deduct an amount under paragraph (b) in respect of the child if 
  (I) paragraph (4)(a) and the reference in paragraph (4)(b) to “or the same domestic establishment” did not apply to the individual for the taxation year, and 
  (II) the child had no income for the year, 
  
  ### Single status
  
  (c) except in the case of an individual entitled to a deduction because of paragraph (a) or (b), the basic personal amount of the individual for the year, 
  (c.1)  [Repealed, 2017, c. 20, s. 12]  
  
  ### Canada caregiver credit
  
  (d) for each person who, at any time in the year, 
  (i) is dependent on the individual because of mental or physical infirmity, and 
  (ii) either 
  (A) is a spouse or common-law partner of the individual, or 
  (B) has attained the age of 18 years and is a dependant of the individual, the amount determined by the formula is the amount, if any, by which the dependant’s income for the year exceeds $16,163, and 
  
  ### Additional amount
  
  (e) in the case of an individual entitled to a deduction in respect of a person because of paragraph (a) or (b) and who would also be entitled, but for paragraph (4)(c), to a deduction because of paragraph (d) in respect of the person, the amount by which the amount that would be determined under paragraph (d) exceeds the amount determined under paragraph (a) or (b), as the case may be, in respect of the person. 
  
  ### Definition of basic personal amount 
  
  (1.1) For the purposes of subsection (1), 
  *basic personal amount*, of an individual for a taxation year, means the amount determined by the formula  is $12,298; and is the amount determined by the formula is the amount determined by the formula is 
  (a) for the 2020 taxation year, $13,229, 
  (b) for the 2021 taxation year, $13,808, 
  (c) for the 2022 taxation year, $14,398, and 
  (d) for the 2023 and subsequent taxation years, $15,000, and is the amount determined for A, is the amount determined for C, and is 
  (a) if the individual’s income for the year is less than or equal to the first dollar amount for the year referred to in paragraph 117(2)(d), nil, and 
  (b) in any other case, the lesser of 1 and the amount determined by the formula is the individual’s income for the year, is the first dollar amount for the year referred to in paragraph 117(2)(d), and is the amount determined by the formula is the first dollar amount for the year referred to in paragraph 117(2)(e), and is the amount determined for I. 
  
  ### Age credit
  
  (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who, before the end of the year, has attained the age of 65 years, there may be deducted the amount determined by the formula is the appropriate percentage for the year; and is 15% of the amount, if any, by which the individual’s income for the year would exceed $25,921 if, in computing that income, no amount were included in respect of a gain from a disposition of property to which section 79 applies and no amount were deductible under paragraph 20(1)(ww). 
  
  ### Pension credit
  
  (3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula is the appropriate percentage for the year; and is the lesser of 
  (a) $2,000, and 
  (b) the total of 
  (i) the eligible pension income of the individual for the taxation year, 
  (ii) the total of all amounts received by the individual in the year on account of a retirement income security benefit under Part 2 of the Veterans Well-being Act, and  
  (iii) the total of all amounts received by the individual in the year on account of an income replacement benefit payable to the individual under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act).  
  (3.1) and (3.2)  [Repealed, 2009, c. 2, s. 34]  
  (3.3)  [Repealed, 2007, c. 29, s. 9]  
  
  ### Limitations re s. (1)
  
  (4) For the purposes of subsection 118(1), the following rules apply: 
  (a) no amount may be deducted under subsection 118(1) because of paragraphs (a) and (b) of the description of B in subsection 118(1) by an individual in a taxation year for more than one other person; 
  (a.1) no amount may be deducted under subsection (1) because of paragraph (b) of the description of B in subsection (1) by an individual for a taxation year for a person in respect of whom an amount is deducted because of paragraph (a) of that description by another individual for the year if, throughout the year, the person and that other individual are married to each other or in a common-law partnership with each other and are not living separate and apart because of a breakdown of their marriage or the common-law partnership, as the case may be; 
  (a.2) a reference to income for a year is to be read as a reference to that income determined as if, in computing that income, no amount were deductible under paragraph 20(1)(ww); 
  (b) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b) of the description of B in that subsection for a taxation year in respect of the same person or the same domestic establishment and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them; 
  (b.1) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b.1) of the description of B in that subsection for a taxation year in respect of the same child and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them; 
  (c) if an individual is entitled to a deduction under subsection (1) because of paragraph (a) or (b) of the description of B in subsection (1) for a taxation year in respect of any person, no amount may be deducted because of paragraph (d) of that description by any individual for the year in respect of the person; and 
  (d) if more than one individual is entitled to a deduction under subsection (1) because of paragraph (d) of the description of B in subsection (1) for a taxation year in respect of the same person, 
  (i) the total of all amounts so deductible for the year shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals for that person if that individual were the only individual entitled to deduct an amount for the year because of that paragraph for that person, and 
  (ii) if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  (e)  [Repealed, 2017, c. 20, s. 12]  
  
  ### Support
  
  (5) No amount may be deducted under subsection (1) in computing an individual’s tax payable under this Part for a taxation year in respect of a person where the individual is required to pay a support amount (within the meaning assigned by subsection 56.1(4)) to the individual’s spouse or common-law partner or former spouse or common-law partner in respect of the person and the individual 
  (a) lives separate and apart from the spouse or common-law partner or former spouse or common-law partner throughout the year because of the breakdown of their marriage or common-law partnership; or 
  (b) claims a deduction for the year because of section 60 in respect of a support amount paid to the spouse or common-law partner or former spouse or common-law partner. 
  
  ### Where subsection (5) does not apply
  
  (5.1) Where, if this Act were read without reference to this subsection, solely because of the application of subsection (5), no individual is entitled to a deduction under paragraph (b) or (b.1) of the description of B in subsection (1) for a taxation year in respect of a child, subsection (5) shall not apply in respect of that child for that taxation year. 
  
  ### Definition of dependant 
  
  (6) For the purposes of paragraph (d) of the description of B in subsection (1), 
  *dependant*, of an individual for a taxation year, means a person who at any time in the year is dependent on the individual for support and is  
  (a) the child or grandchild of the individual or of the individual’s spouse or common-law partner; or 
  (b) the parent, grandparent, brother, sister, uncle, aunt, niece or nephew, if resident in Canada at any time in the year, of the individual or of the individual’s spouse or common-law partner. 
  
  ### Definitions
  
  (7) Subject to subsections (8) and (8.1), for the purposes of this subsection and subsection (3),  
  *eligible pension income* of an individual for a taxation year means  
  (a) if the individual has attained the age of 65 years before the end of the taxation year, the pension income received by the individ-ual in the taxation year, and 
  (b) if the individual has not attained the age of 65 years before the end of the taxation year, the qualified pension income received by the individual in the taxation year; ( revenu de pension déterminé)   
  *pension income* received by an individual in a taxation year means the total of  
  (a) the total of all amounts each of which is an amount included in computing the individual’s income for the year that is 
  (i) a payment in respect of a life annuity out of or under a superannuation or pension plan (other than a pooled registered pension plan) or a specified pension plan, 
  (ii) an annuity payment under a registered retirement savings plan, under an “amended plan” as referred to in subsection 146(12) or under an annuity in respect of which an amount is included in computing the individual’s income by reason of paragraph 56(1)(d.2), 
  (iii) a payment out of or under a registered retirement income fund or under an “amended fund” as referred to in subsection 146.3(11), 
  (iii.1) a payment (other than a payment described in subparagraph (i)) under a money purchase provision (as defined in subsection 147.1(1)) of a registered pension plan or under a specified pension plan,  
  (iii.2) an amount included under section 147.5, 
  (iii.3) an amount included under subsection 146.5(2), 
  (iv) an annuity payment under a deferred profit sharing plan or under a “revoked plan” as referred to in subsection 147(15), 
  (v) a payment described in subparagraph 147(2)(k)(v), or 
  (vi) the amount by which an annuity payment included in computing the individual’s income for the year by reason of paragraph 56(1)(d) exceeds the capital element of that payment as determined or established under paragraph 60(a), and 
  (b) the total of all amounts each of which is an amount included in computing the individual’s income for the year by reason of section 12.2 of this Act or paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952; (revenu de pension)   
  *qualified pension income* received by an individual in a taxation year means the total of all amounts each of which is an amount included in computing the individual’s income for the year and described in  
  (a) subparagraph (a)(i) of the definition pension income in this subsection, or  
  (b) any of subparagraphs 118(7) qualified pension income (a)(ii) to 118(7) qualified pension income (a)(vi) or paragraph (b) of the definition pension income in this subsection received by the individual as a consequence of the death of a spouse or common-law partner of the individual. (revenu de pension admissible)  
  
  ### Interpretation
  
  (8) For the purposes of subsection (7), 
  *pension income* and 
  *qualified pension income* received by an individual in a taxation year do not include any amount that is  
  (a) the amount of a pension or supplement under the Old Age Security Act or of any similar payment under a law of a province;  
  (b) the amount of a benefit under the Canada Pension Plan or under a provincial pension plan as defined in section 3 of that Act;  
  (c) a death benefit; 
  (d) the amount, if any, by which 
  (i) an amount required to be included in computing the individual’s income for the year exceeds 
  (ii) the amount, if any, by which the amount referred to in subparagraph (i) exceeds the total of all amounts deducted (other than under paragraph 60(c)) by the individual for the year in respect of that amount; 
  (e) a payment received out of or under a salary deferral arrangement, a retirement compensation arrangement, an employee benefit plan or an employee trust; or 
  (f) a payment (other than a payment under the Judges Act or the Lieutenant Governors Superannuation Act) received out of or under an unfunded supplemental plan or arrangement, being a plan or arrangement where  
  (i) the payment was in respect of services rendered to an employer by the individual or the individual’s spouse or common-law partner or former spouse or common-law partner as an employee, and 
  (ii) the plan or arrangement would have been a retirement compensation arrangement or an employee benefit plan had the employer made a contribution in respect of the payment to a trust governed by the plan or arrangement. 
  
  ### Bridging benefits
  
  (8.1) For the purposes of subsection (7), a payment in respect of a life annuity under a superannuation or pension plan is deemed to include a payment in respect of bridging benefits, being benefits payable under a registered pension plan on a periodic basis and not less frequently than annually to an individual where 
  (a) the individual or the individual’s spouse or common-law partner or former spouse or common-law partner was a member (as defined in subsection 147.1(1)) of the registered pension plan; 
  (b) the benefits are payable for a period ending no later than the end of the month following the month in which the member attains 65 years of age or would have attained that age if the member had survived to that day; and 
  (c) the amount (expressed on an annualized basis) of the benefits payable to the individual for a calendar year does not exceed the total of the maximum amount of benefits payable for that year under Part I of the Old Age Security Act and the maximum amount of benefits (other than disability, death or survivor benefits) payable for that year under either the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act.  
  (9)  [Repealed, 2009, c. 2, s. 34]  
  
  ### Child tax credit
  
  (9.1) For greater certainty, in the case of a child who in a taxation year is born, adopted or dies, the reference to “throughout the taxation year” in subparagraph 118(1)(b.1)(i) is to be read as a reference to “throughout the portion of the taxation year that is after the child’s birth or adoption or before the child’s death”. 
  
  ### Canada Employment Credit
  
  (10) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the taxation year; and is the lesser of 
  (a) $1,000, and 
  (b) the total of all amounts, each of which is an amount included in computing the individual’s income for the taxation year from an office or employment or an amount included in the taxpayer’s income for the taxation year because of subparagraph 56(1)(r)(v). 
  
  ### Definitions
  
  118.01 (1) The following definitions apply in this section.  
  *adoption period*, in respect of an eligible child of an individual, means the period that  
  (a) begins at the earlier of the time that an application is made for registration with a provincial ministry responsible for adoption (or with an adoption agency licensed by a provincial government) and the time, if any, that an application related to the adoption is made to a Canadian court; and 
  (b) ends at the later of the time an adoption order is issued by, or recognized by, a government in Canada in respect of that child, and the time that the child first begins to reside permanently with the individual. ( période d’adoption)   
  *eligible adoption expense*, in respect of an eligible child of an individual, means an amount paid for expenses incurred during the adoption period in respect of the adoption of that child, including  
  (a) fees paid to an adoption agency licensed by a provincial government; 
  (b) court costs and legal and administrative expenses related to an adoption order in respect of that child; 
  (c) reasonable and necessary travel and living expenses of that child and the adoptive parents; 
  (d) document translation fees; 
  (e) mandatory fees paid to a foreign institution; 
  (f) mandatory expenses paid in respect of the immigration of that child; and 
  (g) any other reasonable expenses related to the adoption required by a provincial government or an adoption agency licensed by a provincial government. ( dépense d’adoption admissible)   
  *eligible child*, of an individual, means a child who has not attained the age of 18 years at the time that an adoption order is issued or recognized by a government in Canada in respect of the adoption of that child by that individual. (enfant admissible)  
  
  ### Adoption expense tax credit
  
  (2) For the purpose of computing the tax payable under this Part by an individual for the taxation year that includes the end of the adoption period in respect of an eligible child of the individual, there may be deducted the amount determined by the formula is the appropriate percentage for the taxation year; and is the lesser of 
  (a) $15,000, and 
  (b) the amount determined by the formula is the total of all eligible adoption expenses in respect of the eligible child, and is the total of all amounts each of which is the amount of a reimbursement or any other form of assistance (other than an amount that is included in computing the individual’s income and that is not deductible in computing the individual’s taxable income) that any individual is or was entitled to receive in respect of an amount included in computing the value of C. 
  
  ### Apportionment of credit
  
  (3) Where more than one individual is entitled to a deduction under this section for a taxation year in respect of the adoption of an eligible child, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals for that child if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Definitions
  
  118.02 (1) The following definitions apply in this section.  
  *digital news subscription*, of an individual with a qualified Canadian journalism organization, means an agreement entered into between the individual and the qualified Canadian journalism organization, if  
  (a) the agreement entitles an individual to access content of the qualified Canadian journalism organization in digital form and that content is primarily written news; and 
  (b) the qualified Canadian journalism organization does not hold a licence as defined in subsection 2(1) of the Broadcasting Act. (abonnement aux nouvelles numériques)   
  *qualifying subscription expense*, for a taxation year, means the amount paid in the year for a digital news subscription of an individual with a qualified Canadian journalism organization and, for this purpose, if the digital news subscription provides access to content in non-digital form or content other than content of qualified Canadian journalism organizations, the amount considered to be paid for the digital news subscription shall not exceed  
  (a) the cost of a comparable digital news subscription with the qualified Canadian journalism organization that solely provides access to content of qualified Canadian journalism organizations in digital form; and 
  (b) if there is no such comparable digital news subscription, 1/2 of the amount actually paid. ( dépense pour abonnement admissible)  
  
  ### Digital news subscription tax credit
  
  (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year that is before 2025, there may be deducted the amount determined by the formula is the appropriate percentage for the year; and is the lesser of 
  (a) $500, and 
  (b) the total of all amounts each of which is a qualifying subscription expense of the individual for the year. 
  
  ### Apportionment of credit
  
  (3) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a qualifying subscription expense, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of the qualifying subscription expense, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Ceasing to qualify
  
  (4) For the purposes of subsection (1), if amounts paid under an agreement cease to be qualifying subscription expenses at any particular time in a calendar year and, at the particular time, the Minister has communicated or otherwise made available pursuant to paragraph 241(3.4)(b) that these amounts qualify as qualifying subscription expenses, amounts paid under that agreement are deemed to be qualifying subscription expenses — to the same extent that the amounts paid were considered to be qualifying subscription expenses immediately before the particular time — until the end of the calendar year in which the Minister communicates or otherwise makes available pursuant to paragraph 241(3.4)(b) that amounts paid under the agreement no longer qualify as qualifying subscription expenses. 
  
  ### Notice to individuals
  
  (5) If an organization enters into a digital news subscription agreement with an individual and amounts paid under the agreement cease to be qualifying subscription expenses, the organization shall inform the individual that amounts paid under the agreement are no longer qualifying subscription expenses. 
  118.03  [Repealed, 2014, c. 39, s. 32]  
  118.031  [Repealed, 2016, c. 7, s. 15]  
  
  ### Definitions
  
  118.04 (1) The following definitions apply in this section.  
  *eligible dwelling* of an individual, at any time, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of such land that exceeds the greater of 1/2 hectare and the portion of such land that the individual establishes is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if  
  (a) the individual (or a trust under which the individual is a beneficiary) owns, whether jointly with another person or otherwise, at that time, the housing unit or a share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation; and 
  (b) the housing unit is ordinarily inhabited at any time during the eligible period by the individual, by the individual’s spouse or common-law partner or former spouse or common-law partner or by a child of the individual. ( logement admissible)   
  *eligible period* means the period that begins on January 28, 2009 and that ends on January 31, 2010. (période d’admissibilité)   
  *individual* does not include a trust. (particulier)   
  *qualifying expenditure* of an individual means an outlay or expense that is made or incurred, by the individual or by a qualifying relation in respect of the individual during the eligible period, that is directly attributable to a qualifying renovation by the individual and that is the cost of goods acquired or services received during the eligible period and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation, but does not include such an outlay or expense  
  (a) to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation in respect of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation in respect of the individual; 
  (b) made or incurred under the terms of an agreement entered into before the eligible period; 
  (c) to acquire a property that can be used independently of the qualifying renovation; 
  (d) that is the cost of annual, recurring or routine repair or maintenance; 
  (e) to acquire a household appliance; 
  (f) to acquire an electronic home-entertainment device; 
  (g) for financing costs in respect of the qualifying renovation; 
  (h) made or incurred for the purpose of gaining or producing income from a business or property; or 
  (i) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act. (dépense admissible)   
  *qualifying relation* in respect of an individual means a person who is the individual’s spouse or common-law partner, or a child of the individual who has not attained the age of 18 years before the end of 2009 (other than a child who was, at any time during the eligible period, a married person, a person who is in a common-law partnership or a person who has a child). (proche admissible)   
  *qualifying renovation* by an individual, at any time, means a renovation or alteration, of a property that is at that time an eligible dwelling of the individual or of a qualifying relation in respect of the individual, that is of an enduring nature and that is integral to the eligible dwelling. (travaux de rénovation admissibles)  
  
  ### Rules of application
  
  (2) For the purposes of this section, 
  (a) a qualifying expenditure of an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation (or, for civil law, a syndicate of co-owners) or a similar entity (in this paragraph referred to as the “corporation”), in respect of a property that is owned, administered or managed by that corporation, and that includes an eligible dwelling of the individual, to the extent of the individual’s share of that outlay or expense, if 
  (i) the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were an eligible dwelling of that natural person, and 
  (ii) the corporation has notified the individual, in writing, of the individual’s share of the outlay or expense; and 
  (b) a qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust, in respect of a property owned by the trust that includes an eligible dwelling of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling of the individual (including, for this purpose, common areas relevant to more than one eligible dwelling), if 
  (i) the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were an eligible dwelling of that natural person, and 
  (ii) the trust has notified the individual, in writing, of the individual’s share of the outlay or expense. 
  
  ### Home renovation tax credit
  
  (3) For the purposes of computing the tax payable under this Part by an individual for the individual’s 2009 taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the taxation year; and is the lesser of $10,000 and the total of all amounts, each of which is a qualifying expenditure of the individual. 
  
  ### Interaction with medical expense credit
  
  (4) Notwithstanding paragraph 248(28)(b), an amount may be included in determining both an amount under subsection (3) and under section 118.2 if those amounts otherwise qualify to be included for the purposes of those provisions. 
  
  ### Apportionment of credit
  
  (5) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a qualifying expenditure of an individual, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of the qualifying expenditure, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Definitions
  
  118.041 (1) The following definitions apply in this section.  
  *eligible dwelling* of an individual, at any time in a taxation year, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of that land that exceeds the greater of ½ hectare and the portion of that land that the individual establishes is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if  
  (a) the individual (or a trust under which the individual is a beneficiary) owns — whether jointly with another person or otherwise — at that time, the housing unit or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation; and 
  (b) the housing unit is ordinarily inhabited, or is reasonably expected to be ordinarily inhabited, at any time in the taxation year 
  (i) by the individual, if the individual is a qualifying individual, or 
  (ii) by the individual and a qualifying individual, if 
  (A) the individual is an eligible individual in respect of the qualifying individual, and 
  (B) the qualifying individual does not, throughout the taxation year, own — whether jointly with another person or otherwise — and ordinarily inhabit another housing unit in Canada. ( logement admissible)   
  *eligible individual*, in respect of a qualifying individual for a taxation year, means  
  (a) an individual who is the qualifying individual’s spouse or common-law partner in the year; 
  (b) except if paragraph (c) applies, an individual who is entitled to deduct an amount under subsection 118.3(2) for the year in respect of the qualifying individual or would be if no amount was claimed for the year by the qualifying individual under subsection 118.3(1) or by the qualifying individual’s spouse or common-law partner under section 118.8; or 
  (c) in the case of a qualifying individual who has attained the age of 65 before the end of the year, an individual who 
  (i) claimed for the year a deduction under subsection 118(1) in respect of the qualifying individual because of 
  (A) paragraph (b) of the description of B in that subsection, or 
  (B) paragraph (d) of the description of B in that subsection where the qualifying individual is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the individual, or of the individual’s spouse or common-law partner, or 
  (ii) could have claimed for the year a deduction referred to in subparagraph (i) in respect of the qualifying individual if 
  (A) the qualifying individual had no income for the year, 
  (B) in the case of a deduction referred to in clause (i)(A), the individual were not married and not in a common-law partnership, and 
  (C) in the case of a deduction under subsection 118(1) because of paragraph (d) of the description of B in that subsection in respect of a qualifying individual who is a dependant (within the meaning of subsection 118(6)) of the individual, the qualifying individual was dependent on the individual because of mental or physical infirmity. ( particulier admissible)   
  *individual* does not include a trust. (particulier)   
  *qualifying expenditure* of an individual means an outlay or expense that is made or incurred, during a taxation year, that is directly attributable to a qualifying renovation — of an eligible dwelling of a qualifying individual or an eligible individual in respect of a qualifying individual — and that is the cost of goods acquired or services received during the year and includes an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation, but does not include an outlay or expense  
  (a) to acquire a property that can be used independently of the qualifying renovation; 
  (b) that is the cost of annual, recurring or routine repair or maintenance; 
  (c) to acquire a household appliance; 
  (d) to acquire an electronic home-entertainment device; 
  (e) that is the cost of housekeeping, security monitoring, gardening, outdoor maintenance or similar services; 
  (f) for financing costs in respect of the qualifying renovation; 
  (g) made or incurred primarily for the purpose of increasing or maintaining the value of the eligible dwelling; 
  (h) made or incurred for the purpose of gaining or producing income from a business or property; 
  (i) in respect of goods or services provided by a person not dealing at arm’s length with the qualifying individual or the eligible individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act ; or  
  (j) to the extent that the outlay or expense can reasonably be considered to have been reimbursed, otherwise than as assistance from the federal or a provincial government including a grant, subsidy, forgivable loan or a deduction from tax. ( dépense admissible)   
  *qualifying individual*, in respect of a taxation year, means an individual  
  (a) who has attained the age of 65 years before the end of the taxation year; or 
  (b) in respect of whom an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year. ( particulier déterminé)   
  *qualifying renovation* means a renovation or alteration of an eligible dwelling of a qualifying individual or an eligible individual in respect of a qualifying individual that  
  (a) is of an enduring nature and integral to the eligible dwelling; and 
  (b) is undertaken to 
  (i) enable the qualifying individual to gain access to, or to be mobile or functional within, the eligible dwelling, or 
  (ii) reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling. ( travaux de rénovation admissibles)  
  
  ### Qualifying expenditure rules
  
  (2) For the purpose of this section, 
  (a) a qualifying expenditure in respect of an eligible dwelling of a particular individual — who is a qualifying individual or an eligible individual in respect of a qualifying individual — includes an outlay or expense made or incurred by a cooperative housing corporation, a condominium corporation (or, for civil law, a syndicate of co-owners) or a similar entity (in this paragraph referred to as the “corporation”), in respect of a property that is owned, administered or managed by that corporation and that includes the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, if 
  (i) the outlay or expense would be a qualifying expenditure of the corporation if the corporation were an individual and the property were an eligible dwelling of that individual, and 
  (ii) the corporation has notified, in writing, either the particular individual or, if the particular individual is an eligible individual in respect of a qualifying individual, the qualifying individual, of the share of the outlay or expense that is attributable to the eligible dwelling; and 
  (b) a qualifying expenditure in respect of an eligible dwelling of a particular individual — who is a qualifying individual or an eligible individual in respect of a qualifying individual — includes an outlay or expense made or incurred by a trust, in respect of a property owned by the trust that includes the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling (including, for this purpose, common areas relevant to more than one eligible dwelling), if 
  (i) the outlay or expense would be a qualifying expenditure of the trust if the trust were an individual and the property were an eligible dwelling of that individual, and 
  (ii) the trust has notified, in writing, either the particular individual or, if the particular individual is an eligible individual in respect of a qualifying individual, the qualifying individual, of the share of the outlay or expense that is attributable to the eligible dwelling. 
  
  ### Home accessibility tax credit
  
  (3) For the purpose of computing the tax payable under this Part by a qualifying individual or an eligible individual, in respect of an eligible dwelling for a taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the taxation year; and is the lesser of 
  (a) $20,000, and 
  (b) the total of all amounts, each of which is a qualifying expenditure of the individual in respect of the eligible dwelling for the taxation year. 
  
  ### Interaction with medical expense credit
  
  (4) Despite paragraph 248(28)(b), an amount may be included in determining both an amount under subsection (3) and under section 118.2 if those amounts otherwise qualify to be included for the purposes of those provisions. 
  
  ### Limits
  
  (5) For the purpose of this section, 
  (a) a maximum of $20,000 of qualifying expenditures for a taxation year in respect of a qualifying individual can be claimed under subsection (3) by the qualifying individual and all eligible individuals in respect of the qualifying individual; 
  (b) if there is more than one qualifying individual in respect of an eligible dwelling, a maximum of $20,000 of qualifying expenditures for a taxation year in respect of the eligible dwelling can be claimed under subsection (3) by the qualifying individuals and all eligible individuals in respect of the qualifying individuals; and 
  (c) if more than one individual is entitled to a deduction under subsection (3) for a taxation year in respect of the same qualifying individual or the same eligible dwelling and the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Effect of bankruptcy
  
  (6) For the purpose of subsection (5), if an individual becomes bankrupt in a particular calendar year, despite subsection 128(2), any reference to the taxation year of the individual is deemed to be a reference to the particular calendar year. 
  
  ### In the event of death and bankruptcy
  
  (7) For the purpose of this section, 
  (a) if an individual dies during a calendar year and would have attained 65 years of age if the individual were alive at the end of the year, the individual is deemed to have attained 65 years of age at the beginning of the year; 
  (b) if an individual becomes a qualifying individual during a calendar year and becomes bankrupt in that year, the individual is deemed to be a qualifying individual at the beginning of that year; and 
  (c) if an individual becomes a qualifying individual during a calendar year and an eligible individual in respect of the qualifying individual becomes bankrupt in that year, the individual is deemed to be a qualifying individual at the beginning of the year. 
  
  ### Definitions
  
  118.05 (1) The following definitions apply in this section.  
  *qualifying home* in respect of an individual, means a 
  *qualifying home* as defined in subsection 146.01(1) that is acquired, whether jointly or otherwise, after January 27, 2009 if  
  (a) the home is acquired by the individual, or by the individual’s spouse or common-law partner, and 
  (i) the individual intends to inhabit the home as a principal place of residence not later than one year after its acquisition, 
  (ii) the individual did not own, whether jointly or otherwise, a home that was occupied by the individual in the period 
  (A) that began at the beginning of the fourth preceding calendar year that ended before the acquisition, and 
  (B) that ended on the day before the acquisition, and 
  (iii) the individual’s spouse or common-law partner did not, in the period referred to in subparagraph (ii), own, whether jointly or otherwise, a home 
  (A) that was inhabited by the individual during the marriage to or common-law partnership with the individual, or 
  (B) that was a share of the capital stock of a cooperative housing corporation that relates to a housing unit inhabited by the individual during the marriage to or common-law partnership with the individual; or 
  (b) the home is acquired by the individual for the benefit of a specified person in respect of the individual, and 
  (i) the individual intends that the home be inhabited by the specified person as a principal place of residence not later than one year after its acquisition by the individual, and 
  (ii) the purpose of the acquisition of the home by the individual is to enable the specified person to live in 
  (A) a home that is more accessible by the specified person or in which the specified person is more mobile or functional, or 
  (B) an environment better suited to the specified person’s personal needs and care. ( habitation admissible)   
  *specified person* in respect of an individual, at any time, means a person who  
  (a) is the individual or is related at that time to the individual; and 
  (b) would be entitled to a deduction under subsection 118.3(1) in computing tax payable under this Part for the person’s taxation year that includes that time if that subsection were read without reference to paragraph (c) of that subsection. ( personne déterminée)  
  
  ### Rules of application
  
  (2) For the purposes of this section, an individual is considered to have acquired a qualifying home only if the individual’s interest (or for civil law, right) in it is registered in accordance with the land registration system or other similar system applicable where it is located. 
  
  ### First-time homebuyers’ tax credit
  
  (3) In computing the tax payable under this Part by an individual for a taxation year in which a qualifying home in respect of the individual is acquired, there may be deducted the amount determined by multiplying $10,000 by the appropriate percentage for the taxation year. 
  
  ### Apportionment of credit
  
  (4) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a particular qualifying home, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of the qualifying home, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Definition of 
  *eligible volunteer firefighting services* 
  
  118.06 (1) In this section and section 118.07, 
  *eligible volunteer firefighting services* means services provided by an individual in the individual’s capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.  
  
  ### Volunteer firefighter tax credit
  
  (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual 
  (a) performs in the year not less than 200 hours of service each of which is an hour of 
  (i) eligible volunteer firefighting service for a fire department, or 
  (ii) eligible search and rescue volunteer service for an eligible search and rescue organization; and 
  (b) provides the certificates referred to in subsections (3) and 118.07(3) as and when requested by the Minister. 
  
  ### Certificate
  
  (3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the fire chief or a delegated official of each fire department to which the individual provided eligible volunteer firefighting services for the year, attesting to the number of hours of eligible volunteer firefighting services performed in the year by the individual for the particular fire department. 
  
  ### Definitions
  
  118.07 (1) The following definitions apply in this section and section 118.06.  
  *eligible search and rescue organization* means a search and rescue organization  
  (a) that is a member of the Search and Rescue Volunteer Association of Canada, the Civil Air Search and Rescue Association or the Canadian Coast Guard Auxiliary; or 
  (b) whose status as a search and rescue organization is recognized by a provincial, municipal or public authority. ( organisme admissible de recherche et sauvetage)   
  *eligible search and rescue volunteer services* means services, other than eligible volunteer firefighting services, provided by an individual in the individual’s capacity as a volunteer to an eligible search and rescue organization that consist primarily of responding to and being on call for search and rescue and related emergency calls, attending meetings held by the organization and participating in required training related to search and rescue services, but does not include services provided to an organization if the individual provides search and rescue services to the organization otherwise than as a volunteer. (services admissibles de volontaire en recherche et sauvetage)  
  
  ### Search and rescue volunteer tax credit
  
  (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible search and rescue volunteer services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual 
  (a) performs in the year not less than 200 hours of service each of which is an hour of 
  (i) eligible search and rescue volunteer service for an eligible search and rescue organization, or 
  (ii) eligible volunteer firefighting services for a fire department; 
  (b) provides the certificates referred to in subsections (3) and 118.06(3) as and when requested by the Minister; and 
  (c) has not deducted an amount under section 118.06 for the year. 
  
  ### Certificate
  
  (3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the team president, or other individual who fulfils a similar role, of each eligible search and rescue organization to which the individual provided eligible search and rescue volunteer services for the year, attesting to the number of hours of eligible search and rescue volunteer services performed in the year by the individual for the particular organization. 
  
  ### Definitions
  
  118.1 (1) In this section,  
  *first-time donor* [Repealed, 2013, c. 33, s. 10]   
  *total charitable gifts*, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift (other than a gift any part of the eligible amount of which is included in the total cultural gifts or the total ecological gifts of any individual for any taxation year) that is made  
  (a) to a qualified donee, 
  (b) in a taxation year that is not a year for which an amount is deducted under subsection 110(2) in computing the individual’s taxable income, and 
  (c) if the individual is 
  (i) not a trust, 
  (A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years, 
  (B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or 
  (C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or 
  (ii) a trust 
  (A) by the trust in the particular year or any of the five preceding taxation years, 
  (B) by the trust if 
  (I) the trust is an individual’s estate, 
  (II) subsection (5.1) applies to the gift, and 
  (III) the particular year is a taxation year 
  1 in which the estate is the individual’s graduated rate estate, and 
  2 that precedes the taxation year in which the gift is made, or 
  (C) by the trust if 
  (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death, 
  (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and 
  (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; ( total des dons de bienfaisance)   
  *total Crown gifts* [Repealed, 2014, c. 39, s. 34]   
  *total cultural gifts*, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift  
  (a) of an object that the Canadian Cultural Property Export Review Board has determined meets the criterion set out in paragraph 29(3)(b) of the Cultural Property Export and Import Act,  
  (b) that is made to an institution or a public authority in Canada that is, at the time the gift is made, designated under subsection 32(2) of the Cultural Property Export and Import Act either generally or for a specified purpose related to that object, and  
  (c) that is made 
  (i) if the individual is not a trust, 
  (A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years, 
  (B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or 
  (C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or 
  (ii) if the individual is a trust, 
  (A) by the trust in the particular year or any of the five preceding taxation years, 
  (B) by the trust if 
  (I) the trust is an individual’s estate, 
  (II) subsection (5.1) applies to the gift, and 
  (III) the particular year is a taxation year 
  1 in which the estate is the individual’s graduated rate estate, and 
  2 that precedes the taxation year in which the gift is made, or 
  (C) by the trust if 
  (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death, 
  (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and 
  (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; ( total des dons de biens culturels)   
  *total ecological gifts*, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift (other than a gift any part of the eligible amount of which is included in the total cultural gifts of any individual for any taxation year)  
  (a) of land (including a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a personal servitude (the rights to which the land is subject and which has a term of not less than 100 years) or a real servitude) 
  (i) the fair market value of which is certified by the Minister of the Environment, and 
  (ii) that is certified by that Minister, or by a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister or the designated person, important to the preservation of Canada’s environmental heritage, 
  (b) that is made to a qualified donee that is 
  (i) Her Majesty in right of Canada or of a province, 
  (i.1) a municipality in Canada, or a municipal or public body performing a function of government in Canada, that is approved by that Minister or the designated person in respect of the gift, or 
  (ii) a registered charity (other than a private foundation) one of the main purposes of which is, in the opinion of that Minister, the conservation and protection of Canada’s environmental heritage, and that is approved by that Minister or the designated person in respect of the gift, and 
  (c) that is made 
  (i) if the individual is not a trust, 
  (A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the 10 preceding taxation years, 
  (B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or 
  (C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or 
  (ii) if the individual is a trust, 
  (A) by the trust in the particular year or any of the 10 preceding taxation years, 
  (B) by the trust if 
  (I) the trust is an individual’s estate, 
  (II) subsection (5.1) applies to the gift, and 
  (III) the particular year is a taxation year 
  1 in which the estate is the individual’s graduated rate estate, and 
  2 that precedes the taxation year in which the gift is made, or 
  (C) by the trust if 
  (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death, 
  (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and 
  (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; ( total des dons de biens écosensibles)   
  *total gifts* of an individual for a taxation year means the total of  
  (a) the least of 
  (i) the individual’s total charitable gifts for the year, 
  (ii) the individual’s income for the year where the individual dies in the year or in the following taxation year, and 
  (iii) in any other case, the lesser of the individual’s income for the year and the amount determined by the formula is the individual’s income for the year, is the total of all amounts, each of which is that proportion of the individual’s taxable capital gain for the taxation year in respect of a gift made by the individual in the taxation year (in respect of which gift an eligible amount is included in the individual’s total charitable gifts for the taxation year) that the eligible amount of the gift is of the individual’s proceeds of disposition in respect of the gift, is the total of all amounts each of which is a taxable capital gain of the individual for the year, because of subsection 40(1.01), from a disposition of a property in a preceding taxation year, is the total of all amounts each of which is determined in respect of the individual’s depreciable property of a prescribed class and equal to the lesser of 
  (A) the amount included under subsection 13(1) in respect of the class in computing the individual’s income for the year, and 
  (B) the total of all amounts each of which is determined in respect of a disposition that is the making of a gift of property of the class made by the individual in the year (in respect of which gift an eligible amount is included in the individual’s total charitable gifts for the taxation year) equal to the lesser of 
  (I) that proportion, of the amount by which the proceeds of disposition of the property exceed any outlays and expenses, to the extent that they were made or incurred by the individual for the purpose of making the disposition, that the eligible amount of the gift is of the individual’s proceeds of disposition in respect of the gift, and 
  (II) that proportion, of the capital cost to the individual of the property, that the eligible amount of the gift is of the individual’s proceeds of disposition in respect of the gift, and is the total of all amounts each of which is the portion of an amount deducted under section 110.6 in computing the individual’s taxable income for the year that can reasonably be considered to be in respect of a gift referred to in the description of B or C, 
  (b)  [Repealed, 2014, c. 39, s. 34]  
  (c) the individual’s total cultural gifts for the year, and 
  (d) the individual’s total ecological gifts for the year. ( total des dons)  
  
  ### Proof of gift
  
  (2) An eligible amount of a gift is not to be included in the total charitable gifts, total cultural gifts or total ecological gifts of an individual unless the making of the gift is evidenced by filing with the Minister 
  (a) a receipt for the gift that contains prescribed information; 
  (b) in the case of a gift described in the definition 
  *total cultural gifts* in subsection (1), the certificate issued under subsection 33(1) of the Cultural Property Export and Import Act ; and  
  (c) in the case of a gift described in the definition 
  *total ecological gifts* in subsection (1), both certificates referred to in that definition.  
  
  ### Ordering of gifts
  
  (2.1) For the purpose of determining an individual’s total charitable gifts, total cultural gifts and total ecological gifts for a taxation year, no amount in respect of a gift described in any of the definitions of those expressions and made in a particular taxation year is to be considered to have been included in determining an amount that was deducted under this section in computing the individual’s tax payable under this Part for a taxation year until amounts in respect of such gifts made in taxation years preceding the particular year that can be so considered are so considered. 
  
  ### Deduction by individuals for gifts
  
  (3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted such amount as the individual claims not exceeding the amount determined by the formula is the appropriate percentage for the year; is the lesser of $200 and the individual’s total gifts for the year; is the highest individual percentage for the year; is 
  (a) in the case of a trust (other than a graduated rate estate or a 
  *qualified disability trust* as defined in subsection 122(3)), the amount, if any, by which its total gifts for the year exceeds $200, and  
  (b) in any other case, the lesser of 
  (i) the amount, if any, by which the individual’s total gifts for the year exceeds $200, and 
  (ii) the amount, if any, by which the individual’s amount taxable for the year for the purposes of subsection 117(2) exceeds the first dollar amount for the year referred to in paragraph 117(2)(e); is 29%; and is the amount, if any, by which the individual’s total gifts for the year exceeds the total of $200 and the amount determined for D. 
  (3.1) and (3.2)  [Repealed, 2013, c. 33, s. 10]  
  
  ### Gifts — deaths before 2016
  
  (4) If an individual dies before 2016 and any of this subsection and subsections (5), (5.2), (5.3), (7) and (7.1) (as they read for the taxation year in which the death occurred) applied to deem the individual to have made a gift at a time before the death, then for the purposes of this section the gift is deemed not to have been made by any other taxpayer or at any other time. 
  
  ### Gifts — deaths after 2015
  
  (4.1) Subsection (5) applies to a gift if an estate arises on and as a consequence of the death after 2015 of an individual and the gift is 
  (a) made by the individual by the individual’s will; 
  (b) deemed by subsection (5.2) to have been made in respect of the death; or 
  (c) made by the estate. 
  
  ### Gifts — deaths after 2015
  
  (5) If this subsection applies to a gift, then for the purposes of the Act (other than subsections (4.1) and (5.2)) the gift is deemed to be made 
  (a) by the estate referred to in subsection (4.1) and not by any other taxpayer; and 
  (b) subject to subsection (13), at the time that the property that is the subject of the gift is transferred to the donee and not at any other time. 
  
  ### Gifts by graduated rate estate
  
  (5.1) This subsection applies to a gift made by an individual’s graduated rate estate (determined without reference to paragraph (a) of the definition 
  *graduated rate estate* in subsection 248(1)) if the gift is made no more than 60 months after the individual’s death, the death occurs after 2015 and either  
  (a) the gift is deemed by subsection (5.2) to have been made in respect of the death, or 
  (b) the subject of the gift is property that was acquired by the estate on and as a consequence of the death or is property that was substituted for that property. 
  
  ### Deemed gifts — eligible transfers
  
  (5.2) For the purposes of this section, money or a negotiable instrument transferred to a qualified donee is deemed to be property that is the subject of a gift, in respect of an individual’s death, made to the qualified donee, if the death occurs after 2015 and the transfer is 
  (a) a transfer — other than a transfer the amount of which is not included in computing the income of the individual or the individual’s estate for any taxation year but would have been included in computing the income of the individual or the estate for a taxation year if the transfer had been made to the individual’s legal representative for the estate’s benefit and this Act were read without reference to subsection 70(3) — made 
  (i) as a consequence of the death, 
  (ii) solely because of the obligations under a life insurance policy under which, immediately before the death, the individual’s life was insured, and the individual’s consent would have been required to change the recipient of the transfer, and 
  (iii) from an insurer to a person that is the qualified donee and that was, immediately before the death, neither a policyholder under the policy nor an assignee of the individual’s interest under the policy; or 
  (b) a transfer made 
  (i) as a consequence of the death, 
  (ii) solely because of the qualified donee’s interest or, for civil law a right, as a beneficiary under an arrangement (other than an arrangement of which a licensed annuities provider is the issuer or carrier) 
  (A) that is a registered retirement savings plan or registered retirement income fund or that was, immediately before the death, a TFSA, and 
  (B) under which the individual was, immediately before the death, the annuitant or holder, and 
  (iii) from the arrangement to the qualified donee. 
  (5.3)  [Repealed, 2014, c. 39, s. 34]  
  
  ### Where subsection (6) applies
  
  (5.4) Subsection (6) applies in circumstances where 
  (a) an individual 
  (i) makes a gift at any time of capital property to a qualified donee, or 
  (ii) who is non-resident, makes a gift at any time of real or immovable property situated in Canada to a prescribed donee who provides an undertaking, in a form satisfactory to the Minister, to the effect that the property will be held for use in the public interest; and 
  (b) the fair market value of the property otherwise determined at that time exceeds 
  (i) in the case of depreciable property of a prescribed class, the lesser of the undepreciated capital cost of that class at the end of the taxation year of the individual that includes that time (determined without reference to proceeds of disposition designated in respect of the property under subsection (6)) and the adjusted cost base to the individual of the property immediately before that time, and 
  (ii) in any other case, the adjusted cost base to the individual of the property immediately before that time. 
  
  ### Gifts of capital property
  
  (6) If this subsection applies in respect of a gift by an individual of property, and the individual or the individual’s legal representative designates an amount in respect of the gift in the individual’s return of income under section 150 for the year in which the gift is made, the amount so designated is deemed to be the individual’s proceeds of disposition of the property and, for the purpose of subsection 248(31), the fair market value of the gift, but the amount so designated may not exceed the fair market value of the property otherwise determined and may not be less than the greater of 
  (a) in the case of a gift made after December 20, 2002, the amount of the advantage, if any, in respect of the gift, and 
  (b) the amount determined under subparagraph (5.4)(b)(i) or (ii), as the case may be, in respect of the property. 
  
  ### Gift of art
  
  (7) Subsection (7.1) applies to a gift made by an individual if the gift is described in the definition 
  *total charitable gifts* or 
  *total cultural gifts* in subsection (1) and the property that is the subject of the gift is a work of art that  
  (a) was created by the individual and is in the individual’s inventory; 
  (b) was acquired by the individual under circumstances where subsection 70(3) applies; or 
  (c) if the individual is an estate that arose on and as a consequence of the death of a particular individual who created the work of art, was in the particular individual’s inventory immediately before the death. 
  
  ### Gift of art
  
  (7.1) If this subsection applies to a gift made by an individual, the following rules apply: 
  (a) in the case of a gift described in the definition 
  *total cultural gifts* in subsection (1),  
  (i) if at the time the gift is made the fair market value of the work of art that is the subject of the gift exceeds its cost amount to the individual, the individual is deemed to receive at that time proceeds of disposition in respect of the work of art equal to the greater of its cost amount to the individual at that time and the amount of the advantage, if any, in respect of the gift, and 
  (ii) if the individual is the graduated rate estate of a particular individual who created the work of art that is the subject of the gift and at the time immediately before the particular individual’s death the fair market value of the work of art exceeds its cost amount to the particular individual, the particular individual is deemed to receive at that time proceeds of disposition in respect of the work of art equal to the cost amount to the particular individual at that time and the estate is deemed to have acquired the work of art at a cost equal to those proceeds; and 
  (b) in the case of a gift described in the definition 
  *total charitable gifts* in subsection (1),  
  (i) if at the time the gift is made the fair market value of the work of art that is the subject of the gift exceeds its cost amount to the individual, then the amount designated in the individual’s return of income under section 150 for the taxation year that includes that time is deemed to be 
  (A) the individual’s proceeds of disposition in respect of the work of art, and 
  (B) the fair market value of the work of art for the purposes of subsection 248(31), 
  (ii) a designation under subparagraph (i) is of no effect to the extent that the amount designated 
  (A) exceeds the fair market value of the work of art otherwise determined, or 
  (B) is less than the greater of the amount of the advantage, if any, in respect of the gift, and the cost amount to the individual of the work of art, 
  (iii) if the individual is the graduated rate estate of a particular individual who created the work of art that is the subject of the gift and at the time immediately before the particular individual’s death the fair market value of the work of art exceeds its cost amount to the particular individual, 
  (A) the amount designated in the particular individual’s return of income under section 150 for the taxation year that includes that time is deemed to be the value of the work of art at the time of the death, and 
  (B) the estate is deemed to have acquired the work of art at a cost equal to that value, and 
  (iv) a designation under subparagraph (iii) is of no effect to the extent that the amount designated 
  (A) exceeds the fair market value of the work of art otherwise determined, or 
  (B) is less than the cost amount to the particular individual of the work of art. 
  
  ### Gifts made by partnership
  
  (8) If at the end of a fiscal period of a partnership an individual is a member of the partnership, the individual’s share of any amount that would, if the partnership were a person, be the eligible amount of a gift made by the partnership to any donee is, for the purpose of this section, deemed to be the eligible amount of a gift made to that donee by the individual in the individual’s taxation year in which the fiscal period of the partnership ends. 
  
  ### Commuter’s charitable donations
  
  (9) Where throughout a taxation year an individual resided in Canada near the boundary between Canada and the United States, if 
  (a) the individual commuted to the individual’s principal place of employment or business in the United States, and 
  (b) the individual’s chief source of income for the year was that employment or business, a gift made by the individual in the year to a religious, charitable, scientific, literary or educational organization created or organized in or under the laws of the United States that would be allowed as a deduction under the United States Internal Revenue Code shall, for the purpose of the definition 
  *total charitable gifts* in subsection 118.1(1), be deemed to have been made to a registered charity.  
  
  ### Determination of fair market value
  
  (10) For the purposes of paragraph 110.1(1)(c) and the definition 
  *total cultural gifts* in subsection 118.1(1), the fair market value of an object is deemed to be the fair market value determined by the Canadian Cultural Property Export Review Board.  
  
  ### Determination of fair market value
  
  (10.1) For the purposes of this section, subparagraph 69(1)(b)(ii), subsection 70(5) and sections 110.1 and 207.31, if at any time the Canadian Cultural Property Export Review Board or the Minister of the Environment determines or redetermines an amount to be the fair market value of a property that is the subject of a gift described in paragraph 110.1(1)(a), or in the definition 
  *total charitable gifts* in subsection (1), made by a taxpayer within the two-year period that begins at that time, an amount equal to the last amount so determined or redetermined within the period is deemed to be the fair market value of the gift at the time the gift was made and, subject to subsections (6), (7.1) and 110.1(3), to be the taxpayer’s proceeds of disposition of the gift.  
  
  ### Request for determination by the Minister of the Environment
  
  (10.2) Where a person disposes or proposes to dispose of a property that would, if the disposition were made and the certificates described in paragraph 110.1(1)(d) or in the definition 
  *total ecological gifts* in subsection (1) were issued by the Minister of the Environment, be a gift described in those provisions, the person may request, by notice in writing to that Minister, a determination of the fair market value of the property.  
  
  ### Duty of Minister of the Environment
  
  (10.3) In response to a request made under subsection (10.2), the Minister of the Environment shall with all due dispatch make a determination in accordance with subsection (12) or 110.1(5), as the case may be, of the fair market value of the property referred to in that request and give notice of the determination in writing to the person who has disposed of, or who proposes to dispose of, the property, except that no such determination shall be made if the request is received by that Minister after three years after the end of the person’s taxation year in which the disposition occurred. 
  
  ### Ecological gifts — redetermination
  
  (10.4) Where the Minister of the Environment has, under subsection (10.3), notified a person of the amount determined by that Minister to be the fair market value of a property in respect of its disposition or proposed disposition, 
  (a) that Minister shall, on receipt of a written request made by the person on or before the day that is 90 days after the day that the person was so notified of the first such determination, with all due dispatch confirm or redetermine the fair market value; 
  (b) that Minister may, on that Minister’s own initiative, at any time redetermine the fair market value; 
  (c) that Minister shall in either case notify the person in writing of that Minister’s confirmation or redetermination; and 
  (d) any such redetermination is deemed to replace all preceding determinations and redeterminations of the fair market value of that property from the time at which the first such determination was made. 
  
  ### Certificate of Fair Market Value
  
  (10.5) Where the Minister of the Environment determines under subsection (10.3) the fair market value of a property, or redetermines that value under subsection (10.4), and the property has been disposed of to a qualified donee described in paragraph 110.1(1)(d) or in the definition 
  *total ecological gifts* in subsection (1), that Minister shall issue to the person who made the disposition a certificate that states the fair market value of the property so determined or redetermined and, where more than one certificate has been so issued, the last certificate is deemed to replace all preceding certificates from the time at which the first certificate was issued.  
  
  ### Assessments
  
  (11) Notwithstanding subsections 152(4) to (5), such assessments or reassessments of a taxpayer’s tax, interest or penalties payable under this Act for any taxation year shall be made as are necessary to give effect 
  (a) to a certificate issued under subsection 33(1) of the Cultural Property Export and Import Act or to a decision of a court resulting from an appeal made pursuant to section 33.1 of that Act ; or  
  (b) to a certificate issued under subsection (10.5) or to a decision of a court resulting from an appeal made pursuant to subsection 169(1.1). 
  
  ### Ecological gifts
  
  (12) For the purposes of applying subparagraph 69(1)(b)(ii), subsection 70(5), this section and section 207.31 in respect of a gift described in the definition 
  *total ecological gifts* in subsection (1) that is made by an individual, the amount that is the fair market value (or, for the purpose of subsection (6), the fair market value otherwise determined) of the gift at the time the gift was made and, subject to subsection (6), the individual’s proceeds of disposition of the gift, is deemed to be the amount determined by the Minister of the Environment to be  
  (a) where the gift is land, the fair market value of the gift; or 
  (b) where the gift is a servitude, covenant or easement to which land is subject, the greater of 
  (i) the fair market value otherwise determined of the gift, and 
  (ii) the amount by which the fair market value of the land is reduced as a result of the making of the gift. 
  
  ### Non-qualifying securities
  
  (13) For the purposes of this section (other than this subsection), if at any particular time an individual makes a gift (including a gift that, but for this subsection, would be deemed by subsection (5) to be made at the particular time) of a non-qualifying security of the individual and the gift is not an excepted gift, 
  (a) except for the purpose of applying subsection 118.1(6) to determine the individual’s proceeds of disposition of the security, the gift is deemed not to have been made; 
  (b) if the security ceases to be a non-qualifying security of the individual at a subsequent time that is within 60 months after the particular time and the donee has not disposed of the security at or before the subsequent time, the individual is deemed to have made a gift to the donee of property at the subsequent time and the fair market value of that property is deemed to be the lesser of the fair market value of the security at the subsequent time and the fair market value of the security at the particular time that would, if this Act were read without reference to this subsection, have been included in calculating the individual’s total charitable gifts for a taxation year; 
  (c) if the security is disposed of by the donee within 60 months after the particular time and paragraph (b) does not apply to the security, the individual is deemed to have made a gift to the donee of property at the time of the disposition and the fair market value of that property is deemed to be the lesser of the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee for the disposition and the fair market value of the security at the particular time that would, if this Act were read without reference to this subsection, have been included in calculating the individual’s total charitable gifts for a taxation year; and 
  (d) a designation under subsection 118.1(6) or 110.1(3) in respect of the gift made at the particular time may be made in the individual’s return of income for the year that includes the subsequent time referred to in paragraph 118.1(13)(b) or the time of the disposition referred to in paragraph 118.1(13)(c). 
  
  ### Application of subsection (13.2)
  
  (13.1) Subsection (13.2) applies if, as part of a series of transactions, 
  (a) an individual makes, at a particular time, a gift of a particular property to a qualified donee; 
  (b) a particular person holds a non-qualifying security of the individual; and 
  (c) the qualified donee acquires, directly or indirectly, a non-qualifying security of the individual or of the particular person. 
  
  ### Non-qualifying securities — third-party accommodation
  
  (13.2) If this subsection applies, 
  (a) for the purposes of this section, the fair market value of the particular property is deemed to be reduced by an amount equal to the fair market value of the non-qualifying security acquired by the qualified donee; and 
  (b) for the purposes of subsection (13), 
  (i) if the non-qualifying security acquired by the qualified donee is a non-qualifying security of the particular person, it is deemed to be a non-qualifying security of the individual, 
  (ii) the individual is deemed to have made, at the particular time referred to in subsection (13.1), a gift of the non-qualifying security acquired by the qualified donee, the fair market value of which does not exceed the amount, if any, by which 
  (A) the fair market value of the particular property determined without reference to paragraph (a) exceeds 
  (B) the fair market value of the particular property determined under paragraph (a), and 
  (iii) paragraph (13)(b) does not apply in respect of the gift. 
  
  ### Non-qualifying securities — anti-avoidance
  
  (13.3) For the purposes of subsections (13.1) and (13.2), if, as part of a series of transactions, an individual makes a gift to a qualified donee and the qualified donee acquires a non-qualifying security of a person (other than the individual or particular person referred to in subsection (13.1)) and it may reasonably be considered, having regard to all the circumstances, that one of the purposes or results of the acquisition of the non-qualifying security by the qualified donee was to facilitate, directly or indirectly, the making of the gift by the individual, then the non-qualifying security acquired by the qualified donee is deemed to be a non-qualifying security of the individual. 
  
  ### Exchanged security
  
  (14) Where a share (in this subsection referred to as the “new share”) that is a non-qualifying security of an individual has been acquired by a donee referred to in subsection 118.1(13) in exchange for another share (in this subsection referred to as the “original share”) that is a non-qualifying security of the individual by means of a transaction to which section 51, subparagraphs 85.1(1)(a)(i) and 85.1(1)(a)(ii) or section 86 or 87 applies, the new share is deemed for the purposes of this subsection and subsection 118.1(13) to be the same share as the original share. 
  
  ### Exchange of beneficial interest in trust
  
  (14.1) Where a donee disposes of a beneficial interest in a trust that is a non-qualifying security of an individual in circumstances where paragraph (13)(c) would, but for this subsection, apply in respect of the disposition, and in respect of which the donee receives no consideration other than other non-qualifying securities of the individual, for the purpose of subsection (13) the gift referred to in that subsection is to be read as a reference to a gift of those other non-qualifying securities. 
  
  ### Death of donor
  
  (15) If, but for this subsection, an individual would be deemed by subsection 118.1(13) to have made a gift after the individual’s death, for the purpose of this section the individual is deemed to have made the gift in the taxation year in which the individual died, except that the amount of interest payable under any provision of this Act is the amount that it would be if this subsection did not apply to the gift. 
  
  ### Loanbacks
  
  (16) For the purpose of this section, where 
  (a) at any particular time an individual makes a gift of property, 
  (b) if the property is a non-qualifying security of the individual, the gift is an excepted gift, and 
  (c) within 60 months after the particular time 
  (i) the donee holds a non-qualifying security of the individual that was acquired by the donee after the time that is 60 months before the particular time, or 
  (ii) the individual or any person or partnership with which the individual does not deal at arm’s length uses property of the donee under an agreement that was made or modified after the time that is 60 months before the particular time, and the property was not used in the carrying on of the donee’s charitable activities, the fair market value of the gift is deemed to be that value otherwise determined minus the total of all amounts each of which is the fair market value of the consideration given by the donee to so acquire a non-qualifying security so held or the fair market value of such a property so used, as the case may be. 
  
  ### Ordering rule
  
  (17) For the purpose of applying subsection (16) to determine the fair market value of a gift made at any time by a taxpayer, the fair market value of consideration given to acquire property described in subparagraph (16)(c)(i) or of property described in subparagraph (16)(c)(ii) is deemed to be that value otherwise determined minus any portion of it that has been applied under that subsection to reduce the fair market value of another gift made before that time by the taxpayer. 
  
  ### Non-qualifying security defined
  
  (18) For the purposes of this section, 
  *non-qualifying security* of an individual at any time means  
  (a) an obligation (other than an obligation of a financial institution to repay an amount deposited with the institution or an obligation listed on a designated stock exchange) of the individual or the individual’s estate or of any person or partnership with which the individual or the estate does not deal at arm’s length immediately after that time; 
  (b) a share (other than a share listed on a designated stock exchange) of the capital stock of a corporation with which the individual or the estate or, where the individual is a trust, a person affiliated with the trust, does not deal at arm’s length immediately after that time; 
  (b.1) a beneficial interest of the individual or the estate in a trust that 
  (i) immediately after that time is affiliated with the individual or the estate, or 
  (ii) holds, immediately after that time, a non-qualifying security of the individual or estate, or held, at or before that time, a share described in paragraph (b) that is, after that time, held by the donee; or 
  (c) any other security (other than a security listed on a designated stock exchange) issued by the individual or the estate or by any person or partnership with which the individ-ual or the estate does not deal at arm’s length (or, in the case where the person is a trust, with which the individual or estate is affiliated) immediately after that time. 
  
  ### Excepted gift
  
  (19) For the purposes of this section, a gift made by a taxpayer is an excepted gift if 
  (a) the security is a share; 
  (b) the donee is not a private foundation; 
  (c) either, 
  (i) if the taxpayer is an individual’s graduated rate estate, 
  (A) the individual dealt at arm’s length with the donee immediately before the individual’s death, and 
  (B) the graduated rate estate deals at arm’s length with the donee (determined without reference to paragraph 251(1)(b)), or 
  (ii) if subparagraph (i) does not apply, the taxpayer deals at arm’s length with the donee; and 
  (d) where the donee is a charitable organization or a public foundation, the taxpayer deals at arm’s length with each director, trustee, officer and like official of the donee. 
  
  ### Financial institution defined
  
  (20) For the purpose of subsection 118.1(18), 
  *financial institution* means a corporation that is  
  (a) a member of the Canadian Payments Association; or 
  (b) a credit union that is a shareholder or member of a body corporate or organization that is a central for the purposes of the Canadian Payments Act.  
  
  ### Options
  
  (21) Subject to subsections (23) and (24), if an individual has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing the total charitable gifts, total cultural gifts or total ecological gifts in respect of any taxpayer for any taxation year. 
  
  ### Application of subsection (23)
  
  (22) Subsection (23) applies if 
  (a) an option to acquire a property of an individual is granted to a qualified donee; 
  (b) the option is exercised so that the property is disposed of by the individual and acquired by the qualified donee at a particular time; and 
  (c) either 
  (i) the amount that is 80% of the fair market value of the property at the particular time is greater than or equal to the total of 
  (A) the consideration received by the individual from the qualified donee for the property, and 
  (B) the consideration received by the individual from the qualified donee for the option, or 
  (ii) the individual establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the individual with the intention to make a gift to the qualified donee. 
  
  ### Granting of an option
  
  (23) If this subsection applies, notwithstanding subsection 49(3), 
  (a) the individual is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and 
  (b) there shall be included in the individual’s total charitable gifts, for the taxation year that includes the particular time, the amount by which the property’s fair market value exceeds the total described in subparagraph (22)(c)(i). 
  
  ### Disposition of an option
  
  (24) If an option to acquire a particular property of an individual is granted to a qualified donee and the option is disposed of by the qualified donee (otherwise than by the exercise of the option) at a particular time 
  (a) the individual is deemed to have disposed of a property at the particular time 
  (i) the adjusted cost base of which to the individual immediately before the particular time is equal to the consideration, if any, paid by the qualified donee for the option, and 
  (ii) the proceeds of disposition of which are equal to the lesser of the fair market value of the particular property at the particular time and the fair market value of any consideration (other than a non-qualifying security of any person) received by the qualified donee for the option; and 
  (b) there shall be included in the total charitable gifts of the individual for the individual’s taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the donee for the option. 
  
  ### Returned property
  
  (25) Subsection (26) applies if a qualified donee has issued to an individual a receipt referred to in subsection (2) in respect of a transfer of a property (in this subsection and subsection (26) referred to as the “original property”) and a particular property that is 
  (a) the original property is later transferred to the individual (unless that later transfer is reasonable consideration or remuneration for property acquired by or services rendered to a person); or 
  (b) any other property that may reasonably be considered compensation for or a substitute for, in whole or in part, the original property, is later transferred to the individual. 
  
  ### Returned property
  
  (26) If this subsection applies, then 
  (a) irrespective of whether the transfer of the original property by the individual to the qualified donee referred to in subsection (25) was a gift, the individual is deemed not to have disposed of the original property at the time of that transfer nor to have made a gift; 
  (b) if the particular property is identical to the original property, the particular property is deemed to be the original property; and 
  (c) if the particular property is not the original property, then 
  (i) the individual is deemed to have disposed of the original property at the time that the particular property is transferred to the individual for proceeds of disposition equal to the greater of the fair market value of the particular property at that time and the fair market value of the original property at the time that it was transferred by the individual to the donee, and 
  (ii) if the transfer of the original property by the individual would be a gift if this section were read without reference to paragraph (a), the individual is deemed to have, at the time of that transfer, transferred to the donee a property that is the subject of a gift having a fair market value equal to the amount, if any, by which the fair market value of the original property at the time of that transfer exceeds the fair market value of the particular property at the time that it is transferred to the individual. 
  
  ### Information return
  
  (27) If subsection (26) applies in respect of a transfer of property to an individual and that property has a fair market value greater than $50, the transferor must file an information return containing prescribed information with the Minister not later than 90 days after the day on which the property was transferred and provide a copy of the return to the individual. 
  
  ### Reassessment
  
  (28) If subsection (26) applies in respect of a transfer of property to an individual, the Minister may reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to the transfer. 
  
  ### Medical expense credit
  
  118.2 (1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the taxation year; is the total of the individual’s medical expenses in respect of the individual, the individual’s spouse or common-law partner or a child of the individual who has not attained the age of 18 years before the end of the taxation year 
  (a) that are evidenced by receipts filed with the Minister, 
  (b) that were not included in determining an amount under this subsection, section 64 or subsection 122.51(2), for a preceding taxation year, 
  (c) that are not included in determining an amount under this subsection, section 64 or subsection 122.51(2), by any other taxpayer for any taxation year, and 
  (d) that were paid by the individual or the individual’s legal representative within any period of 12 months that ends in the taxation year or, if those expenses were in respect of a person (including the individual) who died in the taxation year, within any period of 24 months that includes the day of the person’s death; is the lesser of $1,813 and 3% of the individual’s income for the taxation year; and is the total of all amounts each of which is, in respect of a dependant of the individual (within the meaning assigned by subsection 118(6), other than a child of the individual who has not attained the age of 18 years before the end of the taxation year), the amount determined by the formula is the total of the individual’s medical expenses in respect of the dependant 
  (a) that are evidenced by receipts filed with the Minister, 
  (b) that were not included in determining an amount under this subsection, or subsection 122.51(2), in respect of the individual for a preceding taxation year, 
  (c) that are not included in determining an amount under this subsection, or subsection 122.51(2), by any other taxpayer for any taxation year, and 
  (d) that were paid by the individual or the individual’s legal representative within the period referred to in paragraph (d) of the description of B; and is the lesser of $1,813 and 3% of the dependant’s income for the taxation year. 
  
  ### Medical expenses
  
  (2) For the purposes of subsection (1), a medical expense of an individual is an amount paid 
  (a) to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental services provided to a person (in this subsection referred to as the “patient”) who is the individual, the individual’s spouse or common-law partner or a dependant of the individual (within the meaning assigned by subsection 118(6)) in the taxation year in which the expense was incurred; 
  (b) as remuneration for one full-time attendant (other than a person who, at the time the remuneration is paid, is the individual’s spouse or common-law partner or is under 18 years of age) on, or for the full-time care in a nursing home of, the patient in respect of whom an amount would, but for paragraph 118.3(1)(c), be deductible under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the expense was incurred; 
  (b.1) as remuneration for attendant care provided in Canada to the patient if 
  (i) the patient is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the expense was incurred, 
  (ii) no part of the remuneration is included in computing a deduction claimed in respect of the patient under section 63 or 64 or paragraph (b), (b.2), (c), (d) or (e) for any taxation year, 
  (iii) at the time the remuneration is paid, the attendant is neither the individual’s spouse or common-law partner nor under 18 years of age, and 
  (iv) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number, to the extent that the total of amounts so paid does not exceed $10,000 (or $20,000 if the individual dies in the year); 
  (b.2) as remuneration for the patient’s care or supervision provided in a group home in Canada maintained and operated exclusively for the benefit of individuals who have a severe and prolonged impairment, if 
  (i) because of the patient’s impairment, the patient is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the expense is incurred, 
  (ii) no part of the remuneration is included in computing a deduction claimed in respect of the patient under section 63 or 64 or paragraph (b), (b.1), (c), (d) or (e) for any taxation year, and 
  (iii) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number; 
  (c) as remuneration for one full-time attendant on the patient in a self-contained domestic establishment in which the patient lives, if 
  (i) the patient is, and has been certified in writing by a medical practitioner to be, a person who, by reason of mental or physical infirmity, is and is likely to be for a long-continued period of indefinite duration dependent on others for the patient’s personal needs and care and who, as a result, requires a full-time attendant, 
  (ii) at the time the remuneration is paid, the attendant is neither the individual’s spouse or common-law partner nor under 18 years of age, and 
  (iii) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number; 
  (d) for the full-time care in a nursing home of the patient, who has been certified in writing by a medical practitioner to be a person who, by reason of lack of normal mental capacity, is and in the foreseeable future will continue to be dependent on others for the patient’s personal needs and care; 
  (e) for the care, or the care and training, at a school, an institution or another place of the patient, who has been certified in writing by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient; 
  (f) for transportation by ambulance to or from a public or licensed private hospital for the patient; 
  (g) to a person engaged in the business of providing transportation services, to the extent that the payment is made for the transportation of 
  (i) the patient, and 
  (ii) one individual who accompanied the patient, where the patient was, and has been certified in writing by a medical practitioner to be, incapable of travelling without the assistance of an attendant from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services are normally provided, or from that place to that locality, if 
  (iii) substantially equivalent medical services are not available in that locality, 
  (iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and 
  (v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services; 
  (h) for reasonable travel expenses (other than expenses described in paragraph (g)) incurred in respect of the patient and, where the patient was, and has been certified in writing by a medical practitioner to be, incapable of travelling without the assistance of an attendant, in respect of one individual who accompanied the patient, to obtain medical services in a place that is not less than 80 km from the locality where the patient dwells if the circumstances described in subparagraphs (g)(iii) to (v) apply; 
  (i) for, or in respect of, an artificial limb, an iron lung, a rocking bed for poliomyelitis victims, a wheel chair, crutches, a spinal brace, a brace for a limb, an ileostomy or colostomy pad, a truss for hernia, an artificial eye, a laryngeal speaking aid, an aid to hearing, an artificial kidney machine, phototherapy equipment for the treatment of psoriasis or other skin disorders, or an oxygen concentrator, for the patient; 
  (i.1) for or in respect of diapers, disposable briefs, catheters, catheter trays, tubing or other products required by the patient by reason of incontinence caused by illness, injury or affliction; 
  (j) for eye glasses or other devices for the treatment or correction of a defect of vision of the patient as prescribed by a medical practitioner or optometrist; 
  (k) for an oxygen tent or other equipment necessary to administer oxygen or for insulin, oxygen, liver extract injectible for pernicious anaemia or vitamin B12 for pernicious anaemia, for use by the patient as prescribed by a medical practitioner; 
  (l) on behalf of the patient who is blind or profoundly deaf or has severe autism, severe diabetes, severe epilepsy, severe mental impairment or a severe and prolonged impairment that markedly restricts the use of the patient’s arms or legs, 
  (i) for an animal that is 
  (A) specially trained to 
  (I) in the case of severe mental impairment, perform specific tasks (excluding, for greater certainty, the provision of emotional support) that assist the patient in coping with the impairment, and 
  (II) in all other cases, assist the patient in coping with the impairment, and 
  (B) provided by a person or organization one of whose main purposes is such training of animals, 
  (ii) for the care and maintenance of such an animal, including food and veterinary care, 
  (iii) for reasonable travel expenses of the patient incurred for the purpose of attending a school, institution or other facility that trains, in the handling of such animals, individuals who are so impaired, and 
  (iv) for reasonable board and lodging expenses of the patient incurred for the purpose of the patient’s full-time attendance at a school, institution or other facility referred to in subparagraph (iii); 
  (l.1) on behalf of the patient who requires a bone marrow or organ transplant, 
  (i) for reasonable expenses (other than expenses described in subparagraph (ii)), including legal fees and insurance premiums, to locate a compatible donor and to arrange for the transplant, and 
  (ii) for reasonable travel, board and lodging expenses (other than expenses described in paragraphs (g) and (h)) of the donor (and one other person who accompanies the donor) and the patient (and one other person who accompanies the patient) incurred in respect of the transplant; 
  (l.2) for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, to enable the patient to gain access to, or to be mobile or functional within, the dwelling, provided that such expenses 
  (i) are not of a type that would typically be expected to increase the value of the dwelling, and 
  (ii) are of a type that would not normally be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment; 
  (l.21) for reasonable expenses relating to the construction of the principal place of residence of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, that can reasonably be considered to be incremental costs incurred to enable the patient to gain access to, or to be mobile or functional within, the patient’s principal place of residence, provided that such expenses 
  (i) are not of a type that would typically be expected to increase the value of the dwelling, and 
  (ii) are of a type that would not normally be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment; 
  (l.3) for reasonable expenses relating to rehabilitative therapy, including training in lip reading and sign language, incurred to adjust for the patient’s hearing or speech loss; 
  (l.4) on behalf of the patient who has a speech or hearing impairment, for sign language interpretation services or real-time captioning services, to the extent that the payment is made to a person in the business of providing such services; 
  (l.41) on behalf of the patient who has a mental or physical impairment, for note-taking services, if 
  (i) the patient has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires such services, and 
  (ii) the payment is made to a person in the business of providing such services; 
  (l.42) on behalf of the patient who has a physical impairment, for the cost of voice recognition software, if the patient has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires that software; 
  (l.43) on behalf of the patient who is blind or has a severe learning disability, for reading services, if 
  (i) the patient has been certified in writing by a medical practitioner to be a person who, because of that impairment, requires such services, and 
  (ii) the payment is made to a person in the business of providing such services; 
  (l.44) on behalf of the patient who is blind and profoundly deaf, for deaf-blind intervening services, if the payment is made to a person in the business of providing those services; 
  (l.5) for reasonable moving expenses (within the meaning of subsection 62(3), but not including any expense deducted under section 62 for any taxation year) of the patient, who lacks normal physical development or has a severe and prolonged mobility impairment, incurred for the purpose of the patient’s move to a dwelling that is more accessible by the patient or in which the patient is more mobile or functional, if the total of the expenses claimed under this paragraph by all persons in respect of the move does not exceed $2,000; 
  (l.6) for reasonable expenses relating to alterations to the driveway of the principal place of residence of the patient who has a severe and prolonged mobility impairment, to facilitate the patient’s access to a bus; 
  (l.7) for a van that, at the time of its acquisition or within 6 months after that time, has been adapted for the transportation of the patient who requires the use of a wheelchair, to the extent of the lesser of $5,000 and 20% of the amount by which 
  (i) the amount paid for the acquisition of the van exceeds 
  (ii) the portion, if any, of the amount referred to in subparagraph (i) that is included because of paragraph (m) in computing the individual’s deduction under this section for any taxation year; 
  (l.8) for reasonable expenses (other than amounts paid to a person who was at the time of the payment the individual’s spouse or common-law partner or a person under 18 years of age) to train the individual, or a person related to the individual, if the training relates to the mental or physical infirmity of a person who 
  (i) is related to the individual, and 
  (ii) is a member of the individual’s household or is dependent on the individual for support; 
  (l.9) as remuneration for therapy provided to the patient because of the patient’s severe and prolonged impairment, if 
  (i) because of the patient’s impairment, an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the remuneration is paid, 
  (ii) the therapy is prescribed by, and administered under the general supervision of, 
  (A) a medical doctor, a nurse practitioner or a psychologist, in the case of mental impairment, and 
  (B) a medical doctor, a nurse practitioner or an occupational therapist, in the case of a physical impairment, 
  (iii) at the time the remuneration is paid, the payee is neither the individual’s spouse or common-law partner nor under 18 years of age, and 
  (iv) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number; 
  (l.91) as remuneration for tutoring services that are rendered to, and are supplementary to the primary education of, the patient who 
  (i) has a learning disability or a mental impairment, and 
  (ii) has been certified in writing by a medical practitioner to be a person who, because of that disability or impairment, requires those services, if the payment is made to a person ordinarily engaged in the business of providing such services to individuals who are not related to the payee; 
  (l.92) as remuneration for the design of an individualized therapy plan for the patient because of the patient’s severe and prolonged impairment, if 
  (i) because of the patient’s impairment, an amount would be, if this Act were read without reference to paragraph 118.3(1)(c), deductible under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the remuneration is paid, 
  (ii) the plan is required to access public funding for specialized therapy or is prescribed by 
  (A) a medical doctor, a nurse practitioner or a psychologist, in the case of mental impairment, or 
  (B) a medical doctor, a nurse practitioner or an occupational therapist, in the case of a physical impairment, 
  (iii) the therapy set out in the plan is prescribed by and, if undertaken, administered under the general supervision of 
  (A) a medical doctor, a nurse practitioner or a psychologist, in the case of mental impairment, or 
  (B) a medical doctor, a nurse practitioner or an occupational therapist, in the case of a physical impairment, and 
  (iv) the payment is made to a person ordinarily engaged in a business that includes the design of such plans for individuals who are not related to the payee; 
  (m) for any device or equipment for use by the patient that 
  (i) is of a prescribed kind, 
  (ii) is prescribed by a medical practitioner, 
  (iii) is not described in any other paragraph of this subsection, and 
  (iv) meets such conditions as are prescribed as to its use or the reason for its acquisition; to the extent that the amount so paid does not exceed the amount, if any, prescribed in respect of the device or equipment; 
  (n) for 
  (i) drugs, medicaments or other preparations or substances (other than those described in paragraph (k)) 
  (A) that are manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder or abnormal physical state, or its symptoms, or in restoring, correcting or modifying an organic function, 
  (B) that can lawfully be acquired for use by the patient only if prescribed by a medical practitioner or dentist, and 
  (C) the purchase of which is recorded by a pharmacist, or 
  (ii) drugs, medicaments or other preparations or substances that are prescribed by regulation; 
  (o) for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations, for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability, for the patient as prescribed by a medical practitioner or dentist; 
  (p) to a person authorized under the laws of a province to carry on the business of a dental mechanic, for the making or repairing of an upper or lower denture, or for the taking of impressions, bite registrations and insertions in respect of the making, producing, constructing and furnishing of an upper or lower denture, for the patient; 
  (q) as a premium, contribution or other consideration under a private health services plan in respect of one or more of the individual, the individual’s spouse or common-law partner and any member of the individual’s household with whom the individual is connected by blood relationship, marriage, common-law partnership or adoption, except to the extent that the premium, contribution or consideration is deducted under subsection 20.01(1) in computing an individual’s income from a business for any taxation year; 
  (r) on behalf of the patient who has celiac disease, the incremental cost of acquiring gluten-free food products as compared to the cost of comparable non-gluten-free food products, if the patient has been certified in writing by a medical practitioner to be a person who, because of that disease, requires a gluten-free diet; 
  (s) for drugs obtained under Health Canada’s Special Access Programme in accordance with sections C.08.010 and C.08.011 of the Food and Drug Regulations and purchased for use by the patient;  
  (t) for medical devices obtained under Health Canada’s Special Access Programme in accordance with Part 2 of the Medical Devices Regulations and purchased for use by the patient;  
  (u) on behalf of the patient who is the holder of a medical document (as defined in subsection 264(1) of the Cannabis Regulations) to support their use of cannabis for medical purposes, for the cost of cannabis, cannabis oil, cannabis plant seeds or cannabis products purchased for medical purposes from a holder of a licence for sale (as defined in subsection 264(1) of the Cannabis Regulations); or  
  (v) to a fertility clinic, or donor bank, in Canada as a fee or other amount paid or payable, to obtain sperm or ova to enable the conception of a child by the individual, the individual’s spouse or common-law partner or a surrogate mother on behalf of the individual. 
  
  ### Cosmetic purposes
  
  (2.1) The medical expenses referred to in subsection (2) do not include amounts paid for medical or dental services, nor any related expenses, provided purely for cosmetic purposes, unless necessary for medical or reconstructive purposes. 
  
  ### Fertility expenses
  
  (2.2) An amount is deemed to be a medical expense of an individual for the purposes of this section if the amount 
  (a) is paid for the purpose of a patient (within the meaning of subsection (2)) conceiving a child; and 
  (b) would be a medical expense of the individual (within the meaning of subsection (2)) if the patient were incapable of conceiving a child because of a medical condition. 
  
  ### Surrogacy expenses
  
  (2.21) An amount is deemed to be a medical expense of an individual for the purposes of this section if the amount 
  (a) is paid by the individual or the individual’s spouse or common-law partner; 
  (b) is 
  (i) an expenditure described under any of sections 2 to 4 of the Reimbursement Related to Assisted Human Reproduction Regulations, or  
  (ii) paid in respect of a surrogate mother or donor and would be an expenditure described in subparagraph (i) if it was paid to the surrogate mother or donor; 
  (c) would be a medical expense of the individual (within the meaning of subsection (2)) if the amount was paid in respect of a good or service provided to the individual or the individual’s spouse or common-law partner; 
  (d) is an expense incurred in Canada; and 
  (e) is paid for the purpose of the individual becoming a parent. 
  
  ### Deemed medical expense
  
  (3) For the purposes of subsection (1), 
  (a) any amount included in computing an individual’s income for a taxation year from an office or employment in respect of a medical expense described in subsection (2) paid or provided by an employer at a particular time shall be deemed to be a medical expense paid by the individual at that time; and 
  (b) there shall not be included as a medical expense of an individual any expense to the extent that 
  (i) the individual, 
  (ii) the person referred to in subsection (2) as the patient, 
  (iii) any person related to a person referred to in subparagraph (i) or (ii), or 
  (iv) the legal representative of any person referred to in any of subparagraphs (i) to (iii) is entitled to be reimbursed for the expense, except to the extent that the amount of the reimbursement is required to be included in computing income and is not deductible in computing taxable income. 
  
  ### Deemed payment of medical expenses
  
  (4) Where, in circumstances in which a person engaged in the business of providing transportation services is not readily available, an individual makes use of a vehicle for a purpose described in paragraph (2)(g), the individual or the individual’s legal representative shall be deemed to have paid to a person engaged in the business of providing transportation services, in respect of the operation of the vehicle, such amount as is reasonable in the circumstances. 
  
  ### Credit for mental or physical impairment
  
  118.3 (1) Where 
  (a) an individual has one or more severe and prolonged impairments in physical or mental functions, 
  (a.1) the effects of the impairment or impairments are such that the individual’s ability to perform more than one basic activity of daily living is significantly restricted where the cumulative effect of those restrictions is equivalent to having a marked restriction in the ability to perform a basic activity of daily living or are such that the individual’s ability to perform a basic activity of daily living is markedly restricted or would be markedly restricted but for therapy that 
  (i) is essential to sustain a vital function of the individual, 
  (ii) is required to be administered at least two times each week for a total duration averaging not less than 14 hours a week, and 
  (iii) cannot reasonably be expected to be of significant benefit to persons who are not so impaired, 
  (a.2) in the case of an impairment in physical or mental functions the effects of which are such that the individual’s ability to perform a single basic activity of daily living is markedly restricted or would be so restricted but for therapy referred to in paragraph (a.1), a medical practitioner has certified in prescribed form that the impairment is a severe and prolonged impairment in physical or mental functions the effects of which are such that the individual’s ability to perform a basic activity of daily living is markedly restricted or would be markedly restricted, but for therapy referred to in paragraph (a.1), where the medical practitioner is a medical doctor, a nurse practitioner or, in the case of 
  (i) a sight impairment, an optometrist, 
  (ii) a speech impairment, a speech-language pathologist, 
  (iii) a hearing impairment, an audiologist, 
  (iv) an impairment with respect to an individual’s ability in feeding or dressing themself, an occupational therapist, 
  (v) an impairment with respect to an individual’s ability in walking, an occupational therapist, or after February 22, 2005, a physiotherapist, and 
  (vi) an impairment with respect to an individual’s ability in mental functions necessary for everyday life, a psychologist, 
  (a.3) in the case of one or more impairments in physical or mental functions the effects of which are such that the individual’s ability to perform more than one basic activity of daily living is significantly restricted, a medical practitioner has certified in prescribed form that the impairment or impairments are severe and prolonged impairments in physical or mental functions the effects of which are such that the individual’s ability to perform more than one basic activity of daily living is significantly restricted and that the cumulative effect of those restrictions is equivalent to having a marked restriction in the ability to perform a single basic activity of daily living, where the medical practitioner is, in the case of 
  (i) an impairment with respect to the individual’s ability in feeding or dressing themself, or in walking, a medical doctor, a nurse practitioner or an occupational therapist, and 
  (ii) in the case of any other impairment, a medical doctor or nurse practitioner, 
  (b) the individual has filed for a taxation year with the Minister the certificate described in paragraph (a.2) or (a.3), and 
  (c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person, there may be deducted in computing the individual’s tax payable under this Part for the year the amount determined by the formula is the appropriate percentage for the year, is $6,000, and is 
  (a) where the individual has not attained the age of 18 years before the end of the year, the amount, if any, by which 
  (i) $3,500 exceeds 
  (ii) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount paid in the year for the care or supervision of the individual and included in computing a deduction under section 63, 64 or 118.2 for a taxation year exceeds 
  (B) $2,050, and 
  (b) in any other case, zero. 
  
  ### Time spent on therapy
  
  (1.1) For the purpose of paragraph 118.3(1)(a.1), in determining whether therapy is required to be administered at least two times each week for a total duration averaging not less than an average of 14 hours a week, the time spent on administering therapy 
  (a) includes only time spent on activities that require the individual to take time away from normal everyday activities in order to receive the therapy; 
  (b) in the case of therapy that requires 
  (i) a regular dosage of medication that is required to be adjusted on a daily basis, includes time spent on activities that are directly related to the determination of the dosage of the medication, and 
  (ii) the daily consumption of a medical food or medical formula to limit intake of a particular compound to levels required for the proper development or functioning of the body, includes the time spent on activities that are directly related to the determination of the amount of the compound that can be safely consumed; 
  (c) in the case of 
  (i) a child who is unable to perform the activities related to the administration of the therapy as a result of the child’s age, includes the time spent by another person to perform or supervise those activities for the child, and 
  (ii) an individual who is unable to perform the activities related to the administration of the therapy because of the effects of an impairment or impairments in physical or mental functions, includes the time required to be spent by another person to assist the individual in performing those activities; and 
  (d) does not include time spent on 
  (i) activities (other than activities described in paragraph (b)) related to dietary or exercise restrictions or regimes, 
  (ii) travel time, 
  (iii) medical appointments (other than medical appointments to receive therapy or to determine the daily dosage of medication, medical food or medical formula), 
  (iv) shopping for medication, or 
  (v) recuperation after therapy (other than medically required recuperation). 
  
  ### Deeming
  
  (1.2) Despite subsection (1.1), an individual who is diagnosed with type 1 diabetes mellitus is deemed to require therapy to be administered at least two times each week for a total duration averaging not less than 14 hours a week. 
  
  ### Dependant having impairment
  
  (2) Where 
  (a) an individual has, in respect of a person (other than a person in respect of whom the person’s spouse or common-law partner deducts for a taxation year an amount under section 118 or 118.8) who is resident in Canada at any time in the year and who is entitled to deduct an amount under subsection (1) for the year, 
  (i) claimed for the year a deduction under subsection 118(1) because of 
  (A) paragraph (b) of the description of B in that subsection, or 
  (B) paragraph (d) of that description where the person is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the individual, or of the individual’s spouse or common-law partner, or 
  (ii) could have claimed for the year a deduction referred to in subparagraph (i) in respect of the person if 
  (A) the person had no income for the year and had attained the age of 18 years before the end of the year, and 
  (B) in the case of a deduction referred to in clause (i)(A), the individual were not married or not in a common-law partnership, and 
  (b) no amount in respect of remuneration for an attendant, or care in a nursing home, because of that person’s mental or physical impairment, is included in calculating a deduction under section 118.2 (otherwise than under paragraph 118.2(2)(b.1)) for the year by the individual or by any other person, there may be deducted, for the purpose of computing the tax payable under this Part by the individual for the year, the amount, if any, by which 
  (c) the amount deductible under subsection 118.3(1) in computing that person’s tax payable under this Part for the year exceeds 
  (d) the amount of that person’s tax payable under this Part for the year computed before any deductions under this Division (other than under sections 118 to 118.07 and 118.7). 
  
  ### Partial dependency
  
  (3) Where more than one individual is entitled to deduct an amount under subsection 118.3(2) for a taxation year in respect of the same person, the total of all amounts so deductible for the year shall not exceed the maximum amount that would be deductible under that subsection for the year by an individual in respect of that person if that individual were the only individual entitled to deduct an amount under that subsection in respect of that person, and where the individuals cannot agree as to what portion of the amount each can deduct, the Minister may fix the portions. 
  
  ### Additional information
  
  (4) Where a claim under this section or under section 118.8 is made in respect of an individual’s impairment 
  (a) if the Minister requests in writing information with respect to the individual’s impairment, its effects on the individual and, where applicable, the therapy referred to in paragraph (1)(a.1) that is required to be administered, from any person referred to in subsection (1) or (2) or section 118.8 in connection with such a claim, that person shall provide the information so requested to the Minister in writing; and 
  (b) if the information referred to in paragraph (a) is provided by a person referred to in paragraph (1)(a.2) or (a.3), the information so provided is deemed to be included in a certificate in prescribed form. 
  
  ### Nature of impairment
  
  118.4 (1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection, 
  (a) an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months; 
  (b) an individual’s ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living; 
  (b.1) an individual is considered to have the equivalent of a marked restriction in a basic activity of daily living only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual’s ability to perform more than one basic activity of daily living (including for this purpose, the ability to see) is significantly restricted, and the cumulative effect of those restrictions is tantamount to the individual’s ability to perform a basic activity of daily living being markedly restricted; 
  (c) a basic activity of daily living in relation to an individual means 
  (i) mental functions necessary for everyday life, 
  (ii) feeding oneself or dressing oneself, 
  (iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual, 
  (iv) hearing so as to understand, in a quiet setting, another person familiar with the individual, 
  (v) eliminating (bowel or bladder functions), or 
  (vi) walking; 
  (c.1) mental functions necessary for everyday life include 
  (i) attention, 
  (ii) concentration, 
  (iii) memory, 
  (iv) judgement, 
  (v) perception of reality, 
  (vi) problem solving, 
  (vii) goal setting, 
  (viii) regulation of behaviour and emotions, 
  (ix) verbal and non-verbal comprehension, and 
  (x) adaptive functioning; 
  (d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living; and 
  (e) feeding oneself does not include 
  (i) any of the activities of identifying, finding, shopping for or otherwise procuring food, or 
  (ii) the activity of preparing food to the extent that the time associated with the activity would not have been necessary in the absence of a dietary restriction or regime; and 
  (f) dressing oneself does not include any of the activities of identifying, finding, shopping for or otherwise procuring clothing. 
  
  ### Reference to medical practitioners, etc.
  
  (2) For the purposes of sections 63, 64, 118.2, 118.3 and 118.6, a reference to an audiologist, dentist, medical doctor, medical practitioner, nurse, nurse practitioner, occupational therapist, optometrist, pharmacist, physiotherapist, psychologist or speech-language pathologist is a reference to a person authorized to practise as such, 
  (a) where the reference is used in respect of a service rendered to a taxpayer, pursuant to the laws of the jurisdiction in which the service is rendered; 
  (b) where the reference is used in respect of a certificate issued by the person in respect of a taxpayer, pursuant to the laws of the jurisdiction in which the taxpayer resides or of a province; and 
  (c) where the reference is used in respect of a prescription issued by the person for property to be provided to or for the use of a taxpayer, pursuant to the laws of the jurisdiction in which the taxpayer resides, of a province or of the jurisdiction in which the property is provided. 
  
  ### Tuition credit
  
  118.5 (1) Subject to subsection (1.2), for the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted, 
  (a) subject to subsection (1.1), where the individual was during the year a student enrolled at an educational institution in Canada that is 
  (i) a university, college or other educational institution providing courses at a post-secondary school level, or 
  (ii) certified by the Minister of Employment and Social Development to be an educational institution providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person’s skills in, an occupation, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to the educational institution, except to the extent that those fees 
  (ii.1) are paid to an educational institution described in subparagraph (i) in respect of courses that are not at the post-secondary school level, if 
  (A) the individual had not attained the age of 16 years before the end of the year, or 
  (B) the purpose of the individual’s enrolment at the institution cannot reasonably be regarded as being to provide the individual with skills, or to improve the individual’s skills, in an occupation, 
  (ii.2) are paid to an educational institution described in subparagraph (ii) if 
  (A) the individual had not attained the age of 16 years before the end of the year, or 
  (B) the purpose of the individual’s enrolment at the institution cannot reasonably be regarded as being to provide the individual with skills, or to improve the individual’s skills, in an occupation, 
  (iii) are paid on behalf of, or reimbursed to, the individual by the individual’s employer and the amount paid or reimbursed is not included in the individual’s income, 
  (iii.1) are fees in respect of which the individual is or was entitled to receive a reimbursement or any form of assistance under a program of Her Majesty in right of Canada or a province designed to facilitate the entry or re-entry of workers into the labour force, where the amount of the reimbursement or assistance is not included in computing the individual’s income, 
  (iv) were included as part of an allowance received by the individual’s parent on the individual’s behalf from an employer and are not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix), or 
  (v) are paid on the individual’s behalf, or are fees in respect of which the individual is or was entitled to receive a reimbursement, under a program of Her Majesty in right of Canada designed to assist athletes, where the payment or reimbursement is not included in computing the individual’s income; 
  (b) where the individual was during the year a student in full-time attendance at a university outside Canada in a course leading to a degree, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to the university, except any such fees 
  (i) paid in respect of a course of less than three consecutive weeks duration, 
  (ii) paid on the individual’s behalf by the individual’s employer to the extent that the amount of the fees is not included in computing the individual’s income, or 
  (iii) paid on the individual’s behalf by the employer of the individual’s parent, to the extent that the amount of the fees is not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix); 
  (c) where the individual resided throughout the year in Canada near the boundary between Canada and the United States if the individual 
  (i) was at any time in the year a student enrolled at an educational institution in the United States that is a university, college or other educational institution providing courses at a post-secondary school level, and 
  (ii) commuted to that educational institution in the United States, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to the educational institution if those fees exceeds $100, except to the extent that those fees 
  (iii) are paid on the individual’s behalf by the individual’s employer and are not included in computing the individual’s income, or 
  (iv) were included as part of an allowance received by the individual’s parent on the individual’s behalf from an employer and are not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix); and 
  (d) subject to subsection (1.1), if the individual has taken an examination (in this section referred to as an “occupational, trade or professional examination”) in the year that is required to obtain a professional status recognized under a federal or provincial statute, or to be licensed or certified as a tradesperson, where that status, licence or certification allows the individual to practise the profession or trade in Canada, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees paid in respect of the occupational, trade or professional examination to an educational institution referred to in paragraph (a), a professional association, a provincial ministry or other similar institution, except to the extent that the occupational, trade or professional examination fees 
  (i) are paid on behalf of, or reimbursed to, the individual by the individual’s employer and the amount paid or reimbursed is not included in the individual’s income, or 
  (ii) are fees in respect of which the individual is or was entitled to receive a reimbursement or any form of assistance under a program of Her Majesty in right of Canada or a province designed to facilitate the entry or re-entry of workers into the labour force, where the amount of the reimbursement or assistance is not included in computing the individual’s income. 
  
  ### Minimum amount
  
  (1.1) No amount may be deducted for a taxation year by an individual under paragraph (1)(a) or (d) in respect of any fees paid to a particular institution unless the total of the fees described in those paragraphs and paid to the particular institution in the year by the individual exceeds $100. 
  
  ### Canada training credit reduction
  
  (1.2) The amount that may be deducted for a taxation year by an individual under subsection (1) is to be reduced by the amount determined by the formula is the appropriate percentage for the taxation year; and is the amount, if any, deemed to have been paid by the individual under subsection 122.91(1) in respect of the taxation year. 
  
  ### Application to deemed residents
  
  (2) Where an individual is deemed by section 250 to be resident in Canada throughout all or part of a taxation year, in applying subsection (1) in respect of the individual for the period when the individual is so deemed to be resident in Canada, paragraph (1)(a) shall be read without reference to the words “in Canada”. 
  
  ### Inclusion of ancillary fees and charges
  
  (3) For the purpose of this section, 
  *fees for an individual’s tuition* includes ancillary fees and charges that are paid  
  (a) to an educational institution referred to in subparagraph 118.5(1)(a)(i), and 
  (b) in respect of the individual’s enrolment at the institution in a program at a post-secondary school level, but does not include 
  (c) any fee or charge to the extent that it is levied in respect of 
  (i) a student association, 
  (ii) property to be acquired by students, 
  (iii) services not ordinarily provided at educational institutions in Canada that offer courses at a post-secondary school level, 
  (iv) the provision of financial assistance to students, except to the extent that, if this Act were read without reference to subsection 56(3), the amount of the assistance would be required to be included in computing the income, and not be deductible in computing the taxable income, of the students to whom the assistance is provided, or 
  (v) the construction, renovation or maintenance of any building or facility, except to the extent that the building or facility is owned by the institution and used to provide 
  (A) courses at the post-secondary school level, or 
  (B) services for which, if fees or charges in respect of the services were required to be paid by all students of the institution, the fees or charges would be included because of this subsection in the fees for an individual’s tuition, and 
  (d) any fee or charge for a taxation year that, but for this paragraph, would be included because of this subsection in the fees for the individual’s tuition and that is not required to be paid by 
  (i) all of the institution’s full-time students, where the individual is a full-time student at the institution, and 
  (ii) all of the institution’s part-time students, where the individual is a part-time student at the institution, to the extent that the total for the year of all such fees and charges paid in respect of the individual’s enrolment at the institution exceeds $250. 
  
  ### Ancillary fees and charges for examinations
  
  (4) For the purpose of this section, 
  *fees paid in respect of the occupational, trade or professional examination* of an individual includes ancillary fees and charges, other than fees and charges included in subsection (3), that are paid to an educational institution referred to in subparagraph (1)(a)(i), a professional association, a provincial ministry or other similar institution, in respect of an occupation, trade or professional examination taken by the individual, but does not include any fee or charge to the extent that it is levied in respect of  
  (a) property to be acquired by an individual; 
  (b) the provision of financial assistance to an individual, except to the extent that, if this Act were read without reference to subsection 56(3), the financial assistance would be required to be included in computing the income, and would not be deductible in computing the taxable income, of the individual; 
  (c) the construction, renovation or maintenance of any building or facility; or 
  (d) any fee or charge for a taxation year that, but for this paragraph, would be included because of this subsection in the fees for the individual’s occupational, trade or professional examination and that is not required to be paid by all the individuals taking the occupational, trade or professional examination to the extent that the total for the year of all such fees and charges paid in respect of the individual’s fees for the occupational, trade or professional examination exceeds $250. 
  
  ### Definitions
  
  118.6 (1) For the purposes of sections 63 and 64 and this Subdivision,  
  *designated educational institution* means  
  (a) an educational institution in Canada that is 
  (i) a university, college or other educational institution designated by the lieutenant governor in council of a province as a specified educational institution under the Canada Student Loans Act, designated by an appropriate authority under the Canada Student Financial Assistance Act, or designated, for the purposes of An Act respecting financial assistance for education expenses, R.S.Q, c. A-13.3, by the Minister of the Province of Quebec responsible for the administration of that Act, or  
  (ii) certified by the Minister of Employment and Social Development to be an educational institution providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person’s skills in, an occupation, 
  (b) a university outside Canada at which the individual referred to in the definition 
  *qualifying student* in this subsection was enrolled in a course, of not less than three consecutive weeks duration, leading to a degree, or  
  (c) if the individual referred to in the definition 
  *qualifying student* in this subsection resided, throughout the  year referred to in that definition, in Canada near the boundary between Canada and the United States, an educational institution in the United States to which the individual commuted that is a university, college or other educational institution providing courses at a post-secondary school level; (établissement d’enseignement agréé)   
  *qualifying educational program* means a program of not less than three consecutive weeks duration that provides that each student taking the program spend not less than 10 hours per week on courses or work in the program and, in respect of a program at an institution described in the definition designated educational institution (other than an institution described in subparagraph (a)(ii) of that definition), that is a program that does not consist primarily of research (unless the program leads to a diploma from a college or a Collège d’enseignement général et professionnel, or a bachelor, masters, doctoral or equivalent degree) but, in relation to any particular student, does not include a program if the student receives, from a person with whom the student is dealing at arm’s length, any allowance, benefit, grant or reimbursement for expenses in respect of the program other than  
  (a) an amount received by the student as or on account of a scholarship, fellowship or bursary, or a prize for achievement in a field of endeavour ordinarily carried on by the student, 
  (b) a benefit, if any, received by the student because of a loan made to the student in accordance with the requirements of the Canada Student Loans Act, the Apprentice Loans Act or An Act respecting financial assistance for education expenses, R.S.Q., c. A-13.3, or because of financial assistance given to the student in accordance with the requirements of the Canada Student Financial Assistance Act, or  
  (c) an amount that is received by the student in the year under a program referred to in subparagraph 56(1)(r)(ii) or (iii), a program established under the authority of the Department of Employment and Social Development Act or a prescribed program; (programme de formation admissible)   
  *qualifying student*, for a month in a taxation year, means an individual who,  
  (a) in the month, 
  (i) is enrolled in a qualifying educational program as a full-time student at a designated educational institution, or 
  (ii) is not described in subparagraph (i) and is enrolled at a designated educational institution in a specified educational program that provides that each student in the program spend not less than 12 hours in the month on courses in the program, 
  (b) if requested by the Minister, proves the enrolment by filing with the Minister a certificate in prescribed form issued by the designated educational institution and containing prescribed information, 
  (c) in the case of an individual who is enrolled in a program (other than a program at the post-secondary school level) at a designated educational institution described in subparagraph (a)(i) of the definition designated educational institution or who is enrolled in a program at a designated educational institution described in subparagraph (a)(ii) of that definition,  
  (i) has attained the age of 16 years before the end of the year, and 
  (ii) is enrolled in the program to obtain skills for, or improve the individual’s skills in, an occupation, and 
  (d) in the case of an individual who is enrolled at a designated educational institution described in paragraph (c) of the definition designated educational institution, is enrolled in a program that is at the post-secondary level; (étudiant admissible)   
  *specified educational program* means a program that would be a qualifying educational program if the definition qualifying educational program were read without reference to the words “that provides that each student taking the program spend not less than 10 hours per week on courses or work in the program”. (programme de formation déterminé)  
  (2) and (2.1)  [Repealed, 2016, c. 7, s. 16]  
  
  ### Students eligible for disability tax credit
  
  (3) For the purposes of subparagraph (a)(i) of the definition qualifying student in subsection (1), the reference to “full-time student” is to be read as “student” if  
  (a) an amount may be deducted under section 118.3 in respect of the individual for the year; or 
  (b) the individual has in the year a mental or physical impairment the effects of which on the individual have been certified in writing, to be such that the individual cannot reasonably be expected to be enrolled as a full-time student while so impaired, by a medical doctor, a nurse practitioner or, where the impairment is 
  (i) an impairment of sight, by a medical doctor, a nurse practitioner or an optometrist, 
  (i.1) a speech impairment, by a medical doctor, a nurse practitioner or a speech-language pathologist, 
  (ii) a hearing impairment, by a medical doctor, a nurse practitioner or an audiologist, 
  (iii) an impairment with respect to the individual’s ability in feeding or dressing themself, by a medical doctor, a nurse practitioner or an occupational therapist, 
  (iii.1) an impairment with respect to the individual’s ability in walking, by a medical doctor, a nurse practitioner, an occupational therapist or a physiotherapist, or 
  (iv) an impairment with respect to the individual’s ability in mental functions necessary for everyday life (within the meaning assigned by paragraph 118.4(1)(c.1)), by a medical doctor, a nurse practitioner or a psychologist. 
  
  ### Unused tuition, textbook and education tax credits
  
  118.61 (1) In this section, an individual’s unused tuition, textbook and education tax credits at the end of a taxation year is the amount determined by the formula is the amount determined under this subsection in respect of the individual at the end of the preceding taxation year; is the total of all amounts each of which may be deducted under section 118.5 in computing the individual’s tax payable under this Part for the year; is the lesser of the value of B and the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.07, 118.3 and 118.7); is the amount that the individual may deduct under subsection (2) for the year; and is the tuition tax credit transferred for the year by the individual to the individual’s spouse, common-law partner, parent or grandparent. 
  
  ### Deduction of carryforward
  
  (2) For the purpose of computing an individual’s tax payable under this Part for a taxation year, there may be deducted the lesser of 
  (a) the amount determined under subsection (1) in respect of the individual at the end of the preceding taxation year, and 
  (b) the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.07, 118.3 and 118.7). 
  (3)  [Repealed, 2007, c. 2, s. 24]  
  
  ### Change of appropriate percentage
  
  (4) For the purpose of determining the amount that may be deducted under subsection (2) in computing an individual’s tax payable for a taxation year, in circumstances where the appropriate percentage for the taxation year is different from the appropriate percentage for the preceding taxation year, the individual’s unused tuition, textbook and education tax credits at the end of the preceding taxation year is deemed to be the amount determined by the formula is the appropriate percentage for the current taxation year; is the appropriate percentage for the preceding taxation year; and is the amount that would be the individual’s unused tuition, textbook and education tax credits at the end of the preceding taxation year if this section were read without reference to this subsection. 
  
  ### Credit for interest on student loan
  
  118.62 For the purpose of computing an individual’s tax payable under this Part for a taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the year; and is the total of all amounts (other than any amount paid on account of or in satisfaction of a judgement) each of which is an amount of interest paid in the year (or in any of the five preceding taxation years that are after 1997, to the extent that it was not included in computing a deduction under this section for any other taxation year) by the individual or a person related to the individual on a loan made to, or other amount owing by, the individual under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level.  
  
  ### Credit for EI and QPIP premiums and CPP contributions
  
  118.7 For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount determined by the formula is the appropriate percentage for the year; and is the total of 
  (a) the total of all amounts each of which is an amount payable by the individual as an employee’s premium or a self-employment premium for the year under the Employment Insurance Act, not exceeding the maximum amount of such premiums payable by the individual for the year under that Act,  
  (a.1) the total of all amounts each of which is an amount payable by the individual as an employee’s premium for the year under the Act respecting parental insurance, R.S.Q., c. A-29.011, not exceeding the maximum amount of such premiums payable by the individual for the year under that Act,  
  (a.2) the amount, if any, by which the total of all amounts each of which is an amount payable by the individual in respect of self-employed earnings for the year as a premium under the Act respecting parental insurance, R.S.Q., c. A-29.011, (not exceeding the maximum amount of such premiums payable by the individual for the year under that Act) exceeds the amount deductible under paragraph 60(g) in computing the individual’s income for the year,  
  (b) the total of all amounts each of which is an amount payable by the individual for the year as an employee’s contribution under subsection 8(1) of the Canada Pension Plan or as a like contribution under a 
  *provincial pension plan*, as defined in section 3 of that Act, not exceeding the maximum amount of such contributions payable by the individual for the year under the plan, and  
  (c) the amount by which 
  (i) the total of all amounts each of which is an amount payable by the individual in respect of self-employed earnings for the year as a contribution under the Canada Pension Plan or under a provincial pension plan within the meaning assigned by section 3 of that Act (not exceeding the maximum amount of such contributions payable by the individual for the year under the plan)  exceeds 
  (ii) the amount deductible under paragraph 60(e) in computing the individual’s income for the year. 
  
  ### Transfer of unused credits to spouse or common-law partner
  
  118.8 For the purpose of computing the tax payable under this Part for a taxation year by an individual who, at any time in the year, is a married person or a person who is in a common-law partnership (other than an individual who, by reason of a breakdown of their marriage or common-law partnership, is living separate and apart from the individual’s spouse or common-law partner at the end of the year and for a period of 90 days commencing in the year), there may be deducted an amount determined by the formula is the tuition tax credit transferred for the year by the spouse or common-law partner to the individual; is the total of all amounts each of which is deductible under subsection 118(1), because of paragraph (b.1) of the description of B in that subsection, or subsection 118(2) or (3) or 118.3(1) in computing the spouse’s or common-law partner’s tax payable under this Part for the year; and is the amount, if any, by which 
  (a) the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under subsection 118(1) because of paragraph (c) of the description of B in that subsection, under subsection 118(10) or under any of sections 118.01 to 118.07, 118.3, 118.61 and 118.7) exceeds 
  (b) the lesser of 
  (i) the total of all amounts that may be deducted under section 118.5 in computing the spouse’s or common-law partner’s tax payable under this Part for the year, and 
  (ii) the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under any of sections 118 to 118.07, 118.3, 118.61 and 118.7). 
  
  ### Tuition tax credit transferred
  
  118.81 In this Subdivision, the tuition tax credit transferred for a taxation year by a person to an individual is the lesser of 
  (a) the amount determined by the formula is the lesser of 
  (i) the total of all amounts that may be deducted under section 118.5 in computing the person’s tax payable under this Part for the year, and 
  (ii) the amount determined by the formula is the appropriate percentage for the taxation year, and is $5,000. is the amount that would be the person’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under any of sections 118 to 118.07, 118.3, 118.61 and 118.7), and 
  (b) the amount for the year that the person designates in writing for the purpose of section 118.8 or 118.9. 
  
  ### Transfer to parent or grandparent
  
  118.9 If for a taxation year a parent or grandparent of an individual (other than an individual in respect of whom the individual’s spouse or common-law partner deducts an amount under section 118 or 118.8 for the year) is the only person designated in writing by the individual for the year for the purpose of this section, there may be deducted in computing the tax payable under this Part for the year by the parent or grandparent, as the case may be, the tuition tax credit transferred for the year by the individual to the parent or grandparent, as the case may be. 
  
  ### Part-year residents
  
  118.91 Notwithstanding sections 118 to 118.9, where an individual is resident in Canada throughout part of a taxation year and throughout another part of the year is non-resident, for the purpose of computing the individual’s tax payable under this Part for the year, 
  (a) the amount deductible for the year under each such provision in respect of the part of the year that is not included in the period or periods referred to in paragraph 118.91(b) shall be computed as though such part were the whole taxation year; and 
  (b) the individual shall be allowed only 
  (i) such of the deductions permitted under subsections 118(3) and (10) and sections 118.01 to 118.2, 118.5, 118.62 and 118.7 as can reasonably be considered wholly applicable to the period or periods in the year throughout which the individual is resident in Canada, computed as though that period or those periods were the whole taxation year, and 
  (ii) such part of the deductions permitted under sections 118 (other than subsections 118(3) and (10)), 118.3, 118.8 and 118.9 as can reasonably be considered applicable to the period or periods in the year throughout which the individual is resident in Canada, computed as though that period or those periods were the whole taxation year, except that the amount deductible for the year by the individual under each such provision shall not exceed the amount that would have been deductible under that provision had the individual been resident in Canada throughout the year. 
  
  ### Ordering of credits
  
  118.92 In computing an individual’s tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.04, 118.041, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.9, 118.8, 118.2, 118.1, 118.62 and 121. 
  
  ### Credits in separate returns
  
  118.93 If a separate return of income with respect to a taxpayer is filed under subsection 70(2), 104(23) or 150(4) for a particular period and another return of income under this Part with respect to the taxpayer is filed for a period ending in the calendar year in which the particular period ends, for the purpose of computing the tax payable under this Part by the taxpayer in those returns, the total of all deductions claimed in all those returns under any of subsections 118(3) and (10) and sections 118.01 to 118.7 and 118.9 shall not exceed the total that could be deducted under those provisions for the year with respect to the taxpayer if no separate returns were filed under any of subsections 70(2), 104(23) and 150(4). 
  
  ### Tax payable by non-residents (credits restricted)
  
  118.94 Sections 118 to 118.07 and 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 do not apply for the purpose of computing the tax payable under this Part for a taxation year by an individual who at no time in the year is resident in Canada unless all or substantially all the individual’s income for the year is included in computing the individual’s taxable income earned in Canada for the year. 
  
  ### Credits in year of bankruptcy
  
  118.95 Notwithstanding sections 118 to 118.9, for the purpose of computing an individual’s tax payable under this Part for a taxation year that ends in a calendar year in which the individual becomes bankrupt, the individual shall be allowed only 
  (a) such of the deductions as the individual is entitled to under any of subsections 118(3) and (10) and sections 118.01 to 118.2, 118.5, 118.62 and 118.7, as can reasonably be considered wholly applicable to the taxation year, and 
  (b) such part of the deductions as the individual is entitled to under any of sections 118 (other than subsections 118(3) and (10)), 118.3, 118.8 and 118.9 as can reasonably be considered applicable to the taxation year, except that the total of the amounts so deductible for all taxation years of the individual in the calendar year under any of those provisions shall not exceed the amount that would have been deductible under that provision in respect of the calendar year if the individual had not become bankrupt. 
  
  ### Former resident — credit for tax paid
  
  119 If at any particular time an individual was deemed by subsection 128.1(4) to have disposed of a capital property that was a taxable Canadian property of the individual throughout the period that began at the particular time and that ends at the first time, after the particular time, at which the individual disposes of the property, there may be deducted in computing the individual’s tax payable under this Part for the taxation year that includes the particular time the lesser of 
  (a) that proportion of the individual’s tax for the year otherwise payable under this Part (within the meaning assigned by paragraph (a) of the definition 
  *tax for the year otherwise payable under this Part* in subsection 126(7)) that  
  (i) the individual’s taxable capital gain from the disposition of the property at the particular time is of 
  (ii) the amount determined under paragraph 114(a) in respect of the individual for the year, and 
  (b) that proportion of the individual’s tax payable under Part XIII in respect of dividends received during the period by the individual in respect of the property and amounts deemed under Part XIII to have been paid during the period to the individual as dividends from corporations resident in Canada, to the extent that the amounts can reasonably be considered to relate to the property, that 
  (i) the amount by which the individual’s loss from the disposition of the property at the end of the period is reduced by subsection 40(3.7) is of 
  (ii) the total amount of those dividends. 
  119.1  [Repealed, 2016, c. 7, s. 25]  
  
  ### Income not earned in a province
  
  120 (1) There shall be added to the tax otherwise payable under this Part by an individual for a taxation year the amount that bears the same relation to 48% of the tax otherwise payable under this Part by the individual for the year that 
  (a) the individual’s income for the year, other than the individual’s income earned in the year in a province, bears to 
  (b) the individual’s income for the year. 
  
  ### Amount deemed paid in prescribed manner
  
  (2) Each individual is deemed to have paid, in prescribed manner and on prescribed dates, on account of the individual’s tax under this Part for a taxation year an amount that bears the same relation to 3% of the tax otherwise payable under this Part by the individual for the year that 
  (a) the individual’s income earned in the year in a province that, on January 1, 1973, was a province providing schooling allowances within the meaning of the Youth Allowances Act, chapter Y-1 of the Revised Statutes of Canada, 1970,  bears to 
  (b) the individual’s income for the year. 
  (2.1)  [Repealed, 2001, c. 17, s. 103]  
  
  ### Amount deemed paid
  
  (2.2) An individual is deemed to have paid on the last day of a taxation year, on account of the individual’s tax under this Part for the year, an amount equal to the individual’s income tax payable for the year to an Aboriginal government pursuant to a law of that government made in accordance with a tax sharing agreement between that government and the Government of Canada. 
  
  ### Definition of 
  *the individual’s income for the year* 
  
  (3) For the purpose of this section, 
  *the individual’s income for the year* means  
  (a) if section 114 applies to the individual in respect of the year, the amount determined under paragraph 114(a) in respect of the individual for the year; 
  (b) if the individual was non-resident throughout the year, the individual’s taxable income earned in Canada for the year determined without reference to paragraphs 115(1)(d) to (f); 
  (c) in the case of an individual who is a specified individual in relation to the year, the individual’s income for the year computed without reference to paragraph 20(1)(ww); and 
  (d) in the case of a SIFT trust, the amount, if any, by which its income for the year determined without reference to this paragraph exceeds its taxable SIFT trust distributions (as defined in subsection 122(3)) for the year. 
  
  ### Definitions
  
  (4) In this section,  
  *income earned in the year in a province* means amounts determined under rules prescribed for the purpose of regulations made on the recommendation of the Minister of Finance; (revenu gagné au cours de l’année dans une province)   
  *tax otherwise payable under this Part* by an individual for a taxation year means the total of  
  (a) the greater of 
  (i) the individual”s minimum amount for the year determined under section 127.51, and 
  (ii) the amount that, but for this section, would be the individual’s tax payable under this Part for the year if this Part were read without reference to 
  (A) subsection 117(2.1), section 119, subsection 120.4(2) and sections 126, 127, 127.4 and 127.41, and 
  (B) where the individual is a specified individual in relation to the year, section 121 in its application to dividends included in computing the individual’s split income for the year, and 
  (b) where the individual is a specified individual in relation to the year, the amount, if any, by which 
  (i) the highest individual percentage for the year multiplied by the individual’s split income for the year exceeds 
  (ii) the total of all amounts each of which is an amount that may be deducted under section 121 and that can reasonably be considered to be in respect of a dividend included in computing the individual’s split income for the year. ( impôt qu’il est par ailleurs tenu de payer en vertu de la présente partie ou impôt payable par ailleurs en vertu de la présente partie)  
  120.1  [Repealed, 2000, c. 19, s. 28]  
  
  ### Minimum tax carry-over
  
  120.2 (1) There may be deducted from the amount that, but for this section, section 120 and subsection 120.4(2), would be an individual’s tax payable under this Part for a particular taxation year such amount as the individual claims not exceeding the lesser of 
  (a) the portion of the total of the individual’s additional taxes determined under subsection 120.2(3) for the 7 taxation years immediately preceding the particular year that was not deducted in computing the individual’s tax payable under this Part for a taxation year preceding the particular year, and 
  (b) the amount, if any, by which 
  (i) the amount that, but for this section, section 120 and subsection 120.4(2), would be the individual’s tax payable under this Part for the particular year if the individual were not entitled to any deduction under any of sections 126, 127 and 127.4 exceeds 
  (ii) the individual’s minimum amount for the particular year determined under section 127.51. 
  
  ### Additional tax determined
  
  (3) For the purposes of subsection 120.2(1), additional tax of an individual for a taxation year is the amount, if any, by which 
  (a) the individual’s minimum amount for the year determined under section 127.51 exceeds the total of 
  (b) the amount that, if this Act were read without reference to section 120, would be the individual’s tax payable under this Part for the year if the individual were not entitled to any deduction under any of sections 126, 127 and 127.4, and 
  (c) that proportion of the amount, if any, by which 
  (i) the individual’s special foreign tax credit for the year determined under section 127.54 exceeds 
  (ii) the total of all amounts deductible under section 126 from the individual’s tax for the year that 
  (iii) the amount of the individual’s foreign taxes for the year within the meaning assigned by subsection 127.54(1) is of 
  (iv) the amount that would be the individual’s foreign taxes for the year within the meaning assigned by subsection 127.54(1) if the definition 
  *foreign taxes* in that subsection were read without reference to “2/3 of”.  
  
  ### Where subsection (1) does not apply
  
  (4) Subsection (1) does not apply in respect of an individual’s return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(f) or subsection 150(4). 
  
  ### CPP/QPP disability benefits for previous years
  
  120.3 There shall be added in computing an individual’s tax payable under this Part for a particular taxation year the total of all amounts each of which is the amount, if any, by which 
  (a) the amount that would have been the tax payable under this Part by the individual for a preceding taxation year if that portion of any amount not included in computing the individual’s income for the particular year because of subsection 56(8) and that relates to the preceding year had been included in computing the individual’s income for the preceding year exceeds 
  (b) the tax payable under this Part by the individual for the preceding year. 
  
  ## Lump-sum Payments 
  
  ### Definitions
  
  120.31 (1) The definitions in subsection 110.2(1) apply in this section. 
  
  ### Addition to tax payable
  
  (2) There shall be added in computing an individual’s tax payable under this Part for a particular taxation year the total of all amounts each of which is the amount, if any, by which 
  (a) the individual’s notional tax payable for an eligible taxation year to which a specified portion of a qualifying amount received by the individual relates and in respect of which an amount is deducted under section 110.2 in computing the individual’s taxable income for the particular year exceeds 
  (b) the individual’s tax payable under this Part for the eligible taxation year. 
  
  ### Notional tax payable
  
  (3) For the purpose of subsection (2), an individual’s notional tax payable for an eligible taxation year, calculated for the purpose of computing the individual’s tax payable under this Part for a taxation year (in this subsection referred to as “the year of receipt”) in which the individual received a qualifying amount, is the total of 
  (a) the amount, if any, by which 
  (i) the amount that would be the individual’s tax payable under this Part for the eligible taxation year if the total of all amounts, each of which is the specified portion, in relation to the eligible taxation year, of a qualifying amount received by the individual before the end of the year of receipt, were added in computing the individual’s taxable income for the eligible taxation year exceeds 
  (ii) the total of all amounts each of which is an amount, in respect of a qualifying amount received by the individual before the year of receipt, that was included because of this paragraph in computing the individual’s notional tax payable under this Part for the eligible taxation year, and 
  (b) if the eligible taxation year ended before the taxation year preceding the year of receipt, an amount equal to the amount that would be calculated as interest payable on the amount, if any, by which the amount determined under paragraph (a) in respect of the eligible taxation year exceeds the taxpayer’s tax payable under this Part for that year, if the amount that would be calculated as interest payable on that excess were calculated 
  (i) for the period that began on May 1 of the year following the eligible taxation year and that ended immediately before the year of receipt, and 
  (ii) at the prescribed rate that is applicable for the purpose of subsection 164(3) with respect to the period. 
  
  ## Tax on Split Income 
  
  ### Definitions
  
  120.4 (1) The definitions in this subsection apply in this section.  
  *arm’s length capital*, of a specified individual, means property of the individual if the property, or property for which it is a substitute, was not  
  (a) acquired as income from, or a taxable capital gain or profit from the disposition of, another property that was derived directly or indirectly from a related business in respect of the specified individual; 
  (b) borrowed by the specified individual under a loan or other indebtedness; or 
  (c) transferred, directly or indirectly by any means whatever, to the specified individual from a person who was related to the specified individual (other than as a consequence of the death of a person). ( capital indépendant)   
  *excluded amount*, in respect of an individual for a taxation year, means an amount that is the individual’s income for the year from, or the individual’s taxable capital gain or profit for the year from the disposition of, a property to the extent that the amount  
  (a) if the individual has not attained the age of 24 years before the year, is from a property that was acquired by, or for the benefit of, the individual as a consequence of the death of a person who is 
  (i) a parent of the individual, or 
  (ii) any person, if the individual is 
  (A) enrolled as a full-time student during the year at a post-secondary educational institution (as defined in subsection 146.1(1)), or  
  (B) an individual in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year; 
  (b) is from a property acquired by the individual under a transfer described in subsection 160(4); 
  (c) is a taxable capital gain that arises because of subsection 70(5); 
  (d) is a taxable capital gain for the year from the disposition by the individual of property that is, at the time of the disposition, qualified farm or fishing property or qualified small business corporation shares (as those terms are defined in subsection 110.6(1)), unless the amount would be deemed to be a dividend under subsection 120.4(4) or (5) if this definition were read without reference to this paragraph;  
  (e) if the individual has attained the age of 17 years before the year, is 
  (i) not derived directly or indirectly from a related business in respect of the individual for the year, or 
  (ii) derived directly or indirectly from an excluded business of the individual for the year; 
  (f) if the individual has attained the age of 17 years but not the age of 24 years before the year, is 
  (i) a safe harbour capital return of the individual, or 
  (ii) a reasonable return in respect of the individual, having regard only to the contributions of arm’s length capital by the individual; or 
  (g) if the individual has attained the age of 24 years before the year, is 
  (i) income from, or a taxable capital gain from the disposition of, excluded shares of the individual, or 
  (ii) a reasonable return in respect of the individual. ( montant exclu)   
  *excluded business*, of a specified individual for a taxation year, means a business if the specified individual is actively engaged on a regular, continuous and substantial basis in the activities of the business in either  
  (a) the taxation year, except in respect of an amount described in paragraph (e) of the definition split income ; or  
  (b) any five prior taxation years of the specified individual. ( entreprise exclue)   
  *excluded shares*, of a specified individual at any time, means shares of the capital stock of a corporation owned by the specified individual if  
  (a) the following conditions are met: 
  (i) less than 90% of the business income of the corporation for the last taxation year of the corporation that ends at or before that time (or, if no such taxation year exists, for the taxation year of the corporation that includes that time) was from the provision of services, and 
  (ii) the corporation is not a professional corporation; 
  (b) immediately before that time, the specified individual owns shares of the capital stock of the corporation that 
  (i) give the holders thereof 10% or more of the votes that could be cast at an annual meeting of the shareholders of the corporation, and 
  (ii) have a fair market value of 10% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and 
  (c) all or substantially all of the income of the corporation for the relevant taxation year in subparagraph (a)(i) is income that is not derived, directly or indirectly, from one or more related businesses in respect of the specified individual other than a business of the corporation. ( actions exclues)   
  *reasonable return*, in respect of a specified individual for a taxation year, means a particular amount derived directly or indirectly from a related business in respect of the specified individual that  
  (a) would, if this subsection were read without reference to subparagraph (f)(ii) or (g)(ii) of the definition excluded amount, be an amount described in the definition split income in respect of the specified individual for the year; and  
  (b) is reasonable having regard to the following factors relating to the relative contributions of the specified individual, and each source individual in respect of the specified individual, in respect of the related business: 
  (i) the work they performed in support of the related business, 
  (ii) the property they contributed, directly or indirectly, in support of the related business, 
  (iii) the risks they assumed in respect of the related business, 
  (iv) the total of all amounts that were paid or that became payable, directly or indirectly, by any person or partnership to, or for the benefit of, them in respect of the related business, and 
  (v) such other factors as may be relevant. ( rendement raisonnable)   
  *related business*, in respect of a specified individual for a taxation year, means  
  (a) a business carried on by 
  (i) a source individual in respect of the specified individual at any time in the year, or 
  (ii) a partnership, corporation or trust if a source individual in respect of the specified individual at any time in the year is actively engaged on a regular basis in the activities of the partnership, corporation or trust related to earning income from the business; 
  (b) a business of a particular partnership, if a source individual in respect of the specified individual at any time in the year has an interest — including directly or indirectly — in the particular partnership; and 
  (c) a business of a corporation, if the following conditions are met at any time in the year: 
  (i) a source individual in respect of the specified individual owns 
  (A) shares of the capital stock of the corporation, or 
  (B) property that derives, directly or indirectly, all or part of its fair market value from shares of the capital stock of the corporation, and 
  (ii) it is the case that is the total fair market value of all of the issued and outstanding shares of the capital stock of the corporation, is the total fair market value of property described in clause (i)(A), and is the portion of the total fair market value of property described in clause (i)(B) that is derived from shares of the capital stock of the corporation. ( entreprise liée)   
  *safe harbour capital return*, of a specified individual for a taxation year, means an amount that does not exceed the amount determined by the formula  is the rate equal to the highest rate of interest prescribed under paragraph 4301(c) of the Income Tax Regulations in effect for a quarter in the year; and  is the total of all amounts each of which is determined by the formula is the fair market value of property contributed by the specified individual in support of a related business at the time it was contributed, is the number of days in the year that the property (or property substituted for it) is used in support of the related business and has not directly or indirectly, in any manner whatever, been returned to the specified individual, and is the number of days in the year. ( rendement exonéré)   
  *source individual*, in respect of a specified individual for a taxation year, means an individual (other than a trust) who, at any time in the year, is  
  (a) resident in Canada; and 
  (b) related to the specified individual. ( particulier source)   
  *specified individual*, for a taxation year, means an individual (other than a trust) who  
  (a) is resident in Canada 
  (i) in the case where the individual dies in the year, immediately before the death, and 
  (ii) in any other case, at the end of the year; and 
  (b) if the individual has not attained the age of 17 years before the year, has a parent resident in Canada at any time in the year. ( particulier déterminé)   
  *split income*, of a specified individual for a taxation year, means the total of all amounts (other than excluded amounts) each of which is  
  (a) an amount required to be included in computing the individual’s income for the year 
  (i) in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation), or 
  (ii) because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange), 
  (b) a portion of an amount included because of the application of paragraph 96(1)(f) in computing the individual’s income for the year, to the extent that the portion 
  (i) is not included in an amount described in paragraph (a), and 
  (ii) can reasonably be considered to be income derived directly or indirectly from 
  (A) one or more related businesses in respect of the individual for the year, or 
  (B) the rental of property by a particular partnership or trust, if a person who is related to the individual at any time in the year 
  (I) is actively engaged on a regular basis in the activities of the particular partnership or trust related to the rental of property, or 
  (II) in the case of a particular partnership, has an interest in the particular partnership directly or indirectly through one or more other partnerships, 
  (c) a portion of an amount included because of the application of subsection 104(13) or 105(2) in respect of a trust (other than a mutual fund trust or a trust that is deemed to be in existence by subsection 143(1)) in computing the individual’s income for the year, to the extent that the portion 
  (i) is not included in an amount described in paragraph (a), and 
  (ii) can reasonably be considered 
  (A) to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation), 
  (B) to arise because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange), 
  (C) to be income derived directly or indirectly from one or more related businesses in respect of the individual for the year, or 
  (D) to be income derived from the rental of property by a particular partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the particular partnership or trust related to the rental of property, 
  (d) an amount included in computing the individual’s income for the year to the extent that the amount is in respect of a debt obligation that 
  (i) is of a corporation (other than a mutual fund corporation or a corporation shares of a class of the capital stock of which are listed on a designated stock exchange), partnership or trust (other than a mutual fund trust), and 
  (ii) is not 
  (A) described in paragraph (a) of the definition fully exempt interest in subsection 212(3),  
  (B) listed or traded on a public market, or 
  (C) a deposit, standing to the credit of the individual, 
  (I) within the meaning assigned by the Canada Deposit Insurance Corporation Act, or  
  (II) with a credit union or a branch in Canada of a bank, and 
  (e) an amount in respect of a property, to the extent that 
  (i) the amount 
  (A) is a taxable capital gain, or a profit, of the individual for the year from the disposition after 2017 of the property, or 
  (B) is included under subsection 104(13) or 105(2) in computing the individual’s income for the year and can reasonably be considered to be attributable to a taxable capital gain, or a profit, of any person or partnership for the year from the disposition after 2017 of the property, and 
  (ii) the property is 
  (A) a share of the capital stock of a corporation (other than a share of a class listed on a designated stock exchange or a share of the capital stock of a mutual fund corporation), or 
  (B) a property in respect of which the following conditions are met: 
  (I) the property is 
  1 an interest in a partnership, 
  2 an interest as a beneficiary under a trust (other than a mutual fund trust or a trust that is deemed to be in existence by subsection 143(1)), or 
  3 a debt obligation (other than a debt obligation described in any of clauses (d)(ii)(A) to (C)), and 
  (II) either 
  1 in respect of the property an amount is included in the individual’s split income for the year or an earlier taxation year, or 
  2 all or any part of the fair market value of the property, immediately before the disposition referred to in clause (i)(A) or (B), as the case may be, is derived, directly or indirectly, from a share described in clause (A). ( revenu fractionné)  
  
  ### Additional rules — specified individual
  
  (1.1) For the purpose of applying this section in respect of a specified individual in respect of a taxation year, 
  (a) an individual is deemed to be actively engaged on a regular, continuous and substantial basis in the activities of a business in a taxation year of the individual if the individual works in the business at least an average of 20 hours per week during the portion of the year in which the business operates; 
  (b) if an amount would — if this section were read without reference to this paragraph — be split income of a specified individual who has attained the age of 17 years before the year in respect of a property, and that property was acquired by, or for the benefit of, the specified individual as a consequence of the death of another person, then 
  (i) for the purpose of applying paragraph (b) of the definition reasonable return in subsection (1), to the extent that the particular amount referred to in that paragraph is in respect of the property, then the factors referred to in that paragraph in respect of the other person are to be included for the purpose of determining a reasonable return in respect of the individual,  
  (ii) for the purposes of this subparagraph and the definition excluded business in subsection (1), if the other person was actively engaged on a regular, substantial and continuous basis in the activities of a business throughout five previous taxation years, then the individual is deemed to have been actively engaged on a regular, substantial and continuous basis in the business throughout those five years, and  
  (iii) for the purpose of applying paragraph (g) of the definition excluded amount in subsection (1) in respect of that property, the individual is deemed to have attained the age of 24 years before the year if the other person had attained the age of 24 years before the year;  
  (c) an amount that is a specified individual’s income for a taxation year from, or the specified individual’s taxable capital gain or profit for the year from the disposition of, a property is deemed to be an excluded amount in respect of the specified individual for the taxation year if 
  (i) the following conditions are met: 
  (A) the amount would be an excluded amount in respect of the specified individual’s spouse or common-law partner for the year, if the amount were included in computing the spouse or common-law partner’s income for the year, and 
  (B) the spouse or common-law partner has attained the age of 64 years before the year, or 
  (ii) the amount would have been an excluded amount in respect of an individual who was, immediately before their death, the specified individual’s spouse or common-law partner, if the amount were included in computing the spouse or common-law partner’s income for their last taxation year (determined as if this section applies in respect of that year); 
  (d) for greater certainty, an amount derived directly or indirectly from a business includes 
  (i) an amount that 
  (A) is derived from the provision of property or services to, or in support of, the business, or 
  (B) arises in connection with the ownership or disposition of an interest in the person or partnership carrying on the business, and 
  (ii) an amount derived from an amount described in this paragraph; and 
  (e) for the purposes of this section, an individual is deemed not to be related to their spouse or common-law partner at any time in a year if, at the end of the year, the individual is living separate and apart from their spouse or common-law partner because of a breakdown of their marriage or common-law partnership. 
  
  ### Tax on split income
  
  (2) There shall be added to a specified individual’s tax payable under this Part for a taxation year the highest individual percentage for the year multiplied by the individual’s split income for the year. 
  
  ### Tax payable by a specified individual
  
  (3) Notwithstanding any other provision of this Act, if an individual is a specified individual for a taxation year, the individual’s tax payable under this Part for the year shall not be less than the amount, if any, determined by the formula is the amount added under subsection (2) to the individual’s tax payable under this Part for the year; is the amount that is the lesser of the amounts determined under paragraphs 117(2.1)(a) and (b) for the individual for the year; is the amount deducted under section 118.3 in computing the individual’s tax payable under this Part for the year; and is the total of all amounts each of which is the amount that 
  (a) may be deducted under section 121 or 126 in computing the individual’s tax payable under this Part for the year, and 
  (b) can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the year. 
  
  ### Taxable capital gain
  
  (4) If a specified individual who has not attained the age of 17 years before a taxation year would have for the taxation year, if this Act were read without reference to this section, a taxable capital gain (other than an excluded amount) from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, then the amount of that taxable capital gain is deemed not to be a taxable capital gain and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend. 
  
  ### Taxable capital gain of trust
  
  (5) If a specified individual who has not attained the age of 17 years before a taxation year would be, if this Act were read without reference to this section, required under subsection 104(13) or 105(2) to include an amount in computing the specified individual’s income for the taxation year, then to the extent that the amount can reasonably be considered to be attributable to a taxable capital gain (other than an excluded amount) of a trust from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, subsections 104(13) and 105(2) do not apply in respect of the amount and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend. 
  
  ### Deduction for taxable dividends
  
  121 There may be deducted from the tax otherwise payable under this Part by an individual for a taxation year the total of 
  (a) the product of the amount, if any, that is required by subparagraph 82(1)(b)(i) to be included in computing the individual’s income for the year multiplied by 
  (i) for the 2018 taxation year, 8/11, and 
  (ii) for taxation years after 2018, 9/13, and 
  (b) the product of the amount, if any, that is required by subparagraph 82(1)(b)(ii) to be included in computing the individual’s income for the year multiplied by 
  (i) for the 2009 taxation year, 11/18, 
  (ii) for the 2010 taxation year, 10/17, 
  (iii) for the 2011 taxation year, 13/23, and 
  (iv) for taxation years after 2011, 6/11. 
  
  ### Tax payable by trust
  
  122 (1) Notwithstanding section 117, the tax payable under this Part for a taxation year by a trust (other than a graduated rate estate or qualified disability trust) is the total of 
  (a) the highest individual percentage for the taxation year multiplied by the trust’s amount taxable for the taxation year, 
  (b) if the trust is a SIFT trust for the taxation year, the positive or negative amount determined by the formula is the positive or negative decimal fraction determined by the formula is the net corporate income tax rate in respect of the SIFT trust for the taxation year, is the provincial SIFT tax rate of the SIFT trust for the taxation year, and is the decimal fraction equivalent of the percentage rate of tax provided in paragraph (a) for the taxation year, and is the SIFT trust’s taxable SIFT trust distributions for the taxation year, and 
  (c) if subsection (2) applies to the trust for the taxation year, the amount determined by the formula is the amount that would be determined for B for the year if 
  (i) the rate of tax payable under this Part by the trust for each taxation year referred to in the description of B were the highest individual percentage for the taxation year, and 
  (ii) the trust’s taxable income for a particular taxation year referred to in the description of B were reduced by the total of 
  (A) the amount, if any, that was paid or distributed in satisfaction of all or part of an individual’s interest as a beneficiary under the trust if 
  (I) the individual was an electing beneficiary of the trust for the particular year, 
  (II) the payment or distribution can reasonably be considered to be made out of that taxable income, and 
  (III) the payment or distribution was made in a taxation year referred to in the description of B, 
  (B) the amount that is the portion of the tax payable under this Part by the trust for the particular year that can reasonably be considered to relate to the amount determined under clause (A), and 
  (C) the amount that is the portion of the tax payable, under the law of the province in which the trust is resident for the particular year, that can reasonably be considered to relate to the amount determined under clause (A), is the total of all amounts each of which is the amount of tax payable under this Part by the trust for a taxation year that precedes the year if that preceding taxation year is 
  (i) the later of 
  (A) the first taxation year for which the trust was a qualified disability trust, and 
  (B) the last taxation year, if any, for which subsection (2) applied to the trust, or 
  (ii) a taxation year that ends after the taxation year described in subparagraph (i), and is the total of all amounts each of which is an amount determined for clause (ii)(B) of the description of A in determining the amount for A for the year. 
  
  ### Credits available to trusts
  
  (1.1) No deduction may be made under this Subdivision (other than section 118.1, 120.2 or 121) in computing the tax payable by a trust for a taxation year. 
  
  ### Qualified disability trust — application of (1)(c)
  
  (2) This subsection applies to a trust for a particular taxation year if the trust was a qualified disability trust for a preceding taxation year and 
  (a) none of the beneficiaries under the trust at the end of the particular year was an electing beneficiary of the trust for a preceding year; 
  (b) the particular year ended immediately before the trust ceased to be resident in Canada; or 
  (c) an amount is paid or distributed in the particular year to a beneficiary under the trust in satisfaction of all or part of the beneficiary’s interest in the trust unless 
  (i) the beneficiary is an electing beneficiary of the trust for the particular year or a preceding year, 
  (ii) the amount is deducted under paragraph 104(6)(b) in computing the trust’s income for the particular year, or 
  (iii) the amount is paid or distributed in satisfaction of a right to enforce payment of an amount that was deducted under paragraph 104(6)(b) in computing the trust’s income for a preceding year. 
  
  ### Definitions
  
  (3) The following definitions apply in this section.  
  *beneficiary*, under a trust, includes a person beneficially interested in the trust. (bénéficiaire)   
  *electing beneficiary*, for a taxation year of a qualified disability trust, means a beneficiary under the trust that for the year  
  (a) makes an election described in clause (a)(iii)(A) of the definition 
  *qualified disability trust* in this subsection; and  
  (b) is described in paragraph (b) of that definition. ( bénéficiaire optant)   
  *non-deductible distributions amount* for a taxation year has the meaning assigned by subsection 104(16). (montant de distribution non déductible)   
  *qualified disability trust*, for a taxation year (in this definition referred to as the “trust year”), means a trust, if  
  (a) the trust 
  (i) is, at the end of the trust year, a testamentary trust that arose on and as a consequence of a particular individual’s death, 
  (ii) is resident in Canada for the trust year, and 
  (iii) includes in its return of income under this Part for the trust year 
  (A) an election, made jointly with one or more beneficiaries under the trust in prescribed form, to be a qualified disability trust for the trust year, and 
  (B) the Social Insurance Number of each of those beneficiaries; 
  (b) each of those beneficiaries is an individual, named as a beneficiary by the particular individual in the instrument under which the trust was created, 
  (i) in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary year”) in which the trust year ends, and 
  (ii) who does not jointly elect with any other trust, for a taxation year of the other trust that ends in the beneficiary year, to be a qualified disability trust; and 
  (c) subsection (2) does not apply to the trust for the trust year. ( fiducie admissible pour personne handicapée)   
  *taxable SIFT trust distributions*, of a SIFT trust for a taxation year, means the lesser of  
  (a) its amount taxable for the taxation year, and 
  (b) the amount determined by the formula is its non-deductible distributions amount for the taxation year, is the net corporate income tax rate in respect of the SIFT trust for the taxation year, and is the provincial SIFT tax rate of the SIFT trust for the taxation year. ( montant de distribution imposable)  
  
  ### Definitions
  
  122.1 (1) The following definitions apply in this section and in sections 104 and 122.  
  *eligible resale property*, of an entity, means real or immovable property (other than capital property) of the entity  
  (a) that is contiguous to a particular real or immovable property that is capital property or eligible resale property, held by 
  (i) the entity, or 
  (ii) another entity affiliated with the entity; and 
  (b) the holding of which is ancillary to the holding of the particular property. ( bien de revente admissible)   
  *entity* means a corporation, trust or partnership. (entité)   
  *equity*, of an entity, means  
  (a) if the entity is a corporation, a share of the capital stock of the corporation; 
  (b) if the entity is a trust, an income or capital interest in the trust; 
  (c) if the entity is a partnership, an interest as a member of the partnership; 
  (d) a liability of the entity (and, for purposes of the definition 
  *publicly-traded liability* in this section, a security of the entity that is a liability of another entity) if  
  (i) the liability is convertible into, or exchangeable for, equity of the entity or of another entity, or 
  (ii) any amount paid or payable in respect of the liability is contingent or dependent on the use of or production from property, or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation, or to income or capital paid or payable to any member of a partnership or beneficiary under a trust; and 
  (e) a right to, or to acquire, anything described in this paragraph and any of paragraphs (a) to (d). ( capitaux propres)   
  *equity value*, of an entity at any time, means the total fair market value at that time of  
  (a) if the entity is a corporation, all of the issued and outstanding shares of the capital stock of the corporation; 
  (b) if the entity is a trust, all of the income or capital interests in the trust; or 
  (c) if the entity is a partnership, all of the interests in the partnership. ( valeur des capitaux propres)   
  *excluded subsidiary entity*, for a taxation year, means an entity none of the equity of which is at any time in the taxation year  
  (a) listed or traded on a stock exchange or other public market; nor 
  (b) held by any person or partnership other than 
  (i) a real estate investment trust, 
  (ii) a taxable Canadian corporation, 
  (iii) a SIFT trust (determined without reference to subsection (2)), 
  (iv) a SIFT partnership (determined without reference to subsection 197(8)), 
  (v) a person or partnership that does not have, in connection with the holding of a security of the entity, property the value of which is determined, all or in part, by reference to a security that is listed or traded on a stock exchange or other public market, or 
  (vi) an excluded subsidiary entity for the taxation year. ( filiale exclue)   
  *gross REIT revenue*, of an entity for a taxation year, means the amount, if any, by which the total of all amounts received or receivable in the year (depending on the method regularly followed by the entity in computing the entity’s income) by the entity exceeds the total of all amounts each of which is the cost to the entity of a property disposed of in the year. (revenu brut de FPI)   
  *investment*, in a trust or partnership,  
  (a) means 
  (i) a property that is a security of the trust or partnership, or 
  (ii) a right which may reasonably be considered to replicate a return on, or the value of, a security of the trust or partnership; but 
  (b) does not include 
  (i) an unaffiliated publicly-traded liability of the trust or partnership, nor 
  (ii) regulated innovative capital. ( placement)   
  *non-portfolio earnings*, of a SIFT trust for a taxation year, means the total of  
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is the SIFT trust’s income for the taxation year from a business carried on by it in Canada or from a non-portfolio property, other than income that is a taxable dividend received by the SIFT trust, exceeds 
  (ii) the total of all amounts each of which is the SIFT trust’s loss for the taxation year from a business carried on by it in Canada or from a non-portfolio property, and 
  (b) the amount, if any, by which 
  (i) the total of 
  (A) all taxable capital gains of the SIFT trust from dispositions of non-portfolio properties during the taxation year, and 
  (B) one-half of the total of all amounts each of which is deemed under subsection 131(1) to be a capital gain of the SIFT trust for the taxation year in respect of a non-portfolio property of the SIFT trust for the taxation year exceeds 
  (ii) the total of the allowable capital losses of the SIFT trust for the taxation year from dispositions of non-portfolio properties during the taxation year. ( gains hors portefeuille)   
  *non-portfolio property*, of a particular entity for a taxation year, means a property, held by the particular entity at any time in the taxation year, that is  
  (a) a security of a subject entity (other than a portfolio investment entity), if at that time the particular entity holds 
  (i) securities of the subject entity that have a total fair market value that is greater than 10% of the equity value of the subject entity, or 
  (ii) securities of the subject entity that, together with all the securities that the particular entity holds of entities affiliated with the subject entity, have a total fair market value that is greater than 50% of the equity value of the particular entity; 
  (b) a Canadian real, immovable or resource property, if at any time in the taxation year the total fair market value of all properties held by the particular entity that are Canadian real, immovable or resource properties is greater than 50% of the equity value of the particular entity; or 
  (c) a property that the particular entity, or a person or partnership with whom the particular entity does not deal at arm’s length, uses at that time in the course of carrying on a business in Canada. ( bien hors portefeuille)   
  *portfolio investment entity* at any time means an entity that does not at that time hold any non-portfolio property. (entité de placement de portefeuille)   
  *publicly-traded liability*, of an entity, means a liability that is a security of the entity, that is not equity of the entity and that is listed or traded on a stock exchange or other public market. (dette transigée publiquement)   
  *public market* includes any trading system or other organized facility on which securities that are qualified for public distribution are listed or traded, but does not include a facility that is operated solely to carry out the issuance of a security or its redemption, acquisition or cancellation by its issuer. (marché public)   
  *qualified REIT property*, of a trust at any time, means a property that, at that time, is held by the trust and is  
  (a) a real or immovable property that is capital property, an eligible resale property, an indebtedness of a Canadian corporation represented by a bankers’ acceptance, a property described by paragraph (a) or (b) of the definition 
  *qualified investment* in section 204 or a deposit with a credit union;  
  (b) a security of a subject entity all or substantially all of the gross REIT revenue of which, for its taxation year that ends in the trust’s taxation year that includes that time, is from maintaining, improving, leasing or managing real or immovable properties that are capital properties of the trust or of an entity of which the trust holds a share or an interest, including real or immovable properties that the trust, or an entity of which the trust holds a share or an interest, holds together with one or more other persons or partnerships; 
  (c) a security of a subject entity, if the entity holds no property other than 
  (i) legal title to real or immovable property of the trust or of another subject entity all of the securities of which are held by the trust (including real or immovable property that the trust or the other subject entity holds together with one or more other persons or partnerships), and 
  (ii) property described in paragraph (d); or 
  (d) ancillary to the earning by the trust of amounts described in subparagraphs (b)(i) and (iii) of the definition 
  *real estate investment trust*, other than  
  (i) an equity of an entity, or 
  (ii) a mortgage, hypothecary claim, mezzanine loan or similar obligation. ( bien admissible de FPI)   
  *real estate investment trust*, for a taxation year, means a trust that is resident in Canada throughout the taxation year, if  
  (a) at each time in the taxation year the total fair market value at that time of all non-portfolio properties that are qualified REIT properties held by the trust is at least 90% of the total fair market value at that time of all non-portfolio properties held by the trust; 
  (b) not less than 90% of the trust’s gross REIT revenue for the taxation year is from one or more of the following: 
  (i) rent from real or immovable properties, 
  (ii) interest, 
  (iii) dispositions of real or immovable properties that are capital properties, 
  (iv) dividends, 
  (v) royalties, and 
  (vi) dispositions of eligible resale properties; 
  (c) not less than 75% of the trust’s gross REIT revenue for the taxation year is from one or more of the following: 
  (i) rent from real or immovable properties, 
  (ii) interest from mortgages, or hypothecs, on real or immovable properties, and 
  (iii) dispositions of real or immovable properties that are capital properties; 
  (d) at each time in the taxation year an amount, that is equal to 75% or more of the equity value of the trust at that time, is the amount that is the total fair market value of all properties held by the trust each of which is a real or immovable property that is capital property, an eligible resale property, an indebtedness of a Canadian corporation represented by a bankers’ acceptance, a property described by paragraph (a) or (b) of the definition 
  *qualified investment* in section 204 or a deposit with a credit union; and  
  (e) investments in the trust are, at any time in the taxation year, listed or traded on a stock exchange or other public market. ( fiducie de placement immobilier)   
  *real or immovable property*, of a taxpayer,  
  (a) includes 
  (i) a security held by the taxpayer, if the security is a security of a trust that satisfies (or of any other entity that would, if it were a trust, satisfy) the conditions set out in paragraphs (a) to (d) of the definition 
  *real estate investment trust*, or  
  (ii) an interest in real property or a real right in immovables (other than a right to a rental or royalty described in paragraph (d) or (e) of the definition “Canadian resource property” in subsection 66(15)); but 
  (b) does not include any depreciable property, other than 
  (i) a property included, otherwise than by an election permitted by regulation, in Class 1, 3 or 31 of Schedule II to the Income Tax Regulations,  
  (ii) a property ancillary to the ownership or utilization of a property described in subparagraph (i), or 
  (iii) a lease in, or a leasehold interest in respect of, land or property described in subparagraph (i). ( bien immeuble ou réel)   
  *regulated innovative capital* means equity of a trust, where  
  (a) since November 2006, the equity has been authorized, by the Superintendent of Financial Institutions or by a provincial regulatory authority having powers similar to those of the Superintendent, as Tier 1 or Tier 2 capital of a financial institution (as defined by subsection 181(1)); 
  (b) the terms and conditions of the equity have not changed after August 1, 2008; 
  (c) the trust has not issued any equity after October 31, 2006; and 
  (d) the trust does not hold any non-portfolio property other than 
  (i) liabilities of the financial institution, and 
  (ii) shares of the capital stock of the financial institution that were acquired by the trust for the sole purpose of satisfying a right to require the trust to accept, as demanded by a holder of the equity, the surrender of the equity. ( capital innovateur réglementé)   
  *rent from real or immovable properties*  
  (a) includes 
  (i) rent or similar payments for the use of, or right to use, real or immovable properties, and 
  (ii) payment for services ancillary to the rental of real or immovable properties and customarily supplied or rendered in connection with the rental of real or immovable properties; but 
  (iii)  [Repealed, 2013, c. 34, s. 258]  
  (b) does not include 
  (i) payment for services supplied or rendered, other than those described in subparagraph (a)(ii), to the tenants of such properties, 
  (ii) fees for managing or operating such properties, 
  (iii) payment for the occupation of, use of, or right to use a room in a hotel or other similar lodging facility, or 
  (iv) rent based on profits. ( loyer de biens immeubles ou réels)   
  *security* of a particular entity means any right, whether absolute or contingent, conferred by the particular entity or by an entity that is affiliated with the particular entity, to receive, either immediately or in the future, an amount that can reasonably be regarded as all or any part of the capital, of the revenue or of the income of the particular entity, or as interest paid or payable by the particular entity, and for greater certainty includes  
  (a) a liability of the particular entity; 
  (b) if the particular entity is a corporation, 
  (i) a share of the capital stock of the corporation, and 
  (ii) a right to control in any manner whatever the voting rights of a share of the capital stock of the corporation; 
  (c) if the particular entity is a trust, an income or a capital interest in the trust; 
  (d) if the particular entity is a partnership, an interest as a member of the partnership; and 
  (e) a right to, or to acquire, anything described in this paragraph and any of paragraphs (a) to (d). ( titre)   
  *SIFT trust*, being a specified investment flow-through trust, for a taxation year means a trust (other than an excluded subsidiary entity, or a real estate investment trust, for the taxation year) that meets the following conditions at any time during the taxation year:  
  (a) the trust is resident in Canada; 
  (b) investments in the trust are listed or traded on a stock exchange or other public market; and 
  (c) the trust holds one or more non-portfolio properties. ( fiducie intermédiaire de placement déterminée)   
  *subject entity* means a person or partnership that is  
  (a) a corporation resident in Canada; 
  (b) a trust resident in Canada; 
  (c) a Canadian resident partnership; or 
  (d) a non-resident person, or a partnership that is not described in paragraph (c), the principal source of income of which is one or any combination of sources in Canada. ( entité déterminée)   
  *unaffiliated publicly-traded liability*, of an entity at any time means a publicly-traded liability of the entity if, at that time the total fair market value of all publicly-traded liabilities of the entity that are held at that time by persons or partnerships that are not affiliated with the entity is at least 90% of the total fair market value of all publicly-traded liabilities of the entity. (dette non affiliée transigée publiquement)  
  
  ### Application of subsection (1.2)
  
  (1.1) Subsection (1.2) applies to an entity for a taxation year in respect of an amount and another entity (referred to in this subsection and subsection (1.2) as the “parent entity”, “specified amount” and “source entity”, respectively), if 
  (a) at any time in the taxation year the parent entity 
  (i) is affiliated with the source entity, or 
  (ii) holds securities of the source entity that 
  (A) are described by any of paragraphs (a) to (c) of the definition 
  *equity* in subsection (1), and  
  (B) have a total fair market value that is greater than 10% of the equity value of the source entity; 
  (b) the specified amount is included in computing the parent entity’s gross REIT revenue for the taxation year in respect of a security of the source entity held by the parent entity; and 
  (c) in the case of a source entity that is a subject entity described in paragraph (b) of the definition 
  *qualified REIT property* in subsection (1) in respect of the parent entity at each time during the taxation year at which the parent entity holds securities of the source entity, the specified amount cannot reasonably be considered to be derived from the source entity’s gross REIT revenue from maintaining, improving, leasing or managing real or immovable properties that are capital properties of the parent entity or of an entity of which the parent entity holds a share or an interest, including real or immovable properties that the parent entity, or an entity of which the parent entity holds a share or an interest, holds together with one or more other persons or partnerships.  
  
  ### Character preservation rule
  
  (1.2) If this subsection applies to a parent entity for a taxation year in respect of a specified amount and a source entity, then for the purposes of the definition 
  *real estate investment trust* in subsection (1), to the extent that the specified amount can reasonably be considered to be derived from gross REIT revenue of the source entity having a particular character, the specified amount is deemed to be gross REIT revenue of the parent entity having the same character and not having any other character.  
  
  ### Character of revenue — hedging arrangements
  
  (1.3) For the purposes of the definition 
  *real estate investment trust* in subsection (1),  
  (a) if an amount is included in gross REIT revenue of a trust for a taxation year and it results from an agreement that can reasonably be considered to have been made by the trust to reduce its risk from fluctuations in interest rates in respect of debt incurred by the trust to acquire or refinance real or immovable property, the amount is deemed to have the same character as gross REIT revenue in respect of the real or immovable property and not any other character; and 
  (b) if a real or immovable property is situated in a country other than Canada and an amount included in gross REIT revenue of a trust for a taxation year 
  (i) is a gain from fluctuations in the value of the currency of that country relative to Canadian currency recognized on 
  (A) revenue in respect of the real or immovable property, or 
  (B) debt incurred by the trust for the purpose of earning revenue in respect of the real or immovable property, or 
  (ii) results from an agreement that 
  (A) provides for the purchase, sale or exchange of currency, and 
  (B) can reasonably be considered to have been made by the trust to reduce its risk from currency fluctuations described in subparagraph (i), the amount is deemed to have the same character as gross REIT revenue in respect of the real or immovable property and not any other character. 
  
  ### Application of definition SIFT trust 
  
  (2) The definition 
  *SIFT trust* applies to a trust for a taxation year of the trust that ends after 2006, except that if the trust would have been a SIFT trust on October 31, 2006 had that definition been in force and applied to the trust as of that date, that definition does not apply to the trust for a taxation year of the trust that ends before the earlier of  
  (a) 2011, and 
  (b) the first day after December 15, 2006 on which the trust exceeds normal growth as determined by reference to the normal growth guidelines issued by the Department of Finance on December 15, 2006, as amended from time to time, unless that excess arose as a result of a prescribed transaction. 
  122.2  [Repealed, 1994, c. 7, Sch. VII, s. 10]  
  
  ### Overseas employment tax credit
  
  122.3 (1) If an individual is resident in Canada in a taxation year and, throughout any period of more than six consecutive months that began before the end of the year and included any part of the year (in this section referred to as the “qualifying period”) 
  (a) was employed by a person who was a specified employer, other than for the performance of services under a prescribed international development assistance program of the Government of Canada, and 
  (b) performed all or substantially all the duties of the individual’s employment outside Canada 
  (i) in connection with a contract under which the specified employer carried on business outside Canada with respect to 
  (A) the exploration for or exploitation of petroleum, natural gas, minerals or other similar resources, 
  (B) any construction, installation, agricultural or engineering activity, or 
  (C) any prescribed activity, or 
  (ii) for the purpose of obtaining, on behalf of the specified employer, a contract to undertake any of the activities referred to in clause 122.3(1)(b)(i)(A), 122.3(1)(b)(i)(B) or 122.3(1)(b)(i)(C), there may be deducted, from the amount that would, but for this section, be the individual’s tax payable under this Part for the year, an amount equal to that proportion of the tax otherwise payable under this Part for the year by the individual that the lesser of 
  (c) an amount equal to that proportion of the specified amount for the year that the number of days 
  (i) in that portion of the qualifying period that is in the year, and 
  (ii) on which the individual was resident in Canada is of 365, and 
  (d) the specified percentage for the year of the individual’s income for the year from that employment that is reasonably attributable to duties performed on the days referred to in paragraph (c) is of 
  (e) the amount, if any, by which 
  (i) if the individual is resident in Canada throughout the year, the individual’s income for the year, and 
  (ii) if the individual is non-resident at any time in the year, the amount determined under paragraph 114(a) in respect of the taxpayer for the year exceeds 
  (iii) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under paragraph 110(1)(d.2), (d.3), (f) or (g), in computing the individual’s taxable income for the year. 
  
  ### Specified amount
  
  (1.01) For the purposes of paragraph (1)(c), the specified amount for a taxation year of an individual is 
  (a) for the 2013 to 2015 taxation years, the amount determined by the formula is the individual’s income described in paragraph (1)(d) for the taxation year that is earned in connection with a contract that was committed to in writing before March 29, 2012 by a specified employer of the individual, is the individual’s income described in paragraph (1)(d) for the taxation year, other than income included in the description of A, and is 
  (i) for the 2013 taxation year, $60,000, 
  (ii) for the 2014 taxation year, $40,000, and 
  (iii) for the 2015 taxation year, $20,000; and 
  (b) for the 2016 and subsequent taxation years, nil. 
  
  ### Specified percentage
  
  (1.02) For the purposes of paragraph (1)(d), the specified percentage for a taxation year of an individual is 
  (a) for the 2013 to 2015 taxation years, the amount determined by the formula is the value of A in subsection (1.01), is the value of B in subsection (1.01), and is 
  (i) for the 2013 taxation year, 60%, 
  (ii) for the 2014 taxation year, 40%, and 
  (iii) for the 2015 taxation year, 20%; and 
  (b) for the 2016 and subsequent taxation years, 0%. 
  
  ### Excluded income
  
  (1.1) No amount may be included under paragraph (1)(d) in respect of an individual’s income for a taxation year from the individual’s employment by an employer 
  (a) if 
  (i) the employer carries on a business of providing services and does not employ in the business throughout the year more than five full-time employees, 
  (ii) the individual 
  (A) does not deal at arm’s length with the employer, or is a specified shareholder of the employer, or 
  (B) where the employer is a partnership, does not deal at arm’s length with a member of the partnership, or is a specified shareholder of a member of the partnership, and 
  (iii) but for the existence of the employer, the individual would reasonably be regarded as being an employee of a person or partnership that is not a specified employer; or 
  (b) if at any time in that portion of the qualifying period that is in the taxation year 
  (i) the employer provides the services of the individual to a corporation, partnership or trust with which the employer does not deal at arm’s length, and 
  (ii) the fair market value of all the issued shares of the capital stock of the corporation or of all interests in the partnership or trust, as the case may be, that are held, directly or indirectly, by persons who are resident in Canada is less than 10% of the fair market value of all those shares or interests. 
  
  ### Definitions
  
  (2) In subsection 122.3(1),  
  *specified employer* means  
  (a) a person resident in Canada, 
  (b) a partnership in which interests that exceed in total value 10% of the fair market value of all interests in the partnership are owned by persons resident in Canada or corporations controlled by persons resident in Canada, or 
  (c) a corporation that is a foreign affiliate of a person resident in Canada; ( employeur déterminé)   
  *tax otherwise payable under this Part for the year* means the amount that, but for this section, sections 120 and 120.2, subsection 120.4(2) and sections 121, 126, 127 and 127.4, would be the tax payable under this Part for the year. (impôt qu’il est par ailleurs tenu de payer pour l’année en vertu de la présente partie)  
  
  ### Definitions
  
  122.5 (1) The following definitions apply in this section.  
  *adjusted income*, of an individual for a taxation year in relation to a month specified for the taxation year, means the total of the individual’s income for the taxation year and the income for the taxation year of the individual’s qualified relation, if any, in relation to the specified month, both calculated as if in computing that income no amount were  
  (a) included 
  (i) under paragraph 56(1)(q.1) or subsection 56(6), 
  (ii) in respect of any gain from a disposition of property to which section 79 applies, or 
  (iii) in respect of a gain described in subsection 40(3.21); or 
  (b) deductible under paragraph 20(1)(ww) or 60(y) or (z). ( revenu rajusté)   
  *cohabiting spouse or common-law partner* of an individual at any time has the meaning assigned by section 122.6. (époux ou conjoint de fait visé)   
  *eligible individual*, in relation to a month specified for a taxation year, means an individual (other than a trust) who  
  (a) has, before the specified month, attained the age of 19 years; or 
  (b) was, at any time before the specified month, 
  (i) a parent who resided with their child, or 
  (ii) married or in a common-law partnership. ( particulier admissible)   
  *qualified dependant* of an individual, in relation to a month specified for a taxation year, means a person who at the beginning of the specified month  
  (a) is the individual’s child or is dependent for support on the individual or on the individual’s cohabiting spouse or common-law partner; 
  (b) resides with the individual; 
  (c) is under the age of 19 years; 
  (d) is not an eligible individual in relation to the specified month; and 
  (e) is not a qualified relation of any individual in relation to the specified month. ( personne à charge admissible)   
  *qualified relation* of an individual, in relation to a month specified for a taxation year, means the person, if any, who, at the beginning of the specified month, is the individual’s cohabiting spouse or common-law partner. (proche admissible)   
  *return of income*, in respect of a person for a taxation year, means  
  (a) for a person who is resident in Canada at the end of the taxation year, the person’s return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the person had tax payable under this Part for the taxation year; and 
  (b) in any other case, a prescribed form containing prescribed information that is filed for the taxation year with the Minister. ( déclaration de revenu)  
  
  ### Persons not eligible individuals, qualified relations or qualified dependants
  
  (2) Notwithstanding subsection (1), a person is not an eligible individual, is not a qualified relation and is not a qualified dependant, in relation to a month specified for a taxation year, if the person 
  (a) died before the specified month; 
  (b) is confined to a prison or similar institution for a period of at least 90 days that includes the first day of the specified month; 
  (c) is at the beginning of the specified month a non-resident person, other than a non-resident person who 
  (i) is at that time the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes the first day of the specified month, and 
  (ii) was resident in Canada at any time before the specified month; 
  (d) is at the beginning of the specified month a person described in paragraph 149(1)(a) or (b); or 
  (e) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for the specified month.  
  
  ### Deemed payment on account of tax
  
  (3) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount equal to ¼ of the amount, if any, determined by the formula is the total of 
  (a) $213, 
  (b) $213 for the qualified relation, if any, of the individual in relation to the specified month, 
  (c) if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $213, 
  (d) $112 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month, 
  (e) if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $112, and 
  (f) if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $112 and 2% of the amount, if any, by which the individual’s income for the taxation year exceeds $6,911; and is 5% of the amount, if any, by which the individual’s adjusted income for the taxation year in relation to the specified month exceeds $27,749. 
  
  ### COVID-19 — additional deemed payment
  
  (3.001) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula is the total of 
  (a) $580, 
  (b) $580 for the qualified relation, if any, of the individual in relation to the specified month, 
  (c) if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $580, 
  (d) $306 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month, 
  (e) if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $306, and 
  (f) if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $306 and 2% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,412; is 5% of the amount, if any, by which the individual’s adjusted income for the taxation year in relation to the specified month exceeds $37,789; and is the total amount that the eligible individual is deemed to have paid under subsection (3) on account of their tax payable for the specified months of July 2019, October 2019, January 2020 and April 2020. 
  
  ### Additional deemed payment
  
  (3.002) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula is the total of 
  (a) $918, 
  (b) $918 for the qualified relation, if any, of the individual in relation to the specified month, 
  (c) if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $918, 
  (d) $483 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month, 
  (e) if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $483, and 
  (f) if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $483 and 6% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,919; is 15% of the amount, if any, by which the individual’s adjusted income for the taxation year exceeds $39,826; and is the amount that the eligible individual is deemed to have paid under subsection (3) during the specified month on account of their tax payable for the taxation year. 
  
  ### Additional deemed payment – January 2023
  
  (3.003) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula is the total of 
  (a) $918, 
  (b) $918 for the qualified relation, if any, of the individual in relation to the specified month, 
  (c) if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $918, 
  (d) $483 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month, 
  (e) if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $483, and 
  (f) if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $483 and 6% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,919; is 15% of the amount, if any, by which the individual’s adjusted income for the taxation year exceeds $39,826; and is the amount that the eligible individual is deemed to have paid under subsection (3) during the specified month on account of their tax payable for the taxation year. 
  
  ### Shared-custody parent
  
  (3.01) Notwithstanding subsection (3), if an eligible individual is a shared-custody parent (within the meaning assigned by section 122.6, but with the words qualified dependant in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3) to have been paid during a specified month is equal to the amount determined by the following formula:  is the amount determined by the formula in subsection (3), calculated without reference to this subsection, and is the amount determined by the formula in subsection (3), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### COVID-19 — shared-custody parent
  
  (3.02) Notwithstanding subsection (3.001), if an eligible individual is a shared-custody parent (within the meaning assigned by section 122.6, but with the words qualified dependant in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.001) to have been paid during the specified month is equal to the amount determined by the following formula:  is the amount determined by the formula in subsection (3.001), calculated without reference to this subsection; and is the amount determined by the formula in subsection (3.001), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### Additional deemed payment — shared-custody parent
  
  (3.03) Notwithstanding subsection (3.002), if an eligible individual is a shared-custody parent (within the meaning assigned by section 122.6, but with the words qualified dependant in that section having the meaning assigned by subsection (1) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.002) to have been paid during the specified month is equal to the amount determined by the following formula:  is the amount determined by the formula in subsection (3.002), calculated without reference to this subsection; and is the amount determined by the formula in subsection (3.002), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### January 2023 payment – shared-custody parent
  
  (3.04) Notwithstanding subsection (3.003), if an eligible individual is a shared-custody parent (as defined in section 122.6, but with the term “qualified dependant” in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.003) to have been paid during the specified month is equal to the amount determined by the formula  is the amount determined by the formula in subsection (3.003), calculated without reference to this subsection; and is the amount determined by the formula in subsection (3.003), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### When advance payment applies
  
  (3.1) Subsection (3.2) applies in respect of an eligible individual in relation to a particular month specified for a taxation year, and each subsequent month specified for the taxation year, if 
  (a) the amount deemed by that subsection to have been paid by the eligible individual during the particular month specified for the taxation year is less than $50; and 
  (b) it is reasonable to conclude that the amount deemed by that subsection to have been paid by the eligible individual during each subsequent month specified for the taxation year will be less than $50. 
  
  ### Advance payment
  
  (3.2) If this subsection applies, the total of the amounts that would otherwise be deemed by subsection (3) to have been paid on account of the eligible individual’s tax payable under this Part for the taxation year during the particular month specified for the taxation year, and during each subsequent month specified for the taxation year, is deemed to have been paid by the eligible individual on account of their tax payable under this Part for the taxation year during the particular specified month for the taxation year, and the amount deemed by subsection (3) to have been paid by the eligible individual during those subsequent months specified for the taxation year is deemed, except for the purpose of this subsection, not to have been paid to the extent that it is included in an amount deemed to have been paid by this subsection. 
  
  ### Months specified
  
  (4) For the purposes of this section, the months specified for a taxation year are July and October of the immediately following taxation year and January and April of the second immediately following taxation year. 
  
  ### COVID-19 — month specified
  
  (4.1) Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.001) is May 2020 (or an earlier month designated by the Minister) and the taxation year is the 2018 taxation year. 
  
  ### Month specified
  
  (4.2) Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.002) is October 2022 and the taxation year is the 2021 taxation year. 
  
  ### January 2023 – month specified
  
  (4.3) Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.003) is January 2023 and the taxation year is the 2021 taxation year. 
  
  ### Only one eligible individual
  
  (5) If an individual is a qualified relation of another individual in relation to a month specified for a taxation year and both those individuals would be, but for this subsection, eligible individuals in relation to the specified month, only the individual that the Minister designates is the eligible individual in relation to the specified month. 
  (5.1)  [Repealed, 2002, c. 9, s. 38(2)]  
  
  ### Exception re qualified dependant
  
  (6) If a person would, if this Act were read without reference to this subsection, be the qualified dependant of two or more individuals, in relation to a month specified for a taxation year, 
  (a) the person is deemed to be a qualified dependant, in relation to that month, of the one of those individuals on whom those individuals agree; 
  (b) in the absence of an agreement referred to in paragraph (a), the person is deemed to be, in relation to that month, a qualified dependant of the individuals, if any, who are, at the beginning of that month, eligible individuals (within the meaning assigned by section 122.6, but with the words qualified dependant in that section having the meaning assigned by subsection (1)) in respect of that person; and  
  (c) in any other case, the person is deemed to be, in relation to that month, a qualified dependant only of the individual that the Minister designates. 
  
  ### Notification to Minister
  
  (6.1) An individual shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs: 
  (a) the individual ceases to be an eligible individual; 
  (b) a person becomes or ceases to be the individual’s qualified relation; and 
  (c) a person ceases to be a qualified dependant of the individual, otherwise than because of attaining the age of 19 years. 
  
  ### Non-residents and part-year residents
  
  (6.2) For the purpose of this section, the income of a person who is non-resident at any time in a taxation year is deemed to be equal to the amount that would, if the person were resident in Canada throughout the year, be the person’s income for the year. 
  
  ### Effect of bankruptcy
  
  (7) For the purpose of this section, if in a taxation year an individual becomes bankrupt, the individual’s income for the taxation year shall include the individual’s income for the taxation year that begins on January 1 of the calendar year that includes the date of bankruptcy. 
  
  ### Definitions
  
  122.51 (1) The definitions in this subsection apply in this section.  
  *adjusted income* of an individual for a taxation year has the meaning assigned by section 122.6. (revenu modifié)   
  *eligible individual* for a taxation year means an individual (other than a trust)  
  (a) who is resident in Canada throughout the year (or, if the individual dies in the year, throughout the portion of the year before the individual’s death); 
  (b) who, before the end of the year, has attained the age of 18 years; and 
  (c) the total of whose incomes for the year from the following sources is at least $2,500: 
  (i) offices and employments (computed without reference to paragraph 6(1)(f)), 
  (ii) businesses each of which is a business carried on by the individual either alone or as a partner actively engaged in the business, and 
  (iii) the program established under the Wage Earner Protection Program Act. (particulier admissible)  
  
  ### Deemed payment on account of tax
  
  (2) Where a return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) is filed in respect of an eligible individual for a particular taxation year that ends at the end of a calendar year, there is deemed to be paid at the end of the particular year on account of the individual’s tax payable under this Part for the particular year the amount determined by the formula is the lesser of 
  (a) $1000, and 
  (b) the total of 
  (i) the amount determined by the formula is the appropriate percentage for the particular taxation year, and is the total of all amounts each of which is the amount determined by the formula in subsection 118.2(1) for the purpose of computing the individual’s tax payable under this Part for a taxation year that ends in the calendar year, and 
  (ii) 25% of the total of all amounts each of which is the amount deductible under section 64 in computing the individual’s income for a taxation year that ends in the calendar year; and is 5% of the amount, if any, by which 
  (a) the total of all amounts each of which is the individual’s adjusted income for a taxation year that ends in the calendar year exceeds 
  (b) $21,663. 
  
  # SUBDIVISION A.1 
  
  ## Canada Child Benefit 
  
  ### Definitions
  
  122.6 In this Subdivision,  
  *adjusted earned income* [Repealed, 1998, c. 21, s. 92]   
  *adjusted income*, of an individual for a taxation year, means the total of all amounts each of which would be the income for the year of the individual or of the person who was the individual’s cohabiting spouse or common-law partner at the end of the year if in computing that income no amount were  
  (a) included 
  (i) under paragraph 56(1)(q.1) or subsection 56(6), 
  (ii) in respect of any gain from a disposition of property to which section 79 applies, or 
  (iii) in respect of a gain described in subsection 40(3.21), or 
  (b) deductible under paragraph 20(1)(ww) or 60(y) or (z); ( revenu modifié)   
  *base taxation year* in relation to a month means  
  (a) where the month is any of the first 6 months of a calendar year, the taxation year that ended on December 31 of the second preceding calendar year, and 
  (b) where the month is any of the last 6 months of a calendar year, the taxation year that ended on December 31 of the preceding calendar year; ( année de base)   
  *cohabiting spouse or common-law partner* of an individual at any time means the person who at that time is the individual’s spouse or common-law partner and who is not at that time living separate and apart from the individual and, for the purpose of this definition, a person shall not be considered to be living separate and apart from an individual at any time unless they were living separate and apart at that time, because of a breakdown of their marriage or common-law partnership, for a period of at least 90 days that includes that time; (époux ou conjoint de fait visé)   
  *earned income* [Repealed, 1998, c. 21, s. 92]   
  *eligible individual* in respect of a qualified dependant at any time means a person who at that time  
  (a) resides with the qualified dependant, 
  (b) is a parent of the qualified dependant who 
  (i) is the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant and who is not a shared-custody parent in respect of the qualified dependant, or 
  (ii) is a shared-custody parent in respect of the qualified dependant, 
  (c) is resident in Canada or, where the person is the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes that time, was resident in Canada in any preceding taxation year, 
  (d) is not described in paragraph 149(1)(a) or 149(1)(b), and 
  (e) is, or whose cohabiting spouse or common-law partner is, a Canadian citizen or a person who 
  (i) is a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act,  
  (ii) is a temporary resident within the meaning of the Immigration and Refugee Protection Act, who was resident in Canada throughout the 18 month period preceding that time,  
  (iii) is a protected person within the meaning of the Immigration and Refugee Protection Act,  
  (iv) was determined before that time to be a member of a class defined in the Humanitarian Designated Classes Regulations made under the Immigration Act, or  
  (v) is an Indian within the meaning of the Indian Act,  and for the purposes of this definition, 
  (f) where the qualified dependant resides with the dependant’s female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent, 
  (g) the presumption referred to in paragraph 122.6 eligible individual (f) does not apply in prescribed circumstances, 
  (h) prescribed factors shall be considered in determining what constitutes care and upbringing, and 
  (i) an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada, the government of a province or an Indigenous governing body (as defined in section 2 of the Children’s Special Allowances Act) for the benefit of the other individual; (particulier admissible)   
  *qualified dependant* at any time means a person who at that time  
  (a) has not attained the age of 18 years, 
  (b) is not a person in respect of whom an amount was deducted under paragraph (a) of the description of B in subsection 118(1) in computing the tax payable under this Part by the person’s spouse or common-law partner for the base taxation year in relation to the month that includes that time, and 
  (c) is not a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for the month that includes that time; (personne à charge admissible)   
  *return of income* filed by an individual for a taxation year means  
  (a) where the individual was resident in Canada throughout the year, the individual’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is filed or required to be filed under this Part for the year, and 
  (b) in any other case, a prescribed form containing prescribed information, that is filed with the Minister; ( déclaration de revenu)   
  *shared-custody parent* in respect of a qualified dependant at a particular time means, where the presumption referred to in paragraph (f) of the definition eligible individual does not apply in respect of the qualified dependant, an individual who is one of the two parents of the qualified dependant who  
  (a) are not at that time cohabitating spouses or common-law partners of each other, 
  (b) reside with the qualified dependant either 
  (i) at least 40% of the time in the month in which the particular time occurs, or 
  (ii) on an approximately equal basis, and 
  (c) primarily fulfil the responsibility for the care and upbringing of the qualified dependant when residing with the qualified dependant, as determined in consideration of prescribed factors. ( parent ayant la garde partagée)  
  
  ### Deemed overpayment
  
  122.61 (1) If a person and, if the Minister so demands, the person’s cohabiting spouse or common-law partner at the end of a taxation year have filed a return of income for the year, an overpayment on account of the person’s liability under this Part for the year is deemed to have arisen during a month in relation to which the year is the base taxation year, equal to the amount determined by the formula is the amount determined by the formula is the total of 
  (a) the product obtained by multiplying $6,400 by the number of qualified dependants in respect of whom the person was an eligible individual at the beginning of the month who have not reached the age of six years at the beginning of the month, and 
  (b) the product obtained by multiplying $5,400 by the number of qualified dependants, other than those qualified dependants referred to in paragraph (a), in respect of whom the person was an eligible individual at the beginning of the month, and is 
  (a) if the person’s adjusted income for the year is less than or equal to $30,000, nil, 
  (b) if the person’s adjusted income for the year is greater than $30,000 but less than or equal to $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of 
  (i) only one qualified dependant, 7% of the person’s adjusted income for the year in excess of $30,000, 
  (ii) only two qualified dependants, 13.5% of the person’s adjusted income for the year in excess of $30,000, 
  (iii) only three qualified dependants, 19% of the person’s adjusted income for the year in excess of $30,000, or 
  (iv) more than three qualified dependants, 23% of the person’s adjusted income for the year in excess of $30,000, and 
  (c) if the person’s adjusted income for the year is greater than $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of 
  (i) only one qualified dependant, the total of $2,450 and 3.2% of the person’s adjusted income for the year in excess of $65,000, 
  (ii) only two qualified dependants, the total of $4,725 and 5.7% of the person’s adjusted income for the year in excess of $65,000, 
  (iii) only three qualified dependants, the total of $6,650 and 8% of the person’s adjusted income for the year in excess of $65,000, or 
  (iv) more than three qualified dependants, the total of $8,050 and 9.5% of the person’s adjusted income for the year in excess of $65,000, is the amount determined by the formula is the product obtained by multiplying $2,730 by the number of qualified dependants in respect of whom both 
  (a) an amount may be deducted under section 118.3 for the taxation year that includes the month, and 
  (b) the person is an eligible individual at the beginning of the month, and is 
  (a) if the person’s adjusted income for the year is less than or equal to $65,000, nil, and 
  (b) if the person’s adjusted income for the year is greater than $65,000, 
  (i) where the person is an eligible individual in respect of only one qualified dependant described in N, 3.2% of the person’s adjusted income for the year in excess of $65,000, and 
  (ii) where the person is an eligible individual in respect of two or more qualified dependants described in N, 5.7% of the person’s adjusted income for the year in excess of $65,000. 
  
  ### COVID-19 — additional amount
  
  (1.01) If the month referred to in subsection (1) is May 2020, each amount expressed in dollars referred to in paragraphs (a) and (b) of the description of E in subsection (1) is deemed, for that month, to be equal to that amount (as adjusted under subsection (5)) plus an additional amount of $3,600. For greater certainty, the adjustment in subsection (5) shall not take into account this additional amount. 
  
  ### Shared-custody parent
  
  (1.1) Notwithstanding subsection (1), if an eligible individual is a shared-custody parent in respect of one or more qualified dependants at the beginning of a month, the overpayment deemed by subsection (1) to have arisen during the month is equal to the amount determined by the formula is the amount determined by the formula in subsection (1), calculated without reference to this subsection, and is the amount determined by the formula in subsection (1), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### Deemed overpayment — COVID-19
  
  (1.2) If the Minister determines before 2024 that an overpayment (for greater certainty, in an amount greater than nil) on account of a person’s liability under this Part for a taxation year is deemed to have arisen during a month under subsection (1), or would be so deemed if this section were read without reference to subsection (2), then an overpayment on account of the person’s liability under this Part for the year is deemed to have arisen during the month, equal to the total of all amounts each of which is an amount in respect of a qualified dependant — in respect of whom the person was an eligible individual at the beginning of the month who has not reached the age of six years at the beginning of the month — determined by the formula is 
  (a) 0.5, if the person is a shared-custody parent in respect of the qualified dependant, and 
  (b) 1, in any other case; and is 
  (a) if the month is January 2021 or April 2021, 
  (i) $300, if the person’s adjusted income for 2019 is less than or equal to $120,000, and 
  (ii) $150 in any other case, 
  (b) if the month is July 2021 or October 2021, 
  (i) $300, if the person’s adjusted income for 2020 is less than or equal to $120,000, and 
  (ii) $150 in any other case, and 
  (c) in any other case, nil. 
  
  ### Exceptions
  
  (2) Notwithstanding subsection (1), if a particular month is the first month during which an overpayment that is less than $20 (or such other amount as is prescribed) is deemed under that subsection to have arisen on account of a person’s liability under this Part for the base taxation year in relation to the particular month, any such overpayment that would, but for this subsection, reasonably be expected at the end of the particular month to arise during another month in relation to which the year is the base taxation year is deemed to arise under that subsection during the particular month and not during the other month. 
  
  ### Non-residents and part-year residents
  
  (3) For the purposes of this section, if a person was non-resident at any time in a taxation year, the person’s income for the year is, for greater certainty, deemed to be the amount that would have been the person’s income for the year had the person been resident in Canada throughout the year. 
  
  ### Effect of bankruptcy
  
  (3.1) For the purposes of this Subdivision, where in a taxation year an individual becomes bankrupt, 
  (a) the individual’s income for the year shall include the individual’s income for the taxation year that begins on January 1 of the calendar year that includes the date of bankruptcy; and 
  (b) the total of all amounts deducted under section 63 in computing the individual’s income for the year shall include the amount deducted under that section for the individual’s taxation year that begins on January 1 of the calendar year that includes the date of bankruptcy. 
  (c)  [Repealed, 1998, c. 21, s. 94]  
  
  ### Amount not to be charged, etc.
  
  (4) A refund of an amount deemed by this section to be an overpayment on account of a person’s liability under this Part for a taxation year 
  (a) shall not be subject to the operation of any law relating to bankruptcy or insolvency; 
  (b) cannot be assigned, charged, attached or given as security; 
  (c) does not qualify as a refund of tax for the purposes of the Tax Rebate Discounting Act ;  
  (d) cannot be retained by way of deduction or set-off under the Financial Administration Act ; and  
  (e) is not garnishable moneys for the purposes of the Family Orders and Agreements Enforcement Assistance Act.  
  
  ### Annual adjustment
  
  (5) Each amount expressed in dollars in subsection (1) shall be adjusted so that, where the base taxation year in relation to a particular month is after 2016, the amount to be used under that subsection for the month is the total of 
  (a) the amount that would, but for subsection (7), be the relevant amount used under subsection (1) for the month that is one year before the particular month, and 
  (b) the product obtained by multiplying 
  (i) the amount referred to in paragraph (a) by 
  (ii) the amount, adjusted in such manner as is prescribed and rounded to the nearest one-thousandth or, where the result obtained is equidistant from 2 such consecutive one-thousandths, to the higher thereof, that is determined by the formula is the Consumer Price Index (within the meaning assigned by subsection 117.1(4)) for the 12-month period that ended on September 30 of the base taxation year, and  is the Consumer Price Index for the 12 month period preceding the period referred to in the description of A. 
  (5.1)  [Repealed, 1998, c. 21, s. 93]  
  
  ### Additions to NCB supplement — July 2005 and 2006
  
  (6) Each amount referred to in the description of F in subsection (1) that is to be used for the purpose of determining the amount deemed to be an overpayment arising during months that are 
  (a) after June 2005 and before July 2006, is to be replaced with the amount that is the total of $185 and the amount otherwise determined under subsection (5) for those months; and 
  (b) after June 2006 and before July 2007, is to be replaced with the amount that is the total of $185 and the amount otherwise determined, for those months, by applying subsection (5) to the amount determined under paragraph (a). 
  
  ### Agreement with a province
  
  (6.1) Notwithstanding subsection (5), for the purposes of any agreement referred to in section 122.63 with respect to overpayments deemed to arise during months that are after June 2001 and before July 2002, the amount determined under subparagraph (5)(b)(ii) for a month referred to in paragraph (6)(b) is deemed to be 0.012. 
  
  ### Rounding
  
  (7) If an amount referred to in subsection (1), when adjusted as provided in subsection (5), is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from 2 such consecutive multiples, to the higher thereof. 
  
  ### Eligible individuals
  
  122.62 (1) For the purposes of this Subdivision, a person may be considered to be an eligible individual in respect of a particular qualified dependant at the beginning of a month only if the person has, no later than 11 months after the end of the month, filed with the Minister a notice in prescribed form containing prescribed information. 
  
  ### Extension for notices
  
  (2) The Minister may, on or before the day that is 10 years after the beginning of the month referred to in subsection (1), extend the time for filing a notice under that subsection. 
  
  ### Exception
  
  (3) Where at the beginning of 1993 a person is an eligible individual in respect of a qualified dependant, subsection 122.62(1) does not apply to the person in respect of the qualified dependant if the qualified dependant was an eligible child (within the meaning assigned by subsection 122.2(2) because of subparagraph (a)(i) of the definition 
  *eligible child* in that subsection) of the individual for the 1992 taxation year.  
  
  ### Person ceasing to be an eligible individual
  
  (4) Where during a particular month a person ceases to be an eligible individual in respect of a particular qualified dependant (otherwise than because of the qualified dependant attaining the age of 18 years), the person shall notify the Minister of that fact before the end of the first month following the particular month. 
  
  ### Death of cohabiting spouse
  
  (5) If the cohabiting spouse or common-law partner of an eligible individual in respect of a qualified dependant dies, 
  (a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and 
  (b) subject to subsection (8), for the purpose of determining the amount deemed under subsection 122.61(1) or (1.2) to be an overpayment arising in that first month and any subsequent month on account of the eligible individual’s liability under this Part for the base taxation year in relation to that first month, the eligible individual’s adjusted income for the year is deemed to be equal to the eligible individual’s income for the year. 
  
  ### Separation from cohabiting spouse
  
  (6) If a person ceases to be an eligible individual’s cohabiting spouse or common-law partner, 
  (a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and 
  (b) subject to subsection (8), for the purpose of determining the amount deemed under subsection 122.61(1) or (1.2) to be an overpayment arising in that first month and any subsequent month on account of the eligible individual’s liability under this Part for the base taxation year in relation to that first month, the eligible individual’s adjusted income for the year is deemed to be equal to the eligible individual’s income for the year. 
  
  ### Person becoming a cohabiting spouse
  
  (7) If a taxpayer becomes the cohabiting spouse or common-law partner of an eligible individual, 
  (a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and 
  (b) subject to subsection (8), for the purpose of determining the amount deemed under subsection 122.61(1) or (1.2) to be an overpayment arising in that first month and any subsequent month on account of the eligible individual’s liability under this Part for the base taxation year in relation to that first month, the taxpayer is deemed to have been the eligible individual’s cohabiting spouse or common-law partner at the end of the base taxation year in relation to that month. 
  
  ### Ordering of events
  
  (8) If more than one event referred to in subsections (5) to (7) occur in a calendar month, only the subsection relating to the last of those events to have occurred applies. 
  (9)  [Repealed, 1998, c. 19, s. 142]  
  
  ### Agreement
  
  122.63 (1) The Minister of Finance may enter into an agreement with the government of a province whereby the amounts determined under the description of E in subsection 122.61(1) with respect to persons resident in the province shall, for the purpose of calculating overpayments deemed to arise under that subsection, be replaced by amounts determined in accordance with the agreement. 
  
  ### Agreement
  
  (2) The amounts determined under the description of E in subsection 122.61(1) for a base taxation year because of any agreement entered into with a province and referred to in subsection (1) shall be based on the age of qualified dependants of eligible individuals, or on the number of such qualified dependants, or both, and shall result in an amount in respect of a qualified dependant that is not less, in respect of that qualified dependant, than 85% of the amount that would otherwise be determined under that description in respect of that qualified dependant for that year. 
  
  ### Agreement
  
  (3) Any agreement entered into with a province and referred to in subsection (1) shall provide that, where the operation of the agreement results in a total of all amounts, each of which is an amount deemed under subsection 122.61(1) to be an overpayment on account of the liability under this Part for a taxation year of a person subject to the agreement, that exceeds 101% of the total of such overpayments that would have otherwise been deemed to have arisen under subsection 122.61(1), the excess shall be reimbursed by the government of the province to the Government of Canada. 
  122.64  [Repealed, 2013, c. 40, s. 53]  
  
  # SUBDIVISION A.2 
  
  ## Canada Workers Benefit 
  
  ### Definitions
  
  122.7 (1) The following definitions apply in this Subdivision.  
  *adjusted net income* of an individual for a taxation year means the amount that would be the individual’s income for the taxation year if  
  (a)  [Repealed, 2018, c. 27, s. 12]  
  (b) in computing that income, no amount were included under paragraph 56(1)(q.1) or subsection 56(6), in respect of any gain from a disposition of property to which section 79 applies or in respect of a gain described in subsection 40(3.21); and 
  (c) in computing that income, no amount were deductible under paragraph 20(1)(ww) or 60(y) or (z). ( revenu net rajusté)   
  *cohabiting spouse or common-law partner* of an individual at any time has the meaning assigned by section 122.6. (conjoint visé)   
  *designated educational institution* has the meaning assigned by subsection 118.6(1). (établissement d’enseignement agréé)   
  *eligible dependant* of an individual for a taxation year means a child of the individual who, at the end of the year,  
  (a) resided with the individual; 
  (b) was under the age of 19 years; and 
  (c) was not an eligible individual. ( personne à charge admissible)   
  *eligible individual* for a taxation year means an individual (other than an ineligible individ-ual) who was resident in Canada throughout the taxation year and who was, at the end of the taxation year,  
  (a) 19 years of age or older; 
  (b) the cohabiting spouse or common-law partner of another individual; or 
  (c) the parent of a child with whom the individual resides. ( particulier admissible)   
  *eligible spouse* of an eligible individual for a taxation year means an individual (other than an ineligible individual) who was resident in Canada throughout the taxation year and who was, at the end of the taxation year, the cohabiting spouse or common-law partner of the eligible individual. (conjoint admissible)   
  *ineligible individual* for a taxation year means an individual  
  (a) who is described in paragraph 149(1)(a) or (b) at any time in the taxation year; 
  (b) who, except where the individual has an eligible dependant for the taxation year, was enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the taxation year; or 
  (c) who was confined to a prison or similar institution for a period of at least 90 days during the taxation year. ( particulier non admissible)   
  *return of income* filed by an individual for a taxation year means a return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the individual had tax payable under this Part for the taxation year. (déclaration de revenu)   
  *working income*, of an individual for a taxation year, means the total of  
  (a) the total of all amounts each of which would, if this Act were read without reference to section 8, be the individual’s income for the taxation year from an office or employment, 
  (b) all amounts that are included because of paragraph 56(1)(n) or (o) or subparagraph 56(1)(r)(v) in computing the individual’s income for a period in the taxation year, and 
  (c) the total of all amounts each of which is the individual’s income for the taxation year from a business carried on by the individual otherwise than as a specified member of a partnership. ( revenu de travail)  
  
  ### Optional amounts
  
  (1.1) An individual may determine the total amount for the definition working income for both the individual and the individual’s eligible spouse, if applicable, for a taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4) and if so, the individual shall determine the total amount for the definition adjusted net income for both the individual and the individual’s eligible spouse, if applicable, for the taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4).  
  
  ### Receipt of social assistance
  
  (1.2) For the purposes of applying the definitions eligible dependant and eligible individual in subsection (1) for a taxation year, an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada, the government of a province or an Indigenous governing body (as defined in section 2 of the Children’s Special Allowances Act) for the benefit of the other individual, unless the amount is a special allowance under the Children’s Special Allowances Act in respect of the other individual in the taxation year.  
  
  ### Secondary earner exemption
  
  (1.3) For the purposes of subsections (2) and (3), 
  (a) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was less than the working income for the year of the eligible spouse, the eligible individual’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible individual’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of 
  (i) the eligible individual’s working income for the year, and 
  (ii) $14,000; and 
  (b) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was greater than or equal to the working income for the year of the eligible spouse, the eligible spouse’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible spouse’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of 
  (i) the eligible spouse’s working income for the year, and 
  (ii) $14,000. 
  
  ### Deemed payment on account of tax
  
  (2) Subject to subsection (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula is 
  (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser of $1,395 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $3,000, and 
  (b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,403 and 27% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $3,000; and is 
  (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $22,944, and 
  (b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $26,177. 
  
  ### Deemed payment on account of tax — disability supplement
  
  (3) An eligible individual for a taxation year who files a return of income for the taxation year and who may deduct an amount under subsection 118.3(1) in computing tax payable under this Part for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula is the lesser of $720 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $1,150; and is 
  (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the individual’s adjusted net income for the taxation year exceeds $32,244, 
  (b) if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount under subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $42,197, and 
  (c) if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under subsection 118.3(1) for the taxation year, 7.5% of the amount, if any, by which the total of the adjusted net incomes of the individual and of the eligible spouse, for the taxation year, exceeds $42,197. 
  (4)  [Repealed, 2023, c. 26, s. 30]  
  
  ### Only one eligible individual
  
  (5) If an eligible individual has an eligible spouse for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the purposes of subsection (2) in respect of the taxation year, 
  (a) if the individuals agree on which individual is the eligible individual for the taxation year, only that individual shall be an eligible individual for the purposes of subsection (2) in respect of the taxation year; and 
  (b) in any other case, only the individual that the Minister designates is the eligible individual for the purposes of subsection (2) in respect of the taxation year. 
  (6)  [Repealed, 2023, c. 26, s. 30]  
  (7)  [Repealed, 2023, c. 26, s. 30]  
  (8)  [Repealed, 2023, c. 26, s. 30]  
  (9)  [Repealed, 2023, c. 26, s. 30]  
  
  ### Special rules for eligible dependant
  
  (10) For the purpose of applying subsections (2) and (3), if an individual (referred to in this subsection as the “child”) would be, but for this subsection, an eligible dependant of more than one eligible individual for a taxation year, the child is deemed only to be an eligible dependant of 
  (a) if the individuals agree, the agreed upon individual; and 
  (b) in any other case, the individual designated by the Minister. 
  
  ### Effect of bankruptcy
  
  (11) For the purpose of this Subdivision, if an individual becomes bankrupt in a particular calendar year 
  (a) notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year; and 
  (b) the individual’s working income and adjusted net income for the taxation year ending on December 31 of the particular calendar year is deemed to include the individual’s working income and adjusted net income for the taxation year that begins on January 1 of the particular calendar year. 
  
  ### Special rules in the event of death
  
  (12) For the purpose of this Subdivision, if an individual dies after June 30 of a calendar year 
  (a) the individual is deemed to be resident in Canada from the time of death until the end of the year and to reside at the same place in Canada as the place where the individual resided immediately before death; 
  (b) the individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year; 
  (c) the individual is deemed to be the cohabiting spouse or common-law partner of another individual (referred to in this paragraph as the “surviving spouse”) at the end of the year if, 
  (i) immediately before death, the individual was the cohabiting spouse or common-law partner of the surviving spouse, and 
  (ii) the surviving spouse is not the cohabiting spouse or common-law partner of another individual at the end of the year; and 
  (d) any return of income filed by a legal representative of the individual is deemed to be a return of income filed by the individual. 
  
  ### Modification for purposes of provincial program
  
  122.71 The Minister of Finance may enter into an agreement with the government of a province whereby the amounts determined under subsections 122.7(2) and (3) with respect to an eligible individual resident in the province at the end of the taxation year shall, for the purpose of calculating amounts deemed to be paid on account of the tax payable of an individual under those subsections, be replaced by amounts determined in accordance with the agreement. 
  
  ### Advance payment
  
  122.72 (1) Subject to subsection (5), an individual in relation to a month specified for a taxation year who is an eligible individual for the preceding taxation year who files a return of income for the preceding taxation year on or before the first day of November of the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount equal to 1/6 of the total of the amounts, if any, determined for the individual for the preceding taxation year under subsections 122.7(2) and (3). 
  
  ### Conditions of application of subsection (3)
  
  (2) Subsection (3) applies in respect of an individual in relation to a particular month specified for a taxation year, and each subsequent month specified for the taxation year, if absent subsection (3) 
  (a) the amount deemed by subsection (1) to have been paid by the individual during the particular month specified for the taxation year would be less than $33; and 
  (b) it is reasonable to conclude that the amount deemed by subsection (1) to have been paid by the individual during each subsequent month specified for the taxation year would be less than $33. 
  
  ### Single advance payment
  
  (3) If this subsection applies 
  (a) the total of all amounts that would otherwise be deemed by subsection (1) to have been paid on account of the individual’s tax payable under this Part for the taxation year during the particular month specified for the taxation year, and during each subsequent month specified for the taxation year, is deemed to have been paid by the individual on account of their tax payable under this Part for the taxation year during the particular specified month for the taxation year; and 
  (b) the amount deemed by subsection (1) to have been paid by the eligible individual during those subsequent months specified for the taxation year is deemed, except for the purpose of this subsection, not to have been paid to the extent that it is included in an amount deemed to have been paid by this subsection. 
  
  ### Months specified
  
  (4) For the purposes of this section, the months specified for a taxation year are July and October of the taxation year and January of the immediately following taxation year. 
  
  ### No advance payment
  
  (5) For the purposes of subsection (1), an individual is not an eligible individual for the preceding taxation year in relation to a month specified for a taxation year if the individual 
  (a) dies in the taxation year before the first day of July; 
  (b) is confined to a prison or similar institution for a period in the taxation year of at least 90 days that begins on or before the first day of the specified month; or 
  (c) ceases to be resident in Canada on a day in the taxation year that is on or before the first day of the specified month. 
  
  ### Notification to Minister
  
  (6) If, in the absence of subsection (5), an individual or their cohabiting spouse or common-law partner at the end of the preceding taxation year would be deemed in a taxation year to have paid an amount on account of tax payable for the taxation year under this section, the individual (or, in the case of a deceased individual, their legal representative) shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs: 
  (a) the individual dies in the taxation year; 
  (b) the individual ceases to be resident in Canada in the taxation year; or 
  (c) the individual is confined to a prison or similar institution for a period of at least 90 days in the taxation year. 
  
  ### Advance payment – no eligible spouse
  
  (7) Subsection (1) is to be applied to a particular individual in relation to a month specified for a taxation year as if section 122.7 applied to the particular individual for the preceding taxation year on the basis that the particular individual had no eligible spouse for the preceding taxation year, if 
  (a) another individual was, for the purposes of section 122.7, the eligible spouse of the particular individual for the preceding taxation year; and 
  (b) the other individual is not, for the purposes of subsection (1), an eligible individual for the preceding taxation year in relation to the month specified for the taxation year because of subsection (5). 
  
  # SUBDIVISION A.3 
  
  ## Climate Action Incentive 
  
  ### Definitions
  
  122.8 (1) The following definitions apply in this section.  
  *cohabiting spouse or common-law partner*, of an individual at any time, has the same meaning as in section 122.6. (époux ou conjoint de fait visé)   
  *eligible individual*, in relation to a month specified for a taxation year, means an individual (other than a trust) who  
  (a) has, before the specified month, attained the age of 19 years; or 
  (b) was, at any time before the specified month, 
  (i) a parent who resided with their child, or 
  (ii) married or in a common-law partnership. ( particulier admissible)   
  *qualified dependant*, of an individual in relation to a month specified for a taxation year, means a person who at the beginning of the specified month  
  (a) is the individual’s child or is dependent for support on the individual or on the individual’s cohabiting spouse or common-law partner; 
  (b) resides with the individual; 
  (c) is under the age of 19 years; 
  (d) is not an eligible individual in relation to the specified month; and 
  (e) is not a qualified relation of any individual in relation to the specified month. ( personne à charge admissible)   
  *qualified relation*, of an individual in relation to a month specified for a taxation year, means the person, if any, who, at the beginning of the specified month, is the individual’s cohabiting spouse or common-law partner. (proche admissible)   
  *return of income*, in respect of a person for a taxation year, means the person’s return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the person had tax payable under this Part for the taxation year. (déclaration de revenu)  
  
  ### Persons not eligible or qualified
  
  (2) Despite subsection (1), a person is not an eligible individual, is not a qualified relation and is not a qualified dependant, in relation to a month specified for a taxation year, if the person 
  (a) died before the specified month; 
  (b) is confined to a prison or similar institution for a period of at least 90 days that includes the first day of the specified month; 
  (c) is at the beginning of the specified month a non-resident person, other than a non-resident person who 
  (i) is at that time the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes the first day of the specified month, and 
  (ii) was resident in Canada at any time before the specified month; 
  (d) is at the beginning of the specified month a person described in paragraph 149(1)(a) or (b); or 
  (e) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for the specified month.  
  
  ### Residence
  
  (3) For the purposes of this section, an individual is considered to reside at any time only at their principal place of residence. 
  
  ### Deemed payment on account of tax
  
  (4) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid, during the specified month, on account of their tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula is the amount specified by the Minister of Finance for an eligible individual in relation to the specified month for the province (in this subsection and subsection (6) referred to as the “relevant province”) in which the eligible individual resides at the beginning of the specified month; is 
  (a) the amount specified by the Minister of Finance for a qualified relation in relation to the specified month for the relevant province, if 
  (i) the eligible individual has a qualified relation at the beginning of the specified month, or 
  (ii) subparagraph (i) does not apply and the eligible individual has a qualified dependant at the beginning of the specified month, and 
  (b) in any other case, nil; is the amount specified by the Minister of Finance for a qualified dependant in relation to the specified month for the relevant province; is the number of qualified dependants of the eligible individual at the beginning of the specified month, other than a qualified dependant in respect of whom an amount is included because of subparagraph (a)(ii) of the description of B in relation to the specified month; and is 
  (a) 1.1, if there is a census metropolitan area, as determined in the last census published by Statistics Canada before the taxation year, in the relevant province and the individual does not reside in a census metropolitan area at the beginning of the specified month, and 
  (b) 1, in any other case. 
  
  ### Shared-custody parent
  
  (4.1) Despite subsection (4), if an eligible individual is a shared-custody parent (as defined in section 122.6, but the definition qualified dependent in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (4) to have been paid during a specified month is equal to the amount determined by the formula  is the amount determined under subsection (4), calculated without reference to this subsection; and is the amount determined under subsection (4), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.  
  
  ### Months specified
  
  (4.2) For the purposes of this section, the months specified for a taxation year are April, July and October of the immediately following taxation year and January of the second immediately following taxation year. 
  
  ### Authority to specify amounts
  
  (5) The Minister of Finance may specify amounts for a province in relation to a month specified for a taxation year for the purposes of this section. If the Minister of Finance does not specify a particular amount that is relevant for the purposes of this section, that particular amount is deemed to be nil for the purpose of applying this section. 
  
  ### Deemed rebate in respect of fuel charges
  
  (6) The amount deemed by this section to have been paid during a specified month on account of tax payable for a taxation year is deemed to have been paid during the specified month as a rebate in respect of charges levied under Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the relevant province.  
  
  ### Only one eligible individual
  
  (7) If an individual is a qualified relation of another individual in relation to a month specified for a taxation year and both those individuals would be, but for this subsection, eligible individuals in relation to the specified month, only the individual that the Minister designates is the eligible individual in relation to the specified month. 
  
  ### Exception — qualified dependant
  
  (8) If a person would, if this Act were read without reference to this subsection, be the qualified dependant of two or more individuals, in relation to a month specified for a taxation year, 
  (a) the person is deemed to be a qualified dependant, in relation to that month, of the one of those individuals on whom those individuals agree; 
  (b) in the absence of an agreement referred to in paragraph (a), the person is deemed to be, in relation to that month, a qualified dependant of the individuals, if any, who are, at the beginning of that month, eligible individuals (as defined in section 122.6, but the definition qualified dependant in that section having the meaning assigned by subsection (1)) in respect of that person; and  
  (c) in any other case, the person is deemed to be, in relation to that month, a qualified dependant only of the individual that the Minister designates. 
  
  ### Notification to Minister
  
  (8.1) An individual shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs: 
  (a) the individual ceases to be an eligible individual; 
  (b) a person becomes or ceases to be the individual’s qualified relation; and 
  (c) a person ceases to be a qualified dependant of the individual, otherwise than because of attaining the age of 19 years. 
  
  ### Effect of bankruptcy
  
  (9) For the purposes of this section, if an individual becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year. 
  
  # SUBDIVISION A.4 
  
  ## School Supplies Tax Credit 
  
  ### Definitions
  
  122.9 (1) The following definitions apply in this section.  
  *eligible educator*, in respect of a taxation year, means an individual who, at any time during the taxation year,  
  (a) is employed in Canada as a teacher or an early childhood educator at 
  (i) an elementary or secondary school, or 
  (ii) a regulated child care facility; and 
  (b) holds a valid and recognized (in the province or territory in which the individual is employed) 
  (i) teaching certificate, licence, permit or diploma, or 
  (ii) certificate or diploma in early childhood education. ( éducateur admissible)   
  *eligible supplies expense*, of an eligible educator for a taxation year, means an amount (other than any amount deducted in computing any person’s income for any taxation year or any amount otherwise included in computing a deduction from any person’s tax payable under this Act for any taxation year) paid by the eligible educator in the taxation year for teaching supplies to the extent that  
  (a) the teaching supplies were 
  (i) purchased by the eligible educator for the purpose of teaching or facilitating students’ learning, and 
  (ii) directly consumed or used in the performance of the duties of the eligible educator’s employment; and 
  (b) the eligible educator is not entitled to receive a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of the eligible educator and that is not deductible in computing the taxable income of the eligible educator) in respect of the amount paid. ( dépense admissible)   
  *return of income* filed by an eligible educator for a taxation year means a return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the year or that would be required to be filed if the eligible educator had tax payable under this Part for the year. (déclaration de revenu)   
  *teaching supplies* means  
  (a) consumable supplies; and 
  (b) prescribed durable goods. ( fournitures scolaires)  
  
  ### Deemed overpayment
  
  (2) An eligible educator who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, at the end of the year, on account of tax payable under this Part for the year, an amount equal to 25% of the least of 
  (a) $1,000; 
  (b) the total of all amounts each of which is an eligible supplies expense of the eligible educator for the year; and 
  (c) if the eligible educator fails to provide the certificate referred to in subsection (3) in respect of the year, as and when requested by the Minister, nil. 
  
  ### Certificate
  
  (3) If the Minister so demands, an eligible educator making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from their employer, or a delegated official of the employer, attesting to the eligible supplies expenses of the eligible educator for the year. 
  
  ### Effect of bankruptcy
  
  (4) For the purposes of this Subdivision, if an eligible educator becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the eligible educator (other than in this subsection) is deemed to be a reference to the particular calendar year. 
  
  ### Part-year residents
  
  (5) If an eligible educator is resident in Canada throughout part of a taxation year and is non-resident throughout another part of the year, the total of the amounts that are deemed to be paid by the eligible educator under subsection (2) for the year cannot exceed the lesser of 
  (a) the total of 
  (i) the amounts deemed to be paid under subsection (2) that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the eligible educator is not resident in Canada, computed as though that period or those periods were the whole taxation year, and 
  (ii) the amounts deemed to be paid under subsection (2) that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the eligible educator is resident in Canada, computed as though that period or those periods were the whole taxation year; and 
  (b) the total of the amounts that would have been deemed to have been paid under subsection (2) for the year had the eligible educator been resident in Canada throughout the year. 
  
  ### Non-residents
  
  (6) Subsection (2) does not apply in respect of a taxation year of an eligible educator if the eligible educator is, at no time in the year, resident in Canada, unless all or substantially all the eligible educator’s income for the year is included in computing the eligible educator’s taxable income earned in Canada for the year. 
  
  # SUBDIVISION A.5 
  
  ## Canada Training Credit 
  
  ### Claimed amount
  
  122.91 (1) An individual who is resident in Canada throughout a taxation year, files a return of income for the taxation year and makes a claim under this subsection is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount claimed by the individual that does not exceed the lesser of 
  (a) the training amount limit of the individual for the taxation year, and 
  (b) 50% of the amount that would be deductible under paragraph 118.5(1)(a) or (d) in computing the individual’s tax payable under this Part for the taxation year if 
  (i) this Act were read without reference to subsections 118.5(1.2) and (2), and 
  (ii) the appropriate percentage for the taxation year were 100%. 
  
  ### Training amount limit
  
  (2) For the purposes of this section, the training amount limit of an individual for a taxation year is 
  (a) if the taxation year is after 2019 and the individual has attained the age of 26 years, and has not attained the age of 66 years, before the end of the taxation year, the lesser of 
  (i) the amount determined by the formula is the individual’s training amount limit for the preceding taxation year, is 
  (A) $250, if 
  (I) the individual has filed a return of income for the preceding taxation year, 
  (II) the individual was resident in Canada throughout the preceding taxation year, 
  (III) the total of the following amounts is greater than or equal to $10,000: 
  1 the amount that would be the individual’s working income (as defined in subsection 122.7(1)) for the preceding taxation year, if this Act were read without reference to paragraph 81(1)(a) and subsection 81(4),  
  2 the total of all amounts each of which is an amount payable to the individual under subsection 22(1), 23(1), 152.04(1) or 152.05(1) of the Employment Insurance Act in the preceding taxation year, and  
  3 the amount that would be included in the individual’s income because of subparagraph 56(1)(a)(vii) in computing the individual’s income for the preceding taxation year, if this Act were read without reference to paragraph 81(1)(a), and 
  (IV) the individual’s income for the preceding taxation year under this Part does not exceed the higher dollar amount referred to in paragraph 117(2)(c), as adjusted under this Act for the preceding taxation year, and 
  (B) nil, in any other case, and is the amount deemed to have been paid by the individual under subsection (1) in respect of the preceding taxation year, and 
  (ii) the amount determined by the formula is the total of all amounts deemed to have been paid by the individual under subsection (1) in respect of a preceding taxation year; and 
  (b) nil, in any other case. 
  
  ### Effect of bankruptcy
  
  (3) For the purpose of this Subdivision, if an individual becomes bankrupt in a particular calendar year, 
  (a) notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year; and 
  (b) the individual’s working income and income under this Part for the taxation year ending on December 31 of the particular calendar year is deemed to include the individual’s working income and the income under this Part for the taxation year that begins on January 1 of the particular calendar year. 
  
  ### Special rules in the event of death
  
  (4) For the purposes of this section, if an individual dies in a calendar year, 
  (a) the individual is deemed to be resident in Canada from the time of death until the end of the year; 
  (b) the individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year; and 
  (c) any return of income filed by a legal representative of the individual is deemed to be a return of income filed by the individual. 
  
  # SUBDIVISION A.6 
  
  ## Multigenerational Home Renovation Tax Credit 
  
  ### Definitions
  
  122.92 (1) The following definitions apply in this section.  
  *eligible dwelling*, of a qualifying individual, for a renovation period taxation year, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of that land that exceeds the greater of ½ hectare and the portion of that land that is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if  
  (a) the qualifying individual or a qualifying relation of the qualifying individual (or a trust under which the qualifying individual or a qualifying relation is a beneficiary) owns — whether jointly with another person or otherwise — at any time in the renovation period taxation year, the housing unit; and 
  (b) the housing unit is ordinarily inhabited, or is reasonably expected to be ordinarily inhabited, within 12 months after the end of the renovation period 
  (i) by the qualifying individual, and 
  (ii) by a qualifying relation of the qualifying individual. ( logement admissible)   
  *eligible individual*, in respect of an eligible dwelling for a renovation period taxation year, means  
  (a) an individual who ordinarily resides, or intends to ordinarily reside, in the eligible dwelling within 12 months after the end of the renovation period in respect of a qualifying renovation of the eligible dwelling and who is 
  (i) a qualifying individual, 
  (ii) the cohabiting spouse or common-law partner (as defined in section 122.6) of a qualifying individual at any time in the renovation period taxation year, or  
  (iii) a qualifying relation of a qualifying individual; or 
  (b) an individual who 
  (i) is a qualifying relation of a qualifying individual, and 
  (ii) owns the eligible dwelling or is the beneficiary of a trust that owns the eligible dwelling. ( particulier admissible)   
  *individual* does not include a trust. (particulier)   
  *qualifying expenditure*, of an individual, means a reasonable outlay or expense that  
  (a) is directly attributable to a qualifying renovation of an eligible dwelling in respect of which the individual is an eligible individual; 
  (b) is made or incurred by the individual before the end of the renovation period in respect of the qualifying renovation referred to in paragraph (a); 
  (c) is the cost of goods acquired or services received, including an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation; and 
  (d) is not an outlay or expense 
  (i) for the cost of annual, recurring or routine repair or maintenance, 
  (ii) to acquire a household appliance, 
  (iii) to acquire an electronic home-entertainment device, 
  (iv) that is the cost of housekeeping, security monitoring, gardening, outdoor maintenance or similar services, 
  (v) for financing costs in respect of the qualifying renovation, 
  (vi) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act, or  
  (vii) that can reasonably be considered to have been reimbursed. ( dépense admissible)   
  *qualifying individual*, in respect of a renovation period taxation year, means an individual who has attained the age of  
  (a) 65 years before the end of the renovation period taxation year; or 
  (b) 18 years before the end of the renovation period taxation year and in respect of whom an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under section 118.3 in computing a taxpayer’s tax payable under this Part for the renovation period taxation year. ( particulier déterminé)   
  *qualifying relation*, of a qualifying individual for a renovation period taxation year, means an individual who  
  (a) has attained the age of 18 years before the end of the renovation period taxation year; and 
  (b) at any time in the renovation period taxation year, is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of either the qualifying individual or the cohabiting spouse or common-law partner (as defined in section 122.6) of the qualifying individual. (proche admissible)   
  *qualifying renovation* means a renovation or alteration of, or addition to, an eligible dwelling of a qualifying individual that  
  (a) is of an enduring nature and integral to the eligible dwelling; and 
  (b) is undertaken to enable the qualifying individual to reside in the dwelling with a qualifying relation of the qualifying individual by establishing a secondary unit within the dwelling for occupancy by the qualifying individual or the qualifying relation. ( travaux de rénovation admissibles)   
  *renovation period*, for a qualifying renovation of an eligible dwelling, means a period that  
  (a) begins at the time that the first qualifying expenditure is made or incurred in respect of the qualifying renovation, and 
  (b) ends at the time of the completion of the qualifying renovation. ( période de rénovation)   
  *renovation period taxation year* means the taxation year in which the renovation period in respect of a qualifying renovation ends. (année d’imposition de la période de rénovation)   
  *secondary unit* means a self-contained housing unit that  
  (a) has a private entrance, kitchen, bathroom and sleeping area, 
  (b) if applicable, meets any local requirements to qualify as a secondary dwelling unit, and 
  (c) meets prescribed conditions, if any. ( logement secondaire)  
  
  ### Qualifying expenditure — trusts
  
  (2) For the purposes of this section, a qualifying expenditure of a particular individual who is an eligible individual in respect of an eligible dwelling includes an outlay or expense made or incurred by a trust of which the particular individual is a beneficiary, in respect of the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling, if 
  (a) the outlay or expense would be a qualifying expenditure of the particular individual if the outlay or expense had been made or incurred by that individual; and 
  (b) the trust has notified the particular individual of the amount of the outlay or expenses that are attributable to the eligible dwelling. 
  
  ### Deemed overpayment
  
  (3) An eligible individual who files a return of income for a renovation period taxation year and who makes a claim under this subsection in that return of income is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount determined by the formula is the appropriate percentage for the taxation year; and is the least of 
  (a) $50,000, 
  (b) the total of all amounts, each of which is a qualifying expenditure of the individual in respect of a qualifying renovation that ended in the taxation year, and 
  (c) if the individual is not resident in Canada throughout the taxation year, nil. 
  
  ### Limits
  
  (4) For the purpose of this section, 
  (a) in respect of a qualifying individual, there may only be one qualifying renovation for the purpose of a claim under subsection (3) by all taxpayers during the lifetime of the qualifying individual; 
  (b) a maximum of $50,000 of qualifying expenditures may be claimed by all taxpayers in respect of the same qualifying renovation; and 
  (c) if more than one taxpayer is entitled to a deduction under subsection (3) in respect of the same qualifying individual or the same qualifying renovation and the taxpayers cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. 
  
  ### Effect of bankruptcy
  
  (5) For the purpose of this Subdivision, if an eligible individual becomes bankrupt in a particular calendar year, despite subsection 128(2), any reference to the taxation year of the eligible individual is deemed to be a reference to the particular calendar year. 
  
  ### Special rules in the event of death
  
  (6) For the purpose of this section, if an eligible individual or a qualifying individual dies in a calendar year, 
  (a) the deceased individual is deemed to be resident in Canada from the time of death until the end of the year if, immediately before death, the deceased individual was resident in Canada; 
  (b) the deceased individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year; 
  (c) the deceased individual is deemed to be the cohabiting spouse or common-law partner of another individual (referred to in this paragraph as the “surviving spouse”) at the end of the year if, 
  (i) immediately before death, the deceased individual was the cohabiting spouse or common-law partner (as defined in section 122.6) of the surviving spouse, and  
  (ii) the surviving spouse is not the cohabiting spouse or common-law partner (as defined in section 122.6) of another individual at the end of the year; and  
  (d) any return of income filed by a legal representative of the deceased individual is deemed to be a return of income filed by the individual. 
  
  # SUBDIVISION B 
  
  ## Rules Applicable to Corporations 
  
  ### Rate for corporations
  
  123 (1) The tax payable under this Part for a taxation year by a corporation on its taxable income or taxable income earned in Canada, as the case may be, (in this section referred to as its “amount taxable”) for the year is, except where otherwise provided, 
  (a) 38% of its amount taxable for the year. 
  
  ### Corporation surtax
  
  123.1 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation (other than a corporation that was throughout the year an investment corporation or a non-resident-owned investment corporation) an amount equal to that proportion of 5% of the amount, if any, by which 
  (a) the tax payable under this Part by the corporation for the year determined without reference to this section, sections 123.2 and 126 (except for the purposes of subsection 125(1) and section 125.1), subsections 127(3) and (5), 127.2(1) and 127.3(1) of this Act and paragraph 123(1)(b) and subsection 127(13) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and as if subsection 124(1) of this Act were read without reference to the words “in a province” in that subsection  exceeds 
  (b) in the case of a Canadian-controlled private corporation to which subsection 125(1) applies, the amount, if any, by which 
  (i) 15% of the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year exceeds 
  (ii) the amount, if any, determined under paragraph 125.1(1)(b) in respect of the corporation for the year, 
  (c) in the case of a mutual fund corporation, the least of the amounts that would be determined under paragraphs (a) to (c) of the description of A in the definition 
  *refundable capital gains tax on hand* in subsection 131(6) in respect of the corporation for the year if this Act were read without reference to this section, and  
  (d) in any other case, nil that the number of days in that portion of the year that is after June 30, 1985 and before 1987 is of the number of days in the year. 
  123.2  [Repealed, 2006, c. 4, s. 72]  
  
  ### Refundable tax on CCPC’s investment income
  
  123.3 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation that is throughout the year a Canadian-controlled private corporation an amount equal to 10 2/3% of the lesser of 
  (a) the corporation’s aggregate investment income for the year (within the meaning assigned by subsection 129(4)), and 
  (b) the amount, if any, by which its taxable income for the year exceeds the least of the amounts determined in respect of it for the year under paragraphs 125(1)(a) to (c). 
  
  ## Corporation Tax Reductions 
  
  ### Definitions
  
  123.4 (1) The definitions in this subsection apply in this section.  
  *CCPC rate reduction percentage* [Repealed, 2003, c. 15, s. 78(1)]   
  *full rate taxable income* of a corporation for a taxation year is  
  (a) if the corporation is not a corporation described in paragraph (b) or (c) for the year, the amount by which that portion of the corporation’s taxable income for the year (or, for greater certainty, if the corporation is non-resident, that portion of its taxable income earned in Canada for the year) that is subject to tax under subsection 123(1) exceeds the total of 
  (i) if an amount is deducted under subsection 125.1(1) from the corporation’s tax otherwise payable under this Part for the year, the amount obtained by dividing the amount so deducted by the corporation’s general rate reduction percentage for the taxation year, 
  (ii) if an amount is deducted under subsection 125.1(2) from the corporation’s tax otherwise payable under this Part for the year, the amount determined, in respect of the deduction, by the formula in that subsection, 
  (iii) the corporation’s income for the year from a personal services business, and 
  (iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, that is the product of the amount, if any, determined for B in subsection 137(3) multiplied by the amount determined for C in subsection 137(3) in respect of the corporation for the year; 
  (b) if the corporation is a Canadian-controlled private corporation throughout the year, the amount by which that portion of the corporation’s taxable income for the year that is subject to tax under subsection 123(1) exceeds the total of 
  (i) the amounts that would, if paragraph (a) applied to the corporation, be determined under subparagraphs (a)(i) to (iv) in respect of the corporation for the year, 
  (ii) the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year, and 
  (iii) except for a corporation that is, throughout the year, a cooperative corporation (within the meaning assigned by subsection 136(2)) or a credit union, the corporation’s aggregate investment income for the year, within the meaning assigned by subsection 129(4); and 
  (iv)  [Repealed, 2003, c. 15, s. 78(2)]  
  (c) if the corporation is throughout the year an investment corporation, a mortgage investment corporation or a mutual fund corporation, nil. ( revenu imposable au taux complet)   
  *general rate reduction percentage* of a corporation for a taxation year is the total of  
  (a) that proportion of 7% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year, 
  (b) that proportion of 8.5% that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year, 
  (c) that proportion of 9% that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year, 
  (d) that proportion of 10% that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year, 
  (e) that proportion of 11.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and 
  (f) that proportion of 13% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year. ( pourcentage de réduction du taux général)  
  
  ### General deduction from tax
  
  (2) There may be deducted from a corporation’s tax otherwise payable under this Part for a taxation year the product obtained by multiplying the corporation’s general rate reduction percentage for the year by the corporation’s full rate taxable income for the year. 
  (3)  [Repealed, 2003, c. 15, s. 78(5)]  
  
  ### Tax on personal services business income
  
  123.5 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation an amount equal to 5% of the corporation’s taxable income for the year from a personal services business. 
  
  ## Additional Tax on Banks and Life Insurers 
  
  ### Definition
  
  123.6 (1) The following definition applies in this section.  
  *bank or life insurer group member* means a corporation that is  
  (a) a bank; 
  (b) a life insurance corporation that carries on business in Canada; or 
  (c) a financial institution (as defined in subsection 190(1)) that is related to any corporation described in paragraph (a) or (b). (membre d’un groupe de banques ou d’assureurs-vie)  
  
  ### Additional tax payable
  
  (2) There shall be added to the tax otherwise payable under this Part for a taxation year, by a corporation that is a bank or life insurer group member at any time during the taxation year, an amount determined by the formula is the corporation’s taxable income for the taxation year (or the corporation’s taxable income earned in Canada if the corporation is non-resident in the taxation year); and is 
  (a) if the corporation is not related to another bank or life insurer group member at the end of the taxation year of the corporation, 
  (i) where the corporation’s taxation year is not less than 51 weeks, $100 million, and 
  (ii) in any other case, the amount determined by the formula is the number of days in the taxation year, and 
  (b) in any other case, subject to subsection (5), nil. 
  
  ### Related group
  
  (3) For the purposes of this section, a corporation that is described in paragraph (a) or (b) of the definition bank or life insurer group member in subsection (1) at any time during a taxation year and that was related to another bank or life insurer group member at the end of the year (in this section, the corporation and each such bank or life insurer group member are referred to together as the “related group”) may file with the Minister, with the corporation’s return of income, an agreement in prescribed form on behalf of the related group under which an amount that does not exceed $100 million is allocated among the related group for all taxation years of members of the related group ending in the same calendar year.  
  
  ### Allocation by Minister
  
  (4) The Minister may request a corporation that is a member of a related group at any time during a taxation year to file with the Minister an agreement referred to in subsection (3) and, if the corporation does not file the agreement within 30 days after receiving the request, the Minister may allocate the amount referred to in subsection (3) among the related group for the taxation years of the bank or life insurer group members ending in the same calendar year. 
  
  ### Allocation
  
  (5) For the purposes of this section, the least amount allocated for a taxation year to each bank or life insurer group member under an agreement described in subsection (3) or by the Minister under subsection (4) is the amount determined for B in subsection (2) for the taxation year of that member, but, if no such allocation is made, the amount determined for B in subsection (2) of each bank or life insurer group member for that year is nil. 
  
  ### Anti-avoidance
  
  (6) If an amount has been deducted in computing the income of a corporation, the amount is deemed not to have been deducted in computing the corporation’s taxable income, or taxable income earned in Canada, as the case may be, for the purpose of computing the tax payable by the corporation under subsection (2), if 
  (a) the deduction is in respect of an amount that can reasonably be considered to have been paid or payable (in this subsection referred to as “the payment”), directly or indirectly, to a person or partnership that was not dealing at arm’s length with the corporation; 
  (b) the person or partnership was not a bank or life insurer group member; and 
  (c) it can reasonably be considered that one of the purposes of the payment was to reduce the tax payable by the corporation under subsection (2). 
  
  ### Deduction from corporation tax
  
  124 (1) There may be deducted from the tax otherwise payable by a corporation under this Part for a taxation year an amount equal to 10% of the corporation’s taxable income earned in the year in a province. 
  
  ### Crown agents
  
  (3) Notwithstanding subsection 124(1), no deduction may be made under this section from the tax otherwise payable under this Part for a taxation year by a corporation in respect of any taxable income of the corporation for the year that is not, because of an Act of Parliament, subject to tax under this Part or by a prescribed federal Crown corporation that is an agent of Her Majesty. 
  
  ### Definitions
  
  (4) In this section,  
  *province* includes the Newfoundland offshore area and the Nova Scotia offshore area; (province)   
  *taxable income earned in the year in a province* means the amount determined under rules prescribed for the purpose by regulations made on the recommendation of the Minister of Finance. (revenu imposable gagné au cours de l’année dans une province)  
  
  ### Small business deduction
  
  125 (1) There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation that was, throughout the taxation year, a Canadian-controlled private corporation, an amount equal to the corporation’s small business deduction rate for the taxation year multiplied by the least of 
  (a) the amount, if any, by which the total of 
  (i) the total of all amounts each of which is the amount of income of the corporation for the year from an active business carried on in Canada, other than an amount that is 
  (A) described in paragraph (a) of the description of A in the definition specified partnership income in subsection (7) for the year,  
  (B) described in subparagraph (a)(i) of the definition specified corporate income in subsection (7) for the year, or  
  (C) paid or payable to the corporation by another corporation with which it is associated, that is deemed by subsection 129(6) to be income for the year from an active business carried on by the corporation in circumstances where the associated corporation is not a Canadian-controlled private corporation or is a Canadian-controlled private corporation that has made an election under subsection 256(2) in respect of its taxation year in which the amount was paid or payable, 
  (ii) the specified partnership income of the corporation for the year, and 
  (ii.1) the specified corporate income of the corporation for the year exceeds the total of 
  (iii) the total of all amounts each of which is a loss of the corporation for the year from an active business carried on in Canada (other than a loss of the corporation for the year from a business carried on by it as a member of a partnership), and 
  (iv) the specified partnership loss of the corporation for the year, 
  (b) the amount, if any, by which the corporation’s taxable income for the year exceeds the total of 
  (i) 100/28 of the total of the amounts that would be deductible under subsection 126(1) from the tax for the year otherwise payable under this Part by it if those amounts were determined without reference to sections 123.3 and 123.4, 
  (ii) the amount determined by multiplying the total of the amounts that would be deductible under subsection 126(2) from the tax for the year otherwise payable under this Part by it, if those amounts were determined without reference to section 123.4, by the relevant factor for the year, and 
  (iii) the amount, if any, of the corporation’s taxable income for the year that is not, because of an Act of Parliament, subject to tax under this Part, and 
  (c) the corporation’s business limit for the year. 
  
  ### Small business deduction rate
  
  (1.1) For the purpose of subsection (1), a corporation’s small business deduction rate for a taxation year is the total of 
  (a) that proportion of 17.5% that the number of days in the taxation year that are before 2018 is of the number of days in the taxation year, 
  (b) that proportion of 18% that the number of days in the taxation year that are in 2018 is of the number of days in the taxation year, and 
  (c) that proportion of 19% that the number of days in the taxation year that are after 2018 is of the number of days in the taxation year. 
  (d) and (e)  [Repealed, 2016, c. 7, s. 34]  
  
  ### Business limit
  
  (2) For the purpose of this section, a corporation’s business limit for a taxation year is $500,000 unless the corporation is associated in the taxation year with one or more other Canadian-controlled private corporations, in which case, except as otherwise provided in this section, its business limit is nil. 
  
  ### Associated corporations
  
  (3) Notwithstanding subsection (2), if all the Canadian-controlled private corporations that are associated with each other in a taxation year file with the Minister in prescribed form an agreement that assigns for the purpose of this section a percentage to one or more of them for the year, the business limit for the year of each of the corporations is 
  (a) if the total of the percentages assigned in the agreement does not exceed 100%, $500,000 multiplied by the percentage assigned to that corporation in the agreement; and 
  (b) in any other case, nil. 
  
  ### Reduction — business limit
  
  (3.1) The business limit for the year of a corporation under subsection (2), (3) or (4) is reduced by the total of all amounts each of which is the portion, if any, of the business limit that the corporation assigns to another corporation under subsection (3.2). 
  
  ### Assignment
  
  (3.2) For the purpose of this section, a Canadian-controlled private corporation (in this subsection referred to as the 
  *first corporation*) may assign all or any portion of its business limit under subsection (2), (3) or (4) for a taxation year of the first corporation to another Canadian-controlled private corporation (in this subsection referred to as the 
  *second corporation*) for a taxation year of the second corporation if  
  (a) the second corporation has an amount of income, for its taxation year, referred to in subparagraph (a)(i) of the definition specified corporate income in subsection (7) from the provision of services or property directly to the first corporation;  
  (b) the first corporation’s taxation year ends in the second corporation’s taxation year; 
  (c) the amount assigned does not exceed the amount determined by the formula is the amount of income referred to in paragraph (a), and is the portion of the amount described in A that is deductible by the first corporation in respect of the amount of income referred to in clause (1)(a)(i)(A) or (B) for the year; and 
  (d) a prescribed form is filed with the Minister by 
  (i) the first corporation in its return of income for its taxation year, and 
  (ii) the second corporation in its return of income for its taxation year. 
  
  ### Failure to file agreement
  
  (4) If any of the Canadian-controlled private corporations that are associated with each other in a taxation year has failed to file with the Minister an agreement as contemplated by subsection (3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year. The total amount so allocated must equal the least of the amounts that would, if none of the corporations were associated with any other corporation during the year and if this Act were read without reference to subsections (5) and (5.1), be the business limits of the corporations for the year. 
  
  ### Special rules for business limit
  
  (5) Notwithstanding subsections (2), (3) and (4), 
  (a) where a Canadian-controlled private corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and it is associated in 2 or more of those taxation years with another Canadian-controlled private corporation that has a taxation year ending in that calendar year, the business limit of the first corporation for each taxation year ending in the calendar year in which it is associated with the other corporation that ends after the first such taxation year ending in that calendar year is, subject to the application of paragraph 125(5)(b), an amount equal to the lesser of 
  (i) its business limit determined under subsection 125(3) or 125(4) for the first such taxation year ending in the calendar year, and 
  (ii) its business limit determined under subsection 125(3) or 125(4) for the particular taxation year ending in the calendar year; and 
  (b) where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, its business limit for the year is that proportion of its business limit for the year determined without reference to this paragraph that the number of days in the year is of 365. 
  
  ### Business limit reduction
  
  (5.1) Notwithstanding subsections (2), (3), (4) and (5), a Canadian-controlled private corporation’s business limit for a particular taxation year ending in a calendar year is the amount, if any, by which its business limit otherwise determined for the particular taxation year exceeds the greater of 
  (a) the amount determined by the formula is the amount that would, but for this subsection, be the corporation’s business limit for the particular taxation year, and is the amount determined by the formula is 
  (i) if, in both the particular taxation year and the preceding taxation year, the corporation is not associated with any corporation, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the preceding taxation year, 
  (ii) if, in the particular taxation year, the corporation is not associated with any corporation but was associated with one or more corporations in the preceding taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year, or 
  (iii) if, in the particular taxation year, the corporation is associated with one or more particular corporations, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation or of any of the particular corporations for its last taxation year that ended in the preceding calendar year, and 
  (b) the amount determined by the formula is the amount determined for A in paragraph (a), and is the total of all amounts each of which is the adjusted aggregate investment income of the corporation, or of any corporation with which it is associated at any time in the particular taxation year, for each taxation year of the corporation, or associated corporation, as the case may be, that ended in the preceding calendar year. 
  
  ### Anti-avoidance
  
  (5.2) A particular corporation and another corporation are deemed to be associated with each other at a particular time for the purposes of paragraph (5.1)(b) if 
  (a) the particular corporation lends or transfers property at any time, either directly or indirectly, by means of a trust or by any other means whatever, to the other corporation; 
  (b) the other corporation is, at the particular time, related to the particular corporation but is not associated with it; and 
  (c) it may reasonably be considered that one of the reasons the loan or transfer was made was to reduce the amount determined for E in paragraph (5.1)(b) in respect of the particular corporation, or of any corporation with which it is associated, for a taxation year. 
  
  ### Corporate partnerships
  
  (6) Where in a taxation year a corporation is a member of a particular partnership and in the year the corporation or a corporation with which it is associated in the year is a member of one or more other partnerships and it may reasonably be considered that one of the main reasons for the separate existence of the partnerships is to increase the amount of a deduction of any corporation under subsection 125(1), the specified partnership income of the corporation for the year shall, for the purposes of this section, be computed in respect of those partnerships as if all amounts each of which is the income of one of the partnerships for a fiscal period ending in the year from an active business carried on in Canada were nil except for the greatest of those amounts. 
  
  ### Corporation deemed member of partnership
  
  (6.1) For the purposes of this section, a corporation that is a member, or is deemed by this subsection to be a member, of a partnership that is a member of another partnership shall be deemed to be a member of the other partnership and the corporation’s share of the income of the other partnership for a fiscal period shall be deemed to be equal to the amount of that income to which the corporation was directly or indirectly entitled. 
  
  ### Specified partnership income deemed nil
  
  (6.2) Notwithstanding any other provision of this section, where a corporation is a member of a partnership that was controlled, directly or indirectly in any manner whatever, by one or more non-resident persons, by one or more public corporations (other than a prescribed venture capital corporation) or by any combination thereof at any time in its fiscal period ending in a taxation year of the corporation, the income of the partnership for that fiscal period from an active business carried on in Canada shall, for the purposes of computing the specified partnership income of a corporation for the year, be deemed to be nil. 
  
  ### Partnership deemed to be controlled
  
  (6.3) For the purposes of subsection 125(6.2), a partnership shall be deemed to be controlled by one or more persons at any time if the total of the shares of that person or those persons of the income of the partnership from any source for the fiscal period of the partnership that includes that time exceeds 1/2 of the income of the partnership from that source for that period. 
  
  ### Definitions
  
  (7) In this section,  
  *active asset*, of a particular corporation at any time, means property that is  
  (a) used at that time principally in an active business carried on primarily in Canada by the particular corporation or by a Canadian-controlled private corporation that is related to the particular corporation, 
  (b) a share of the capital stock of another corporation if, at that time, 
  (i) the other corporation is connected with the particular corporation (within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and 
  (ii) the share would be a qualified small business corporation share (as defined in subsection 110.6(1)) if  
  (A) the references in that definition to an “individual” were references to the particular corporation, and 
  (B) that definition were read without reference to “the individual’s spouse or common-law partner”, or 
  (c) an interest in a partnership, if 
  (i) at that time, the fair market value of the particular corporation’s interest in the partnership is equal to or greater than 10% of the total fair market value of all interests in the partnership, 
  (ii) throughout the 24–month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to property described in this paragraph or in paragraph (a) or (b), and 
  (iii) at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in this paragraph or in paragraph (a) or (b); ( bien actif)   
  *active business carried on by a corporation* means any business carried on by the corporation other than a specified investment business or a personal services business and includes an adventure or concern in the nature of trade; (entreprise exploitée activement)   
  *adjusted aggregate investment income*, of a corporation (other than a corporation that is deemed not to be a private corporation by subsection 136(1) or 137(7) or section 141.1) for a taxation year, means the amount that would be the aggregate investment income (as defined in subsection 129(4)) of the corporation for the year, if  
  (a) paragraph (a) of that definition read as follows: 
  (a) the amount, if any, by which 
  (i) the eligible portion of the corporation’s taxable capital gains (other than taxable capital gains from the disposition of property that is, at the time of disposition, an active asset of the corporation) for the year exceeds 
  (ii) the eligible portion of its allowable capital losses (other than allowable capital losses from the disposition of property that is, at the time of disposition, an active asset of the corporation) for the year, or 
  (b) subparagraph (b)(iii) of that definition read as follows: 
  (iii) a dividend from a corporation connected with it (within the meaning assigned by subsection 186(4) on the assumption that the corporation is at that time a payer corporation within the meaning of that subsection), and 
  (c) paragraph (a) of the definition income or loss in subsection 129(4) read as follows:  
  (a) includes 
  (i) the income or loss from a specified investment business carried on by it, and 
  (ii) amounts in respect of a life insurance policy that are included in computing the corporation’s income for the year, to the extent that the amounts would not otherwise be included in the computation of the corporation’s aggregate investment income, but and 
  (d) no amount were deducted under subsection 91(4) by the corporation in computing its income for the year; ( revenu de placement total ajusté)   
  *Canadian-controlled private corporation* means a private corporation that is a Canadian corporation other than  
  (a) a corporation controlled, directly or indirectly in any manner whatever, by one or more non-resident persons, by one or more public corporations (other than a prescribed venture capital corporation), by one or more corporations described in paragraph (c), or by any combination of them, 
  (b) a corporation that would, if each share of the capital stock of a corporation that is owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation described in paragraph (c) were owned by a particular person, be controlled by the particular person, 
  (c) a corporation a class of the shares of the capital stock of which is listed on a designated stock exchange, or 
  (d) in applying subsection (1), paragraphs 87(2)(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)(e.2)), the definitions excessive eligible dividend designation, general rate income pool and low rate income pool in subsection 89(1) and subsections 89(4) to (6), (8) to (10) and 249(3.1), a corporation that has made an election under subsection 89(11) and that has not revoked the election under subsection 89(12); (société privée sous contrôle canadien)   
  *designated member*, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year where, at any time in the year,  
  (a) the corporation is not a member of the particular partnership, and 
  (b) either 
  (i) one of its shareholders holds a direct or indirect interest in the particular partnership, or 
  (ii) if subparagraph (i) does not apply, 
  (A) the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and 
  (B) it is not the case that all or substantially all of the corporation’s income for the year from an active business is from providing services or property to 
  (I) persons with which the corporation deals at arm’s length, or 
  (II) partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; ( associé désigné)   
  *income of the corporation for the year from an active business* means the total of  
  (a) the corporation’s income for the year from an active business carried on by it including any income for the year pertaining to or incident to that business, other than income for the year from a source in Canada that is a property (within the meaning assigned by subsection 129(4)), and 
  (b) the amount, if any, included under subsection 12(10.2) in computing the corporation’s income for the year; ( revenu de la société pour l’année provenant d’une entreprise exploitée activement)   
  *personal services business* carried on by a corporation in a taxation year means a business of providing services where  
  (a) an individual who performs services on behalf of the corporation (in this definition and paragraph 18(1)(p) referred to as an “incorporated employee”), or 
  (b) any person related to the incorporated employee is a specified shareholder of the corporation and the incorporated employee would reasonably be regarded as an officer or employee of the person or partnership to whom or to which the services were provided but for the existence of the corporation, unless 
  (c) the corporation employs in the business throughout the year more than five full-time employees, or 
  (d) the amount paid or payable to the corporation in the year for the services is received or receivable by it from a corporation with which it was associated in the year; ( entreprise de prestation de services personnels)   
  *specified cooperative income* [Repealed, 2019, c. 29, s. 22]   
  *specified corporate income,* of a corporation for a taxation year, means the lesser of  
  (a) the lesser of 
  (i) the total of all amounts each of which is income (other than specified farming or fishing income of the corporation for the year) from an active business of the corporation for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if 
  (A) at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and 
  (B) it is not the case that all or substantially all of the corporation’s income for the year from an active business is from the provision of services or property to 
  (I) persons (other than the private corporation) with which the corporation deals at arm’s length, or 
  (II) partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, and 
  (ii) the total of all amounts each of which is the portion, if any, of the business limit of a private corporation described in subparagraph (i) for a taxation year that the private corporation assigns to the corporation under subsection (3.2), and 
  (b) an amount that the Minister determines to be reasonable in the circumstances; ( revenu de société déterminé)   
  *specified farming or fishing income*, of a particular corporation for a taxation year, means income of the particular corporation (other than an amount included in the particular corporation’s income under subsection 135(7)), if  
  (a) the income is from the sale of the farming products or fishing catches of the particular corporation’s farming or fishing business to another corporation, and 
  (b) the particular corporation deals at arm’s length with the other corporation; ( revenu d’agriculture ou de pêche déterminé)   
  *specified investment business*, carried on by a corporation in a taxation year, means a business (other than a business carried on by a credit union or a business of leasing property other than real or immovable property) the principal purpose of which is to derive income (including interest, dividends, rents and royalties) from property but, except where the corporation was a prescribed labour-sponsored venture capital corporation at any time in the year, does not include a business carried on by the corporation in the year where  
  (a) the corporation employs in the business throughout the year more than 5 full-time employees, or 
  (b) any other corporation associated with the corporation provides, in the course of carrying on an active business, managerial, administrative, financial, maintenance or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than 5 full-time employees if those services had not been provided; ( entreprise de placement déterminée)   
  *specified partnership business limit,* of a person for a taxation year, at any particular time, means the amount determined by the formula  is the total of all amounts each of which is the person’s share of the income (determined in accordance with Subdivision J of Division B) of a partnership of which the person was a member for a fiscal period ending in the year from an active business carried on in Canada, is the total of all amounts each of which is the income of the partnership for a fiscal period referred to in paragraph (a) of the description of A in the definition specified partnership income in this subsection from an active business carried on in Canada,  is the lesser of 
  (a) the amount of the business limit indicated in subsection (2) for a corporation that is not associated in a taxation year with one or more other Canadian-controlled private corporations, and 
  (b) the product obtained by the formula is the amount referred to in paragraph (a), is 365, and is the total of all amounts each of which is the number of days in a fiscal period of the partnership that ends in the year, and is the total of all amounts each of which is an amount, if any, that the person assigns under subsection (8); ( plafond des affaires de société de personnes déterminé)   
  *specified partnership income* of a corporation for a taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount in respect of a partnership of which the corporation was a member, or a designated member, in the year equal to the least of 
  (a) the total of all amounts each of which is an amount in respect of an active business carried on in Canada by the corporation as a member, or a designated member, of the partnership determined by the formula is the total of all amounts each of which is 
  (i) the corporation’s share of the income (determined in accordance with Subdivision J of Division B) of the partnership for a fiscal period of the business that ends in the year, 
  (ii) income of the corporation for the year from the provision (directly or indirectly, in any manner whatever) of services or property to the partnership, or 
  (iii) an amount included in the corporation’s income for the year in respect of the business under any of subsections 34.2(2), (3) and (12), and is the total of all amounts deducted in computing the corporation’s income for the year from the business (other than amounts that were deducted in computing the income of the partnership from the business or the income of the corporation described under subparagraph (ii) of the description of G) or in respect of the business under subsection 34.2(4) or (11), 
  (b) an amount equal to 
  (i) if the corporation was a member of the partnership, the corporation’s specified partnership business limit for the year, and 
  (ii) if the corporation was a designated member of the partnership, the total of all amounts assigned to it under subsection (8) for the year and, where no such amounts have been assigned, nil, and 
  (c) nil, if 
  (i) the corporation is a member, or a designated member, of the partnership (including indirectly through one or more other partnerships) in the year, and 
  (ii) the partnership provides services or property to either 
  (A) a private corporation (directly or indirectly in any manner whatever) in the year, if 
  (I) the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and 
  (II) it is not the case that all or substantially all of the partnership’s income for the year from an active business is from the provision of services or property to 
  1 persons (other than the private corporation) that deal at arm’s length with the partnership and each person that holds a direct or indirect interest in the partnership, or 
  2 partnerships with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, or 
  (B) a particular partnership (directly or indirectly in any manner whatever) in the year, if 
  (I) the corporation (or one of its shareholders) does not deal at arm’s length with the particular partnership or a person that holds a direct or indirect interest in the particular partnership, and 
  (II) it is not the case that all or substantially all of the partnership’s income for the year from an active business is from the provision of services or property to 
  1 persons that deal at arm’s length with the partnership and each person that holds a direct or indirect interest in the partnership, or 
  2 partnerships (other than the particular partnership) with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, and is the lesser of 
  (a) the total of the amounts determined in respect of the corporation for the year under subparagraphs 125(1)(a)(iii) and 125(1)(a)(iv), and 
  (b) the total of all amounts each of which is an amount in respect of a partnership of which the corporation was a member, or a designated member, in the year equal to the amount determined by the formula is the amount determined in respect of the partnership for the year under paragraph (a) of the description of A, and is the amount determined in respect of the partnership for the year 
  (i) if the corporation was a member of the partnership, under subparagraph (b)(i) of the description of A, and 
  (ii) if the corporation was a designated member of the partnership, under subparagraph (b)(ii) of the description of A; ( revenu de société de personnes déterminé)   
  *specified partnership loss* of a corporation for a taxation year means the total of all amounts each of which is an amount in respect of a partnership of which the corporation was a member in the year determined by the formula  is the total of all amounts each of which is the corporation’s share of the loss (determined in accordance with Subdivision J of Division B) of the partnership for a fiscal period ending in the year from an active business carried on in Canada by the corporation as a member of the partnership, and is the total of all amounts each of which is an amount determined by the formula is the amount determined for H in the definition specified partnership income in this subsection for the year in respect of the corporation’s income from an active business carried on in Canada by the corporation as a member of the partnership, and  is the amount determined for G in the definition specified partnership income in this subsection for the year in respect of the corporation’s share of the income from the business. (perte de société de personnes déterminée)  
  
  ### Assignment — specified partnership business limit
  
  (8) For the purpose of the definition specified partnership income in subsection (7), a person that is a member of a partnership in a taxation year may assign to a designated member of the partnership — for a taxation year of the designated member — all or any portion of the person’s specified partnership business limit (determined without reference to this assignment) in respect of the person’s taxation year if  
  (a) the person is described in paragraph (b) of the definition designated member in subsection (7) in respect of the designated member in the designated member’s taxation year;  
  (b) the specified partnership business limit of the person is in respect of a fiscal period of the partnership that ends in the designated member’s taxation year; and 
  (c) a prescribed form is filed with the Minister by 
  (i) the designated member in its return of income for the designated member’s taxation year, and 
  (ii) the person in its return of income for the person’s taxation year. 
  
  ### Anti-avoidance
  
  (9) If a corporation provides services or property to a person or partnership that holds a direct or indirect interest in a particular partnership or corporation and one of the reasons for the provision of the services or property to the person or partnership, instead of to the particular partnership or corporation, is to avoid the application of subparagraph (1)(a)(ii) or (ii.1) in respect of the income from the provision of the services or property, no amount in respect of the corporation’s income from the provision of the services or property is to be included in the total amount determined under paragraph (1)(a). 
  
  ### Computational rule — specified corporate income
  
  (10) For the purpose of determining an amount for a taxation year in respect of a corporation under clause (1)(a)(i)(B) or subparagraph (1)(a)(ii.1), an amount of income is to be excluded if the amount is 
  (a) income from an active business of the corporation for the year from the provision of services or property to another corporation with which the corporation is associated (in this subsection referred to as the associated corporation); and  
  (b) not deductible by the associated corporation for its taxation year in respect of an amount included in the income of the associated corporation that is 
  (i) referred to in any of clauses (1)(a)(i)(A) to (C), or 
  (ii) reasonable to consider as being attributable to or derived from an amount referred to in clause (1)(a)(i)(C). 
  
  ### Manufacturing and processing profits deductions
  
  125.1 (1) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year an amount equal to the corporation’s general rate reduction percentage for the taxation year (within the meaning assigned by subsection 123.4(1)) multiplied by the lesser of 
  (a) the amount, if any, by which the corporation’s Canadian manufacturing and processing profits for the year exceed, where the corporation was a Canadian-controlled private corporation throughout the year, the least of the amounts determined under paragraphs 125(1)(a) to 125(1)(c) in respect of the corporation for the year, and 
  (b) the amount, if any, by which the corporation’s taxable income for the year exceeds the total of 
  (i) where the corporation was a Canadian-controlled private corporation throughout the year, the least of the amounts determined under paragraphs 125(1)(a) to 125(1)(c) in respect of the corporation for the year, 
  (ii) the amount determined by multiplying the total of the amounts that would be deductible under subsection 126(2) from the tax for the year otherwise payable under this Part by it, if those amounts were determined without reference to section 123.4, by the relevant factor for the year, and 
  (iii) where the corporation was a Canadian-controlled private corporation throughout the year, its aggregate investment income for the year (within the meaning assigned by subsection 129(4)). 
  
  ### Electrical energy and steam
  
  (2) A corporation that generates electrical energy for sale, or produces steam for sale, in a taxation year may deduct from its tax otherwise payable under this Part for the year an amount equal to the corporation’s general rate reduction percentage for the taxation year (within the meaning assigned by subsection 123.4(1)) multiplied by the amount determined by the formula is the amount, if any, that would, if the definition 
  *manufacturing or processing* in subsection (3), and in subsection 1104(9) of the Income Tax Regulations, were read without reference to paragraph (h) of those definitions (other than for the purpose of applying section 5201 of those Regulations and if subsection (5) applied for the purpose of subsection (1), be the lesser of  
  (a) the amount determined under paragraph (1)(a) in respect of the corporation for the year, and 
  (b) the amount determined under paragraph (1)(b) in respect of the corporation for the year; and is the amount, if any, that is the lesser of 
  (a) the amount determined under paragraph (1)(a) in respect of the corporation for the year, and 
  (b) the amount determined under paragraph (1)(b) in respect of the corporation for the year. 
  
  ### Definitions
  
  (3) In this section,  
  *Canadian manufacturing and processing profits* of a corporation for a taxation year means such portion of the total of all amounts each of which is the income of the corporation for the year from an active business carried on in Canada as is determined under rules prescribed for that purpose by regulation made on the recommendation of the Minister of Finance to be applicable to the manufacturing or processing in Canada of goods for sale or lease; (bénéfices de fabrication et de transformation au Canada)   
  *manufacturing or processing* does not include  
  (a) farming or fishing, 
  (b) logging, 
  (c) construction, 
  (d) operating an oil or gas well or extracting petroleum or natural gas from a natural accumulation of petroleum or natural gas, 
  (e) extracting minerals from a mineral resource, 
  (f) processing 
  (i) ore (other than iron ore or tar sands ore) from a mineral resource located in Canada to any stage that is not beyond the prime metal stage or its equivalent, 
  (ii) iron ore from a mineral resource located in Canada to any stage that is not beyond the pellet stage or its equivalent, or 
  (iii) tar sands ore from a mineral resource located in Canada to any stage that is not beyond the crude oil stage or its equivalent, 
  (g) producing industrial minerals, 
  (h) producing or processing electrical energy or steam, for sale, 
  (i) processing natural gas as part of the business of selling or distributing gas in the course of operating a public utility, 
  (j) processing heavy crude oil recovered from a natural reservoir in Canada to a stage that is not beyond the crude oil stage or its equivalent, 
  (k) Canadian field processing, or 
  (l) any manufacturing or processing of goods for sale or lease, if, for any taxation year of a corporation in respect of which the expression is being applied, less than 10% of its gross revenue from all active businesses carried on in Canada was from 
  (i) the selling or leasing of goods manufactured or processed in Canada by it, and 
  (ii) the manufacturing or processing in Canada of goods for sale or lease, other than goods for sale or lease by it. ( fabrication ou transformation)  
  
  ### Determination of gross revenue
  
  (4) For the purposes of paragraph (l) of the definition 
  *manufacturing or processing* in subsection 125.1(3), where a corporation was a member of a partnership at any time in a taxation year,  
  (a) there shall be included in the gross revenue of the corporation for the year from all active businesses carried on in Canada, that proportion of the gross revenue from each such business carried on in Canada by means of the partnership, for the fiscal period of the partnership coinciding with or ending in that year, that the corporation’s share of the income of the partnership from that business for that fiscal period is of the income of the partnership from that business for that fiscal period; and 
  (b) there shall be included in the gross revenue of the corporation for the year from all activities described in subparagraphs (l)(i) and (ii) of the definition 
  *manufacturing or processing* in subsection 125.1(3), that proportion of the gross revenue from each such activity engaged in in the course of a business carried on by means of the partnership, for the fiscal period of the partnership coinciding with or ending in that year, that the corporation’s share of the income of the partnership from that business for that fiscal period is of the income of the partnership from that business for that fiscal period.  
  
  ### Interpretation
  
  (5) For the purpose of the description of A in subsection (2) and for the purpose of applying the Income Tax Regulations (other than section 5201 of those Regulations) to that subsection other than the description of B, 
  (a) electrical energy and steam are deemed to be goods; and 
  (b) the generation of electrical energy for sale, and the production of steam for sale, are deemed to be, subject to paragraph (l) of the definition 
  *manufacturing or processing* in subsection (3), manufacturing or processing.  
  125.11  [Repealed, 2003, c. 28, s. 13(2)]  
  
  ### Definitions
  
  125.2 (1) The following definitions apply in this section.  
  *adjusted business income*, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (revenu rajusté tiré d’une entreprise)   
  *cost of capital*, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en capital)   
  *cost of labour*, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en main-d’oeuvre)   
  *zero-emission technology manufacturing profits*, of a corporation for a taxation year, means the amount determined by the formula  is the corporation’s adjusted business income for the taxation year; is the fraction determined by the formula is the total of the corporation’s ZETM cost of capital and ZETM cost of labour for the taxation year, and is the total of the corporation’s cost of capital and cost of labour for the taxation year; and is 
  (a) if the fraction determined for B is at least 0.9, the fraction determined by the formula is the amount determined for E, and is the amount determined for D; and 
  (b) 1, in any other case. ( bénéfices de fabrication de technologies à zéro émission)   
  *ZETM cost of capital*, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en capital de FTZE)   
  *ZETM cost of labour*, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en main-d’œuvre de FTZE)  
  
  ### Zero-emission technology manufacturing
  
  (2) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year the amount determined by the formula is 
  (a) 0.075, if the taxation year begins after 2021 and before 2029, 
  (b) 0.05625, if the taxation year begins after 2028 and before 2030, 
  (c) 0.0375, if the taxation year begins after 2029 and before 2031, 
  (d) 0.01875, if the taxation year begins after 2030 and before 2032, and 
  (e) nil, in any other case; is the least of 
  (a) the corporation’s zero-emission technology manufacturing profits for the taxation year, 
  (b) the amount of the corporation’s adjusted business income for the taxation year (determined without reference to section 5203 of the Income Tax Regulations) less  
  (i) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year, and 
  (ii) in any other case, nil, and 
  (c) the amount, if any, by which the corporation’s taxable income for the taxation year exceeds the total of 
  (i) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year, 
  (ii) the corporation’s aggregate investment income (as defined in subsection 129(4)) for the taxation year, and  
  (iii) the amount determined by multiplying the total of the amounts deducted under subsection 126(2) from its tax for the taxation year otherwise payable under this Part, by the relevant factor for the taxation year; is 
  (a) 0.045, if the taxation year begins after 2021 and before 2029, 
  (b) 0.03375, if the taxation year begins after 2028 and before 2030, 
  (c) 0.0225, if the taxation year begins after 2029 and before 2031, 
  (d) 0.01125, if the taxation year begins after 2030 and before 2032, and 
  (e) nil, in any other case; and is 
  (a) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the lesser of 
  (i) the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year, and 
  (ii) the amount determined by the formula is the corporation’s zero-emission technology manufacturing profits for the taxation year, and is the amount determined for B, and 
  (b) nil, in any other case. 
  
  ### Part XIII tax  — eligible bank affiliate
  
  125.21 There may be deducted in computing the tax payable under this Part for a taxation year by a particular corporation that is throughout the year an eligible Canadian bank (as defined in subsection 95(2.43)) the total of all amounts, each of which is the amount, if any, by which 
  (a) an amount paid under paragraph 212(1)(b) in respect of interest paid or credited in the year by the particular corporation in respect of an upstream deposit (as defined in subsection 95(2.43)) owing to a non-resident corporation that is, throughout the year, an eligible bank affiliate (as defined in subsection 95(2.43)) of the particular corporation exceeds 
  (b) the total of all amounts each of which is a portion of the amount described in paragraph (a) that is available to the non-resident corporation or any other person or partnership at any time as a credit or reduction of, or deduction from, any amount otherwise payable to the government of a country other than Canada, or a political subdivision of that country, having regard to all available provisions of the laws of that country, or political subdivision, as the case may be, any tax treaty with that country and any other agreements entered into by that country or political subdivision. 
  
  ### Deduction of Part I.3 tax
  
  125.3 (1) There may be deducted in computing the tax payable under this Part for a taxation year by a corporation (other than a corporation that was throughout the year a financial institution, within the meaning assigned by section 190) an amount equal to such part as the corporation claims of its unused Part I.3 tax credits for any of its 7 immediately preceding taxation years ending before 1992, to the extent that that amount does not exceed the amount, if any, by which 
  (a) its Canadian surtax payable for the year exceeds 
  (b) the amount that would, but for subsection 181.1(4), be its tax payable under Part I.3 for the year. 
  
  ### Idem
  
  (1.1) There may be deducted in computing the tax payable under this Part for a taxation year by a corporation that was a financial institution (within the meaning assigned by section 190) throughout the year an amount equal to such part as the corporation claims of its unused Part I.3 tax credits for any of its 7 immediately preceding taxation years ending before 1992, to the extent that that amount does not exceed the lesser of 
  (a) the amount, if any, by which its Canadian surtax payable for the year exceeds the amount that would, but for subsection 181.1(4), be its tax payable under Part I.3 for the year, and 
  (b) the amount, if any, by which its tax payable under this Part (determined without reference to this section) for the year exceeds the amount that would, but for subsections 181.1(4) and 190.1(3), be the total of its taxes payable under Parts I.3 and VI for the year. 
  
  ### Special rules
  
  (2) For the purposes of this section, 
  (a) no amount may be claimed under subsection 125.3(1) in computing a corporation’s tax payable under this Part for a particular taxation year in respect of its unused Part I.3 tax credit for another taxation year until its unused Part I.3 tax credits for taxation years preceding the other year that may be claimed for the particular year have been claimed; and 
  (b) an amount in respect of a corporation’s unused Part I.3 tax credit for a taxation year may be claimed under subsection 125.3(1) in computing its tax payable under this Part for another taxation year only to the extent that it exceeds the total of all amounts each of which is the amount claimed in respect of that unused Part I.3 tax credit in computing its tax payable under this Part for a taxation year preceding that other year. 
  
  ### Acquisition of control
  
  (3) Where, at any time, control of a corporation has been acquired by a person or group of persons, no amount in respect of its unused Part I.3 tax credit for a taxation year ending before that time is deductible by the corporation for a taxation year ending after that time and no amount in respect of its unused Part I.3 tax credit for a taxation year ending after that time is deductible by the corporation for a taxation year ending before that time, except that 
  (a) where a business was carried on by the corporation in a taxation year ending before that time, its unused Part I.3 tax credit for that year is deductible by the corporation for a particular taxation year ending after that time only if that business was carried on by the corporation for profit or with a reasonable expectation of profit throughout the particular year and only to the extent of that proportion of the corporation’s Canadian surtax payable for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of its income for the particular year from that business and, where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, its income for the particular year from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the particular year by the corporation in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of that business or the other business, is of the greater of 
  (ii) the amount determined under subparagraph 125.3(3)(a)(i), and 
  (iii) the corporation’s taxable income for the particular year; and 
  (b) where a business was carried on by the corporation throughout a taxation year ending after that time, its unused Part I.3 tax credit for that year is deductible by the corporation for a particular taxation year ending before that time only if that business was carried on by the corporation for profit or with a reasonable expectation of profit in the particular year and only to the extent of that proportion of the corporation’s Canadian surtax payable for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of its income for the particular year from that business and, where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, its income for the particular year from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the particular year by the corporation in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of that business or the other business, is of the greater of 
  (ii) the amount determined under subparagraph 125.3(3)(b)(i), and 
  (iii) the corporation’s taxable income for the particular year. 
  
  ### Definitions
  
  (4) For the purposes of this section,  
  *Canadian surtax payable* of a corporation for a taxation year means  
  (a) in the case of a corporation that is non-resident throughout the year, the lesser of 
  (i) the amount determined under section 123.2 in respect of the corporation for the year, and 
  (ii) its tax payable under this Part for the year, and 
  (b) in any other case, the lesser of 
  (i) the prescribed proportion of the amount determined under section 123.2 in respect of the corporation for the year, and 
  (ii) its tax payable under this Part for the year; ( surtaxe canadienne payable)   
  *unused Part I.3 tax credit* of a corporation for a taxation year means  
  (a) where the year ended before 1992, the amount, if any, by which its tax payable under Part I.3 for the year exceeds the amount deductible under subsection 125.3(1) in computing its tax payable under this Part for the year, and 
  (b) where the year ends after 1991, the amount, if any, by which the corporation’s tax payable under Part I.3 for the year (determined without reference to subsection 181.1(4)) exceeds its Canadian surtax payable under this Part for the year. ( crédit d’impôt de la partie I.3 inutilisé)  
  
  ## Canadian Film or Video Production Tax Credit 
  
  ### Definitions
  
  125.4 (1) The definitions in this subsection apply in this section.  
  *assistance* means an amount, other than a prescribed amount or an amount deemed under subsection (3) to have been paid, that would be included under paragraph 12(1)(x) in computing a taxpayer’s income for any taxation year if that paragraph were read without reference to  
  (a) subparagraphs 12(1)(x)(v) to (viii), if the amount were received 
  (i) from a person or partnership described in subparagraph 12(1)(x)(ii), or 
  (ii) in circumstances where clause 12(1)(x)(i)(C) applies; and 
  (b) subparagraphs 12(1)(x)(v) to (vii), in any other case. ( montant d’aide)   
  *Canadian film or video production* has the meaning assigned by regulation. (production cinématographique ou magnétoscopique canadienne)   
  *Canadian film or video production certificate* means a certificate issued in respect of a production by the Minister of Canadian Heritage certifying that the production is a Canadian film or video production in respect of which that Minister is satisfied that, except where the production is a treaty co-production (as defined in subsection 1106(3) of the Income Tax Regulations), an acceptable share of revenues from the exploitation of the production in non-Canadian markets is, under the terms of any agreement, retained by  
  (a) a qualified corporation that owns or owned an interest in, or for civil law a right in, the production; 
  (b) a prescribed taxable Canadian corporation related to the qualified corporation; or 
  (c) any combination of corporations described in paragraph (a) or (b). ( certificat de production cinématographique ou magnétoscopique canadienne)   
  *investor* [Repealed, 2014, c. 39, s. 41]   
  *labour expenditure*, of a corporation for a taxation year in respect of a Canadian film or video production, means, in the case of a corporation that is not a qualified corporation for the taxation year, nil, and in the case of a corporation that is a qualified corporation for the taxation year, subject to subsection (2), the total of the following amounts to the extent that they are reasonable in the circumstances and included in the cost to, or in the case of depreciable property the capital cost to, the corporation, or any other person or partnership, of the production:  
  (a) the salary or wages directly attributable to the production that are incurred after 1994 and in the taxation year, or the preceding taxation year, by the corporation for the stages of production of the property, from the production commencement time to the end of the post-production stage, and paid by it in the taxation year or within 60 days after the end of the taxation year (other than amounts incurred in that preceding taxation year that were paid within 60 days after the end of that preceding taxation year), 
  (b) that portion of the remuneration (other than salary or wages and other than remuneration that relates to services rendered in the preceding taxation year and that was paid within 60 days after the end of that preceding taxation year) that is directly attributable to the production of property, that relates to services rendered after 1994 and in the taxation year, or that preceding taxation year, to the corporation for the stages of production, from the production commencement time to the end of the post-production stage, and that is paid by it in the taxation year or within 60 days after the end of the taxation year to 
  (i) an individual who is not an employee of the corporation, to the extent that the amount paid 
  (A) is attributable to services personally rendered by the individual for the production of the property, or 
  (B) is attributable to and does not exceed the salary or wages of the individual’s employees for personally rendering services for the production of the property, 
  (ii) another taxable Canadian corporation, to the extent that the amount paid is attributable to and does not exceed the salary or wages of the other corporation’s employees for personally rendering services for the production of the property, 
  (iii) another taxable Canadian corporation all the issued and outstanding shares of the capital stock of which (except directors’ qualifying shares) belong to an individual and the activities of which consist principally of the provision of the individual’s services, to the extent that the amount paid is attributable to services rendered personally by the individual for the production of the property, or 
  (iv) a partnership that is carrying on business in Canada, to the extent that the amount paid 
  (A) is attributable to services personally rendered by an individual who is a member of the partnership for the production of the property, or 
  (B) is attributable to and does not exceed the salary or wages of the partnership’s employees for personally rendering services for the production of the property, and 
  (c) where 
  (i) the corporation is a subsidiary wholly-owned corporation of another taxable Canadian corporation (in this section referred to as the “parent”), and 
  (ii) the corporation and the parent have agreed that this paragraph apply in respect of the production, the reimbursement made by the corporation in the year, or within 60 days after the end of the year, of an expenditure that was incurred by the parent in a particular taxation year of the parent in respect of that production and that would be included in the labour expenditure of the corporation in respect of the property for the particular taxation year because of paragraph (a) or (b) if 
  (iii) the corporation had had such a particular taxation year, and 
  (iv) the expenditure were incurred by the corporation for the same purpose as it was by the parent and were paid at the same time and to the same person or partnership as it was by the parent. ( dépense de main-d’oeuvre)   
  *production commencement time*, in respect of a Canadian film or video production, means the earlier of  
  (a) the time at which principal photography of the production begins, and 
  (b) the latest of 
  (i) the time at which a qualified corporation that has an interest in, or for civil law a right in, the production, or the parent of the corporation, first makes an expenditure for salary or wages or other remuneration for activities, of scriptwriters, that are directly attributable to the development by the corporation of script material of the production, 
  (ii) the time at which the corporation or the parent of the corporation acquires a property, on which the production is based, that is a published literary work, screenplay, play, personal history or all or part of the script material of the production, and 
  (iii) two years before the date on which principal photography of the production begins. ( début de la production)   
  *qualified corporation* for a taxation year means a corporation that is throughout the year a prescribed taxable Canadian corporation the activities of which in the year are primarily the carrying on through a permanent establishment (as defined by regulation) in Canada of a business that is a Canadian film or video production business. (société admissible)   
  *qualified labour expenditure*, of a corporation for a taxation year in respect of a Canadian film or video production, means the lesser of  
  (a) the amount, if any, by which 
  (i) the total of 
  (A) the labour expenditure of the corporation for the year in respect of the production, and 
  (B) the amount by which the total of all amounts each of which is the labour expenditure of the corporation for a preceding taxation year in respect of the production exceeds the total of all amounts each of which is a qualified labour expenditure of the corporation in respect of the production for a preceding taxation year before the end of which the principal filming or taping of the production began exceeds 
  (ii) where the corporation is a parent, the total of all amounts each of which is an amount that is the subject of an agreement in respect of the production referred to in paragraph (c) of the definition 
  *labour expenditure* between the corporation and its wholly-owned corporation, and  
  (b) the amount determined by the formula is 60% of the amount by which 
  (i) the total of all amounts each of which is an expenditure by the corporation in respect of the production that is included in the cost to, or in the case of depreciable property the capital cost to, the corporation or any other person or partnership of the production at the end of the taxation year, exceeds 
  (ii) the total of all amounts each of which is an amount of assistance in respect of that cost that, at the time of the filing of its return of income for the year, the corporation or any other person or partnership has received, is entitled to receive or can reasonably be expected to receive, that has not been repaid before that time pursuant to a legal obligation to do so (and that does not otherwise reduce that cost), and is the total of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production for a preceding taxation year before the end of which the principal filming or taping of the production began. ( dépense de main-d’oeuvre admissible)   
  *salary or wages* does not include an amount  
  (a) described in section 7; 
  (b) determined by reference to profits or revenues; or 
  (c) paid to a person in respect of services rendered by the person at a time when the person was non-resident, unless the person was at that time a Canadian citizen. ( traitement ou salaire)   
  *script material*, in respect of a production, means written material describing the story on which the production is based and, for greater certainty, includes a draft script, an original story, a screen story, a narration, a television production concept, an outline or a scene-by-scene schematic, synopsis or treatment. (texte)  
  
  ### COVID-19 — production commencement time
  
  (1.1) The reference to “two years” in subparagraph (b)(iii) of the definition production commencement time in subsection (1) is to be read as a reference to “three years” in respect of film or video productions for which the labour expenditure of the corporation in respect of the production for the taxation year ending in 2020 or 2021 was greater than nil.  
  
  ### Rules governing labour expenditure of a corporation
  
  (2) For the purposes of the definitions 
  *labour expenditure* and 
  *qualified labour expenditure* in subsection (1),  
  (a) remuneration does not include remuneration 
  (i) determined by reference to profits or revenues, or 
  (ii) in respect of services rendered by a person at a time when the person was non-resident, unless the person was at that time a Canadian citizen; 
  (b) services referred to in paragraph (b) of that definition that relate to the post-production stage of the production include only the services that are rendered at that stage by a person who performs the duties of animation cameraman, assistant colourist, assistant mixer, assistant sound-effects technician, boom operator, colourist, computer graphics designer, cutter, developing technician, director of post production, dubbing technician, encoding technician, inspection technician — clean up, mixer, optical effects technician, picture editor, printing technician, projectionist, recording technician, senior editor, sound editor, sound-effects technician, special effects editor, subtitle technician, timer, video-film recorder operator, videotape operator or by a person who performs a prescribed duty; 
  (c) that definition does not apply to an amount to which section 37 applies; and 
  (d) an expenditure incurred in respect of a film or video production by a qualified corporation (in this paragraph referred to as the “co-producer”) in respect of goods supplied or services rendered by another qualified corporation to the co-producer in respect of the production is not a labour expenditure to the co-producer or, for the purpose of applying this section to the co-producer, a cost or capital cost of the production. 
  
  ### Tax credit
  
  (3) Where 
  (a) a qualified corporation for a taxation year files with its return of income for the year 
  (i) a Canadian film or video production certificate issued in respect of a Canadian film or video production of the corporation, 
  (ii) a prescribed form containing prescribed information, and 
  (iii) each other document prescribed in respect of the production, and 
  (b) the principal filming or taping of the production began before the end of the year, the corporation is deemed to have paid on its balance-due day for the year an amount on account of its tax payable under this Part for the year equal to 25% of its qualified labour expenditure for the year in respect of the production. 
  
  ### Exception
  
  (4) This section does not apply to a Canadian film or video production if the production  — or an interest in a person or partnership that has, directly or indirectly, an interest in, or for civil law a right in, the production  — is a tax shelter investment for the purpose of section 143.2. 
  
  ### When assistance received
  
  (5) For the purposes of this Act other than this section, and for greater certainty, the amount that a corporation is deemed under subsection 125.4(3) to have paid for a taxation year is assistance received by the corporation from a government immediately before the end of the year. 
  
  ### Revocation of certificate
  
  (6) If an omission or incorrect statement was made for the purpose of obtaining a Canadian film or video production certificate in respect of a production, or if the production is not a Canadian film or video production, 
  (a) the Minister of Canadian Heritage may 
  (i) revoke the certificate, or 
  (ii) if the certificate was issued in respect of productions included in an episodic television series, revoke the certificate in respect of one or more episodes in the series; 
  (b) for greater certainty, for the purposes of this section, the expenditures and cost of production in respect of productions included in an episodic television series that relate to an episode in the series in respect of which a certificate has been revoked are not attributable to a Canadian film or video production; and 
  (c) for the purpose of subparagraph (3)(a)(i), a certificate that has been revoked is deemed never to have been issued. 
  
  ### Guidelines
  
  (7) The Minister of Canadian Heritage shall issue guidelines respecting the circumstances under which the conditions in the definition 
  *Canadian film or video production certificate* in subsection (1) are satisfied. For greater certainty, those guidelines are not statutory instruments as defined in the Statutory Instruments Act.  
  
  ## Film or Video Production Services Tax Credit 
  
  ### Definitions
  
  125.5 (1) The definitions in this subsection apply in this section.  
  *accredited film or video production certificate*, in respect of a film or video production, means a certificate issued by the Minister of Canadian Heritage certifying that the production is an accredited production. (certificat de production cinématographique ou magnétoscopique agréée)   
  *accredited production* has the meaning assigned by regulation. (production agréée)   
  *assistance* means an amount, other than an amount deemed under subsection 125.5(3) to have been paid, that would be included under paragraph 12(1)(x) in computing the income of a taxpayer for any taxation year if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to 12(1)(x)(vii). (montant d’aide)   
  *Canadian labour expenditure* of a corporation for a taxation year in respect of an accredited production means, in the case of a corporation that is not an eligible production corporation in respect of the production for the year, nil, and in any other case, subject to subsection 125.5(2), the total of the following amounts in respect of the production to the extent that they are reasonable in the circumstances:  
  (a) the salary or wages directly attributable to the production that are incurred by the corporation after October 1997, and in the year or the preceding taxation year, and that relate to services rendered in Canada for the stages of production of the production, from the final script stage to the end of the post-production stage, and paid by it in the year or within 60 days after the end of the year to employees of the corporation who were resident in Canada at the time the payments were made (other than amounts incurred in that preceding year that were paid within 60 days after the end of that preceding year), 
  (b) that portion of the remuneration (other than salary or wages and other than remuneration that relates to services rendered in the preceding taxation year and that was paid within 60 days after the end of that preceding year) that is directly attributable to the production, that relates to services rendered in Canada after October 1997 and in the year, or that preceding year, to the corporation for the stages of production of the production, from the final script stage to the end of the post-production stage, and that is paid by it in the year or within 60 days after the end of the year to a person or a partnership, that carries on a business in Canada through a permanent establishment (as defined by regulation), and that is 
  (i) an individual resident in Canada at the time the amount is paid and who is not an employee of the corporation, to the extent that the amount paid 
  (A) is attributable to services personally rendered by the individual in Canada in respect of the accredited production, or 
  (B) is attributable to and does not exceed the salary or wages paid by the individual to the individual’s employees at a time when they were resident in Canada for personally rendering services in Canada in respect of the accredited production, 
  (ii) another corporation that is a taxable Canadian corporation, to the extent that the amount paid is attributable to and does not exceed the salary or wages paid to the other corporation’s employees at a time when they were resident in Canada for personally rendering services in Canada in respect of the accredited production, 
  (iii) another corporation that is a taxable Canadian corporation, all the issued and outstanding shares of the capital stock of which (except directors’ qualifying shares) belong to an individual who was resident in Canada and the activities of which consist principally of the provision of the individual’s services, to the extent that the amount paid is attributable to services rendered personally in Canada by the individual in respect of the accredited production, or 
  (iv) a partnership, to the extent that the amount paid 
  (A) is attributable to services personally rendered in respect of the accredited production by an individual who is resident in Canada and who is a member of the partnership, or 
  (B) is attributable to and does not exceed the salary or wages paid by the partnership to its employees at a time when they were resident in Canada for personally rendering services in Canada in respect of the accredited production, and 
  (c) where 
  (i) the corporation is a subsidiary wholly-owned corporation of another corporation that is a taxable Canadian corporation (in this section referred to as the “parent”), and 
  (ii) the corporation and the parent have filed with the Minister an agreement that this paragraph apply in respect of the production, the reimbursement made by the corporation in the year, or within 60 days after the end of the year, of an expenditure that was incurred by the parent in a particular taxation year of the parent in respect of the production and that would be included in the Canadian labour expenditure of the corporation in respect of the production for the particular taxation year because of paragraph (a) or (b) if 
  (iii) the corporation had had such a particular taxation year, and 
  (iv) the expenditure were incurred by the corporation for the same purpose as it was incurred by the parent and were paid at the same time and to the same person or partnership as it was paid by the parent. ( dépense de main-d’oeuvre au Canada)   
  *eligible production corporation*, in respect of an accredited production for a taxation year, means a corporation, the activities of which in the year in Canada are primarily the carrying on through a permanent establishment (as defined by regulation) in Canada of a film or video production business or a film or video production services business and that  
  (a) owns the copyright in the accredited production throughout the period during which the production is produced in Canada, or 
  (b) has contracted directly with the owner of the copyright in the accredited production to provide production services in respect of the production, where the owner of the copyright is not an eligible production corporation in respect of the production,except a corporation that is, at any time in the year, 
  (c) a person all or part of whose taxable income is exempt from tax under this Part, 
  (d) controlled directly or indirectly in any manner whatever by one or more persons all or part of whose taxable income is exempt from tax under this Part, or 
  (e) prescribed to be a labour-sponsored venture capital corporation for the purpose of section 127.4. ( société de production admissible)   
  *qualified Canadian labour expenditure* of an eligible production corporation for a taxation year in respect of an accredited production means the amount, if any, by which  
  (a) the total of all amounts each of which is the corporation’s Canadian labour expenditure for the year or a preceding taxation year exceeds the aggregate of 
  (b) the total of all amounts, each of which is an amount of assistance that can reasonably be considered to be in respect of amounts included in the total determined under paragraph (a) in respect of the corporation for the year that, at the time of filing its return of income for the year, the corporation or any other person or partnership has received, is entitled to receive or can reasonably be expected to receive, that has not been repaid before that time pursuant to a legal obligation to do so (and that does not otherwise reduce that expenditure), 
  (c) the total of all amounts, each of which is the qualified Canadian labour expenditure of the corporation in respect of the accredited production for a preceding taxation year before the end of which the principal filming or taping of the production began, and 
  (d) where the corporation is a parent, the total of all amounts each of which is included in the total determined under paragraph (a) in respect of the corporation for the year and is the subject of an agreement in respect of the accredited production referred to in paragraph (c) of the definition 
  *Canadian labour expenditure* between the corporation and its subsidiary wholly-owned corporation. (dépense de main-d’oeuvre admissible au Canada)   
  *salary or wages* does not include an amount described in section 7 or an amount determined by reference to profits or revenues. (traitement ou salaire)  
  
  ### Rules governing Canadian labour expenditure of a corporation
  
  (2) For the purpose of the definition 
  *Canadian labour expenditure* in subsection 125.5(1),  
  (a) remuneration does not include remuneration determined by reference to profits or revenues; 
  (b) services referred to in paragraph (b) of that definition that relate to the post-production stage of the accredited production include only the services that are rendered at that stage by a person who performs the duties of animation cameraman, assistant colourist, assistant mixer, assistant sound-effects technician, boom operator, colourist, computer graphics designer, cutter, developing technician, director of post production, dubbing technician, encoding technician, inspection technician — clean up, mixer, optical effects technician, picture editor, printing technician, projectionist, recording technician, senior editor, sound editor, sound-effects technician, special effects editor, subtitle technician, timer, video-film recorder operator, videotape operator or by a person who performs a prescribed duty; 
  (c) that definition does not apply to an amount to which section 37 applies; and 
  (d) for greater certainty, that definition does not apply to an amount that is not a production cost including an amount in respect of advertising, marketing, promotion, market research or an amount related in any way to another film or video production. 
  
  ### Tax credit
  
  (3) An eligible production corporation in respect of an accredited production for a taxation year is deemed to have paid on its balance-due day for the year an amount on account of its tax payable under this Part for the year equal to 16% of its qualified Canadian labour expenditure for the year in respect of the production, if 
  (a) the corporation files with its return of income for the year 
  (i) a prescribed form containing prescribed information in respect of the production, 
  (ii) an accredited film or video production certificate in respect of the production, and 
  (iii) each other document prescribed in respect of the production; and 
  (b) the principal filming or taping of the production began before the end of the year. 
  
  ### Canadian film or video production
  
  (4) Subsection 125.5(3) does not apply in respect of a production in respect of which an amount is deemed to have been paid under subsection 125.4(3). 
  
  ### When assistance received
  
  (5) For the purposes of this Act other than this section, and for greater certainty, the amount that a corporation is deemed under subsection 125.5(3) to have paid for a taxation year is assistance received by the corporation from a government immediately before the end of the year. 
  
  ### Revocation of certificate
  
  (6) An accredited film or video production certificate in respect of an accredited production may be revoked by the Minister of Canadian Heritage where 
  (a) an omission or incorrect statement was made for the purpose of obtaining the certificate, or 
  (b) the production is not an accredited production, and, for the purpose of subparagraph 125.5(3)(a)(ii), a certificate that has been revoked is deemed never to have been issued. 
  
  ### Definitions
  
  125.6 (1) The following definitions apply in this section.  
  *assistance* means an amount, other than an amount received from the Aid to Publishers component of the Canada Periodical Fund or an amount deemed under subsection (2) to have been paid, that would be included under paragraph 12(1)(x) in computing the income of a taxpayer for any taxation year if that paragraph were read without reference to  
  (a) subparagraphs 12(1)(x)(v) to (viii), if the amount were received 
  (i) from a person or partnership described in subparagraph 12(1)(x)(ii), or 
  (ii) in circumstances where clause 12(1)(x)(i)(C) applies; and 
  (b) subparagraphs 12(1)(x)(v) to (vii), in any other case. ( montant d’aide)   
  *eligible newsroom employee*, in respect of a qualifying journalism organization in a taxation year, means an individual who  
  (a) is employed by the organization in the taxation year; 
  (b) works, on average, a minimum of 26 hours per week throughout the portion of the taxation year in which the individual is employed by the organization; 
  (c) at any time in the taxation year, has been, or is reasonably expected to be, employed by the organization for a minimum period of 40 consecutive weeks that includes that time; 
  (d) spends at least 75% of their time engaged in the production of original written news content, including by researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content; and 
  (e) meets any prescribed conditions. ( employé de salle de presse admissible)   
  *qualifying journalism organization*, at any time, means a qualified Canadian journalism organization that meets the following conditions:  
  (a) it does not hold a licence, as defined in subsection 2(1) of the Broadcasting Act ; and  
  (b) if it is a corporation having share capital, it meets the conditions in subparagraph (e)(iii) of the definition Canadian newspaper in subsection 19(5). (organisation journalistique admissible)  
  (c)  [Repealed, 2021, c. 23, s. 23]  
  (d)  [Repealed, 2021, c. 23, s. 23]   
  *qualifying labour expenditure*, of a taxpayer for a taxation year in respect of an eligible newsroom employee, means the lesser of  
  (a) the amount determined by the formula is the lesser of 365 and the number of days in the taxation year in which the taxpayer is a qualifying journalism organization, and 
  (b) the amount determined by the formula is the salary or wages payable by the taxpayer to the eligible newsroom employee in respect of the portion of the taxation year throughout which the taxpayer is a qualifying journalism organization, and is the total of all amounts each of which is an amount of assistance that 
  (i) the taxpayer has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in A, and 
  (ii) has not been repaid before the end of the year pursuant to a legal obligation to do so. ( dépense de main-d’oeuvre admissible)  
  
  ### Tax credit
  
  (2) A taxpayer (other than a partnership) that is a qualifying journalism organization at any time in a taxation year and that files a prescribed form containing prescribed information with its return of income for the year is deemed to have, on its balance-due day for the year, paid on account of its tax payable under this Part for the year an amount determined by the formula is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee; and is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year. 
  
  ### Partnership — tax credit
  
  (2.1) If a taxpayer (other than a partnership) is a member of a partnership (other than a specified member of the partnership) at the end of a fiscal period of the partnership that ends in a taxation year of the taxpayer, the partnership is a qualifying journalism organization at any time in that fiscal period and the partnership files an information return in prescribed form containing prescribed information for that fiscal period, then the taxpayer is deemed to have, on the taxpayer’s balance-due day for the taxation year, paid on account of the taxpayer’s tax payable under this Part for the taxation year an amount determined by the formula is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee; is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period; is the specified proportion of the taxpayer for the fiscal period; and is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership. 
  
  ### Partnership — application rule
  
  (2.2) In this section, a taxpayer includes a partnership. 
  
  ### When assistance received
  
  (3) For the purposes of this Act other than this section, and for greater certainty, the amount that a taxpayer is deemed under subsection (2) or (2.1) to have paid for a taxation year is assistance received by the taxpayer from a government immediately before the end of the year. 
  
  ### Definitions
  
  125.7 (1) The following definitions apply in this section and in subsections 163(2.901) and (2.902).  
  *baseline remuneration*, in respect of an eligible employee of an eligible entity, means the average weekly eligible remuneration, excluding any period of seven or more consecutive days for which the employee was not remunerated, paid to the eligible employee by the eligible entity during the period that  
  (a) begins on January 1, 2020 and ends on March 15, 2020; or 
  (b) if the eligible entity elects, 
  (i) begins on March 1, 2019 and ends on May 31, 2019, in respect of any of the first qualifying period to the third qualifying period, 
  (ii) begins on March 1, 2019 and ends on June 30, 2019, in respect of the fourth qualifying period, unless the eligible entity elects to use the period that begins on March 1, 2019 and ends on May 31, 2019 for that qualifying period, 
  (iii) begins on July 1, 2019 and ends on December 31, 2019, in respect of any of the fifth qualifying period to the thirteenth qualifying period, 
  (iii.1) begins on March 1, 2019 and ends on June 30, 2019, in respect of any of the fourteenth qualifying period to the seventeenth qualifying period, unless the eligible entity elects to use the period that begins on July 1, 2019 and ends on December 31, 2019 for that qualifying period, 
  (iii.2) begins on July 1, 2019 and ends on December 31, 2019, in respect of the eighteenth qualifying period and any subsequent qualifying period, or 
  (iv) if the eligible employee was on leave for any reason mentioned in subsection 12(3) of the Employment Insurance Act or section 2 of the Act respecting parental insurance, CQLR, c. A-29.011 throughout the period that begins on July 1, 2019 and ends on March 15, 2020, begins 90 days prior to the date on which the employee commenced that leave and ends on the day prior to the date on which they commenced their leave, in respect of the fifth qualifying period and any subsequent qualifying period. (rémunération de base)   
  *base percentage*, of an eligible entity for a qualifying period, means  
  (a) for the fifth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 60%, and 
  (ii) in any other case, 1.2 multiplied by the revenue reduction percentage; 
  (b) for the sixth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 60%, and 
  (ii) in any other case, 1.2 multiplied by the revenue reduction percentage; 
  (c) for the seventh qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 50%, and 
  (ii) in any other case, 1 multiplied by the revenue reduction percentage; 
  (d) for the eighth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and 
  (ii) in any other case, 0.8 multiplied by the revenue reduction percentage; 
  (e) for the ninth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and 
  (ii) in any other case, 0.8 multiplied by the revenue reduction percentage; 
  (f) for the tenth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and 
  (ii) in any other case, 0.8 multiplied by the revenue reduction percentage; 
  (g) for the eleventh qualifying period to the seventeenth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and 
  (ii) in any other case, the percentage determined by the formula is the revenue reduction percentage; 
  (h) for the eighteenth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 35%, and 
  (ii) in any other case, the percentage determined by the formula is the revenue reduction percentage; 
  (i) for the nineteenth qualifying period, 
  (i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 25%, and 
  (ii) in any other case, the percentage determined by the formula is the revenue reduction percentage; 
  (j) for the twentieth qualifying period, 
  (i) if the eligible entity’s revenue reduction percentage is greater than or equal to 50%, 25%, and 
  (ii) in any other case, the percentage determined by the formula is the revenue reduction percentage; 
  (k) for the twenty-first qualifying period, 
  (i) if the eligible entity’s revenue reduction percentage is greater than or equal to 50%, 10%, and 
  (ii) in any other case, the percentage determined by the formula is the revenue reduction percentage; 
  (l) for the twenty-second qualifying period to the twenty-sixth qualifying period, 
  (i) the lesser of 75% and the eligible entity’s revenue reduction percentage for the qualifying period, if, for the qualifying period, 
  (A) the eligible entity’s revenue reduction percentage is greater than or equal to 40%, and 
  (B) either of the following conditions is met: 
  (I) the eligible entity is a qualifying tourism or hospitality entity, or 
  (II) the eligible entity is subject to a qualifying public health restriction, 
  (ii) if subparagraph (i) does not apply to the eligible entity, the eligible entity’s revenue reduction percentage for the qualifying period is greater than or equal to 50% and the prior year revenue decline of the eligible entity is greater than or equal to 50%, the lesser of 50% and the percentage determined by the formula is the eligible entity’s revenue reduction percentage for the qualifying period, and 
  (iii) in any other case, nil; 
  (m) for the twenty-seventh qualifying period and the twenty-eighth qualifying period, 
  (i) the lesser of 37.5% and one half of the eligible entity’s revenue reduction percentage for the qualifying period, if, for the qualifying period, 
  (A) the eligible entity’s revenue reduction percentage is greater than or equal to 40%, and 
  (B) either of the following conditions is met: 
  (I) the eligible entity is a qualifying tourism or hospitality entity, or 
  (II) the eligible entity is subject to a qualifying public health restriction, 
  (ii) if subparagraph (i) does not apply to the eligible entity, the eligible entity’s revenue reduction percentage is for the qualifying period greater than or equal to 50% and the prior year revenue decline of the eligible entity is greater than or equal to 50%, the lesser of 25% and the percentage determined by the formula is the eligible entity’s revenue reduction percentage for the qualifying period, and 
  (iii) in any other case, nil; and 
  (n) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity for the qualifying period or, for a qualifying period after the twenty-eighth qualifying period, if there is no percentage determined by regulation for the qualifying period, nil. ( pourcentage de base)   
  *current reference period*, for a qualifying period, means  
  (a) for the first qualifying period, March 2020; 
  (b) for the second qualifying period, April 2020; 
  (c) for the third qualifying period, May 2020; 
  (c.1) for the fourth qualifying period, June 2020; 
  (c.2) for the fifth qualifying period, July 2020; 
  (c.3) for the sixth qualifying period, August 2020; 
  (c.4) for the seventh qualifying period, September 2020; 
  (c.5) for the eighth qualifying period, October 2020; 
  (c.6) for the ninth qualifying period, November 2020; 
  (c.7) for the tenth qualifying period, December 2020; 
  (c.8) for the eleventh qualifying period, December 2020; 
  (c.9) for the twelfth qualifying period, January 2021; 
  (c.91) for the thirteenth qualifying period, February 2021; 
  (c.92) for the fourteenth qualifying period, March 2021; 
  (c.93) for the fifteenth qualifying period, April 2021; 
  (c.94) for the sixteenth qualifying period, May 2021; 
  (c.95) for the seventeenth qualifying period, June 2021; 
  (c.96) for the eighteenth qualifying period, July 2021; 
  (c.97) for the nineteenth qualifying period, August 2021; 
  (c.98) for the twentieth qualifying period, September 2021; 
  (c.99) for the twenty-first qualifying period, October 2021; 
  (c.991) for the twenty-second qualifying period, November 2021; 
  (c.992) for the twenty-third qualifying period, December 2021; 
  (c.993) for the twenty-fourth qualifying period, January 2022; 
  (c.994) for the twenty-fifth qualifying period, February 2022; 
  (c.995) for the twenty-sixth qualifying period, March 2022; 
  (c.996) for the twenty-seventh qualifying period, April 2022; 
  (c.997) for the twenty-eighth qualifying period, May 2022; and 
  (d) for the qualifying period referred to in paragraph (d) of the definition qualifying period, a prescribed period. (période de référence actuelle)   
  *eligible employee*, of an eligible entity in respect of a week in a qualifying period, means an individual employed by the eligible entity primarily in Canada throughout the qualifying period (or the portion of the qualifying period throughout which the individual was employed by the eligible entity), other than, if the qualifying period is any of the first qualifying period to the fourth qualifying period, an individual who is without remuneration by the eligible entity in respect of 14 or more consecutive days in the qualifying period. (employé admissible)   
  *eligible entity* means  
  (a) a corporation or a trust, other than a corporation or a trust that is exempt from tax under this Part or is a public institution; 
  (b) an individual other than a trust; 
  (c) a registered charity, other than a public institution; 
  (d) a person that is exempt from tax under this Part because of paragraph 149(1)(e), (j), (k) or (l), other than a public institution; 
  (e) a partnership, all of the members of which are described in this paragraph or any of paragraphs (a) to (d); or 
  (f) a prescribed organization. ( entité déterminée)   
  *eligible remuneration*, of an eligible employee of an eligible entity, means amounts described in paragraph 153(1)(a) or (g), other than  
  (a) for greater certainty, a retiring allowance; 
  (b) amounts deemed to have been received by the eligible employee as a benefit under or because of any of paragraphs 7(1)(a) to (d.1); 
  (c) any amount received that can reasonably be expected to be paid or returned, directly or indirectly, in any manner whatever, to 
  (i) the eligible entity, 
  (ii) a person or partnership not dealing at arm’s length with the eligible entity, or 
  (iii) another person or partnership at the direction of the eligible entity; and 
  (d) any amount that is paid in respect of a week in the qualifying period, if, as part of an arrangement involving the eligible employee and the eligible entity, 
  (i) the amount is in excess of the eligible employee’s baseline remuneration, 
  (ii) after the qualifying period, the eligible employee is reasonably expected to be paid a lower weekly amount than their baseline remuneration, and 
  (iii) one of the main purposes for the arrangement is to increase the amount of the deemed overpayment under subsection (2). ( rémunération admissible)   
  *executive compensation repayment amount*, of an eligible entity, means  
  (a) nil, unless 
  (i) shares of the capital stock of the eligible entity are listed or traded on a stock exchange or other public market, or 
  (ii) the eligible entity is controlled by a corporation described in subparagraph (i); and 
  (b) if the conditions in subparagraph (a)(i) or (ii) are met, the amount determined by the formula is 
  (i) a percentage assigned to the eligible entity under an agreement in respect of the seventeenth qualifying period to the twenty-third qualifying period if 
  (A) the agreement is entered into by 
  (I) the eligible entity, 
  (II) an eligible entity, shares of the capital stock of which are listed or traded on a stock exchange or other public market, that controls the eligible entity (referred to in this definition as the “public parent corporation”), if the public parent corporation received a deemed overpayment under subsection (2) in respect of any of the seventeenth qualifying period to the twenty-third qualifying period, and 
  (III) each other eligible entity that received a deemed overpayment under subsection (2) in respect of any of the seventeenth qualifying period to the twenty-third qualifying period and was controlled in that period by the eligible entity or the public parent corporation, if any, 
  (B) the agreement is filed in prescribed form and manner with the Minister, 
  (C) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A) of this subparagraph, 
  (D) the total of all the percentages assigned under the agreement equals 100%, and 
  (E) the percentage allocated to any eligible entity under the agreement would not result in an amount allocated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity under subsection (2) for any of the seventeenth qualifying period to the twenty-third qualifying period, 
  (i.1) a percentage assigned to the eligible entity under an agreement in respect of the twenty-fourth qualifying period and any subsequent qualifying period if 
  (A) the agreement is entered into by 
  (I) the eligible entity, 
  (II) the public parent corporation, if the public parent corporation received a deemed overpayment under subsection (2) in respect of the twenty-fourth qualifying period or any subsequent qualifying period, and 
  (III) each other eligible entity that received a deemed overpayment under subsection (2) in respect of the twenty-fourth qualifying period or any subsequent qualifying period and was controlled in that period by the eligible entity or the public parent corporation, if any, 
  (B) the agreement is filed in prescribed form and manner with the Minister, 
  (C) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A) of this subparagraph, 
  (D) the total of all the percentages assigned under the agreement equals 100%, and 
  (E) the percentage allocated to any eligible entity under the agreement would not result in an amount allocated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity under subsection (2) for the twenty-fourth qualifying period and any subsequent qualifying period, and 
  (ii) in any other case, 100%, and is 
  (i) for the seventeenth qualifying period to the twenty-third qualifying period, the lesser of 
  (A) the total of all amounts each of which is an amount of a deemed overpayment under subsection (2) for each of the eligible entities described in clause (i)(A) of the description of A for the seventeenth qualifying period to the twenty-third qualifying period, other than amounts in respect of employees on leave with pay, and 
  (B) the amount determined by the formula is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2021 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year), and is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2019 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year), and 
  (ii) for the twenty-fourth qualifying period and any subsequent qualifying period, the lesser of 
  (A) the total of all amounts each of which is an amount of a deemed overpayment under subsection (2) for each of the eligible entities described in clause (i.1)(A) of the description of A for the twenty-fourth qualifying period and any subsequent qualifying period, other than amounts in respect of employees on leave with pay, and 
  (B) the amount determined by the formula is the amount, if any, by which the amount determined under clause (i)(B) exceeds the amount determined under clause (i)(A), is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2022 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year), and is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2019 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year). ( montant du remboursement de la rémunération de la haute direction)   
  *executive remuneration*, of an eligible entity, means  
  (a) the total amount of compensation that is reported in the eligible entity’s Statement of Executive Compensation for Named Executive Officers pursuant to National Instrument 51-102 Continuous Disclosure Obligations, as amended from time to time, of the Canadian Securities Administrators in respect of Named Executive Officers of the eligible entity; 
  (b) if paragraph (a) does not apply and the eligible entity is required to make a similar disclosure to shareholders under the laws of another jurisdiction, the amount of total compensation reported in that disclosure (if the compensation of more than five individuals is required to be reported under that disclosure, using the five most highly compensated of those individuals); and 
  (c) if paragraphs (a) and (b) do not apply, the amount that would be required to be reported by the eligible entity using the methodology for preparing the Statement of Executive Compensation referred to in paragraph (a). ( rémunération de la haute direction)   
  *prior reference period*, for a qualifying period of an eligible entity, means  
  (a) subject to paragraph (b), 
  (i) for the first qualifying period, March 2019, 
  (ii) for the second qualifying period, April 2019, 
  (iii) for the third qualifying period, May 2019, 
  (iv) for the fourth qualifying period, June 2019, 
  (v) for the fifth qualifying period, July 2019, 
  (vi) for the sixth qualifying period, August 2019, 
  (vii) for the seventh qualifying period, September 2019, 
  (viii) for the eighth qualifying period, October 2019, 
  (ix) for the ninth qualifying period, November 2019, 
  (x) for the tenth qualifying period, December 2019, 
  (xi) for the eleventh qualifying period, December 2019, 
  (xii) for the twelfth qualifying period, January 2020, 
  (xiii) for the thirteenth qualifying period, February 2020, 
  (xiv) for the fourteenth qualifying period, March 2019, 
  (xv) for the fifteenth qualifying period, April 2019, 
  (xvi) for the sixteenth qualifying period, May 2019, 
  (xvii) for the seventeenth qualifying period, June 2019, 
  (xviii) for the eighteenth qualifying period, July 2019, 
  (xix) for the nineteenth qualifying period, August 2019, 
  (xx) for the twentieth qualifying period, September 2019, 
  (xxi) for the twenty-first qualifying period, October 2019, 
  (xxii) for the twenty-second qualifying period, November 2019, 
  (xxiii) for the twenty-third qualifying period, December 2019, 
  (xxiv) for the twenty-fourth qualifying period, January 2020, 
  (xxv) for the twenty-fifth qualifying period, February 2020, 
  (xxvi) for the twenty-sixth qualifying period, March 2019, 
  (xxvii) for the twenty-seventh qualifying period, April 2019, and 
  (xxviii) for the twenty-eighth qualifying period, May 2019; 
  (b) January and February 2020, if 
  (i) on March 1, 2019, the eligible entity was not carrying on business or otherwise carrying on its ordinary activities and the qualifying period is any of the first qualifying period to the fourth qualifying period, or 
  (ii) the qualifying period is any of 
  (A) the first qualifying period to the fourth qualifying period and the eligible entity elects for all of the first qualifying period to the third qualifying period, 
  (B) the fifth qualifying period to the qualifying period referred to in paragraph (d) of the definition qualifying period and the eligible entity elects for all of those qualifying periods,  
  (C) the fourteenth qualifying period to the seventeenth qualifying period, if 
  (I) on March 1, 2019, the eligible entity was not carrying on business or otherwise carrying on its ordinary activities, and 
  (II) the eligible entity elects for all of those qualifying periods, or 
  (D) the twenty-sixth qualifying period to the twenty-eighth qualifying period, if 
  (I) on March 1, 2019, the eligible entity was not carrying on business or otherwise carrying on its ordinary activities, and 
  (II) the eligible entity elects for all of those qualifying periods; and 
  (c) for the qualifying period referred to in paragraph (d) of the definition qualifying period, a prescribed period. (période de référence antérieure)   
  *prior year revenue decline*, of an eligible entity means, the average of all percentages each of which would, if the Act were read without reference to subsection 125.7(9) and section 257, be the revenue reduction percentage of the eligible entity for a qualifying period  
  (a) that is any of the first qualifying period to the thirteenth qualifying period (but including only one of the tenth qualifying period or the eleventh qualifying period); and 
  (b) throughout which the eligible entity was 
  (i) carrying on its ordinary activities, or 
  (ii) not carrying on its ordinary activities because of a public health restriction. ( réduction du revenu d’une année antérieure)   
  *public health restriction*, in respect of a qualifying property of an eligible entity for a qualifying period, means an order or decision in respect of which the following conditions are met:  
  (a) it is made under a law of Canada or a province, or the authority granted under such a law; 
  (b) it is made in response to the coronavirus disease 2019 (COVID-19) pandemic; 
  (c) it is limited in scope based on one or more factors, such as 
  (i) defined geographical boundaries, 
  (ii) type of business or other activity, or 
  (iii) risks associated with a particular location; 
  (d) non-compliance with the order or decision is a federal or provincial offence or can result in the imposition of an administrative monetary penalty or other sanction by the Government of Canada or a province; 
  (e) it does not result from a violation by the eligible entity – or a party with which the eligible entity does not deal at arm’s length that rents, directly or indirectly, the qualifying property from the eligible entity (referred to in this definition as the “specified tenant”) – of an order or decision that meets the conditions in paragraphs (a) to (d); 
  (f) as a result of the order or decision, some or all of the activities of the eligible entity – or the specified tenant – at, or in connection with, the qualifying property (that it is reasonable to expect the eligible entity – or the specified tenant – would, absent the order or decision, otherwise have engaged in) are required to cease (referred to in this definition as the “restricted activities”) based, for greater certainty, on the type of activity rather than the extent to which an activity may be performed or limits placed on the time during which an activity may be performed; 
  (g) it is reasonable to conclude that at least approximately 25% of the qualifying revenues of the eligible entity – or the specified tenant – for the prior reference period that were earned from, or in connection with, the qualifying property were derived from the restricted activities; and 
  (h) the restricted activities are required to cease for a period of at least one week. ( restrictions sanitaires)   
  *public institution* means  
  (a) an organization described in any of paragraphs 149(1)(a) to (d.6); or 
  (b) a school, school board, hospital, health authority, public university or college. ( institution publique)   
  *qualifying entity*, for a qualifying period, means an eligible entity that meets the following conditions:  
  (a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner on or before the later of 
  (i) January 31, 2021, and 
  (ii) 180 days after the end of the qualifying period; 
  (b) the individual who has principal responsibility for the financial activities of the eligible entity attests that the application is complete and accurate in all material respects; 
  (c) if the qualifying period is any of the first qualifying period to the fourth qualifying period, its qualifying revenues for the current reference period are equal to or less than the specified percentage, for the qualifying period, of 
  (i) if paragraph (a) or (c) of the definition prior reference period applies, its qualifying revenues for the prior reference period, and  
  (ii) if paragraph (b) of the definition prior reference period applies, the amount determined by the formula  is its qualifying revenues for the prior reference period, is the number of days in the prior reference period, and is the number of days in the prior reference period during which the eligible entity was carrying on business; and 
  (d) it meets either of the following conditions: 
  (i) it had, on March 15, 2020, a business number in respect of which it is registered with the Minister to make remittances required under section 153, or 
  (ii) it is the case that 
  (A) on March 15, 2020, 
  (I) it employed one or more individuals in Canada, 
  (II) the payroll for its employees was administered by another person or partnership (referred to in this subparagraph as the “payroll service provider”), and 
  (III) the payroll service provider had a business number in respect of which it is registered with the Minister to make remittances required under section 153, 
  (B) the payroll service provider used its business number to make the remittances referred to in subclause (A)(III) in respect of the employees of the eligible entity, and 
  (C) the Minister is satisfied that the conditions in clauses (A) and (B) are met. ( entité admissible)   
  *qualifying period* means  
  (a) the period that begins on March 15, 2020 and ends on April 11, 2020 (referred to in this section as the “first qualifying period”); 
  (b) the period that begins on April 12, 2020 and ends on May 9, 2020 (referred to in this section as the “second qualifying period”); 
  (c) the period that begins on May 10, 2020 and ends on June 6, 2020 (referred to in this section as the “third qualifying period”); 
  (c.1) the period that begins on June 7, 2020 and ends on July 4, 2020 (referred to in this section as the “fourth qualifying period”); 
  (c.2) the period that begins on July 5, 2020 and ends on August 1, 2020 (referred to in this section as the “fifth qualifying period”); 
  (c.3) the period that begins on August 2, 2020 and ends on August 29, 2020 (referred to in this section as the “sixth qualifying period”); 
  (c.4) the period that begins on August 30, 2020 and ends on September 26, 2020 (referred to in this section as the “seventh qualifying period”); 
  (c.5) the period that begins on September 27, 2020 and ends on October 24, 2020 (referred to in this section as the “eighth qualifying period”); 
  (c.6) the period that begins on October 25, 2020 and ends on November 21, 2020 (referred to in this section as the “ninth qualifying period”); 
  (c.7) the period that begins on November 22, 2020 and ends on December 19, 2020 (referred to in this section as the “tenth qualifying period”); 
  (c.8) the period that begins on December 20, 2020 and ends on January 16, 2021 (referred to in this section as the “eleventh qualifying period”); 
  (c.9) the period that begins on January 17, 2021 and ends on February 13, 2021 (referred to in this section as the “twelfth qualifying period”); 
  (c.91) the period that begins on February 14, 2021 and ends on March 13, 2021 (referred to in this section as the “thirteenth qualifying period”); 
  (c.92) the period that begins on March 14, 2021 and ends on April 10, 2021 (referred to in this section as the “fourteenth qualifying period”); 
  (c.93) the period that begins on April 11, 2021 and ends on May 8, 2021 (referred to in this section as the “fifteenth qualifying period”); 
  (c.94) the period that begins on May 9, 2021 and ends on June 5, 2021 (referred to in this section as the “sixteenth qualifying period”); 
  (c.95) the period that begins on June 6, 2021 and ends on July 3, 2021 (referred to in this section as the “seventeenth qualifying period”); 
  (c.96) the period that begins on July 4, 2021 and ends on July 31, 2021 (referred to in this section as the “eighteenth qualifying period”); 
  (c.97) the period that begins on August 1, 2021 and ends on August 28, 2021 (referred to in this section as the “nineteenth qualifying period”); 
  (c.98) the period that begins on August 29, 2021 and ends on September 25, 2021 (referred to in this section as the “twentieth qualifying period”); 
  (c.99) the period that begins on September 26, 2021 and ends on October 23, 2021 (referred to in this section as the “twenty-first qualifying period”); 
  (c.991) the period that begins on October 24, 2021 and ends on November 20, 2021 (referred to in this section as the “twenty-second qualifying period”); 
  (c.992) the period that begins on November 21, 2021 and ends on December 18, 2021 (referred to in this section as the “twenty-third qualifying period”); 
  (c.993) the period that begins on December 19, 2021 and ends on January 15, 2022 (referred to in this section as the “twenty-fourth qualifying period”); 
  (c.994) the period that begins on January 16, 2022 and ends on February 12, 2022 (referred to in this section as the “twenty-fifth qualifying period”); 
  (c.995) the period that begins on February 13, 2022 and ends on March 12, 2022 (referred to in this section as the “twenty-sixth qualifying period”); 
  (c.996) the period that begins on March 13, 2022 and ends on April 9, 2022 (referred to in this section as the “twenty-seventh qualifying period”); 
  (c.997) the period that begins on April 10, 2022 and ends on May 7, 2022 (referred to in this section as the “twenty-eighth qualifying period”); and 
  (d) a prescribed period that ends no later than July 2, 2022. ( période d’admissibilité)   
  *qualifying property*, of an eligible entity for a qualifying period, means real or immovable property (other than property that is a self-contained domestic establishment used by the eligible entity or by a person not dealing at arm’s length with the eligible entity, or part of such a self-contained domestic establishment, the land subjacent to the self-contained domestic establishment and such portion of any immediately contiguous land as can reasonably be regarded as contributing to the use and enjoyment of the self-contained domestic establishment as a residence) in Canada used by the eligible entity in the course of its ordinary activities. (bien admissible)   
  *qualifying public health restriction*, of an eligible entity for a qualifying period, means that  
  (a) one or more qualifying properties of the eligible entity — or of one or more specified tenants (within the meaning of the definition public health restriction) of the eligible entity — is subject to a public health restriction for at least seven days in the qualifying period; and  
  (b) it is reasonable to conclude that at least approximately 25% of the qualifying revenues of the eligible entity — together with the qualifying revenues of any specified tenants of the eligible entity — for the prior reference period were derived from the restricted activities. ( restrictions sanitaires admissibles)   
  *qualifying recovery entity*, for a qualifying period, means an eligible entity that meets the following conditions:  
  (a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner no later than 180 days after the end of the qualifying period; 
  (b) it would be a qualifying entity for the qualifying period if the definition qualifying entity were read without reference to its paragraph (a);  
  (c) if it is a corporation (other than a corporation that is exempt from tax under this Part), it 
  (i) is a Canadian-controlled private corporation, or 
  (ii) would be a Canadian-controlled private corporation absent the application of subsection 136(1); 
  (d) if it is a partnership, throughout the qualifying period it is the case that is the total of all amounts, each of which is the fair market value of an interest in the partnership held — directly or indirectly, through one or more partnerships — by 
  (i) a person or partnership other than an eligible entity, or 
  (ii) a corporation, other than a corporation that 
  (A) is exempt from tax under this Part, or 
  (B) is described in subparagraph (c)(i) or (ii), and is the total fair market value of all interests in the partnership; and 
  (e) it has a revenue reduction percentage 
  (i) greater than 0%, if it is the seventeenth qualifying period, or 
  (ii) greater than 10% (or a percentage determined by regulation for the qualifying period), if it is any of the eighteenth qualifying period and subsequent qualifying periods. ( entité de relance admissible)   
  *qualifying rent expense*, in respect of a qualifying property for an eligible entity for a qualifying period, means the amount determined by the formula  is the lesser of $75,000 and the total of all amounts paid — under a written agreement entered into before October 9, 2020, or pursuant to the renewal (on substantially similar terms) or assignment of a written agreement entered into before October 9, 2020 — in respect of the qualifying period by the eligible entity to a party with which the eligible entity deals at arm’s length, each of which is 
  (a) rent for the use of, or right to use, the qualifying property, 
  (i) including 
  (A) gross rent, 
  (B) rent based on a percentage of sales, profit or a similar criterion, 
  (C) amounts required to be paid under a net lease by the eligible entity either to the lessor or a third party, as 
  (I) base rent, 
  (II) regular instalments of operating expenses, such as insurance, utilities and common area maintenance expenses, customarily charged to the lessee under a net lease, 
  (III) property and similar taxes, including school and municipal taxes, and 
  (IV) regular instalments of other amounts payable to the lessor for services ancillary to the rental of real or immovable properties and customarily supplied or rendered in connection with the rental of real or immovable properties, and 
  (D) amounts received by the lessor under the Canada Emergency Commercial Rent Assistance program that were applied against rent payable in respect of the qualifying period, if those amounts would otherwise be required to be refunded to the eligible entity, and 
  (ii) excluding 
  (A) sales taxes, 
  (B) amounts paid as, on account of, in lieu of payment of or in satisfaction of, damages, 
  (C) amounts paid under a guarantee, security or similar indemnity or covenant, 
  (D) payments arising due to default under the agreement by the eligible entity, 
  (E) interest and penalties on unpaid amounts, 
  (F) fees payable for discrete items or special services, and 
  (G) reconciliation adjustment payments, and 
  (b) in the case of qualifying property owned by the eligible entity that is not used by the eligible entity primarily to earn rental income or, where the qualifying property is used primarily by the eligible entity to earn rental income directly or indirectly from a person or partnership not dealing at arm’s length with the eligible entity, that is not used by that person or partnership primarily to earn rental income, 
  (i) if there is a debt obligation secured by a mortgage or hypothec on the qualifying property, interest on the debt obligation to the extent that the amount of the debt obligation does not exceed the lesser of 
  (A) the lowest total principal amount secured by one or more mortgages or hypothecs (provided the mortgage or hypothec has an amortization period) on the qualifying property at any time after it was acquired by the eligible entity (excluding any temporary period in the course of a refinancing transaction between the time when an existing mortgage is discharged and a new mortgage is registered), and 
  (B) the cost amount of the qualifying property, 
  (ii) amounts paid for insurance on the qualifying property, and 
  (iii) property and similar taxes on the qualifying property, including school and municipal taxes; and is the total of all amounts, each of which is received or receivable by the eligible entity in respect of the qualifying period, either directly or indirectly, from a party with which the entity deals at arm’s length and is described in paragraph (a) of the description of A. ( dépenses de loyer admissibles)   
  *qualifying renter*, for a qualifying period, means an eligible entity that meets the following conditions:  
  (a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner no later than 180 days after the end of the qualifying period; 
  (b) the individual who has principal responsibility for the financial activities of the eligible entity attests that the application is complete and accurate in all material respects; and 
  (c) it meets any of the following conditions: 
  (i) it meets the condition in paragraph (d) of the definition qualifying entity,  
  (ii) it had a business number on September 27, 2020 and provides records and other information satisfactory to the Minister in support of its application, or 
  (iii) it meets prescribed conditions. ( locataire admissible)   
  *qualifying revenue*, of an eligible entity for a prior reference period or a current reference period, means the inflow of cash, receivables or other consideration arising in the course of the ordinary activities of the eligible entity — generally from the sale of goods, the rendering of services and the use by others of resources of the eligible entity — in Canada in the particular period, subject to the following:  
  (a) in the case of an eligible entity described in paragraph (c) of the definition eligible entity,  
  (i) it includes revenue from a related business (as defined in subsection 149.1(1)), gifts and other amounts received in the course of its ordinary activities, and  
  (ii) notwithstanding subparagraph (i), the eligible entity may elect to exclude funding received from government sources in the determination of its qualifying revenue for all of its prior reference periods and current reference periods; 
  (b) in the case of an eligible entity described in paragraph (d) of the definition eligible entity,  
  (i) it includes membership fees and other amounts received in the course of its ordinary activities, and 
  (ii) notwithstanding subparagraph (i), the eligible entity may elect to exclude funding received from government sources in the determination of its qualifying revenue for all of its prior reference periods and current reference periods; 
  (b.1) in the case of an eligible entity prescribed in paragraph (f) of the definition eligible entity that would be described in paragraph (c) or (d) of that definition if it were not a public institution, subparagraphs (a)(i) and (ii) apply to an eligible entity that would be described in paragraph (c) of that definition and subparagraphs (b)(i) and (ii) apply to an eligible entity that would be described in paragraph (d) of that definition;  
  (c) it excludes, for greater certainty, extraordinary items; 
  (d) it excludes amounts derived from persons or partnerships not dealing at arm’s length with the eligible entity; and 
  (e) it excludes, for greater certainty, deemed overpayments under subsection (2) and deemed remittances under subsection 153(1.02). ( revenu admissible)   
  *qualifying tourism or hospitality entity*, for a qualifying period, has the meaning assigned by regulation. (entité touristique ou d’accueil admissible)   
  *recovery wage subsidy rate*, for a qualifying period, means  
  (a) for any of the seventeenth qualifying period to the nineteenth qualifying period, 50%; 
  (b) for the twentieth qualifying period, 40%; 
  (c) for the twenty-first qualifying period, 30%; and 
  (d) for any of the twenty-second qualifying period and subsequent qualifying periods, 50% or a percentage determined by regulation for the qualifying period. ( taux de subvention salariale de relance)   
  *rent subsidy percentage*, of an eligible entity for a qualifying period, means  
  (a) if the qualifying period is any of the eighth qualifying period to the seventeenth qualifying period, 
  (i) if the eligible entity’s revenue reduction percentage is greater than or equal to 70%, 65%, 
  (ii) if the eligible entity’s revenue reduction percentage is greater than or equal to 50%, but less than 70%, the percentage determined by the formula is the eligible entity’s revenue reduction percentage, and 
  (iii) if the eligible entity’s revenue reduction percentage is less than 50%, the percentage determined by the formula is the eligible entity’s revenue reduction percentage; 
  (a.1) if the qualifying period is any of the eighteenth qualifying period to the twenty-eighth qualifying period, the percentage determined by the formula is the eligible entity’s base percentage for the qualifying period, and is the eligible entity’s top-up percentage for the qualifying period; and 
  (b) for a qualifying period after the twenty-eighth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. ( pourcentage de subvention pour le loyer)   
  *rent top-up percentage*, of an eligible entity in respect of a qualifying property for a qualifying period, means the percentage determined by the formula  is 25%, or a prescribed percentage, for any of the eighth qualifying period to the twenty-eighth qualifying period and nil, or a prescribed percentage, for any subsequent qualifying period, is the number of days in the qualifying period throughout which the qualifying property is subject to a public health restriction, and is the number of days in the qualifying period. ( pourcentage compensatoire pour le loyer)   
  *revenue reduction percentage*, of an eligible entity for a qualifying period, means the result (expressed as a percentage) of the formula  is the eligible entity’s qualifying revenue for the current reference period for the qualifying period; and is the eligible entity’s qualifying revenue for the prior reference period for the qualifying period – or, if the prior reference period is January and February 2020, the amount determined by the formula in subparagraph (c)(ii) of the definition qualifying entity – or a period prescribed by regulation in respect of the eligible entity for the qualifying period. (pourcentage de baisse de revenu)   
  *specified percentage*, for a qualifying period, means  
  (a) for the first qualifying period, 85%; and 
  (b) for any of the second qualifying period to the fourth qualifying period, 70%. ( pourcentage déterminé)  
  (c)  [Repealed, 2021, c. 23, s. 24]   
  *top-up percentage*, of an eligible entity for a qualifying period, means the percentage determined by regulation for the qualifying period or, if there is no percentage determined by regulation for the qualifying period,  
  (a) for any of the fifth qualifying period to the tenth qualifying period, the lesser of 25% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; 
  (b) for any of the eleventh qualifying period to the seventeenth qualifying period, the lesser of 35% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; 
  (c) for the eighteenth qualifying period, the lesser of 25% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; 
  (d) for the nineteenth qualifying period, the lesser of 15% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; 
  (e) for the twentieth qualifying period, the lesser of 15% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; 
  (f) for the twenty-first qualifying period, the lesser of 10% and the percentage determined by the formula is the entity’s top-up revenue reduction percentage for the qualifying period; and 
  (g) for each qualifying period after the twenty-first qualifying period, nil. ( pourcentage compensatoire)   
  *top-up revenue reduction percentage*, of an eligible entity for a qualifying period, means  
  (a) for any of the fifth qualifying period to the seventh qualifying period, the result (expressed as a percentage) of the formula is the average monthly qualifying revenue of the eligible entity for the last three calendar months that ended prior to the current reference period for the qualifying period, and is the average monthly qualifying revenue of the eligible entity for 
  (i) if the prior reference period for the qualifying period is January and February 2020, January and February 2020, and 
  (ii) in any other case, the last three calendar months that ended prior to the prior reference period for the qualifying period; 
  (b) for any of the eighth qualifying period to the tenth qualifying period, the greater of 
  (i) the result (expressed as a percentage) of the formula in paragraph (a), and 
  (ii) the revenue reduction percentage of the eligible entity for the qualifying period; and 
  (c) for the eleventh qualifying period and each subsequent qualifying period, the eligible entity’s revenue reduction percentage for the qualifying period. ( pourcentage compensatoire de baisse de revenue)   
  *total base period remuneration*, of an eligible entity, means the total of all amounts, each of which is for an eligible employee in respect of a week in the fourteenth qualifying period, equal to the least of  
  (a) $1,129, 
  (b) the eligible remuneration paid to the eligible employee in respect of the week, 
  (c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and 
  (d) if the eligible employee is on leave with pay in the week, nil. ( rémunération totale de la période de base)   
  *total current period remuneration*, of an eligible entity for a qualifying period, means the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, equal to the least of  
  (a) $1,129, 
  (b) the eligible remuneration paid to the eligible employee in respect of the week, 
  (c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and 
  (d) if the eligible employee is on leave with pay in the week, nil. ( rémunération totale de la période actuelle)  
  
  ### COVID-19 — wage subsidy
  
  (2) For a qualifying entity for a qualifying period, an overpayment on account of the qualifying entity’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula is the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, 
  (a) if the qualifying period is described in any of paragraphs (a) to (c.1) of the definition qualifying period in subsection (1), equal to the greater of  
  (i) the least of 
  (A) 75% of eligible remuneration paid to the eligible employee by the qualifying entity in respect of that week, 
  (B) $847, and 
  (C) if the eligible employee does not deal at arm’s length with the qualifying entity in the qualifying period, nil, and 
  (ii) the least of 
  (A) the amount of eligible remuneration paid to the eligible employee by the qualifying entity in respect of that week, 
  (B) 75% of baseline remuneration in respect of the eligible employee determined for that week, and 
  (C) $847, and 
  (b) if the qualifying period is described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1),  
  (i) if the eligible employee is not on leave with pay for that week and the qualifying period is described in paragraph (c.2) or (c.3) of the definition qualifying period in subsection (1), the greater of  
  (A) an amount equal to 
  (I) nil, if the revenue reduction percentage of the qualifying entity for the qualifying period is less than 30%, and 
  (II) in any other case, the greater of the amount determined under subparagraph (a)(i) and the amount determined under subparagraph (a)(ii), and 
  (B) the amount determined by the formula in subparagraph (ii), 
  (ii) if the eligible employee is not on leave with pay for that week and the qualifying period is described in any of paragraphs (c.4) to (d) of the definition qualifying period in subsection (1), the amount determined by the formula  is the qualifying entity’s base percentage for the qualifying period, is the qualifying entity’s top-up percentage for the qualifying period, and is the least of 
  (A) the amount of eligible remuneration paid to the eligible employee by the qualifying entity in respect of that week, 
  (B) $1,129, and 
  (C) if the eligible employee does not deal at arm’s length with the qualifying entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, 
  (iii) if the eligible employee is on leave with pay for that week and the qualifying period is described in paragraph (c.2) or (c.3) of the definition qualifying period in subsection (1),  
  (A) nil, unless 
  (I) the revenue reduction percentage of the qualifying entity for the qualifying period is greater than 0%, or 
  (II) the top-up percentage of the qualifying entity for the qualifying period is greater than 0%, and 
  (B) in any other case, the greater of the amount determined under subparagraph (a)(i) and the amount determined under subparagraph (a)(ii), and 
  (iv) if the eligible employee is on leave with pay for that week and the qualifying period is described in any of paragraphs (c.4) to (d) of the definition qualifying period in subsection (1), the least of  
  (A) the amount of eligible remuneration paid to the eligible employee by the qualifying entity in respect of that week, 
  (B) an amount determined by regulation in respect of the qualifying entity for the qualifying period, 
  (C) nil, if 
  (I) the eligible employee does not deal at arm’s length with the qualifying entity in the qualifying period, and 
  (II) the baseline remuneration of the eligible employee for that week is nil, and 
  (D) nil, unless 
  (I) the revenue reduction percentage of the qualifying entity for the qualifying period is greater than 0%, or 
  (II) the top-up percentage of the qualifying entity for the qualifying period is greater than 0%; is the total of all amounts each of which is an amount deemed to have been remitted under subsection 153(1.02) by the qualifying entity in the qualifying period; is the total of all amounts received by the eligible employee for each week in the qualifying period as a work-sharing benefit under the Employment Insurance Act ; and  is 
  (a) nil, if the qualifying period is any of the fifth qualifying period to the nineteenth qualifying period, unless 
  (i) the revenue reduction percentage of the qualifying entity for the qualifying period is greater than 0%, or 
  (ii) the top-up percentage of the qualifying entity for the qualifying period is greater than 0%, 
  (a.1) nil, if the qualifying period is after the nineteenth qualifying period, and 
  (b) in any other case, the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, if the eligible employee is on leave with pay for that week and the amount is 
  (i) an amount payable by the qualifying entity 
  (A) as an employer’s premium under the Employment Insurance Act, or  
  (B) as an employer’s contribution under the Canada Pension Plan or under a provincial pension plan as defined in section 3 of the Canada Pension Plan, or  
  (ii) an amount payable by the qualifying entity as an employer’s premium under the Act respecting parental insurance, CQLR, c. A-29.011.  
  
  ### Exception
  
  (2.01) Despite subsection (2), no overpayment on account of a qualifying entity’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen with respect to a qualifying entity that is a publicly traded company or a subsidiary of such a company if, in the qualifying period, it paid taxable dividends to an individual who is a holder of common shares of the company or of the subsidiary of the company. 
  
  ### COVID-19 — rent subsidy
  
  (2.1) For a qualifying renter for a qualifying period referred to in any of paragraphs (c.5) to (d) of the definition qualifying period in subsection (1), an overpayment on account of the qualifying renter’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula  is the amount determined by the formula is the qualifying renter’s rent subsidy percentage for the qualifying period, and is the lesser of 
  (a) the total of all amounts, each of which is the qualifying renter’s qualifying rent expense for a qualifying property for the qualifying period, and 
  (b) the amount determined by the formula is 
  (i) 100%, unless the qualifying renter is affiliated at any time in the qualifying period with one or more eligible entities that claims an amount under this subsection in respect of the qualifying period, 
  (ii) a percentage assigned to the qualifying renter under an agreement, if 
  (A) the agreement is entered into by the qualifying renter and each eligible entity that 
  (I) is affiliated with the qualifying renter in the qualifying period, and 
  (II) claims an amount under this subsection in respect of the qualifying period, 
  (B) the agreement is filed in prescribed form and manner with the Minister in respect of the qualifying period by the qualifying renter and each eligible entity referred to in clause (A) with their application for the qualifying period, 
  (C) the agreement assigns, for the purposes of this subsection, a percentage in respect of each eligible entity referred to in clause (B) for the qualifying period, and 
  (D) the total of all the percentages assigned under the agreement does not exceed 100%, and 
  (iii) in any other case, nil, and is 
  (i) $300,000 for the eighth qualifying period to the twenty-first qualifying period, and 
  (ii) $1,000,000 for the twenty-second qualifying period and subsequent qualifying periods; and is the total of all amounts, each of which is an amount in respect of a qualifying property for the qualifying period, determined by the formula is 
  (i) nil, unless the rent subsidy percentage of the qualifying renter for the qualifying period is greater than 0%, and 
  (ii) in any other case, the rent top-up percentage of the qualifying renter in respect of the qualifying property for the qualifying period, and is the qualifying rent expense of the qualifying renter in respect of the qualifying property for the qualifying period. 
  
  ### Canada recovery hiring program
  
  (2.2) For a qualifying recovery entity for a qualifying period, an overpayment on account of the qualifying entity’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula is the recovery wage subsidy rate for the qualifying period; is the qualifying recovery entity’s total current period remuneration for the qualifying period; and is the qualifying recovery entity’s total base period remuneration. 
  
  ### When assistance received
  
  (3) For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is deemed under any of subsections (2) to (2.2) to have overpaid is assistance received by it from a government immediately before the end of the qualifying period to which it relates. 
  
  ### Computation of revenue
  
  (4) For the purposes of the definition qualifying revenue in subsection (1), the qualifying revenue of an eligible entity is to be determined in accordance with its normal accounting practices, except that  
  (a) if a group of eligible entities normally prepares consolidated financial statements, each member of the group may determine its qualifying revenue separately, provided every member of the group determines its qualifying revenue on that basis; 
  (b) if an eligible entity and each member of an affiliated group of eligible entities of which the eligible entity is a member jointly elect, the qualifying revenue of the group determined on a consolidated basis in accordance with relevant accounting principles is to be used for each member of the group; 
  (c) if all of the interests in an eligible entity are owned by participants in a joint venture and all or substantially all of the qualifying revenue of the eligible entity for a qualifying period is in respect of the joint venture, then the eligible entity may use the qualifying revenues of the joint venture (determined as if the joint venture were an eligible entity) as its qualifying revenues for the qualifying period for the purposes of this section; 
  (d) if all or substantially all of an eligible entity’s qualifying revenue — determined without reference to paragraph (d) of the definition qualifying revenue in subsection (1) — for a qualifying period is from one or more particular persons or partnerships with which it does not deal at arm’s length and each particular person or partnership jointly elects with the eligible entity, for the purposes of this section  
  (i) the eligible entity’s qualifying revenue for the prior reference period is deemed to be $100, and 
  (ii) the eligible entity’s qualifying revenue for the current reference period is deemed to be the total of all amounts, each of which is determined by the formula is the eligible entity’s qualifying revenue (determined without reference to paragraph (d) of the definition qualifying revenue in subsection (1)) for the current reference period attributable to a particular person or partnership,  is the total of all amounts, each of which is the eligible entity’s qualifying revenue (determined without reference to paragraph (d) of the definition qualifying revenue in subsection (1)) for the current reference period attributable to a particular person or partnership,  is the particular person or partnership’s qualifying revenue (determined as if the definition qualifying revenue in subsection (1) were read without reference to “in Canada”) for the current reference period, and  is the particular person or partnership’s qualifying revenue (determined as if the definition qualifying revenue in subsection (1) were read without reference to “in Canada”) for the prior reference period; and  
  (e) an eligible entity may make an election, which must apply for all qualifying periods, to determine its qualifying revenues based on 
  (i) the cash method, within the meaning assigned by subsection 28(1) with any modifications that the circumstances require, or 
  (ii) the accrual method, in accordance with generally accepted accounting principles. 
  
  ### Asset sales — conditions
  
  (4.1) Subsection (4.2) applies to an eligible entity in respect of a qualifying period if 
  (a) the eligible entity acquired assets (referred to in this subsection and subsection (4.2) as the “acquired assets”) of a person or partnership (referred to in this subsection and subsection (4.2) as the “seller”) during the qualifying period or at any time before that period; 
  (b) immediately prior to the acquisition, the fair market value of the acquired assets constituted 
  (i) all or substantially all of the fair market value of the property of the seller used in the course of carrying on business, or 
  (ii) if the seller and the eligible entity deal with each other at arm’s length, all or substantially all of the property of the seller that can reasonably be regarded as being necessary for the eligible entity to be capable of carrying on a business of the seller, or part of a business of the seller, as a business; 
  (c) the acquired assets were used by the seller in the course of a business carried on in Canada by the seller; 
  (d) it is reasonable to conclude that none of the main purposes of the acquisition was to increase the amount of a deemed overpayment under subsection (2); and 
  (e) the eligible entity elects in respect of the qualifying period and files the election in prescribed form and manner with the Minister or, if the seller is in existence during the qualifying period, the eligible entity and the seller jointly elect in respect of that period and so file with the Minister. 
  
  ### Asset sales — application
  
  (4.2) If this subsection applies to an eligible entity in respect of a qualifying period, 
  (a) the amount of the qualifying revenue of the seller for the prior reference period, or the current reference period, for the qualifying period that is reasonably attributable to the acquired assets (referred to in this subsection as the “assigned revenue”) is to be included in determining the qualifying revenue of the eligible entity for its prior reference period or current reference period, as the case may be, for the qualifying period; 
  (b) the assigned revenue is to be subtracted from the qualifying revenue of the seller for its prior reference period or current reference period, as the case may be, for the qualifying period; 
  (c) if a portion of the assigned revenue is from a person or partnership that did not deal at arm’s length with the seller and that person or partnership deals at arm’s length with the eligible entity throughout the current reference period, then that portion of the assigned revenue is deemed to not be derived from persons or partnerships not dealing at arm’s length for the purposes of paragraph (d) of the definition qualifying revenue in subsection (1);  
  (d) if the seller meets any of the following conditions, the eligible entity is deemed to meet that condition: 
  (i) either of the conditions in paragraph (d) of the definition qualifying entity in subsection (1), and  
  (ii) both of the conditions in subparagraph (c)(ii), or the condition in subparagraph (c)(iii), of the definition qualifying renter in subsection (1); and  
  (e) for the purposes of subparagraph (b)(i) of the definition prior reference period in subsection (1) and the description of C in subparagraph (c)(ii) of the definition qualifying entity in subsection (1), the eligible entity is deemed to have commenced carrying on the business in which the acquired assets are used at the earlier of  
  (i) the date on which the eligible entity commenced carrying on that business, and 
  (ii) the date on which the seller commenced carrying on the business in which the acquired assets were used. 
  
  ### Deemed overpayment
  
  (5) For the purposes of this section, 
  (a) the amount of any deemed overpayment by an eligible entity under any of subsections (2) to (2.2) in respect of a qualifying period cannot exceed the amount claimed by the eligible entity in the application referred to in paragraph (a) of the definition qualifying entity in subsection (1) — or paragraph (a) of the definition qualifying renter in subsection (1) or paragraph (a) of the definition qualifying recovery entity in subsection (1) — in respect of that qualifying period; and  
  (b) if an eligible employee is employed in a week by two or more qualifying entities that do not deal with each other at arm’s length, the total amount of the deemed overpayment under subsection (2) or (2.2) in respect of the eligible employee for that week shall not exceed the amount that would arise if the eligible employee’s eligible remuneration for that week were paid by one qualifying entity. 
  
  ### Anti-avoidance — qualifying revenues
  
  (6) Notwithstanding any other provision in this section, the qualifying revenue of an eligible entity for a current reference period for a qualifying period is deemed to be equal to the qualifying revenue of the eligible entity for the relevant prior reference period, if 
  (a) the eligible entity, or a person or partnership not dealing at arm’s length with the eligible entity, enters into a transaction or participates in an event (or a series of transactions or events) or takes an action (or fails to take an action) — other than, for greater certainty, a decision under subparagraph (a)(ii) or (b)(ii) of the definition qualifying revenue in subsection (1) or the decision to use one of the methods of computing qualifying revenues under subsection (4) — that has the effect of  
  (i) reducing the qualifying revenues (determined without reference to this subsection) of the eligible entity for the current reference period, or 
  (ii) increasing the qualifying rent expenses of the eligible entity for the qualifying period; and 
  (b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph (a) is to 
  (i) cause an eligible entity to qualify for the deemed overpayment under subsection (2) in respect of that qualifying period, 
  (ii) in respect of the fifth qualifying period and subsequent qualifying periods, increase the amount of a deemed overpayment under subsection (2), or 
  (iii) increase the amount of a deemed overpayment under subsection (2.1). 
  
  ### Anti-avoidance — recovery wage subsidy
  
  (6.1) Notwithstanding any other provision in this section, the total current period remuneration of an eligible entity for a qualifying period is deemed to be equal to the total base period remuneration of the eligible entity, if 
  (a) the eligible entity, or a person or partnership not dealing at arm’s length with the eligible entity, enters into a transaction or participates in an event (or a series of transactions or events) or takes an action (or fails to take an action) that has the effect of increasing the difference between the total current period remuneration and the total base period remuneration of the eligible entity for the qualifying period; and 
  (b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph (a) is to increase the amount of a deemed overpayment under subsection (2.2). 
  
  ### Partnerships
  
  (7) A partnership is deemed 
  (a) for the purposes of subsections (2) to (2.2) and subsections 152(3.4) and 160.1(1), to be a taxpayer; and 
  (b) for the purposes of subsections (2) to (2.2), to have a liability under this Part for a taxation year in which a qualifying period ends. 
  
  ### Prescribed amounts
  
  (8) The following may be prescribed for the purposes of: 
  (a) the definition base percentage in subsection (1),  
  (i) the percentages in subparagraphs (a)(i), (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i), and 
  (ii) the factors in subparagraphs (a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii) and (j)(ii); and 
  (b) the definition rent subsidy percentage in subsection (1), the factors and percentages in paragraphs (a) and (a.1) of that definition;  
  (b.1) the definition recovery wage subsidy rate in subsection (1), the percentages in that definition; and  
  (c) the definition qualifying rent expense in subsection (1), specific, or classes of, expenses that are included or excluded as qualifying rent expenses under paragraph (a) or (b) of that definition.  
  
  ### Deeming rules — revenue decline tests
  
  (9) If, absent the application of this subsection, 
  (a) an eligible entity meets the conditions in paragraph (c) of the definition qualifying entity in subsection (1) in respect of a particular qualifying period described in any of paragraphs (a) to (c) of the definition qualifying period in subsection (1), then the eligible entity is deemed to meet the conditions of that paragraph in respect of the immediately following qualifying period; or  
  (b) a lower revenue reduction percentage is determined in respect of an eligible entity for a particular qualifying period described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1) than for the immediately preceding qualifying period, then the revenue reduction percentage in respect of the eligible entity for the particular qualifying period is deemed to be equal to its revenue reduction percentage for the immediately preceding qualifying period.  
  
  ### Special case
  
  (9.1) For the purposes of paragraph (9)(b), if the particular qualifying period is the eleventh qualifying period, then the immediately preceding qualifying period is deemed to be the ninth qualifying period. 
  
  ### Greater of wage and recovery subsidies
  
  (9.2) For a qualifying period, 
  (a) if the amount of any deemed overpayment under subsection (2) is equal to or greater than the amount of any deemed overpayment under subsection (2.2), the amount of any deemed overpayment under subsection (2.2) is deemed to be nil; and 
  (b) if the amount of any deemed overpayment under subsection (2.2) is greater than the amount of any deemed overpayment under subsection (2), the amount of any deemed overpayment under subsection (2) is deemed to be nil. 
  
  ### Amending or revoking elections
  
  (10) An eligible entity may amend or revoke an election made under this section on or before the date that the application is due for the first qualifying period in respect of which the election is made. 
  
  ### Affiliated entities
  
  (11) For the purposes of the description of E in subsection (2.1), if two eligible entities are affiliated with the same eligible entity, they are deemed to be affiliated with each other. 
  
  ### Deeming rule — qualifying rent expense
  
  (12) For the purposes of the definition qualifying rent expense in subsection (1), an amount is deemed to have been paid by an eligible entity on the date it first became due under an agreement, and not at a later date, if the individual referred to in paragraph (b) of the definition qualifying renter in subsection (1) attests that the eligible entity intends to pay the amount due under the agreement no later than 60 days after the day on which the Minister makes the first refund under subsection 164(1.6) in respect of the amount deemed to have been paid (referred to in subsection (13) as the “payment deadline”).  
  
  ### Deeming rule — qualifying rent expense
  
  (13) Subsection (12) is deemed not to have produced its effect if the amount due referred to in subsection (12) is not actually paid on or before the payment deadline. 
  
  ### Executive compensation
  
  (14) The amount of a refund made by the Minister to an eligible entity in respect of a deemed overpayment under subsection (2) on a particular date under subsection 164(1.6), in respect of any of the seventeenth qualifying period to the twenty-third qualifying period, is deemed to be an amount that has been refunded to the eligible entity on that particular date (for the taxation year in which the refund was made) in excess of the amount to which the eligible entity was entitled as a refund under this Act to the extent of the lesser of the amount of the refund and the amount determined by the formula is the executive compensation repayment amount of the eligible entity; and is the total of all amounts deemed to be an excess refund to the eligible entity under this subsection in respect of refunds made after the particular date. 
  
  ### Executive compensation
  
  (14.1) The amount of a refund made by the Minister to an eligible entity in respect of a deemed overpayment under subsection (2) on a particular date under subsection 164(1.6), in respect of any of the twenty-fourth qualifying period and any subsequent qualifying period, is deemed to be an amount that has been refunded to the eligible entity on that particular date (for the taxation year in which the refund was made) in excess of the amount to which the eligible entity was entitled as a refund under this Act to the extent of the lesser of the amount of the refund and the amount determined by the formula is the greater of 
  (a) the executive compensation repayment amount of the eligible entity, and 
  (b) with respect to a qualifying entity that is a publicly traded company or a subsidiary of such a company, the amount of taxable dividends paid by the company or its subsidiary to an individual who is a holder of common shares of the company or of the subsidiary of the company; and is the total of all amounts deemed to be an excess refund to the eligible entity under this subsection in respect of refunds made after the particular date. 
  
  ### Foreign currency — executive remuneration
  
  (15) For the purposes of paragraphs 261(2)(b) and (5)(c), amounts referred to in the definition executive remuneration in subsection (1) are deemed to arise on the last day of the eligible entity’s fiscal period to which the amount relates and not at any other time.  
  
  ### Extension of time by Minister
  
  (16) For the purposes of determining whether an eligible entity is a qualifying entity, a qualifying recovery entity or a qualifying renter, the Minister may, at any time, extend the time for filing an application under this section. 
  
  # SUBDIVISION C 
  
  ## Rules Applicable to all Taxpayers 
  
  ### Foreign tax deduction
  
  126 (1) A taxpayer who was resident in Canada at any time in a taxation year may deduct from the tax for the year otherwise payable under this Part by the taxpayer an amount equal to 
  (a) such part of any non-business-income tax paid by the taxpayer for the year to the government of a country other than Canada (except, where the taxpayer is a corporation, any such tax or part thereof that may reasonably be regarded as having been paid by the taxpayer in respect of income from a share of the capital stock of a foreign affiliate of the taxpayer) as the taxpayer may claim, not exceeding, however, 
  (b) that proportion of the tax for the year otherwise payable under this Part by the taxpayer that 
  (i) the amount, if any, by which the total of the taxpayer’s qualifying incomes exceeds the total of the taxpayer’s qualifying losses 
  (A) for the year, if the taxpayer is resident in Canada throughout the year, and 
  (B) for the part of the year throughout which the taxpayer is resident in Canada, if the taxpayer is non-resident at any time in the year, from sources in that country, on the assumption that 
  (C) no businesses were carried on by the taxpayer in that country, 
  (D) where the taxpayer is a corporation, it had no income from shares of the capital stock of a foreign affiliate of the taxpayer, and 
  (E) where the taxpayer is an individual, 
  (I) no amount was deducted under subsection 91(5) in computing the taxpayer’s income for the year, and 
  (II) if the taxpayer deducted an amount under subsection 122.3(1) from the taxpayer’s tax otherwise payable under this Part for the year, the taxpayer’s income from employment in that country was not from a source in that country to the extent of the lesser of the amounts determined in respect thereof under paragraphs 122.3(1)(c) and 122.3(1)(d) for the year, is of 
  (ii) the total of 
  (A) the amount, if any, by which, 
  (I) if the taxpayer was resident in Canada throughout the year, the taxpayer’s income for the year computed without reference to paragraph 20(1)(ww), and 
  (II) if the taxpayer was non-resident at any time in the year, the amount determined under paragraph 114(a) in respect of the taxpayer for the year exceeds 
  (III) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and 
  (B) the amount, if any, added under section 110.5 in computing the taxpayer’s taxable income for the year. 
  
  ### Authorized foreign bank
  
  (1.1) In applying subsections 20(12) and (12.1) and this section in respect of an authorized foreign bank, 
  (a) the bank is deemed, for the purposes of subsections (1), (4) to (5), (6) and (7), to be resident in Canada in respect of its Canadian banking business; 
  (b) the references in subsection 20(12) and paragraph (1)(a) to “country other than Canada” shall be read as a reference to “country that is neither Canada nor a country in which the taxpayer is resident at any time in the taxation year”; 
  (c) the reference in subparagraph (1)(b)(i) to “from sources in that country” shall be read as a reference to “in respect of its Canadian banking business from sources in that country”; 
  (d) subparagraph (1)(b)(ii) shall be read as follows: 
  “(ii) the lesser of 
  (A) the taxpayer’s taxable income earned in Canada for the year, and 
  (B) the total of the taxpayer’s income for the year from its Canadian banking business and the amount determined in respect of the taxpayer under subparagraph 115(1)(a)(vii) for the year.”; 
  (e) in computing the non-business-income tax paid by the bank for a taxation year to the government of a country other than Canada, there shall be included only taxes that relate to amounts that are included in computing the bank’s taxable income earned in Canada from its Canadian banking business; and 
  (f) the definition 
  *tax-exempt income* in subsection (7) shall be read as follows:  “ 
  *tax-exempt income* means income of a taxpayer from a source in a particular country in respect of which  
  (a) the taxpayer is, because of a comprehensive agreement or convention for the elimination of double taxation on income, which has the force of law in the particular country and to which a country in which the taxpayer is resident is a party, entitled to an exemption from all income or profits taxes, imposed in the particular country, to which the agreement or convention applies, and 
  (b) no income or profits tax to which the agreement or convention does not apply is imposed in the particular country;”. 
  
  ### Idem
  
  (2) Where a taxpayer who was resident in Canada at any time in a taxation year carried on business in the year in a country other than Canada, the taxpayer may deduct from the tax for the year otherwise payable under this Part by the taxpayer an amount not exceeding the least of 
  (a) such part of the total of the business-income tax paid by the taxpayer for the year in respect of businesses carried on by the taxpayer in that country and the taxpayer’s unused foreign tax credits in respect of that country for the 10 taxation years immediately preceding and the 3 taxation years immediately following the year as the taxpayer may claim, 
  (b) the amount determined under subsection 126(2.1) for the year in respect of businesses carried on by the taxpayer in that country, and 
  (c) the amount by which 
  (i) the tax for the year otherwise payable under this Part by the taxpayer exceeds 
  (ii) the amount or the total of amounts, as the case may be, deducted under subsection 126(1) by the taxpayer from the tax for the year otherwise payable under this Part. 
  
  ### Amount determined for purposes of para. (2)(b)
  
  (2.1) For the purposes of paragraph 126(2)(b), the amount determined under this subsection for a year in respect of businesses carried on by a taxpayer in a country other than Canada is the total of 
  (a) that proportion of the tax for the year otherwise payable under this Part by the taxpayer that 
  (i) the amount, if any, by which the total of the taxpayer’s qualifying incomes exceeds the total of the taxpayer’s qualifying losses 
  (A) for the year, if the taxpayer is resident in Canada throughout the year, and 
  (B) for the part of the year throughout which the taxpayer is resident in Canada, if the taxpayer is non-resident at any time in the year, from businesses carried on by the taxpayer in that country is of 
  (ii) the total of 
  (A) the amount, if any, by which 
  (I) if the taxpayer is resident in Canada throughout the year, the taxpayer’s income for the year computed without reference to paragraph 20(1)(ww), and 
  (II) if the taxpayer is non-resident at any time in the year, the amount determined under paragraph 114(a) in respect of the taxpayer for the year exceeds 
  (III) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and 
  (B) the amount, if any, added under section 110.5 in computing the taxpayer’s taxable income for the year, and 
  (b) that proportion of the amount, if any, added under subsection 120(1) to the tax for the year otherwise payable under this Part by the taxpayer that 
  (i) the amount determined under subparagraph (a)(i) in respect of the country is of 
  (ii) the amount, if any, by which, 
  (A) where section 114 does not apply to the taxpayer in respect of the year, the taxpayer’s income for the year, and 
  (B) where section 114 applies to the taxpayer in respect of the year, the total of the taxpayer’s income for the period or periods referred to in paragraph 114(a) and the amount that would be determined under paragraph 114(b) in respect of the taxpayer for the year if subsection 115(1) were read without reference to paragraphs 115(1)(d) to 115(1)(f) exceeds 
  (C) the taxpayer’s income earned in the year in a province (within the meaning assigned by subsection 120(4)). 
  
  ### Non-resident’s foreign tax deduction
  
  (2.2) If at any time in a taxation year a taxpayer who is not at that time resident in Canada disposes of a property that was deemed by subsection 48(2), as it read in its application before 1993, or by paragraph 128.1(4)(e), as it read in its application before October 2, 1996, to be taxable Canadian property of the taxpayer, the taxpayer may deduct from the tax for the year otherwise payable under this Part by the taxpayer an amount equal to the lesser of 
  (a) the amount of any non-business-income tax paid by the taxpayer for the year to the government of a country other than Canada that can reasonably be regarded as having been paid by the taxpayer in respect of any gain or profit from the disposition of the property, and 
  (b) that proportion of the tax for the year otherwise payable under this Part by the taxpayer that 
  (i) the taxable capital gain from the disposition of that property is of 
  (ii) if the taxpayer is non-resident throughout the year, the taxpayer’s taxable income earned in Canada for the year determined without reference to paragraphs 115(1)(d) to (f), and 
  (iii) if the taxpayer is resident in Canada at any time in the year, the amount that would have been the taxpayer’s taxable income earned in Canada for the year if the part of the year throughout which the taxpayer was non-resident were the whole taxation year. 
  
  ### Former resident — deduction
  
  (2.21) If at any particular time in a particular taxation year a non-resident individual disposes of a property that the individual last acquired because of the application, at any time (in this subsection referred to as the “acquisition time”) after October 1, 1996, of paragraph 128.1(4)(c), there may be deducted from the individual’s tax otherwise payable under this Part for the year (in this subsection referred to as the “emigration year”) that includes the time immediately before the acquisition time an amount not exceeding the lesser of 
  (a) the total of all amounts each of which is the amount of any business-income tax or non-business-income tax paid by the individual for the particular year 
  (i) where the property is real or immovable property situated in a country other than Canada, 
  (A) to the government of that country, or 
  (B) to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, or 
  (ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, that can reasonably be regarded as having been paid in respect of that portion of any gain or profit from the disposition of the property that accrued while the individual was resident in Canada and before the time the individual last ceased to be resident in Canada, and 
  (b) the amount, if any, by which 
  (i) the amount of tax under this Part that was, after taking into account the application of this subsection in respect of dispositions that occurred before the particular time, otherwise payable by the individual for the emigration year exceeds 
  (ii) the amount of such tax that would have been payable if the property had not been deemed by subsection 128.1(4) to have been disposed of in the emigration year. 
  
  ### Former resident — trust beneficiary
  
  (2.22) If at any particular time in a particular taxation year a non-resident individual disposes of a property that the individual last acquired at any time (in this subsection referred to as the “acquisition time”) on a distribution after October 1, 1996 to which paragraphs 107(2)(a) to (c) do not apply only because of subsection 107(5), the trust may deduct from its tax otherwise payable under this Part for the year (in this subsection referred to as the “distribution year”) that includes the acquisition time an amount not exceeding the lesser of 
  (a) the total of all amounts each of which is the amount of any business-income tax or non-business-income tax paid by the individual for the particular year 
  (i) where the property is real or immovable property situated in a country other than Canada, 
  (A) to the government of that country, or 
  (B) to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, or 
  (ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, that can reasonably be regarded as having been paid in respect of that portion of any gain or profit from the disposition of the property that accrued before the distribution and after the latest of the times, before the distribution, at which 
  (iii) the trust became resident in Canada, 
  (iv) the individual became a beneficiary under the trust, or 
  (v) the trust acquired the property, and 
  (b) the amount, if any, by which 
  (i) the amount of tax under this Part that was, after taking into account the application of this subsection in respect of dispositions that occurred before the particular time, otherwise payable by the trust for the distribution year exceeds 
  (ii) the amount of such tax that would have been payable by the trust for the distribution year if the property had not been distributed to the individual. 
  
  ### Where foreign credit available
  
  (2.23) For the purposes of subsections (2.21) and (2.22), in computing, in respect of the disposition of a property by an individual in a taxation year, the total amount of taxes paid by the individual for the year to one or more governments of countries other than Canada, there shall be deducted any tax credit (or other reduction in the amount of a tax) to which the individual was entitled for the year, under the law of any of those countries or under a tax treaty between Canada and any of those countries, because of taxes paid or payable by the individual under this Act in respect of the disposition or a previous disposition of the property. 
  
  ### Rules relating to unused foreign tax credit
  
  (2.3) For the purposes of this section, 
  (a) the amount claimed under paragraph 126(2)(a) by a taxpayer for a taxation year in respect of a country shall be deemed to be in respect of the business-income tax paid by the taxpayer for the year in respect of businesses carried on by the taxpayer in that country to the extent of the amount of that tax, and the remainder, if any, of the amount so claimed shall be deemed to be in respect of the taxpayer’s unused foreign tax credits 
  
  ### in respect of that country that may be claimed for the taxation year;
  
  (b) no amount may be claimed under paragraph (2)(a) in computing a taxpayer’s tax payable under this Part for a particular taxation year in respect of the taxpayer’s unused foreign tax credit in respect of a country for a taxation year until the taxpayer’s unused foreign tax credits in respect of that country for taxation years preceding the taxation year that may be claimed for the particular taxation year have been claimed; and 
  (c) an amount in respect of a taxpayer’s unused foreign tax credit in respect of a country for a taxation year may be claimed under paragraph (2)(a) in computing the taxpayer’s tax payable under this Part for a particular taxation year only to the extent that it exceeds the aggregate of all amounts each of which is the amount that may reasonably be considered to have been claimed in respect of that unused foreign tax credit in computing the taxpayer’s tax payable under this Part for a taxation year preceding the particular taxation year. 
  
  ### Employees of international organizations
  
  (3) Where an individual is resident in Canada at any time in a taxation year, there may be deducted from the individual’s tax for the year otherwise payable under this Part an amount equal to that proportion of the tax for the year otherwise payable under this Part by the individual that 
  (a) the individual’s income 
  (i) for the year, if the individual is resident in Canada throughout the year, and 
  (ii) for the part of the year throughout which the individual was resident in Canada, if the individual is non-resident at any time in the year, from employment with an international organization (other than a prescribed international organization), as defined for the purposes of section 2 of the Foreign Missions and International Organizations Act  is of 
  (b) the amount, if any, by which 
  (i) if the taxpayer is resident in Canada throughout the year, the taxpayer’s income for the year computed without reference to paragraph 20(1)(ww), and 
  (ii) if the taxpayer is non-resident at any time in the year, the amount determined under paragraph 114(a) in respect of the taxpayer for the year exceeds 
  (iii) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (d.3), (f) and (g), in computing the taxpayer’s taxable income for the year, except that the amount deductible under this subsection in computing the individual’s tax payable under this Part for the year may not exceed that proportion of the total of all amounts each of which is an amount paid by the individual to the organization as a levy (the proceeds of which are used to defray expenses of the organization), computed by reference to the remuneration received by the individual in the year from the organization in a manner similar to the manner in which income tax is computed, that 
  (c) the individual’s income for the year from employment with the organization is of 
  (d) the amount that would be the individual’s income for the year from employment with the organization if this Act were read without reference to paragraph 81(1)(a). 
  
  ### Portion of foreign tax not included
  
  (4) For the purposes of this Act, an income or profits tax paid by a person resident in Canada to the government of a country other than Canada does not include a tax, or that portion of a tax, imposed by that government that would not be imposed if the person were not entitled under section 113 or this section to a deduction in respect of the tax or that portion of the tax. 
  
  ### No economic profit
  
  (4.1) If a taxpayer acquires a property, other than a capital property, at any time after February 23, 1998 and it is reasonable to expect at that time that the taxpayer will not realize an economic profit in respect of the property for the period that begins at that time and ends when the taxpayer next disposes of the property, the total amount of all income or profits taxes (referred to as the “foreign tax” for the purpose of subsection 20(12.1)) in respect of the property for the period, and in respect of related transactions, paid by the taxpayer for any year to the government of any country other than Canada, is not included in computing the taxpayer’s business-income tax or non-business-income tax for any taxation year. 
  
  ### Denial of foreign tax credit
  
  (4.11) If a taxpayer is a member of a partnership, any income or profits tax paid to the government of a particular country other than Canada — in respect of the income of the partnership for a period during which the taxpayer’s direct or indirect share of the income of the partnership under the income tax laws (referred to in subsection (4.12) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of the partnership is subject to income taxation, is less than the taxpayer’s direct or indirect share of the income for the purposes of this Act — is not included in computing the taxpayer’s business-income tax or non-business-income tax for any taxation year. 
  
  ### Exceptions
  
  (4.12) For the purposes of subsection (4.11), a taxpayer is not to be considered to have a lesser direct or indirect share of the income of a partnership under the relevant foreign tax law than for the purposes of this Act solely because of one or more of the following: 
  (a) a difference between the relevant foreign tax law and this Act in the manner of 
  (i) computing the income of the partnership, or 
  (ii) allocating the income of the partnership because of the admission to, or withdrawal from, the partnership of any of its members; 
  (b) the treatment of the partnership as a corporation under the relevant foreign tax law; or 
  (c) the fact that the taxpayer is not treated as a corporation under the relevant foreign tax law. 
  
  ### Tiered partnerships
  
  (4.13) For the purposes of subsections (4.11) and (4.12), if a taxpayer is (or is deemed by this subsection to be) a member of a particular partnership that is a member of another partnership, the taxpayer is deemed to be a member of the other partnership. 
  
  ### Short-term securities acquisitions
  
  (4.2) If at any particular time a taxpayer disposes of a property that is a share or debt obligation and the period that began at the time the taxpayer last acquired the property and ended at the particular time is one year or less, the amount included in business-income tax or non-business-income tax paid by the taxpayer for a particular taxation year on account of all taxes (referred to in this subsection and subsections (4.3) and 161(6.1) as the “foreign tax”) that are 
  (a) paid by the taxpayer in respect of dividends or interest in respect of the period that are included in computing the taxpayer’s income from the property for any taxation year, 
  (b) otherwise included in business-income tax or non-business-income tax for any taxation year, and 
  (c) similar to the tax levied under Part XIII shall, subject to subsection (4.3), not exceed the amount determined by the formula is 
  (a) if the foreign tax would otherwise be included in business-income tax, the total of 
  (i) that proportion of 26.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and 
  (ii) that proportion of 25% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year, and 
  (b) if the foreign tax would otherwise be included in non-business-income tax, the total of 
  (i) if the taxpayer is a corporation that is a Canadian-controlled private corporation throughout the taxation year, that proportion of 28% that the number of days in the taxation year that are after 2010 is of the number of days in the taxation year, and 
  (ii) if the taxpayer is not a Canadian-controlled private corporation throughout the taxation year, the total of 
  (A) that proportion of 16.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and 
  (B) that proportion of 15% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year, is the total of the taxpayer’s proceeds from the disposition of the property at the particular time and the amount of all dividends or interest from the property in respect of the period included in computing the taxpayer’s income for any taxation year, is the total of the cost at which the taxpayer last acquired the property and any outlays or expenses made or incurred by the taxpayer for the purpose of disposing of the property at the particular time, is the amount of foreign tax that would otherwise be included in computing the taxpayer’s business-income tax or non-business-income tax for the particular year, and is the total amount of foreign tax that would otherwise be included in computing the taxpayer’s business-income tax or non-business-income tax for all taxation years. 
  
  ### Exceptions
  
  (4.3) Subsection (4.2) does not apply to a property of a taxpayer 
  (a) that is a capital property; 
  (b) that is a debt obligation issued to the taxpayer that has a term of one year or less and that is held by no one other than the taxpayer at any time; 
  (c) that was last acquired by the taxpayer before February 24, 1998; or 
  (d) in respect of which any foreign tax is, because of subsection (4.1), not included in computing the taxpayer’s business-income tax or non-business-income tax. 
  
  ### Dispositions ignored
  
  (4.4) For the purposes of subsections (4.1) and (4.2) and the definition 
  *economic profit* in subsection (7),  
  (a) a disposition or acquisition of property deemed to be made by subsection 10(12) or (13) or 45(1), section 70, 128.1 or 132.2, subsections 138(11.3), 138.2(4) or 142.5(2), paragraph 142.6(1)(b) or subsections 142.6(1.1) or (1.2) or 149(10) is not a disposition or acquisition, as the case may be; and 
  (b) a disposition 
  (i) to which section 51.1 applies, of a convertible obligation in exchange for a new obligation, 
  (ii) to which subsection 86(1) applies, of old shares in exchange for new shares, or 
  (iii) to which subsections 87(4) and (8) apply, of old shares in exchange for new shares, is not a disposition, and the convertible obligation and the new obligation, or the old shares and the new shares, as the case may be, are deemed to be the same property. 
  
  ### Synthetic disposition — holding period
  
  (4.5) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, 
  (a) for the purpose of determining whether the period referred to in subsection (4.2) is one year or less, the period is deemed to begin at the earlier of 
  (i) the time that is immediately before the particular time referred to in subsection (4.2), and 
  (ii) the end, if any, of the synthetic disposition period; and 
  (b) for the purposes of subsection (4.6), the taxpayer is deemed not to own the property during the synthetic disposition period. 
  
  ### Exception
  
  (4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement. 
  
  ### Foreign oil and gas levies
  
  (5) A taxpayer who is resident in Canada throughout a taxation year and carries on a foreign oil and gas business in a taxing country in the year is deemed for the purposes of this section to have paid in the year as an income or profits tax to the government of the taxing country an amount equal to the lesser of 
  (a) the amount, if any, by which 
  (i) the amount obtained by multiplying the taxpayer’s income from the business in the taxing country for the year by the total of 
  (A) that proportion of 26.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and 
  (B) that proportion of 25% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year exceeds 
  (ii) the total of all amounts that would, but for this subsection, be income or profits taxes paid in the year in respect of the business to the government of the taxing country, and 
  (b) the taxpayer’s production tax amount for the business in the taxing country for the year. 
  
  ### Deductions for specified capital gains
  
  (5.1) Where in a taxation year an individual has claimed a deduction under section 110.6 in computing the individual’s taxable income for the year, for the purposes of this section the individual shall be deemed to have claimed the deduction under section 110.6 in respect of such taxable capital gains or portion thereof as the individual may specify in the individual’s return of income required to be filed pursuant to section 150 for the year or, where the individual has failed to so specify, in respect of such taxable capital gains as the Minister may specify in respect of the taxpayer for the year. 
  
  ### Rules of construction
  
  (6) For the purposes of this section, 
  (a) the government of a country other than Canada includes the government of a state, province or other political subdivision of that country; 
  (b) where a taxpayer’s income for a taxation year is in whole or in part from sources in more than one country other than Canada, subsections (1) and (2) shall be read as providing for separate deductions in respect of each of the countries other than Canada; 
  (c) if any income from a source in a particular country would be tax-exempt income but for the fact that a portion of the income is subject to an income or profits tax imposed by the government of a country other than Canada, the portion is deemed to be income from a separate source in the particular country; and 
  (d) if, in computing a taxpayer’s income for a taxation year from a business carried on by the taxpayer in Canada, an amount is included in respect of interest paid or payable to the taxpayer by a person resident in a country other than Canada, and the taxpayer has paid to the government of that other country a non-business-income tax for the year with respect to the amount, the amount is, in applying the definition 
  *qualifying incomes* in subsection (7) for the purpose of subsection (1), deemed to be income from a source in that other country.  
  
  ### Definitions
  
  (7) In this section,  
  *business-income tax* paid by a taxpayer for a taxation year in respect of businesses carried on by the taxpayer in a country other than Canada (referred to in this definition as the “business country”) means, subject to subsections (4.1) to (4.2), the portion of any income or profits tax paid by the taxpayer for the year to the government of a country other than Canada that can reasonably be regarded as tax in respect of the income of the taxpayer from a business carried on by the taxpayer in the business country, but does not include a tax, or the portion of a tax, that can reasonably be regarded as relating to an amount that  
  (a) any other person or partnership has received or is entitled to receive from that government, or 
  (b) was deductible under subparagraph 110(1)(f)(i) in computing the taxpayer’s taxable income for the year; ( impôt sur le revenu tiré d’une entreprise)   
  *commercial obligation* in respect of a taxpayer’s foreign oil and gas business in a country means an obligation of the taxpayer to a particular person, undertaken in the course of carrying on the business or in contemplation of the business, if the law of the country would have allowed the taxpayer to undertake an obligation, on substantially the same terms, to a person other than the particular person; (obligation commerciale)   
  *economic profit* of a taxpayer in respect of a property for a period means the part of the taxpayer’s profit, from the business in which the property is used, that is attributable to the property in respect of the period or to related transactions, determined as if the only amounts deducted in computing that part of the profit were  
  (a) interest and financing expenses incurred by the taxpayer and attributable to the acquisition or holding of the property in respect of the period or to a related transaction, 
  (b) income or profits taxes payable by the taxpayer for any year to the government of a country other than Canada, in respect of the property for the period or in respect of a related transaction, or 
  (c) other outlays and expenses that are directly attributable to the acquisition, holding or disposition of the property in respect of the period or to a related transaction; ( profit économique)   
  *foreign oil and gas business* of a taxpayer means a business, carried on by the taxpayer in a taxing country, the principal activity of which is the extraction from natural accumulations, or from oil or gas wells, of petroleum, natural gas or related hydrocarbons; (entreprise pétrolière et gazière à l’étranger)   
  *non-business-income tax* paid by a taxpayer for a taxation year to the government of a country other than Canada means, subject to subsections (4.1) to (4.2), the portion of any income or profits tax paid by the taxpayer for the year to the government of that country that  
  (a) was not included in computing the taxpayer’s business-income tax for the year in respect of any business carried on by the taxpayer in any country other than Canada, 
  (b) was not deductible by virtue of subsection 20(11) in computing the taxpayer’s income for the year, and 
  (c) was not deducted by virtue of subsection 20(12) in computing the taxpayer’s income for the year, but does not include a tax, or the portion of a tax, 
  (c.1) that is in respect of an amount deducted because of subsection 104(22.3) in computing the taxpayer’s business-income tax, 
  (d) that would not have been payable had the taxpayer not been a citizen of that country and that cannot reasonably be regarded as attributable to income from a source outside Canada, 
  (e) that may reasonably be regarded as relating to an amount that any other person or partnership has received or is entitled to receive from that government, 
  (f) that, where the taxpayer deducted an amount under subsection 122.3(1) from the taxpayer’s tax otherwise payable under this Part for the year, may reasonably be regarded as attributable to the taxpayer’s income from employment to the extent of the lesser of the amounts determined in respect thereof under paragraphs 122.3(1)(c) and 122.3(1)(d) for the year, 
  (g) that can reasonably be attributed to a taxable capital gain or a portion thereof in respect of which the taxpayer or a spouse or common-law partner of the taxpayer has claimed a deduction under section 110.6, or 
  (h)  [Repealed, 2013, c. 33, s. 13]  
  (i) that can reasonably be regarded as relating to an amount that was deductible under subparagraph 110(1)(f)(i) in computing the taxpayer’s taxable income for the year; ( impôt sur le revenu ne provenant pas d’une entreprise)   
  *production tax amount* of a taxpayer for a foreign oil and gas business carried on by the taxpayer in a taxing country for a taxation year means the total of all amounts each of which  
  (a) became receivable in the year by the government of the country because of an obligation (other than a commercial obligation) of the taxpayer, in respect of the business, to the government or an agent or instrumentality of the government, 
  (b) is computed by reference to the amount by which 
  (i) the amount or value of petroleum, natural gas or related hydrocarbons produced or extracted by the taxpayer in the course of carrying on the business in the year exceeds 
  (ii) an allowance or other deduction that 
  (A) is deductible, under the agreement or law that creates the obligation described in paragraph (a), in computing the amount receivable by the government of the country, and 
  (B) is intended to take into account the taxpayer’s operating and capital costs of that production or extraction, and can reasonably be considered to have that effect, 
  (c) would not, if this Act were read without reference to subsection (5), be an income or profits tax, and 
  (d) is not identified as a royalty under the agreement that creates the obligation or under any law of the country; ( impôt sur la production)   
  *qualifying incomes* of a taxpayer from sources in a country means incomes from sources in the country, determined in accordance with subsection (9); (revenus admissibles)   
  *qualifying losses* of a taxpayer from sources in a country means losses from sources in the country, determined in accordance with subsection (9); (pertes admissibles)   
  *related transactions*, in respect of a taxpayer’s ownership of a property for a period, means transactions entered into by the taxpayer as part of the arrangement under which the property was owned; (opérations connexes)   
  *tax-exempt income* means income of a taxpayer from a source in a country in respect of which  
  (a) the taxpayer is, because of a tax treaty with that country, entitled to an exemption from all income or profits taxes, imposed in that country, to which the treaty applies, and 
  (b) no income or profits tax to which the treaty does not apply is imposed in any country other than Canada; ( revenu exonéré d’impôt)   
  *tax for the year otherwise payable under this Part* by a taxpayer means  
  (a) in paragraph (1)(b) and subsection (3), the amount determined by the formula is the amount that would be the tax payable under this Part for the year by the taxpayer if that tax were determined without reference to section 120.3 and before making any deduction under any of sections 121, 122.3, 125 to 127.41 and, if the taxpayer is a Canadian-controlled private corporation throughout the year, section 123.4, and is the amounts deemed by subsections 120(2) and (2.2) to have been paid on account of tax payable under this Part by the taxpayer, 
  (b) in subparagraph (2)(c)(i) and paragraph (2.2)(b), the amount that would be the tax payable under this Part for the year by the taxpayer if that tax were determined without reference to sections 120.3 and 123.3 and before making any deduction under any of sections 121 and 122.3, subsection 123.4(3), and sections 124 to 127.41, and 
  (c) in subsection (2.1), the amount that would be the tax payable under this Part for the year by the taxpayer if that tax were determined without reference to subsection 120(1) and sections 120.3 and 123.3 and before making any deduction under any of sections 121 and 122.3, subsection 123.4(3) and sections 124 to 127.41; ( impôt payable par ailleurs pour l’année en vertu de la présente partie)   
  *taxing country* means a country (other than Canada) the government of which regularly imposes, in respect of income from businesses carried on in the country, a levy or charge of general application that would, if this Act were read without reference to subsection (5), be an income or profits tax; (pays taxateur)   
  *unused foreign tax credit* of a taxpayer in respect of a country for a taxation year means the amount, if any, by which  
  (a) the business-income tax paid by the taxpayer for the year in respect of businesses carried on by the taxpayer in that country exceeds 
  (b) the amount, if any, deductible under subsection (2) in respect of that country in computing the taxpayer’s tax payable under this Part for the year. ( fraction inutilisée du crédit pour impôt étranger)  
  
  ### Deemed dividend — partnership
  
  (8) If an amount is deemed by subsection 96(1.11) to be a taxable dividend received by a person in a taxation year of the person in respect of a partnership, and it is reasonable to consider that all or part of the amount (in this subsection referred to as the “foreign-source portion”) is attributable to income of the partnership from a source in a country other than Canada, the person is deemed for the purposes of this section to have an amount of income from that source for that taxation year equal to the amount determined by the formula is the total amount included under subsection 82(1) in computing the income of the person in respect of the taxable dividend for that taxation year; is the foreign-source portion; and is the amount of the taxable dividend deemed to be received by the person. 
  
  ### Computation of qualifying incomes and losses
  
  (9) The qualifying incomes and qualifying losses for a taxation year of a taxpayer from sources in a country shall be determined 
  (a) without reference to 
  (i) any portion of income that was deductible under subparagraph 110(1)(f)(i) in computing the taxpayer’s taxable income, 
  (ii) for the purpose of subparagraph (1)(b)(i), any portion of income in respect of which an amount was deducted under section 110.6 in computing the taxpayer’s income, or 
  (iii) any income or loss from a source in the country if any income of the taxpayer from the source would be tax-exempt income; and 
  (b) as if the total of all amounts each of which is that portion of an amount deducted under subsection 66(4), 66.21(4), 66.7(2) or 66.7(2.3) in computing those qualifying incomes and qualifying losses for the year that applies to those sources were the greater of 
  (i) the total of all amounts each of which is that portion of an amount deducted under subsection 66(4), 66.21(4), 66.7(2) or 66.7(2.3) in computing the taxpayer’s income for the year that applies to those sources, and 
  (ii) the total of 
  (A) the portion of the maximum amount that would be deductible under subsection 66(4) in computing the taxpayer’s income for the year that applies to those sources if the amount determined under subparagraph 66(4)(b)(ii) for the taxpayer in respect of the year were equal to the amount, if any, by which the total of 
  (I) the taxpayer’s foreign resource income (within the meaning assigned by subsection 66.21(1)) for the year in respect of the country, determined as if the taxpayer had claimed the maximum amounts deductible for the year under subsections 66.7(2) and (2.3), and 
  (II) all amounts each of which would have been an amount included in computing the taxpayer’s income for the year under subsection 59(1) in respect of a disposition of a foreign resource property in respect of the country, determined as if each amount determined under subparagraph 59(1)(b)(ii) were nil, exceeds 
  (III) the total of all amounts each of which is a portion of an amount (other than a portion that results in a reduction of the amount otherwise determined under subclause (I)) that applies to those sources and that would be deducted under subsection 66.7(2) in computing the taxpayer’s income for the year if the maximum amounts deductible for the year under that subsection were deducted, 
  (B) the maximum amount that would be deductible under subsection 66.21(4) in respect of those sources in computing the taxpayer’s income for the year if 
  (I) the amount deducted under subsection 66(4) in respect of those sources in computing the taxpayer’s income for the year were the amount determined under clause (A), 
  (II) the amounts deducted under subsections 66.7(2) and (2.3) in respect of those sources in computing the taxpayer’s income for the year were the maximum amounts deductible under those subsections, 
  (III) for the purposes of the definition 
  *cumulative foreign resource expense* in subsection 66.21(1), the total of the amounts designated under subparagraph 59(1)(b)(ii) for the year in respect of dispositions by the taxpayer of foreign resource properties in respect of the country in the year were the maximum total that could be so designated without any reduction in the maximum amount that would be determined under clause (A) in respect of the taxpayer for the year in respect of the country if no assumption had been made under subclause (A)(II) in respect of designations made under subparagraph 59(1)(b)(ii), and  
  (IV) the amount determined under paragraph 66.21(4)(b) were nil, and 
  (C) the total of all amounts each of which is the maximum amount, applicable to one of those sources, that is deductible under subsection 66.7(2) or (2.3) in computing the taxpayer’s income for the year. 
  126.1  [Repealed, 2013, c. 34, s. 268]  
  
  ### Logging tax deduction
  
  127 (1) There may be deducted from the tax otherwise payable by a taxpayer under this Part for a taxation year an amount equal to the lesser of 
  (a) 2/3 of any logging tax paid by the taxpayer to the government of a province in respect of income for the year from logging operations in the province, and 
  (b) 6 2/3% of the taxpayer’s income for the year from logging operations in the province referred to in paragraph 127(1)(a), except that in no case shall the total of amounts in respect of all provinces that would otherwise be deductible under this subsection from the tax otherwise payable under this Part for the year by the taxpayer exceed 6 2/3% of the amount that would be the taxpayer’s taxable income for the year or taxable income earned in Canada for the year, as the case may be, if this Part were read without reference to paragraphs 60(b), 60(c) to 60(c.2), 60(i) and 60(v) and sections 62, 63 and 64. 
  
  ### Definitions
  
  (2) In subsection 127(1),  
  *income for the year from logging operations in the province* has the meaning assigned by regulation; (revenu pour l’année tiré des opérations forestières dans la province)   
  *logging tax* means a tax imposed by the legislature of a province that is declared by regulation to be a tax of general application on income from logging operations. (impôt sur les opérations forestières)  
  
  ### Contributions to registered parties and candidates
  
  (3) There may be deducted from the tax otherwise payable by a taxpayer under this Part for a taxation year in respect of the total of all amounts each of which is the eligible amount of a monetary contribution that is referred to in the Canada Elections Act and that is made by the taxpayer in the year to a registered party, a registered association or a candidate, as those terms are defined in that Act,  
  (a) when that total does not exceed $400, 75% of that total, 
  (b) when that total exceeds $400 and does not exceed $750, $300 plus 50% of the amount by which that total exceeds $400, and 
  (c) when that total exceeds $750, the lesser of 
  (i) $650, and 
  (ii) $475 plus 33 1/3% of the amount by which the total exceeds $750, if payment of each monetary contribution that is included in that total is evidenced by filing with the Minister a receipt, signed by the agent authorized under that Act to accept that monetary contribution, that contains prescribed information. 
  
  ### Issue of receipts
  
  (3.1) A receipt referred to in subsection (3) must be issued only in respect of the monetary contribution that it provides evidence for and only to the contributor who made it. 
  
  ### Authorization required for receipts from registered associations
  
  (3.2) No agent of a registered association of a registered party shall issue a receipt referred to in subsection (3) unless the leader of the registered party has, in writing, notified the financial agent, as referred to in the Canada Elections Act, of the registered association that its agents are authorized to issue those receipts.  
  
  ### Prohibition — issuance of receipts
  
  (3.3) If the Commissioner of Canada Elections makes an application under subsection 521.1(2) of the Canada Elections Act in respect of a registered party, no registered agent of the party — including, for greater certainty, a registered agent appointed by a provincial division of the party — and no electoral district agent of a registered association of the party shall issue a receipt referred to in subsection (3) unless the Commissioner withdraws the application or the court makes an order under subsection 521.1(6) of that Act or dismisses the application.  
  (4)  [Repealed, 2003, c. 19, s. 73]  
  
  ### Monetary contributions — form and content
  
  (4.1) For the purpose of subsections (3) and (3.1), a monetary contribution made by a taxpayer may be in the form of cash or of a negotiable instrument issued by the taxpayer. However, it does not include 
  (a) a monetary contribution that a taxpayer who is an agent authorized under the Canada Elections Act to accept monetary contributions makes in that capacity; or  
  (b) a monetary contribution in respect of which a taxpayer has received or is entitled to receive a financial benefit of any kind (other than a prescribed financial benefit or a deduction under subsection (3)) from a government, municipality or other public authority, whether as a grant, subsidy, forgivable loan or deduction from tax or an allowance or otherwise. 
  (4.2)  [Repealed, 2006, c. 9, s. 64]  
  
  ### Investment tax credit
  
  (5) There may be deducted from the tax otherwise payable by a taxpayer under this Part for a taxation year an amount not exceeding the lesser of 
  (a) the total of 
  (i) the taxpayer’s investment tax credit at the end of the year in respect of property acquired before the end of the year, of the taxpayer’s apprenticeship expenditure for the year or a preceding taxation year, of the taxpayer’s flow-through mining expenditure for the year or a preceding taxation year, of the taxpayer’s flow-through critical mineral mining expenditure for the year or a preceding taxation year, of the taxpayer’s pre-production mining expenditure for the year or a preceding taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the year or at the end of a preceding taxation year, and 
  (ii) the lesser of 
  (A) the taxpayer’s investment tax credit at the end of the year in respect of property acquired in a subsequent taxation year, of the taxpayer’s apprenticeship expenditure for a subsequent taxation year, of the taxpayer’s flow-through mining expenditure for a subsequent taxation year, of the taxpayer’s flow-through critical mineral mining expenditure for a subsequent taxation year, of the taxpayer’s pre-production mining expenditure for a subsequent taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the subsequent taxation year to the extent that an investment tax credit was not deductible under this subsection for the subsequent taxation year, and 
  (B) the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the amount, if any, determined under subparagraph 127(5)(a)(i), and 
  (b) where Division E.1 applies to the taxpayer for the year, the amount, if any, by which 
  (i) the taxpayer’s tax otherwise payable under this Part for the year exceeds 
  (ii) the taxpayer’s minimum amount for the year determined under section 127.51. 
  
  ### Investment tax credit of cooperative corporation
  
  (6) Where at any particular time in a taxation year a taxpayer that is a cooperative corporation within the meaning assigned by subsection 136(2) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by that subsection to be remitted to the Receiver General, an amount, not exceeding the amount, if any, by which 
  (a) its investment tax credit at the end of the immediately preceding taxation year in respect of property acquired and expenditures made before the end of that preceding taxation year exceeds the total of 
  (b) the amount deducted under subsection 127(5) from its tax otherwise payable under this Part for the immediately preceding taxation year in respect of property acquired and expenditures made before the end of that preceding taxation year, and 
  (c) the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year, and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) 
  (d) shall be deducted in computing the taxpayer’s investment tax credit at the end of the taxation year, and 
  (e) shall be deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made. 
  
  ### Investment tax credit of certain trusts
  
  (7) If, in a particular taxation year of a taxpayer who is a beneficiary under a trust that is a graduated rate estate or that is deemed to be in existence by section 143, an amount is determined in respect of the trust under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9) for its taxation year that ends in that particular taxation year, the trust may, in its return of income for its taxation year that ends in that particular taxation year, designate the portion of that amount that can, having regard to all the circumstances including the terms and conditions of the trust, reasonably be considered to be attributable to the taxpayer and was not designated by the trust in respect of any other beneficiary of the trust, and that portion is to be added in computing the investment tax credit of the taxpayer at the end of that particular taxation year and is to be deducted in computing the investment tax credit of the trust at the end of its taxation year that ends in that particular taxation year.  
  
  ### Investment tax credit of partnership
  
  (8) Subject to subsection (28), where, in a particular taxation year of a taxpayer who is a member of a partnership, an amount would be determined in respect of the partnership, for its taxation year that ends in the particular taxation year, under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9), if  
  (a) except for the purpose of subsection 127(13), the partnership were a person and its fiscal period were its taxation year, and 
  (b) in the case of a taxpayer who is a specified member of the partnership in the taxation year of the partnership, that definition were read without reference to paragraph (a.1) thereof, and paragraph (e.1) of that definition were read without reference to subparagraphs (ii) to (iv) thereof, the portion of that amount that can reasonably be considered to be the taxpayer’s share thereof shall be added in computing the investment tax credit of the taxpayer at the end of the particular year. 
  
  ### Investment tax credit of limited partner
  
  (8.1) Notwithstanding subsection (8), if a taxpayer is a limited partner of a partnership at the end of a fiscal period of the partnership, the amount, if any, determined under subsection (8) to be added in computing the taxpayer’s investment tax credit at the end of the taxpayer’s taxation year in which that fiscal period ends shall not exceed the lesser of 
  (a) the portion of the amount that would, if this section were read without reference to this subsection, be determined under subsection (8) to be the amount to be added in computing the taxpayer’s investment tax credit at the end of the taxpayer’s taxation year in which that fiscal period ends as is considered to have arisen because of the expenditure by the partnership of an amount equal to the taxpayer’s expenditure base (as determined under subsection (8.2) in respect of the partnership) at the end of that fiscal period, and 
  (b) the taxpayer’s at-risk amount in respect of the partnership at the end of that fiscal period. 
  
  ### Expenditure base
  
  (8.2) For the purposes of subsection 127(8.1), a taxpayer’s expenditure base in respect of a partnership at the end of a taxation year of the partnership is the lesser of 
  (a) the amount, if any, by which the total of 
  (i) the taxpayer’s at-risk amount in respect of the partnership at the time the taxpayer last became a limited partner of the partnership, 
  (ii) all amounts described in subparagraph 53(1)(e)(iv) contributed by the taxpayer after the time the taxpayer last became a limited partner of the partnership and before the end of the year that may reasonably be considered to have increased the taxpayer’s at-risk amount in respect of the partnership at the end of the taxation year in which the contribution was made, and 
  (iii) the amount, if any, by which 
  (A) the total of all amounts each of which is the taxpayer’s share of any income of the partnership as determined under paragraph 96(1)(f) for the year, or a preceding year ending after the time the taxpayer last became a limited partner of the partnership, exceeds 
  (B) the total of all amounts each of which is the taxpayer’s share of any loss of the partnership as determined under paragraph 96(1)(g) for one of those years exceeds the total of 
  (iv) all amounts received by the taxpayer after the time the taxpayer last became a limited partner of the partnership and before the end of the year as, on account or in lieu of payment of, or in satisfaction of, a distribution of the taxpayer’s share of partnership profits or partnership capital, and 
  (v) the total of all amounts each of which is the amount of an expenditure of the partnership referred to in paragraph 127(8.1)(a) in respect of the taxpayer for a preceding year, and 
  (b) that proportion of the lesser of 
  (i) the total of all amounts each of which is, if the partnership were a person and its fiscal period were its taxation year, 
  (A) an amount a specified percentage of which would be determined in respect of the partnership under paragraph (a), (b) or (e.1) of the definition investment tax credit in subsection 127(9) for the year,  
  (A.1) an amount that would be the apprenticeship expenditure of the partnership if the reference to “$2,000” in paragraph (a) of the definition apprenticeship expenditure in subsection (9) were read as a reference to “$20,000” and paragraph (b) of that definition were read without reference to “10% of”, or  
  (A.2)  [Repealed, 2017, c. 20, s. 23]  
  (B) the amount that would be the SR&ED qualified expenditure pool of the partnership at the end of the year, and 
  (ii) the total of all amounts each of which is the amount determined under paragraph 127(8.2)(a) in respect of each of the limited partners of the partnership at the end of the year that 
  (iii) the amount determined in respect of the taxpayer under paragraph 127(8.2)(a) for the year is of 
  (iv) the amount determined under subparagraph 127(8.2)(b)(ii). 
  
  ### Investment tax credit — allocation of unallocated partnership ITCs
  
  (8.3) For the purpose of subsection (8), and subject to subsection (8.4), if a taxpayer is a member of a partnership (other than a specified member) throughout a fiscal period of the partnership, there shall be added to the amount that can reasonably be considered to be that member’s share of the amount determined under subsection (8) the amount, if any, that is such portion of the amount determined under subsection (8.31) in respect of that fiscal period as is reasonable in the circumstances (having regard to the investment in the partnership, including debt obligations of the partnership, of each of those members of the partnership who was a member of the partnership throughout the fiscal period of the partnership and who was not a specified member of the partnership during the fiscal period of the partnership). 
  
  ### Amount of unallocated partnership ITC
  
  (8.31) For the purpose of subsection (8.3), the amount determined under this subsection in respect of a fiscal period of a partnership is the amount, if any, by which 
  (a) the total of all amounts each of which is an amount that would, if the partnership were a person and its fiscal period were its taxation year, be determined in respect of the partnership under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9) for a taxation year that is the fiscal period,  exceeds 
  (b) the total of 
  (i) the total of all amounts each of which is the amount determined under subsection (8) in respect of the fiscal period to be the share of the total determined under paragraph (a) of a partner of the partnership (other than a member of the partnership who was at any time in the fiscal period of the partnership a specified member of the partnership), and 
  (ii) the total of all amounts each of which is the amount determined under subsection (8), with reference to subsection (8.1), in respect of the fiscal period to be the share of the total determined under paragraph (a) of a partner of the partnership who was at any time in the fiscal period of the partnership a specified member of the partnership. 
  (iii)  [Repealed, 2007, c. 35, s. 43]  
  
  ### Idem
  
  (8.4) Notwithstanding subsection 127(8), where, pursuant to subsections 127(8) and 127(8.3) an amount would, but for this subsection, be required to be added in computing the investment tax credit of a taxpayer for a taxation year, where the taxpayer so elects in prescribed form and manner in the taxpayer’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) under this Part for the year, such portion of the amount as is elected by the taxpayer shall, for the purposes of this section, be deemed not to have been required by subsection 127(8) to have been added in computing the taxpayer’s investment tax credit at the end of the year. 
  
  ### Definitions
  
  (8.5) In subsections 127(8.1) to 127(8.4), the words at-risk amount of a taxpayer and limited partner of a partnership have the meanings assigned to those words by subsections 96(2.2) and 96(2.4), respectively.  
  
  ### Idem
  
  (9) In this section,  
  *annual investment tax credit limit* [Repealed, 1994, c. 8, s. 15]   
  *apprenticeship expenditure* of a taxpayer for a taxation year in respect of an eligible apprentice is the lesser of  
  (a) $2,000, and 
  (b) 10% of the eligible salary and wages payable by the taxpayer in the taxation year to the eligible apprentice in respect of the eligible apprentice’s employment, in the taxation year and on or after May 2, 2006, by the taxpayer in a business carried on in Canada by the taxpayer in the taxation year; ( dépense d’apprentissage)   
  *approved project* means a project with a total capital cost of depreciable property, determined without reference to subsection 13(7.1) or 13(7.4), of not less than $25,000 that has, on application in writing before July, 1988, been approved by such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council for the purposes of this definition in relation to projects in the appropriate province or region of a province; (ouvrage approuvé)   
  *approved project property* [Repealed, 1996, c. 21, s. 30]   
  *Cape Breton* means Cape Breton Island and that portion of the Province of Nova Scotia within the following described boundary:  beginning at a point on the southwesterly shore of Chedabucto Bay near Red Head, said point being S70 degrees E (Nova Scotia grid meridian) from Geodetic Station Sand, thence in a southwesterly direction to a point on the northwesterly boundary of highway 344, said point being southwesterly 240 [FEET] from the intersection of King Brook with said highway boundary, thence northwesterly to Crown post 6678, thence continuing northwesterly to Crown post 6679, thence continuing northwesterly to Crown post 6680, thence continuing northwesterly to Crown post 6681, thence continuing northwesterly to Crown post 6632, thence continuing northwesterly to Crown post 6602, thence northerly to Crown post 8575; thence northerly to Crown post 6599, thence continuing northerly to Crown post 6600, thence northwesterly to the southwest angle of the Town of Mulgrave, thence along the westerly boundary of the Town of Mulgrave and a prolongation thereof northerly to the Antigonish-Guysborough county line, thence along said county line northeasterly to the southwesterly shore of the Strait of Canso, thence following the southwesterly shore of the Strait of Canso and the northwesterly shore of Chedabucto Bay southeasterly to the place of beginning; ( Cap-Breton)   
  *certified property* of a taxpayer means any property (other than an approved project property) described in paragraph (a) or (b) of the definition qualified property in this subsection  
  (a) that was acquired by the taxpayer 
  (i) after October 28, 1980 and 
  (A) before 1987, or 
  (B) before 1988 where the property is 
  (I) a building under construction before 1987, or 
  (II) machinery and equipment ordered in writing by the taxpayer before 1987, 
  (ii) after 1986 and before 1989, other than a property included in subparagraph (i), 
  (iii) after 1988 and before 1995, 
  (iv) after 1994 and before 1996 where 
  (A) the property is acquired by the taxpayer for use in a project that was substantially advanced by or on behalf of the taxpayer, as evidenced in writing, before February 22, 1994, and 
  (B) construction of the project by or on behalf of the taxpayer begins before 1995, or 
  (v) after 1994 where the property 
  (A) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994, 
  (B) was under construction by or on behalf of the taxpayer on February 22, 1994, or 
  (C) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994, and that has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the taxpayer, and 
  (b) that is part of a facility as defined for the purposes of the Regional Development Incentives Act, chapter R-3 of the Revised Statutes of Canada, 1970, and was acquired primarily for use by the taxpayer in a prescribed area; (bien certifié)   
  *child care space amount* [Repealed, 2017, c. 20, s. 23]   
  *contract payment* means  
  (a) an amount paid or payable to a taxpayer, by a taxable supplier in respect of the amount, for scientific research and experimental development to the extent that it is performed 
  (i) for or on behalf of a person or partnership entitled to a deduction in respect of the amount because of subparagraph 37(1)(a)(i.01) or (i.1), and 
  (ii) at a time when the taxpayer is dealing at arm’s length with the person or partnership, or 
  (b) an amount in respect of an expenditure of a current nature (within the meaning assigned by paragraph 37(8)(d)) of a taxpayer, other than a prescribed amount, payable by a Canadian government or municipality or other Canadian public authority or by a person exempt, because of section 149, from tax under this Part on all or part of the person’s taxable income for scientific research and experimental development to be performed for it or on its behalf; ( paiement contractuel)   
  *critical mineral* means  
  (a) copper, 
  (b) nickel, 
  (c) lithium, 
  (d) cobalt, 
  (e) graphite, 
  (f) a rare earth element, 
  (g) scandium, 
  (h) titanium, 
  (i) gallium, 
  (j) vanadium, 
  (k) tellurium, 
  (l) magnesium, 
  (m) zinc, 
  (n) a platinum group metal, or 
  (o) uranium; ( minéral critique)   
  *eligible apprentice* means an individual who is employed in Canada in a trade prescribed in respect of a province or in respect of Canada, during the first twenty-four months of the individual’s apprenticeship contract registered with the province or Canada, as the case may be, under an apprenticeship program designed to certify or license individuals in the trade; (apprenti admissible)   
  *eligible child care space expenditure* [Repealed, 2017, c. 20, s. 23]   
  *eligible salary and wages* payable by a taxpayer to an eligible apprentice means the amount, if any, that is the salary and wages payable by the taxpayer to the eligible apprentice in respect of the first 24 months of the apprenticeship (other than a qualified expenditure incurred by the taxpayer in a taxation year, remuneration that is based on profits, bonuses, amounts described in section 6 or 7, and amounts deemed to be incurred by subsection 78(4)); (traitement et salaire admissibles)   
  *eligible taxpayer* means  
  (a) a corporation other than a non-qualifying corporation, 
  (b) an individual other than a trust, 
  (c) a trust all the beneficiaries of which are eligible taxpayers, and 
  (d) a partnership all the members of which are eligible taxpayers, and for the purpose of this definition, a beneficiary of a trust is a person or partnership that is beneficially interested in the trust; ( contribuable admissible)   
  *first term shared-use-equipment*, of a taxpayer, means depreciable property of the taxpayer (other than prescribed depreciable property of a taxpayer) acquired before 2014 that is used by the taxpayer, during its operating time in the period (in this subsection and subsection (11.1) referred to as the “first period”) beginning at the time the property was acquired by the taxpayer and ending at the end of the taxpayer’s first taxation year ending at least 12 months after that time, primarily for the prosecution of scientific research and experimental development in Canada, but does not include general purpose office equipment or furniture; (matériel à vocations multiples de première période)   
  *flow-through critical mineral mining expenditure* of a taxpayer for a taxation year means an expense deemed by subsection 66(12.61) (or by subsection 66(18) as a consequence of the application of subsection 66(12.61) to the partnership, referred to in paragraph (c) of this definition, of which the taxpayer is a member) to be incurred by the taxpayer in the year  
  (a) that is a Canadian exploration expense incurred by a corporation after April 7, 2022 in conducting mining exploration activity from or above the surface of the earth primarily targeting critical minerals, 
  (b) that 
  (i) is an expense described in paragraph (f) of the definition Canadian exploration expense in subsection 66.1(6), and  
  (ii) is not an expense in respect of 
  (A) trenching, if one of the purposes of the trenching is to carry out preliminary sampling (other than specified sampling), 
  (B) digging test pits (other than for the purpose of carrying out specified sampling), and 
  (C) preliminary sampling (other than specified sampling), 
  (c) that is an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after April 7, 2022 and on or before March 31, 2027, 
  (d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after April 7, 2022 and on or before March 31, 2027, 
  (e) that, in respect of an agreement described in paragraph (c), a qualified professional engineer or professional geoscientist certifies in prescribed form and manner that the expense is to be incurred in accordance with an exploration plan that primarily targets critical minerals if the qualified professional engineer or professional geoscientist 
  (i) completed the certification within the 12-month period immediately preceding the time when the agreement is made, and 
  (ii) acted reasonably, in their professional capacity, in completing the certification, and 
  (f) that is not an expense that the taxpayer has included under paragraph (a.2) of the definition investment tax credit in the computation of its investment tax credit in respect of which the taxpayer has, at any time, sought a deduction under subsection (5); (dépense minière de minéral critique déterminée)   
  *flow-through mining expenditure* of a taxpayer for a taxation year means an expense deemed by subsection 66(12.61) (or by subsection 66(18) as a consequence of the application of subsection 66(12.61) to the partnership, referred to in paragraph (c) of this definition, of which the taxpayer is a member) to be incurred by the taxpayer in the year  
  (a) that is a Canadian exploration expense incurred by a corporation after March 2019 and before 2025 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2025) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1),  
  (b) that 
  (i) is an expense described in paragraph (f) of the definition Canadian exploration expense in subsection 66.1(6), and  
  (ii) is not an expense in respect of 
  (A) trenching, if one of the purposes of the trenching is to carry out preliminary sampling (other than specified sampling), 
  (B) digging test pits (other than digging test pits for the purpose of carrying out specified sampling), and 
  (C) preliminary sampling (other than specified sampling), 
  (c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2019 and before April 2024, 
  (d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2019 and before April 2024, and 
  (e) that is not an expense that the taxpayer has included under paragraph (a.21) of the definition investment tax credit in the computation of its investment tax credit in respect of which the taxpayer has, at any time, sought a deduction under subsection (5); (dépense minière déterminée)   
  *Gaspé Peninsula* means that portion of the Gaspé region of the Province of Quebec that extends to the western border of Kamouraska County and includes the Magdalen Islands; (péninsule de Gaspé)   
  *government assistance* means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than as a deduction under subsection 127(5) or 127(6); (aide gouvernementale)   
  *investment tax credit* of a taxpayer at the end of a taxation year means the amount, if any, by which the total of  
  (a) the total of all amounts each of which is the specified percentage of the capital cost to the taxpayer of qualified property or qualified resource property acquired by the taxpayer in the year, 
  (a.1) 15% of the amount by which the taxpayer’s SR&ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the taxpayer in respect of a province, 
  (a.2) where the taxpayer is an individual (other than a trust), 15% of the taxpayer’s flow-through mining expenditures for the year, 
  (a.21) where the taxpayer is an individual (other than a trust), 30% of the taxpayer’s flow-through critical mineral mining expenditures for the year, 
  (a.3) if the taxpayer is a taxable Canadian corporation, the total of 
  (i) the specified percentage of the portion of the taxpayer’s pre-production mining expenditure described in subparagraph (a)(i) of the definition pre-production mining expenditure, and  
  (ii) the specified percentage of the portion of the taxpayer’s pre-production mining expenditure described in subparagraph (a)(ii) of the definition pre-production mining expenditure,  
  (a.4) the total of all amounts each of which is an apprenticeship expenditure of the taxpayer for the taxation year in respect of an eligible apprentice, 
  (a.5)  [Repealed, 2017, c. 20, s. 23]  
  (b) the total of amounts required by subsection 127(7) or 127(8) to be added in computing the taxpayer’s investment tax credit at the end of the year, 
  (c) the total of all amounts each of which is an amount determined under any of paragraphs (a) to (b) in respect of the taxpayer for any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year, 
  (d)  [Repealed, 2006, c. 4, s. 75]  
  (e) the total of all amounts each of which is an amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year or at the end of any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year, 
  (e.1) the total of all amounts each of which is the specified percentage of that part of a repayment made by the taxpayer in the year or in any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year that can reasonably be considered to be a repayment of government assistance, non-government assistance or a contract payment that reduced 
  (i) the capital cost to the taxpayer of a property under paragraph 127(11.1)(b), 
  (ii) the amount of a qualified expenditure incurred by the taxpayer under paragraph 127(11.1)(c) for taxation years that began before 1996, 
  (iii) the prescribed proxy amount of the taxpayer under paragraph 127(11.1)(f) for taxation years that began before 1996, 
  (iv) a qualified expenditure incurred by the taxpayer under any of subsections 127(18) to 127(20), 
  (v) the amount of a pre-production mining expenditure of the taxpayer under paragraph (11.1)(c.3), or 
  (vi) the amount of eligible salary and wages payable by the taxpayer to an eligible apprentice under paragraph (11.1)(c.4), to the extent that that reduction had the effect of reducing the amount of an apprenticeship expenditure of the taxpayer, and 
  (vii)  [Repealed, 2017, c. 20, s. 23]  
  (e.2) the total of all amounts each of which is the specified percentage of 1/4 of that part of a repayment made by the taxpayer in the year or in any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year that can reasonably be considered to be a repayment of government assistance, non-government assistance or a contract payment that reduced 
  (i) the amount of a qualified expenditure incurred by the taxpayer under paragraph 127(11.1)(e) for taxation years that began before 1996, or 
  (ii) a qualified expenditure incurred by the taxpayer under any of subsections 127(18) to 127(20), in respect of first term shared-use-equipment or second term shared-use-equipment, and, for that purpose, a repayment made by the taxpayer in any taxation year preceding the first taxation year that ends coincidentally with the first period or the second period in respect of first term shared-use-equipment or second term shared-use-equipment, respectively, is deemed to have been incurred by the taxpayer in that first taxation year, exceeds the total of 
  (f) the total of all amounts each of which is an amount deducted under subsection 127(5) from the tax otherwise payable under this Part by the taxpayer for a preceding taxation year in respect of property acquired, or an expenditure incurred, in the year or in any of the 10 taxation years immediately preceding or the 2 taxation years immediately following the year, or in respect of the taxpayer’s SR&ED qualified expenditure pool at the end of such a year, 
  (g) the total of all amounts each of which is an amount required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit 
  (i) at the end of the year, or 
  (ii)  [Repealed, 1996, c. 21, s. 30]  
  (iii) at the end of any of the 9 taxation years immediately preceding or the 3 taxation years immediately following the year, 
  (h) the total of all amounts each of which is an amount required by subsection 127(7) to be deducted in computing the taxpayer’s investment tax credit 
  (i) at the end of the year, or 
  (ii)  [Repealed, 1996, c. 21, s. 30]  
  (iii) at the end of any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year, 
  (i) the total of all amounts each of which is an amount claimed under subparagraph 192(2)(a)(ii) by the taxpayer for the year or a preceding taxation year in respect of property acquired, or an expenditure made, in the year or the 10 taxation years immediately preceding the year, 
  (j) if the taxpayer is subject to a loss restriction event at any time before the end of the year, the amount determined under subsection (9.1) in respect of the taxpayer, and 
  (k) if the taxpayer is subject to a loss restriction event at any time after the end of the year, the amount determined under subsection (9.2) in respect of the taxpayer, except that no amount shall be included in the total determined under any of paragraphs (a) to (e.2) in respect of an outlay, expense or expenditure that would, if this Act were read without reference to subsections 127(26) and 78(4), be made or incurred by the taxpayer in the course of earning income in a particular taxation year, and no amount shall be added under paragraph (b) in computing the taxpayer’s investment tax credit at the end of a particular taxation year in respect of an outlay, expense or expenditure made or incurred by a trust or a partnership in the course of earning income, if 
  (l) any of the income is exempt income or is exempt from tax under this Part, 
  (m) the taxpayer does not file with the Minister a prescribed form containing prescribed information in respect of the amount on or before the day that is one year after the taxpayer’s filing-due date for the particular year; ( crédit d’impôt à l’investissement)   
  *non-government assistance* means an amount that would be included in income under paragraph 12(1)(x) if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to (vii); (aide non gouvernementale)   
  *non-qualifying corporation* at any time means  
  (a) a corporation that is, at that time, not a Canadian-controlled private corporation, 
  (b) a corporation that would be liable to pay tax under Part I.3 for the taxation year of the corporation that includes that time if that Part were read without reference to subsection 181.1(4) and if the amount determined under subsection 181.2(3) in respect of the corporation for the year were determined without reference to amounts described in any of paragraphs 181.2(3)(a), 181.2(3)(b), 181.2(3)(d) and 181.2(3)(f) to the extent that the amounts so described were used to acquire property that would be qualified small-business property if the corporation were not a non-qualifying corporation, or 
  (c) a corporation that at that time is related for the purposes of section 181.5 to a corporation described in paragraph (b); ( société non admissible)   
  *phase*, of a project, means a discrete expansion in the extraction, processing or production capacity of the project of a taxpayer beyond a capacity level that was attained before March 29, 2012 and which expansion in capacity was the taxpayer’s demonstrated intention immediately before that date; (phase)   
  *pre-production mining expenditure*, of a taxable Canadian corporation for a taxation year, means the total of all amounts each of which is an expenditure incurred after 2002 by the taxable Canadian corporation in the taxation year that  
  (a) is a Canadian exploration expense and would be 
  (i) described in paragraph (f) of the definition Canadian exploration expense in subsection 66.1(6) if the expression mineral resource in that paragraph were defined to mean a mineral deposit from which the principal mineral to be extracted is diamond, a base or precious metal deposit, or a mineral deposit from which the principal mineral to be extracted is an industrial mineral that, when refined, results in a base or precious metal, or  
  (ii) described in paragraph (g), (g.3) or (g.4) and not in paragraph (f), of the definition Canadian exploration expense in subsection 66.1(6) if the expression “mineral resource” in paragraph (g) of that definition were defined to mean a mineral deposit from which the principal mineral to be extracted is diamond, a base or precious metal deposit, or a mineral deposit from which the principal mineral to be extracted is an industrial mineral that, when refined, results in a base or precious metal, and  
  (b) is not an expense that 
  (i) was renounced under subsection 66(12.6) to the taxable Canadian corporation except if the corporation is, on the effective date of the renunciation, 
  (A) a corporation that would be a principal business corporation, as defined in subsection 66(15), if that definition were read without reference to its paragraphs (a), (a.1), (f), (h) and (i), and  
  (B) the sole shareholder of the corporation that renounced the expenditure, or 
  (ii) is a member’s share of an expense incurred by a partnership unless the expense was deemed by subsection 66(18) to have been made or incurred at the end of the fiscal period of the partnership by the member and throughout the fiscal period of the partnership in which the expense was incurred 
  (A) each member of the partnership would (otherwise than because of being a member of the partnership) be a “principal-business corporation” as defined in subsection 66(15) of the Act, if that definition were read without reference to its paragraphs (a), (a.1), (f), (h) and (i), and 
  (B) the corporation is a member of the partnership at the time the expenditure is incurred and would not be a specified member of the partnership if the definition specified member in subsection 248(1) were read without reference to its subparagraph (b)(ii), (dépense minière préparatoire)   
  *qualified Canadian exploration expenditure* [Repealed, 1996, c. 21, s. 30]   
  *qualified construction equipment* [Repealed, 1996, c. 21, s. 30]   
  *qualified expenditure* incurred by a taxpayer in a taxation year means  
  (a) an amount that is an expenditure incurred in the year by the taxpayer in respect of scientific research and experimental development and is 
  (i) an expenditure described in subparagraph 37(1)(a)(i), or 
  (ii) 80% of an expenditure described in any of subparagraphs 37(1)(a)(i.01) to (iii), or 
  (iii) and (iv)  [Repealed, 2012, c. 31, s. 27]  
  (b) a prescribed proxy amount of the taxpayer for the year, but does not include 
  (c) a prescribed expenditure incurred in the year by the taxpayer, 
  (d) where the taxpayer is a corporation, an expenditure specified by the taxpayer for the year for the purpose of clause 194(2)(a)(ii)(A), 
  (e)  [Repealed, 1998, c. 19, s. 33]  
  (f) an expenditure (other than an expenditure that is salary or wages of an employee of the taxpayer) incurred by the taxpayer in respect of scientific research and experimental development to the extent that it is performed by another person or partnership at a time when the taxpayer and the person or partnership to which the expenditure is paid or payable do not deal with each other at arm’s length, 
  (g) an expenditure described in paragraph 37(1)(a) that is paid or payable by the taxpayer to or for the benefit of a person or partnership that is not a taxable supplier in respect of the expenditure, other than an expenditure in respect of scientific research and experimental development directly undertaken by the taxpayer, and 
  (h) an amount that would otherwise be a qualified expenditure incurred by the taxpayer in the year to the extent of any reduction in respect of the amount that is required under any of subsections 127(18) to 127(20) to be applied; ( dépense admissible)   
  *qualified professional engineer or professional geoscientist* means an individual who  
  (a) is an engineer or geoscientist with a university degree, or equivalent accreditation, in an area of geoscience, or engineering, relating to mineral exploration or mining, 
  (b) has at least five years of experience in mineral exploration, mine development or operation, or mineral project assessment, or any combination of those, that is relevant to their professional degree or area of practice, 
  (c) has experience relevant to the subject matter of the exploration plan and the certification described in paragraph (e) of the definition flow-through critical mineral mining expenditure, and  
  (d) is registered and in good standing with a professional association that has the authority or recognition by law of a jurisdiction in Canada to regulate the profession of engineering or geoscience in 
  (i) the jurisdiction where the property that is the subject of the exploration plan is located, or 
  (ii) if there is no professional association in the jurisdiction described in subparagraph (i), a jurisdiction in Canada where a professional association regulates the profession of engineering or geoscience; ( ingénieur ou géoscientifique professionnel qualifié)   
  *qualified property*, of a taxpayer, means property (other than a qualified resource property) that is  
  (a) a prescribed building to the extent that it is acquired by the taxpayer after June 23, 1975, 
  (b) prescribed machinery and equipment acquired by the taxpayer after June 23, 1975, or 
  (b.1) prescribed energy generation and conservation property acquired by the taxpayer after March 28, 2012, that has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the taxpayer and that is 
  (c) to be used by the taxpayer in Canada primarily for the purpose of 
  (i) manufacturing or processing goods for sale or lease, 
  (ii) farming or fishing, 
  (iii) logging, 
  (iv) storing grain, or 
  (v) harvesting peat, 
  (vi) to (xiii)  [Repealed, 2012, c. 31, s. 27]  
  (c.1) property (other than property described in paragraph (b.1)) to be used by the taxpayer in Canada primarily for the purpose of producing or processing electrical energy or steam in a prescribed area, if 
  (i) all or substantially all of the energy or steam 
  (A) is used by the taxpayer for the purpose of gaining or producing income from a business (other than the business of selling the product of the particular property), or 
  (B) is sold directly (or indirectly by way of sale to a provincially regulated power utility operating in the prescribed area) to a person related to the taxpayer, and 
  (ii) the energy or steam is used by the taxpayer or the person related to the taxpayer primarily for the purpose of manufacturing or processing goods in the prescribed area for sale or lease, or 
  (d) to be leased by the taxpayer to a lessee (other than a person exempt from tax under this Part because of section 149) who can reasonably be expected to use the property in Canada primarily for any of the purposes referred to in paragraph (c), but this paragraph does not apply to property that is prescribed for the purposes of paragraph (b) or (b.1) unless 
  (i) the property is leased in the ordinary course of carrying on a business in Canada by a corporation whose principal business is leasing property, lending money, purchasing conditional sales contracts, accounts receivable, bills of sale, chattel mortgages or hypothecary claims on movables, bills of exchange or other obligations representing all or part of the sale price of merchandise or services, or any combination thereof, 
  (ii) the property is manufactured and leased in the ordinary course of carrying on business in Canada by a corporation whose principal business is manufacturing property that it sells or leases, 
  (iii) the property is leased in the ordinary course of carrying on business in Canada by a corporation whose principal business is selling or servicing property of that type, or 
  (iv) the property is a fishing vessel, including the furniture, fittings and equipment attached to it, leased by an individual (other than a trust) to a corporation, controlled by the individual, that carries on a fishing business in connection with one or more commercial fishing licences issued by the Government of Canada to the individual, and, for the purpose of this definition, Canada includes the offshore region prescribed for the purpose of the definition specified percentage ; (bien admissible)   
  *qualified resource property*, of a taxpayer, means property that is a prescribed building or prescribed machinery and equipment, that is acquired by the taxpayer after March 28, 2012, that has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the taxpayer and that is  
  (a) to be used by the taxpayer in Canada primarily for the purpose of 
  (i) operating an oil or gas well or extracting petroleum or natural gas from a natural accumulation of petroleum or natural gas, 
  (ii) extracting minerals from a mineral resource, 
  (iii) processing 
  (A) ore (other than iron ore or tar sands ore) from a mineral resource to any stage that is not beyond the prime metal stage or its equivalent, 
  (B) iron ore from a mineral resource to any stage that is not beyond the pellet stage or its equivalent, or 
  (C) tar sands ore from a mineral resource to any stage that is not beyond the crude oil stage or its equivalent, 
  (iv) producing industrial minerals, 
  (v) processing heavy crude oil recovered from a natural reservoir in Canada to a stage that is not beyond the crude oil stage or its equivalent, 
  (vi) Canadian field processing, 
  (vii) exploring or drilling for petroleum or natural gas, or 
  (viii) prospecting or exploring for or developing a mineral resource, or 
  (b) to be leased by the taxpayer to a lessee (other than a person exempt from tax under this Part because of section 149) who can reasonably be expected to use the property in Canada primarily for any of the purposes referred to in paragraph (a), but this paragraph does not apply to prescribed machinery and equipment unless 
  (i) the property is leased in the ordinary course of carrying on a business in Canada by a corporation whose principal business is any of, or a combination of, leasing property, lending money, purchasing conditional sales contracts, accounts receivable, bills of sale, chattel mortgages or hypothecary claims on movables, bills of exchange or other obligations representing all or part of the sale price of merchandise or services, 
  (ii) the property is manufactured and leased in the ordinary course of carrying on business in Canada by a corporation whose principal business is manufacturing property that it sells or leases, or 
  (iii) the property is leased in the ordinary course of carrying on business in Canada by a corporation the principal business of which is selling or servicing property of that type, and, for the purpose of this definition, “Canada” includes the offshore region prescribed for the purpose of the definition specified percentage ; (bien minier admissible)   
  *qualified small-business property* [Repealed, 1996, c. 21, s. 30]   
  *qualified transportation equipment* [Repealed, 1996, c. 21, s. 30]   
  *second term shared-use-equipment* of a taxpayer means property of the taxpayer that was first term shared-use-equipment of the taxpayer and that is used by the taxpayer, during its operating time in the period (in this subsection and subsection 127(11.1) referred to as the “second period”) beginning at the time the property was acquired by the taxpayer and ending at the end of the taxpayer’s first taxation year ending at least 24 months after that time, primarily for the prosecution of scientific research and experimental development in Canada; (matériel à vocations multiples de deuxième période)   
  *specified child care start-up expenditure* [Repealed, 2017, c. 20, s. 23]   
  *specified percentage* means  
  (a) in respect of a qualified property 
  (i) acquired before April, 1977, 5%, 
  (ii) acquired after March 31, 1977 and before November 17, 1978 primarily for use in 
  (A) the Province of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland or the Gaspé Peninsula, 10%, 
  (B) a prescribed designated region, 7 1/2%, and 
  (C) any other area in Canada, 5%, 
  (iii) acquired primarily for use in the Province of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland or the Gaspé Peninsula, 
  (A) after November 16, 1978 and before 1989, 20%, 
  (B) after 1988 and before 1995, 15%, 
  (C) after 1994, 15% where the property 
  (I) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994, 
  (II) was under construction by or on behalf of the taxpayer on February 22, 1994, or 
  (III) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994, and 
  (D) after 1994, 10% where the property is not property to which clause (C) applies, 
  (iv) acquired after November 16, 1978 and before February 26, 1986 primarily for use in a prescribed offshore region, 7%, 
  (v) acquired primarily for use in a prescribed offshore region and 
  (A) after February 25, 1986 and before 1989, 20%, 
  (B) after 1988 and before 1995, 15%, 
  (C) after 1994, 15% where the property 
  (I) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994, 
  (II) was under construction by or on behalf of the taxpayer on February 22, 1994, or 
  (III) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994, and 
  (D) after 1994, 10% where the property is not property to which clause (C) applies, 
  (vi) acquired primarily for use in a prescribed designated region and 
  (A) after November 16, 1978 and before 1987, 10%, 
  (B) in 1987, 7%, 
  (C) in 1988, 3%, and 
  (D) after 1988, 0%, and 
  (vii) acquired primarily for use in Canada (other than a property described in subparagraph (iii), (iv), (v) or (vi)), and 
  (A) after November 16, 1978 and before 1987, 7%, 
  (B) in 1987, 5%, 
  (C) in 1988, 3%, and 
  (D) after 1988, 0%, 
  (a.1) in respect of a qualified resource property acquired by a taxpayer primarily for use in Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, the Gaspé Peninsula or the prescribed offshore region, and that is acquired 
  (i) after March 28, 2012 and before 2014, 10%, 
  (ii) after 2013 and before 2017, 10% if the property 
  (A) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before March 29, 2012, or 
  (B) is acquired as part of a phase of a project and 
  (I) the construction of the phase was started by, or on behalf of, the taxpayer before March 29, 2012 (and for this purpose construction does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), or 
  (II) the engineering and design work for the construction of the phase, as evidenced in writing, was started by, or on behalf of, the taxpayer before March 29, 2012 (and for this purpose engineering and design work does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), and 
  (iii) in any other case, 
  (A) in 2014 and 2015, 5%, and 
  (B) after 2015, 0%, 
  (b) in respect of qualified transportation equipment acquired 
  (i) before 1987, 7%, 
  (ii) in 1987, 5%, and 
  (iii) in 1988, 3%, 
  (c) in respect of qualified construction equipment acquired 
  (i) before 1987, 7%, 
  (ii) in 1987, 5%, and 
  (iii) in 1988, 3%, 
  (d) in respect of certified property 
  (i) included in subparagraph (a)(i) of the definition certified property in this subsection, 50%,  
  (ii) included in subparagraph (a)(ii) of that definition, 40%, and 
  (iii) in any other case, 30%, 
  (e) in respect of a qualified expenditure 
  (i) made after March 31, 1977 and before November 17, 1978 in respect of scientific research and experimental development to be carried out in 
  (A) the Province of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland or the Gaspé Peninsula, 10%, 
  (B) a prescribed designated region, 7 1/2%, and 
  (C) any other area in Canada, 5%, 
  (ii) made by a taxpayer after November 16, 1978 and before the taxpayer’s taxation year that includes November 1, 1983 or made by the taxpayer in the taxpayer’s taxation year that includes November 1, 1983 or a subsequent taxation year if the taxpayer deducted an amount under section 37.1 in computing the taxpayer’s income for the year, 
  (A) where the expenditure was made by a Canadian-controlled private corporation in a taxation year of the corporation in which it is or would, if it had sufficient taxable income for the year, be entitled to a deduction under section 125 in computing its tax payable under this Part for the year, 25%, and 
  (B) where clause (A) is not applicable and the qualified expenditure was in respect of scientific research and experimental development to be carried out in 
  (I) the Province of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland or the Gaspé Peninsula, 20%, and 
  (II) any other area in Canada, 10%, 
  (iii) made by a taxpayer in the taxpayer’s taxation year that ends after October 31, 1983 and before January 1, 1985, other than a qualified expenditure in respect of which subparagraph (ii) is applicable, 
  (A) where the expenditure was made by a Canadian-controlled private corporation in a taxation year of the corporation in which it is or would, if it had sufficient taxable income for the year, be entitled to a deduction under section 125 in computing its tax payable under this Part for the year, 35%, and 
  (B) where clause (A) is not applicable and the qualified expenditure was in respect of scientific research and experimental development to be carried out in 
  (I) the Province of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland or the Gaspé Peninsula, 30%, and 
  (II) any other area in Canada, 20%, 
  (iv) made by a taxpayer 
  (A) after the taxpayer’s 1984 taxation year and before 1995, or 
  (B) after 1994 under a written agreement entered into by the taxpayer before February 22, 1994, (other than a qualified expenditure in respect of which subparagraph (ii) applies) in respect of scientific research and experimental development to be carried out in 
  (C) the Province of Newfoundland, Prince Edward Island, Nova Scotia or New Brunswick or the Gaspé Peninsula, 30%, and 
  (D) in any other area in Canada, 20%, and 
  (v) made by a taxpayer after 1994, 20% where the amount is not an amount to which clause (B) applies, 
  (f) in respect of the repayment of government assistance, non-government assistance or a contract payment that reduced 
  (i) the capital cost to the taxpayer of a property under paragraph 127(11.1)(b), 
  (ii) the amount of a qualified expenditure incurred by the taxpayer under paragraph 127(11.1)(c) or 127(11.1)(e) for taxation years that began before 1996, or 
  (iii) the prescribed proxy amount of the taxpayer under paragraph 127(11.1)(f) for taxation years that began before 1996, the specified percentage that applied in respect of the property, the expenditure or the prescribed proxy amount, as the case may be, 
  (f.1) in respect of the repayment of government assistance, non-government assistance or a contract payment that reduced 
  (i) a qualified expenditure of a taxpayer under any of subsections (18) to (20), for the qualified expenditure incurred 
  (A) before 2015, 20%, and 
  (B) after 2014, 15%, 
  (ii) the amount of eligible salary and wages payable (by the taxpayer) to an eligible apprentice under paragraph (11.1)(c.4), 10%, 
  (iii)  [Repealed, 2017, c. 20, s. 23]  
  (g) in respect of an approved project property acquired 
  (i) before 1989, 60%, and 
  (ii) after 1988, 45%, 
  (h) in respect of the qualified Canadian exploration expenditure of a taxpayer for a taxation year, 25%, 
  (i) in respect of qualified small-business property, 10%, 
  (j) in respect of a pre-production mining expenditure of the taxpayer that is described in subparagraph (a)(i) of the definition pre-production mining expenditure and that is incurred  
  (i) before 2013, 10%, 
  (ii) in 2013, 5%, and 
  (iii) after 2013, 0%, and 
  (k) in respect of a pre-production mining expenditure of the taxpayer that is described in subparagraph (a)(ii) of the definition pre-production mining expenditure and that is incurred  
  (i) before 2014, 10%, 
  (ii) after 2013 and before 2016, 10% if the expenditure is incurred 
  (A) under a written agreement entered into by the taxpayer before March 29, 2012, or 
  (B) as part of the development of a new mine and 
  (I) the construction of the mine was started by, or on behalf of, the taxpayer before March 29, 2012 (and for this purpose construction does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), or 
  (II) the engineering and design work for the construction of the mine, as evidenced in writing, was started by, or on behalf of, the taxpayer before March 29, 2012 (and for this purpose engineering and design work does not include obtaining permits or regulatory approvals, conducting environmental assessments, community consultations or impact benefit studies, and similar activities), and 
  (iii) in any other case, 
  (A) in 2014, 7%, 
  (B) in 2015, 5% if the expense is described in paragraph (a)(ii) of the definition pre-production mining expenditure because of paragraph (g.4) of the definition Canadian exploration expense in subsection 66.1(6), and 4% otherwise, and  
  (C) after 2015, 0%; ( pourcentage déterminé)   
  *specified property* [Repealed, 2017, c. 20, s. 23]   
  *specified sampling* means the collecting and testing of samples in respect of a mineral resource except that specified sampling does not include  
  (a) the collecting or testing of a sample that, at the time the sample is collected, weighs more than 15 tonnes, and 
  (b) the collecting or testing of a sample collected at any time in a calendar year in respect of any one mineral resource if the total weight of all such samples collected (by any person or partnership or any combination of persons and partnerships) in the period in the calendar year that is before that time (other than samples each of which weighs less than one tonne) exceeds 1,000 tonnes; ( échantillonnage déterminé)   
  *SR&ED qualified expenditure pool* of a taxpayer at the end of a taxation year means the amount determined by the formula  is the total of all amounts each of which is a qualified expenditure incurred by the taxpayer in the year, is the total of all amounts each of which is an amount determined under paragraph 127(13)(e) for the year in respect of the taxpayer, and in respect of which the taxpayer files with the Minister a prescribed form containing prescribed information by the day that is 12 months after the taxpayer’s filing-due date for the year, and is the total of all amounts each of which is an amount determined under paragraph 127(13)(d) for the year in respect of the taxpayer; ( compte de dépenses admissibles de recherche et de développement)   
  *super-allowance benefit amount* for a particular taxation year in respect of a corporation in respect of a province means the amount determined by the formula  is the total of all amounts each of which is an amount that is or may become deductible by the corporation, in computing income or taxable income relevant in calculating an income tax payable by the corporation under a law of the province for any taxation year, in respect of an expenditure on scientific research and experimental development incurred in the particular year, is the amount by which the amount of the expenditure exceeds the total of all amounts that would be required by subsections (18) to (20) to reduce the corporation’s qualified expenditures otherwise determined under this section if the definitions government assistance and non-government assistance did not apply to assistance provided under that law, and  is 
  (a) where the corporation’s expenditure limit for the particular year is nil, the maximum rate of the province’s income tax that applies for that year to active business income earned in the province by a corporation, and 
  (b) in any other case, the rate of the province’s income tax for that year that would apply to the corporation if 
  (i) it were not associated with any other corporation in the year, 
  (ii) its taxable income for the year were less than $200,000, and 
  (iii) its taxable income for the year were earned in the province in respect of an active business carried on in the province; ( avantage relatif à la superdéduction)   
  *taxable supplier* in respect of an amount means  
  (a) a person resident in Canada or a Canadian partnership, or 
  (b) a non-resident person, or a partnership that is not a Canadian partnership, 
  (i) by which the amount was payable, or 
  (ii) by or for whom the amount was receivable in the course of carrying on a business through a permanent establishment (as defined by regulation) in Canada. ( fournisseur imposable)  
  
  ### Transitional application of investment tax credit definition
  
  (9.01) For the purpose of applying each of paragraphs (c) to (f), (h) and (i) of the definition investment tax credit in subsection (9) in respect of a taxpayer, the reference to “10” in that paragraph is to be read as a reference to the number that is the lesser of  
  (a) 20, and 
  (b) the number that is the total of 10 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 1997 exceeds 11. 
  
  ### Transitional application of investment tax credit definition
  
  (9.02) For the purpose of applying paragraph (g) of the definition investment tax credit in subsection (9) in respect of a taxpayer, the reference to “9” in that paragraph is to be read as a reference to the number that is the lesser of  
  (a) 19, and 
  (b) the number that is the total of 9 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 1997 exceeds 11. 
  
  ### Loss restriction event before end of year
  
  (9.1) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) before the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (j) of the definition investment tax credit in subsection (9) with respect to the taxpayer is the amount, if any, by which  
  (a) the amount, if any, by which 
  (i) the total of all amounts added in computing its investment tax credit at the end of the year in respect of a property acquired, or an expenditure made, before that time exceeds 
  (ii) the total of all amounts each of which is an amount 
  (A) deducted in computing its investment tax credit at the end of the year under paragraph (f) or (g) of the definition investment tax credit in subsection 127(9), or  
  (B) deducted in computing its investment tax credit at the end of the taxation year immediately preceding the year under paragraph (i) of that definition, to the extent that the amount may reasonably be considered to have been so deducted in respect of a property or expenditure in respect of which an amount is included in subparagraph 127(9.1)(a)(i) exceeds the total of 
  (c) the amount, if any, by which its refundable Part VII tax on hand at the end of the year exceeds the total of all amounts each of which is an amount designated under subsection 192(4) in respect of a share issued by it 
  (i) in the period commencing one month before that time and ending at that time, or 
  (ii) after that time, and before the end of the year, and 
  (d) that proportion of the amount that, but for subsections 127(3) and 127(5) and sections 126, 127.2 and 127.3, would be its tax payable under this Part for the year that, 
  (i) if throughout the year the taxpayer carried on a particular business in the course of which a property was acquired, or an expenditure was made, before that time in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is 
  (A) its income for the year from the particular business, or 
  (B) its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time exceeds 
  (C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business, is of the greater of 
  (ii) the amount determined under subparagraph 127(9.1)(d)(i), and 
  (iii) its taxable income for the year. 
  
  ### Loss restriction event after end of year
  
  (9.2) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) after the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (k) of the definition investment tax credit in subsection (9) is the amount, if any, by which  
  (a) the total of all amounts each of which is an amount included in computing its investment tax credit at the end of the year in respect of a property acquired, or an expenditure made, after that time exceeds the total of 
  (c) its refundable Part VII tax on hand at the end of the year, and 
  (d) that proportion of the amount that, but for subsections 127(3) and 127(5) and sections 126, 127.2 and 127.3, would be its tax payable under this Part for the year that, 
  (i) if the taxpayer acquired a property or made an expenditure, in the course of carrying on a particular business throughout the portion of a taxation year that is after that time, in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is 
  (A) its income for the year from the particular business, or 
  (B) if the taxpayer carried on a particular business in the year, its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time exceeds 
  (C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business is of the greater of 
  (ii) the amount determined under subparagraph 127(9.2)(d)(i), and 
  (iii) its taxable income for the year. 
  
  ### Ascertainment of certain property
  
  (10) The Minister may 
  (a) obtain the advice of the appropriate minister for the purposes of the Regional Development Incentives Act, chapter R-3 of the Revised Statutes of Canada, 1970, as to whether any property is property as described in paragraph (b) of the definition certified property in subsection 127(9);  
  (b) obtain a certificate from the appropriate minister for the purposes of the Regional Development Incentives Act certifying that any property specified therein is property as described in paragraph (b) of that definition; or  
  (c) provide advice to the member of the Queen’s Privy Council for Canada appointed to be the Minister for the purposes of the Atlantic Canada Opportunities Agency Act as to whether any property qualifies for certification under the definition approved project property in subsection 127(9).  
  
  ### Additions to investment tax credit
  
  (10.1) For the purposes of paragraph (e) of the definition investment tax credit in subsection (9), if a corporation was throughout a taxation year a Canadian-controlled private corporation, there shall be added in computing the corporation’s investment tax credit at the end of the year the amount that is 20% of the least of  
  (a) such amount as the corporation claims; 
  (b) the amount by which the corporation’s SR&ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the corporation in respect of a province; and 
  (c) the corporation’s expenditure limit for the year. 
  
  ### Expenditure limit
  
  (10.2) For the purpose of subsection (10.1), a particular corporation’s expenditure limit for a particular taxation year is the amount determined by the formula is 
  (a) nil, if the following amount is less than or equal to $10 million: 
  (i) if the particular corporation is not associated with any other corporation in the particular taxation year, the amount that is its taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year, and 
  (ii) if the particular corporation is associated with one or more other corporations in the particular taxation year, the amount that is the total of all amounts, each of which is the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of the particular corporation for its, or of one of the other corporations for its, last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, and 
  (b) in any other case, the lesser of $40 million and the amount by which the amount determined under subparagraph (a)(i) or (ii), as the case may be, exceeds $10 million. 
  
  ### Expenditure limits — associated CCPCs
  
  (10.21) Notwithstanding subsection (10.2), the expenditure limit for a taxation year of a corporation that is associated in the taxation year with one or more other Canadian-controlled private corporations is, except as otherwise provided in this section, nil. 
  
  ### Deemed non-association of corporations
  
  (10.22) If a particular Canadian-controlled private corporation is associated with another corporation in circumstances where those corporations would not be associated if the Act were read without reference to paragraph 256(1.2)(a), the particular corporation has issued shares to one or more persons who have been issued shares by the other corporation and there is at least one shareholder of the particular corporation who is not a shareholder of the other corporation or one shareholder of the other corporation who is not a shareholder of the particular corporation, the particular corporation is deemed not to be associated with the other corporation for the purpose of determining the particular corporation’s expenditure limit under subsection (10.2). 
  
  ### Application of subsection (10.22)
  
  (10.23) Subsection (10.22) applies to the particular corporation and the other corporation referred to in that subsection only if the Minister is satisfied that 
  (a) the particular corporation and the other corporation are not otherwise associated under this Act; and 
  (b) the existence of one or more shareholders of the particular corporation who is not a shareholder of the other corporation, or the existence of one or more shareholders of the other corporation who is not a shareholder of the particular corporation, is not for the purpose of satisfying the requirements of subsection (10.22) or 127.1(2.2). 
  
  ### Associated corporations
  
  (10.3) If all of the Canadian-controlled private corporations that are associated with each other in a taxation year file with the Minister in prescribed form an agreement whereby, for the purpose of subsection 127(10.1), they allocate an amount to one or more of them for the year and the amount so allocated or the total of the amounts so allocated, as the case may be, does not exceed the amount determined for the year by the formula in subsection 127(10.2), the expenditure limit for the year of each of the corporations is the amount so allocated to it. 
  
  ### Failure to file agreement
  
  (10.4) If any of the Canadian-controlled private corporations that are associated with each other in a taxation year fails to file with the Minister an agreement as contemplated by subsection 127(10.3) within 30 days after notice in writing by the Minister is forwarded to any of them that such an agreement is required for the purposes of this Part, the Minister shall, for the purpose of subsection 127(10.1), allocate an amount to one or more of them for the year, which amount or the total of which amounts, as the case may be, shall equal the amount determined for the year by the formula in subsection 127(10.2), and in any such case the expenditure limit for the year of each of the corporations is the amount so allocated to it. 
  
  ### Expenditure limit determination in certain cases
  
  (10.6) Notwithstanding any other provision of this section, 
  (a) where a Canadian-controlled private corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and it is associated in two or more of those taxation years with another Canadian-controlled private corporation that has a taxation year ending in that calendar year, the expenditure limit of the first corporation for each taxation year in which it is associated with the other corporation ending in that calendar year is, subject to the application of paragraph 127(10.6)(b), an amount equal to its expenditure limit for the first such taxation year determined without reference to paragraph 127(10.6)(b); and 
  (b) where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, its expenditure limit for the year is that proportion of its expenditure limit for the year determined without reference to this paragraph that the number of days in the year is of 365. 
  (c)  [Repealed, 2019, c. 29, s. 24]  
  
  ### Further additions to investment tax credit
  
  (10.7) Where a taxpayer has in a particular taxation year repaid an amount of government assistance, non-government assistance or a contract payment that was applied to reduce 
  (a) the amount of a qualified expenditure incurred by the taxpayer under paragraph 127(11.1)(c) for a preceding taxation year that began before 1996, 
  (b) the prescribed proxy amount of the taxpayer under paragraph 127(11.1)(f) for a preceding taxation year that began before 1996, or 
  (c) a qualified expenditure incurred by the taxpayer under any of subsections 127(18) to 127(20) for a preceding taxation year, there shall be added to the amount otherwise determined under subsection 127(10.1) in respect of the taxpayer for the particular year the amount, if any, by which 
  (d) the amount that would have been determined under subsection 127(10.1) in respect of the taxpayer for that preceding year if subsections 127(11.1) and 127(18) to 127(20) had not applied in respect of the government assistance, non-government assistance or contract payment, as the case may be, to the extent of the amount so repaid, exceeds 
  (e) the amount determined under subsection 127(10.1) in respect of the taxpayer for that preceding year. 
  
  ### Further additions to investment tax credit
  
  (10.8) For the purposes of paragraph (e.1) of the definition investment tax credit in subsection 127(9), subsection 127(10.7) and paragraph 37(1)(c), an amount of government assistance, non-government assistance or a contract payment that  
  (a) was applied to reduce 
  (i) the capital cost to a taxpayer of a property under paragraph 127(11.1)(b), 
  (ii) the amount of a qualified expenditure incurred by a taxpayer under paragraph 127(11.1)(c) for taxation years that began before 1996, 
  (iii) the prescribed proxy amount of a taxpayer under paragraph 127(11.1)(f) for taxation years that began before 1996, or 
  (iv) a qualified expenditure incurred by a taxpayer under any of subsections 127(18) to 127(20), 
  (b) was not received by the taxpayer, and 
  (c) ceased in a taxation year to be an amount that the taxpayer can reasonably be expected to receive, is deemed to be the amount of a repayment by the taxpayer in the year of the government assistance, non-government assistance or contract payment, as the case may be. 
  
  ### Interpretation
  
  (11) For the purposes of the definitions qualified property and qualified resource property in subsection (9),  
  (a)  manufacturing or processing does not include any of the activities  
  (i) referred to in any of paragraphs (a) to (e) and (g) to (i) of the definition manufacturing or processing in subsection 125.1(3),  
  (ii) that would be referred to in paragraph (f) of that definition if that paragraph were read without reference to the expression “located in Canada”, 
  (iii) that would be referred to in paragraph (j) of that definition if that paragraph were read without reference to the expression “in Canada”, or 
  (iv) that would be referred to in paragraph (k) of that definition if the definition Canadian field processing in subsection 248(1) were read without reference to the expression “in Canada”; and  
  (b) for greater certainty, the purposes referred to in paragraph (c) of the definition qualified property and paragraph (a) of the definition qualified resource property in subsection (9) do not include  
  (i) storing (other than the storing of grain), shipping, selling or leasing finished goods, 
  (ii) purchasing raw materials, 
  (iii) administration, including clerical and personnel activities, 
  (iv) purchase and resale operations, 
  (v) data processing, or 
  (vi) providing facilities for employees, including cafeterias, clinics and recreational facilities. 
  
  ### Investment tax credit
  
  (11.1) For the purposes of the definition investment tax credit in subsection 127(9),  
  (a) the capital cost to a taxpayer of a property shall be computed as if no amount were added thereto by virtue of section 21; 
  (b) the capital cost to a taxpayer of a property shall be deemed to be the capital cost to the taxpayer of the property, determined without reference to subsections 13(7.1) and 13(7.4), less the amount of any government assistance or non-government assistance that can reasonably be considered to be in respect of, or for the acquisition of, the property and that, at the time of the filing of the taxpayer’s return of income under this Part for the taxation year in which the property was acquired, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; 
  (c)  [Repealed, 1996, c. 21, s. 30]  
  (c.1) the amount of a taxpayer’s qualified Canadian exploration expenditure for a taxation year shall be deemed to be the amount of the taxpayer’s qualified Canadian exploration expenditure for the year as otherwise determined less the amount of any government assistance, non-government assistance or contract payment (other than assistance under the Petroleum Incentives Program Act or the Petroleum Incentives Program Act, Chapter P-4.1 of the Statutes of Alberta, 1981) in respect of expenditures included in determining the taxpayer’s qualified Canadian exploration expenditure for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive;  
  (c.2) the amount of a taxpayer’s flow-through mining expenditure for a taxation year is deemed to be the amount of the taxpayer’s flow-through mining expenditure for the year as otherwise determined less the amount of any government assistance or non-government assistance in respect of expenses included in determining the taxpayer’s flow-through mining expenditure for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; 
  (c.21) the amount of a taxpayer’s flow-through critical mineral mining expenditure for a taxation year is deemed to be the amount of the taxpayer’s flow-through critical mineral mining expenditure for the year as otherwise determined less the amount of any government assistance or non-government assistance in respect of expenses included in determining the taxpayer’s flow-through critical mineral mining expenditure for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; 
  (c.3) the amount of a taxpayer’s pre-production mining expenditure for a taxation year is deemed to be the amount of the taxpayer’s pre-production mining expenditure for the year as otherwise determined less the amount of any government assistance or non-government assistance in respect of expenses included in determining the taxpayer’s pre-production mining expenditure for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; 
  (c.4) the amount of a taxpayer’s eligible salary and wages for a taxation year is deemed to be the amount of the taxpayer’s eligible salary and wages for the year otherwise determined less the amount of any government assistance or non-government assistance in respect of the eligible salary and wages for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; and 
  (c.5)  [Repealed, 2017, c. 20, s. 23]  
  (d) where at a particular time a taxpayer who is a beneficiary of a trust or a member of a partnership has received, is entitled to receive or can reasonably be expected to receive government assistance, non-government assistance or a contract payment, the amount thereof that may reasonably be considered to be in respect of, or for the acquisition of, depreciable property of the trust or partnership or in respect of an expenditure by the trust or partnership shall be deemed to have been received at that time by the trust or partnership, as the case may be, as government assistance, non-government assistance or as a contract payment in respect of the property or the expenditure, as the case may be. 
  (e) and (f)  [Repealed, 1996, c. 21, s. 30]  
  
  ### Time of acquisition
  
  (11.2) In applying subsections (5), (7) and (8), paragraphs (a) and (a.1) of the definition investment tax credit in subsection (9) and section 127.1, qualified property and qualified resource property are deemed not to have been acquired by a taxpayer before the property is considered to have become available for use by the taxpayer, determined without reference to paragraphs 13(27)(c) and (28)(d).  
  
  ### Decertification of approved project property
  
  (11.3) For the purposes of the definition approved project property in subsection 127(9), a property that has been certified by the Minister of Regional Industrial Expansion, the Minister of Industry, Science and Technology or the member of the Queen’s Privy Council for Canada appointed to be the Minister for the purposes of the Atlantic Canada Opportunities Agency Act may have its certification revoked by the latter Minister where  
  (a) an incorrect statement was made in the furnishing of information for the purpose of obtaining the certificate, or 
  (b) the taxpayer does not conform to the plan described in that definition, and a certificate that has been so revoked shall be void from the time of its issue. 
  
  ### Special rule for eligible salary and wages — apprentices
  
  (11.4) For the purpose of the definition eligible salary and wages in subsection (9), the eligible salary and wages payable by a taxpayer in a taxation year to an eligible apprentice in respect of the eligible apprentice’s employment in the taxation year is, if the eligible apprentice is employed by any other taxpayer who is related to the taxpayer (including a partnership that has a member that is related to the taxpayer) in the calendar year that includes the end of the taxpayer’s taxation year, deemed to be nil unless the taxpayer is designated in prescribed form by all of those related taxpayers to be the only employer of the eligible apprentice for the purpose of the taxpayer applying that definition to the salary and wages payable by the taxpayer to the eligible apprentice in that taxation year, in which case  
  (a) the eligible salary and wages payable by the taxpayer in the taxation year to the eligible apprentice in respect of the eligible apprentice’s employment in the taxation year shall be the amount determined without reference to this subsection; and 
  (b) the eligible salary and wages payable to the eligible apprentice by each of the other related taxpayers in their respective taxation years that end in the calendar year is deemed to be nil. 
  
  ### Adjustments to qualified expenditures
  
  (11.5) For the purposes of the definition qualified expenditure in subsection (9), the amount of an expenditure (other than a prescribed proxy amount) incurred by a taxpayer in a taxation year is deemed to be the amount of the expenditure determined under subsection (11.6).  
  
  ### Non-arm’s length costs
  
  (11.6) For the purpose of subsection 127(11.5), where 
  (a) a taxpayer would, if this Act were read without reference to subsection 127(26), incur at any time an expenditure as consideration for a person or partnership (referred to in this subsection as the “supplier”) rendering a service (other than a service rendered by a person as an employee of the taxpayer) or providing a property to the taxpayer, and 
  (b) at that time the taxpayer does not deal at arm’s length with the supplier, the amount of the expenditure incurred by the taxpayer for the service or property and the cost to the taxpayer of the property are deemed to be 
  (c) in the case of a service rendered to the taxpayer, the lesser of 
  (i) the amount of the expenditure otherwise incurred by the taxpayer for the service, and 
  (ii) the adjusted service cost to the supplier of rendering the service, and 
  (d) in the case of a property sold to the taxpayer, the lesser of 
  (i) the cost to the taxpayer of the property otherwise determined, and 
  (ii) the adjusted selling cost to the supplier of the property. 
  
  ### Definitions
  
  (11.7) The definitions in this subsection apply in this subsection and subsection 127(11.6).  
  *adjusted service cost* to a person or partnership (referred to in this definition as the “supplier”) of rendering a particular service is the amount determined by the formula:  is the cost to the supplier of rendering the particular service, is the total of all amounts each of which is the amount, if any, by which 
  (a) the cost to the supplier for a service (other than a service rendered by a person as an employee of the supplier) rendered by a person or partnership that does not deal at arm’s length with the supplier to the extent that the cost is incurred for the purpose of rendering the particular service exceeds 
  (b) the adjusted service cost to the person or partnership referred to in paragraph (a) of rendering the service referred to in that paragraph to the supplier, is the total of all amounts each of which is the amount, if any, by which 
  (a) the cost to the supplier of a property acquired by the supplier from a person or partnership that does not deal at arm’s length with the supplier exceeds 
  (b) the adjusted selling cost to the person or partnership referred to in paragraph (a) of the property, to the extent that the excess relates to the cost of rendering the particular service, is the total of all amounts each of which is remuneration based on profits or a bonus paid or payable to an employee of the supplier to the extent that it is included in the cost to the supplier of rendering the particular service, and is the total of all amounts each of which is government assistance or non-government assistance that can reasonably be considered to be in respect of rendering the particular service and that the supplier has received, is entitled to receive or can reasonably be expected to receive. ( coût de service rajusté)   
  *adjusted selling cost* to a person or partnership (referred to in this definition as the “supplier”) of a property is the amount determined by the formula  is 
  (a) where the property is purchased from another person or partnership with which the supplier does not deal at arm’s length, the lesser of 
  (i) the cost to the supplier of the property, and 
  (ii) the adjusted selling cost to the other person or partnership of the property, and 
  (b) in any other case, the cost to the supplier of the property, and for the purpose of paragraph (b), 
  (c) where part of the cost to a supplier of a particular property is attributable to another property acquired by the supplier from a person or partnership with which the supplier does not deal at arm’s length, that part of the cost is deemed to be the lesser of 
  (i) the amount of that part of the cost otherwise determined, and 
  (ii) the adjusted selling cost to the person or the partnership of the other property, 
  (d) where part of the cost to a supplier of a property is attributable to a service (other than a service rendered by a person as an employee of the supplier) rendered to the supplier by a person or partnership with which the supplier does not deal at arm’s length, that part of the cost is deemed to be the lesser of 
  (i) the amount of that part of the cost otherwise determined, and 
  (ii) the adjusted service cost to the person or partnership of rendering the service, and 
  (e) no part of the cost to a supplier of a property that is attributable to remuneration based on profits or a bonus paid or payable to an employee of the supplier shall be included, and is the total of all amounts each of which is the amount of government assistance or non-government assistance that can reasonably be considered to be in respect of the property and that the supplier has received, is entitled to receive or can reasonably be expected to receive. ( coût de vente rajusté)  
  
  ### Interpretation for non-arm’s length costs
  
  (11.8) For the purposes of this subsection and subsections 127(11.6) and 127(11.7), 
  (a) the cost to a person or partnership (referred to in this paragraph as the “supplier”) of rendering a service or providing a property to another person or partnership (referred to in this paragraph as the “recipient”) with which the supplier does not deal at arm’s length does not include, 
  (i) where the cost to the recipient of the service rendered or property provided by the supplier would, but for this paragraph, be a cost to the recipient incurred in rendering a particular service or providing a particular property to a person or partnership with which the recipient does not deal at arm’s length, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient in rendering the particular service or providing the particular property, be excluded from a cost to the recipient because of this paragraph, and 
  (ii) in any other case, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient, not be a qualified expenditure of the recipient; and 
  (b) paragraph 69(1)(c) does not apply in determining the cost of a property. 
  (c)  [Repealed, 2012, c. 31, s. 27]  
  
  ### Interpretation
  
  (12) For the purposes of subsection 13(7.1), where, ursuant to a designation or an allocation from a trust or partnership, an amount is required by subsection 127(7) or 127(8) to be added in computing the investment tax credit of a taxpayer at the end of the taxpayer’s taxation year, the portion thereof that can reasonably be considered to relate to depreciable property shall be deemed to have been received by the partnership or trust, as the case may be, at the end of its fiscal period in respect of which the designation or allocation was made as assistance from a government for the acquisition of depreciable property. 
  
  ### Idem
  
  (12.1) For the purposes of section 37, where, pursuant to a designation or an allocation from a trust or partnership, an amount is required by subsection 127(7) or 127(8) to be added in computing the investment tax credit of a taxpayer at the end of the taxpayer’s taxation year, the portion thereof that may reasonably be regarded as relating to expenditures of a current nature in respect of scientific research and experimental development that are qualified expenditures shall, at the end of the fiscal period of the trust or partnership, as the case may be, in respect of which the designation or allocation was made, reduce the total of such expenditures of a current nature as may be claimed by the trust or partnership in respect of scientific research and experimental development. 
  
  ### Idem
  
  (12.2) For the purposes of paragraphs 53(2)(c), 53(2)(h) and 53(2)(k), where in a taxation year a taxpayer has deducted under subsection 127(5) an amount that may reasonably be regarded as attributable to amounts included in computing the investment tax credit of the taxpayer at the end of the year in respect of property acquired, or an expenditure made, in a subsequent taxation year, the taxpayer shall be deemed to have made the deduction under that subsection in that subsequent taxation year. 
  
  ### Idem
  
  (12.3) For the purposes of the determination of J in the definition cumulative Canadian exploration expense in subsection 66.1(6), where, pursuant to a designation by a trust, an amount is required by subsection 127(7) to be added in computing the investment tax credit of a taxpayer at the end of the taxpayer’s taxation year, the portion thereof that can reasonably be considered to relate to a qualified Canadian exploration expenditure of the trust for a taxation year shall be deemed to have been received by the trust at the end of its taxation year in respect of which the designation was made as assistance from a government in respect of that expenditure.  
  
  ### Agreement to transfer qualified expenditures
  
  (13) Where a taxpayer (referred to in this subsection and subsections 127(15) and 127(16) as the “transferor”) and another taxpayer (referred to in this subsection and subsection 127(15) as the “transferee”) file with the Minister an agreement or an amended agreement in respect of a particular taxation year of the transferor, the least of 
  (a) the amount specified in the agreement for the purpose of this subsection, 
  (b) the amount that but for the agreement would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year, and 
  (c) the total of all amounts each of which is an amount that, if the transferor were dealing at arm’s length with the transferee, would be a contract payment 
  (i) for the performance of scientific research and experimental development for, or on behalf of, the transferee, 
  (ii) that is paid by the transferee to the transferor on or before the day that is 180 days after the end of the particular year, and 
  (iii) that would be in respect of 
  (A) a qualified expenditure that 
  (I) would be incurred by the transferor in the particular year (if this Act were read without reference to subsections 127(26) and 78(4)) in respect of that portion of the scientific research and experimental development that was performed at a time when the transferor did not deal at arm’s length with the transferee, and 
  (II) is paid by the transferor on or before the day that is 180 days after the end of the particular year, or 
  (B) an amount added because of this subsection to the transferor’s SR&ED qualified expenditure pool at the end of the particular year where the amount is attributable to an expenditure in respect of the scientific research and experimental development is deemed to be 
  (d) an amount determined in respect of the transferor for the particular year for the purpose of determining the value of C in the definition SR&ED qualified expenditure pool in subsection 127(9), and  
  (e) an amount determined in respect of the transferee for the transferee’s first taxation year that ends at or after the end of the particular year for the purpose of determining the value of B in the definition SR&ED qualified expenditure pool in subsection 127(9),  and where the total of all amounts each of which is an amount specified in an agreement filed with the Minister under this subsection in respect of a particular taxation year of a transferor exceeds the amount that would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year if no agreement were filed with the Minister in respect of the particular year, the least of the amounts determined under paragraphs 127(13)(a) to 127(13)(c) in respect of each such agreement is deemed to be nil. 
  
  ### Identification of amounts transferred
  
  (14) Where 
  (a) a transferor and a transferee have filed an agreement under subsection 127(13) in respect of a taxation year of the transferor, 
  (b) the agreement includes a statement identifying the amount specified in the agreement for the purpose of subsection 127(13), or a part of that amount, as being related to 
  (i) a particular qualified expenditure included in the value of A in the formula in the definition SR&ED qualified expenditure pool in subsection 127(9) for the purpose of determining the transferor’s SR&ED qualified expenditure pool at the end of the year, or  
  (ii) a particular amount included in the value of B in the formula in that definition for the purpose of determining the transferor’s SR&ED qualified expenditure pool at the end of the year that is deemed by paragraph 127(14)(d) to be a qualified expenditure, and 
  (c) the total of all amounts so identified in agreements filed by the transferor under subsection 127(13) as being related to the particular expenditure or the particular amount does not exceed the particular expenditure or the particular amount, as the case may be, for the purposes of this section (other than the description of A in the definition SR&ED qualified expenditure pool in subsection 127(9)) and section 127.1,  
  (d) the amount so identified that is included in the value of B in the formula in that definition for the purpose of determining the transferee’s SR&ED qualified expenditure pool at the end of the taxation year of the transferee is deemed to be a qualified expenditure either of a current nature or of a capital nature, incurred by the transferee in that year, where the particular expenditure or the particular amount was an expenditure of a current nature or of a capital nature, as the case may be, and 
  (e) except for the purpose of paragraph 127(14)(b), the amount of the transferor’s qualified expenditures of a current nature incurred in the taxation year of the transferor in respect of which the agreement is made is deemed not to exceed the amount by which the amount of such expenditures otherwise determined exceeds the total of all amounts identified under paragraph 127(14)(b) by the transferor in agreements filed under subsection 127(13) in respect of the year as being related to expenditures of a current nature. 
  
  ### Invalid agreements
  
  (15) An agreement or amended agreement referred to in subsection 127(13) between a transferor and a transferee is deemed not to have been filed with the Minister for the purpose of that subsection where 
  (a) it is not in prescribed form; 
  (b) it is not filed 
  (i) on or before the transferor’s filing-due date for the particular taxation year to which the agreement relates, 
  (ii) in the period within which the transferor may serve a notice of objection to an assessment of tax payable under this Part for the particular year, or 
  (iii) in the period within which the transferee may serve a notice of objection to an assessment of tax payable under this Part for its first taxation year that ends at or after the end of the transferor’s particular year; 
  (c) it is not accompanied by, 
  (i) where the transferor is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, 
  (ii) where the transferor is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made, 
  (iii) where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and 
  (iv) where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or 
  (d) an agreement amending the agreement has been filed in accordance with subsection 127(13) and this subsection, except where subsection 127(16) applies to the original agreement. 
  
  ### Non-arm’s length parties
  
  (16) Where a taxpayer does not deal at arm’s length with another taxpayer as a result of a transaction, event or arrangement, or a series of transactions or events, the principal purpose of which can reasonably be considered to have been to enable the taxpayers to enter into an agreement referred to in subsection 127(13), for the purpose of paragraph 127(13)(e) the least of the amounts determined under paragraphs 127(13)(a) to 127(13)(c) in respect of the agreement is deemed to be nil. 
  
  ### Assessment
  
  (17) Notwithstanding subsections 152(4) and 152(5), such assessment of the tax, interest and penalties payable by any taxpayer in respect of any taxation year that began before the day an agreement or amended agreement is filed under subsection 127(13) or 127(20) shall be made as is necessary to take into account the agreement or the amended agreement. 
  
  ### Reduction of qualified expenditures
  
  (18) Where on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection as the “taxpayer”) the taxpayer has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development, the amount by which the particular amount exceeds all amounts applied for preceding taxation years under this subsection or subsection 127(19) or 127(20) in respect of the particular amount shall be applied to reduce the taxpayer’s qualified expenditures otherwise incurred in the year that can reasonably be considered to be in respect of the scientific research and experimental development. 
  
  ### Reduction of qualified expenditures
  
  (19) Where on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection as the “recipient”) the recipient has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and the particular amount exceeds the total of 
  (a) all amounts applied for preceding taxation years under this subsection or subsection 127(18) or 127(20) in respect of the particular amount, 
  (b) the total of all amounts each of which would be a qualified expenditure that is incurred in the year by the recipient and that can reasonably be considered to be in respect of the scientific research and experimental development if subsection 127(18) did not apply to the particular amount, and 
  (c) the total of all amounts each of which would, but for the application of this subsection to the particular amount, be a qualified expenditure 
  (i) that was incurred by a person or partnership in a taxation year of the person or partnership that ended in the recipient’s taxation year, and 
  (ii) that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the person or partnership at a time when the person or partnership was not dealing at arm’s length with the recipient, the particular amount shall be applied to reduce each qualified expenditure otherwise determined that is referred to in paragraph 127(19)(c). 
  
  ### Agreement to allocate
  
  (20) Where 
  (a) on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection and subsection 127(22) as the “taxpayer”) the taxpayer has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development, 
  (b) subsection 127(19) does not apply to the particular amount in respect of the year, and 
  (c) the taxpayer and a person or partnership (referred to in this subsection and subsection 127(22) as the “transferee”) with which the taxpayer does not deal at arm’s length file an agreement or amended agreement with the Minister, the lesser of 
  (d) the amount specified in the agreement, and 
  (e) the total of all amounts each of which would, but for the agreement, be a qualified expenditure 
  (i) that was incurred by the transferee in a particular taxation year of the transferee that ended in the taxpayer’s taxation year, and 
  (ii) that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the transferee at a time when the transferee was not dealing at arm’s length with the taxpayer shall be applied to reduce the qualified expenditures otherwise determined that are described in paragraph 127(20)(e). 
  
  ### Failure to allocate
  
  (21) Where on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection as the “recipient”) the recipient has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and subsection 127(19) does not apply to the particular amount in respect of the year, the lesser of 
  (a) the total of all amounts each of which is a qualified expenditure 
  (i) that was incurred by a particular person or partnership in a taxation year of the particular person or partnership that ended in the recipient’s taxation year, and 
  (ii) that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the particular person or partnership at a time when the particular person or partnership was not dealing at arm’s length with the recipient, and 
  (b) the amount, if any, by which the particular amount exceeds the total of amounts applied for the year and preceding taxation years under subsection 127(18), 127(19) or 127(20) in respect of the particular amount is deemed for the purposes of this section to be an amount of government assistance received at the end of the particular year by the particular person or partnership in respect of the scientific research and experimental development. 
  
  ### Invalid agreements
  
  (22) An agreement or amended agreement referred to in subsection 127(20) between a taxpayer and a transferee is deemed not to have been filed with the Minister where 
  (a) it is not in prescribed form; 
  (b) it is not filed 
  (i) on or before the taxpayer’s filing-due date for the particular taxation year to which the agreement relates, 
  (ii) in the period within which the taxpayer may serve a notice of objection to an assessment of tax payable under this Part for the particular year, or 
  (iii) in the period within which the transferee may serve a notice of objection to an assessment of tax payable under this Part for its first taxation year that ends at or after the end of the taxpayer’s particular year; 
  (c) it is not accompanied by, 
  (i) where the taxpayer is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, 
  (ii) where the taxpayer is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made, 
  (iii) where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and 
  (iv) where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or 
  (d) an agreement amending the agreement has been filed in accordance with subsection 127(20) and this subsection. 
  
  ### Partnership’s taxation year
  
  (23) For the purposes of subsections 127(18) to 127(22), the taxation year of a partnership is deemed to be its fiscal period and its filing-due date for a taxation year is deemed to be the day that would be its filing-due date for the year if it were a corporation. 
  
  ### Exclusion from qualified expenditure
  
  (24) Where 
  (a) a person or partnership (referred to in this subsection as the “first person”) does not deal at arm’s length with another person or partnership (referred to in this subsection as the “second person”), 
  (b) there is an arrangement under which an amount is paid or payable by the first person to a person or partnership with which the first person deals at arm’s length and an amount is received or receivable by the second person from a person or partnership with which the second person deals at arm’s length, and 
  (c) one of the main purposes of the arrangement can reasonably be considered to be to cause the amount paid or payable by the first person to be a qualified expenditure, the amount paid or payable by the first person is deemed not to be a qualified expenditure. 
  
  ### Deemed contract payment
  
  (25) Where 
  (a) a person or partnership (referred to in this subsection as the “first person”) deals at arm’s length with another person or partnership (referred to in this subsection as the “second person”), 
  (b) there is an arrangement under which an amount is paid or payable by the first person to a person or partnership (other than the second person) and a particular amount is received or receivable in respect of scientific research and experimental development by the second person from a person or partnership that is not a taxable supplier in respect of the particular amount, and 
  (c) one of the main purposes of the arrangement can reasonably be considered to be to cause the amount received or receivable by the second person not to be a contract payment, the amount received or receivable by the second person is deemed to be a contract payment in respect of scientific research and experimental development. 
  
  ### Unpaid amounts
  
  (26) For the purposes of subsections 127(5) to 127(25) and section 127.1, a taxpayer’s expenditure described in paragraph 37(1)(a) that is unpaid on the day that is 180 days after the end of the taxation year in which the expenditure is otherwise incurred is deemed 
  (a) not to have been incurred in the year; and 
  (b) to be incurred at the time it is paid. 
  
  ### Recapture of investment tax credit
  
  (27) Where 
  (a) a taxpayer acquired a particular property from a person or partnership in a taxation year of the taxpayer or in any of the 10 preceding taxation years, 
  (b) the cost, or a portion of the cost, of the particular property was a qualified expenditure, or would if this Act were read without reference to subsection (26) be a qualified expenditure, to the taxpayer, 
  (c) the cost, or the portion of the cost, of the particular property is included, or would if this Act were read without reference to subsection (26) be included, in an amount, a percentage of which can reasonably be considered to be included in computing the taxpayer’s investment tax credit at the end of the taxation year, and 
  (d) in the year and after February 23, 1998, the taxpayer converts to commercial use, or disposes of without having previously converted to commercial use, the particular property or another property that incorporates the particular property, there shall be added to the taxpayer’s tax otherwise payable under this Part for the year the lesser of 
  (e) the amount that can reasonably be considered to be included in the taxpayer’s investment tax credit at the end of any taxation year, or that would be so included if this Act were read without reference to subsection (26), in respect of the particular property, and 
  (f) the amount that is the percentage — that is the sum of each percentage described in paragraph (c) that has been applied to compute the taxpayer’s investment tax credit in respect of the particular property — of 
  (i) in the case where the particular property or the other property is disposed of to a person who deals at arm’s length with the taxpayer, 
  (A) the proceeds of disposition of the property, if the property 
  (I) is the particular property and is neither first term shared-use equipment nor second term shared-use equipment, or 
  (II) is the other property, 
  (B) 25% of the proceeds of disposition of the property, if the property is the particular property, is first term shared-use equipment and is not second term shared-use equipment, and 
  (C) 50% of the proceeds of disposition of the property, if the property is the particular property and is second term shared-use equipment, and 
  (ii) in the case where the particular property or the other property is converted to commercial use or is disposed of to a person who does not deal at arm’s length with the taxpayer, 
  (A) the fair market value of the property, if the property 
  (I) is the particular property and is neither first term shared-use equipment nor second term shared-use equipment, or 
  (II) is the other property, 
  (B) 25% of the fair market value of the property at the time of its conversion or disposition, if the particular property is first term shared-use equipment and is not second term shared-use equipment, and 
  (C) 50% of the fair market value of the property at the time of its conversion or disposition, if the particular property is second term shared-use equipment. 
  (27.1) to (27.12)  [Repealed, 2017, c. 20, s. 23]  
  
  ### Recapture of investment tax credit of partnership
  
  (28) For the purpose of computing the amount determined under subsection (8) in respect of a partnership at the end of a particular fiscal period, where 
  (a) a particular property, the cost of which is a qualified expenditure, is acquired by the partnership from a person or partnership in the particular fiscal period or in any of the 10 preceding fiscal periods of the partnership, 
  (b) the cost of the particular property is included in an amount, a percentage of which can reasonably be considered to have been included in computing the amount determined under subsection (8) in respect of the partnership at the end of a fiscal period, and 
  (c) in the particular fiscal period and after February 23, 1998, the partnership converts to commercial use, or disposes of without having previously converted to commercial use, the particular property or another property that incorporates the particular property, there shall be deducted in computing the amount determined under subsection (8) in respect of the partnership at the end of the particular fiscal period the lesser of 
  (d) the amount that can reasonably be considered to have been included in respect of the particular property in computing the amount determined under subsection (8) in respect of the partnership, and 
  (e) the percentage (described in paragraph (b)) of 
  (i) where the particular property or the other property is disposed of to a person who deals at arm’s length with the partnership, the proceeds of disposition of that property, and 
  (ii) in any other case, the fair market value of the particular property or the other property at the time of the conversion or disposition. 
  (28.1)  [Repealed, 2017, c. 20, s. 23]  
  
  ### Recapture of investment tax credit of allocating taxpayer
  
  (29) Where 
  (a) a taxpayer acquired a particular property from a person or partnership in a taxation year or in any of the 10 preceding taxation years, 
  (b) the cost of the particular property was a qualified expenditure to the taxpayer, 
  (c) all or part of the qualified expenditure can reasonably be considered to have been the subject of an agreement made under subsection (13) by the taxpayer and another taxpayer (in this subsection referred to as the “transferee”), and 
  (d) in the year and after February 23, 1998, the taxpayer converts to commercial use, or disposes of without having previously converted to commercial use, the particular property or another property that incorporates the particular property, there shall be added to the taxpayer’s tax otherwise payable under this Part for the year the lesser of 
  (e) the amount that can reasonably be considered to have been included in computing the transferee’s investment tax credit in respect of the qualified expenditure that was the subject of the agreement, and 
  (f) the amount determined by the formula is the percentage applied by the transferee in determining its investment tax credit in respect of the qualified expenditure that was the subject of the agreement, is 
  (i) where the particular property or the other property is disposed of to a person who deals at arm’s length with the taxpayer, the proceeds of disposition of that property, and 
  (ii) in any other case, the fair market value of the particular property or the other property at the time of the conversion or disposition, and is the amount, if any, added to the taxpayer’s tax payable under subsection (27) in respect of the particular property. 
  
  ### Addition to tax
  
  (30) Where a taxpayer is a member of a partnership at the end of a fiscal period of the partnership, there shall be added to the taxpayer’s tax otherwise payable under this Part for the taxpayer’s taxation year in which that fiscal period ends the amount that can reasonably be considered to be the taxpayer’s share of the amount, if any, by which 
  (a) the total of 
  (i) the total of all amounts each of which is the lesser of the amounts described in paragraphs (28)(d) and (e) in respect of the partnership in respect of the fiscal period, and 
  (ii) the total of all amounts each of which is the lesser of the amounts described in paragraphs (35)(c) and (d) in respect of the partnership in respect of the fiscal period, 
  (iii)  [Repealed, 2017, c. 20, s. 23]  exceeds 
  (b) the amount that would be determined in respect of the partnership under subsection (8) if that subsection were read without reference to subsections (28) and (35). 
  
  ### Tiered partnership
  
  (31) Where a taxpayer is a member of a particular partnership that is a member of another partnership and an amount would be added to the particular partnership’s tax payable under this Part for the year pursuant to subsection (30) if the particular partnership were a person and its fiscal period were its taxation year, that amount is deemed to be an amount that is the lesser of the amounts described in paragraphs (28)(d) and (e), in respect of a property of the particular partnership, that is required by subsection (28) to be deducted in computing the amount under subsection (8) in respect of the particular partnership at the end of the fiscal period. 
  
  ### Meaning of cost
  
  (32) For the purposes of subsections (27), (28) and (29), cost of the particular property to a taxpayer shall not exceed the amount paid by the taxpayer to acquire the particular property from a transferor of the particular property and, for greater certainty, does not include amounts paid by the taxpayer to maintain, modify or transform the particular property.  
  
  ### Certain non-arm’s length transfers
  
  (33) Subsections (27) to (29), (34) and (35) do not apply to a taxpayer or partnership (in this subsection referred to as the “transferor”) that disposes of a property to a person or partnership (in this subsection and subsections (34) and (35) referred to as the “purchaser”), that does not deal at arm’s length with the transferor, if the purchaser acquired the property in circumstances where the cost of the property to the purchaser would have been an expenditure of the purchaser described in subclause 37(8)(a)(ii)(A)(III) or (B)(III) (as those subclauses read on March 29, 2012) but for subparagraph 2902(b)(iii) of the Income Tax Regulations.  
  
  ### Recapture of investment tax credit
  
  (34) Where, at any particular time in a taxation year and after February 23, 1998, a purchaser (other than a partnership) converts to commercial use, or disposes of without having previously converted to commercial use, a property 
  (a) that was acquired by the purchaser in circumstances described in subsection (33) or that is another property that incorporates a property acquired in such circumstances; and 
  (b) that was first acquired, or that incorporates a property that was first acquired, by a person or partnership (in this subsection referred to as the “original user”) with which the purchaser did not deal at arm’s length at the time at which the purchaser acquired the property, in the original user’s taxation year or fiscal period that includes the particular time (on the assumption that the original user had such a taxation year or fiscal period) or in any of the original user’s 10 preceding taxation years or fiscal periods, there shall be added to the purchaser’s tax otherwise payable under this Part for the year the lesser of 
  (c) the amount 
  (i) included, in respect of the property, in the investment tax credit of the original user, or 
  (ii) where the original user is a partnership, that can reasonably be considered to have been included in respect of the property in computing the amount determined under subsection (8) in respect of the original user, and 
  (d) the amount determined by applying the percentage that was applied by the original user in determining the amount referred to in paragraph (c) to 
  (i) if the property or the other property is disposed of to a person who deals at arm’s length with the purchaser, the proceeds of disposition of that property, and 
  (ii) in any other case, the fair market value of the property or the other property at the time of the conversion or disposition. 
  
  ### Recapture of investment tax credit
  
  (35) Where, at any particular time in a fiscal period and after February 23, 1998, a purchaser is a partnership that converts to commercial use, or disposes of without having previously converted to commercial use, a property 
  (a) that was acquired by the purchaser in circumstances described in subsection (33) or that is another property that incorporates a property acquired in such circumstances, and 
  (b) that was first acquired, or that incorporates a property that was first acquired, by a person or partnership (in this subsection referred to as the “original user”) with which the purchaser did not deal at arm’s length at the time at which the purchaser acquired the property, in the original user’s taxation year or fiscal period that includes the particular time (on the assumption that the original user had such a taxation year or fiscal period) or in any of the original user’s 10 preceding taxation years or fiscal periods, there shall be deducted in computing the amount determined under subsection (8) in respect of the purchaser at the end of the fiscal period the lesser of 
  (c) the amount 
  (i) included, in respect of the property, in the investment tax credit of the original user, or 
  (ii) where the original user is a partnership, that can reasonably be considered to have been included in respect of the property in computing the amount determined under subsection (8) in respect of the original user, and 
  (d) the amount determined by applying the percentage that was applied by the original user in determining the amount referred to in paragraph (c) to 
  (i) if the property or the other property is disposed of to a person who deals at arm’s length with the purchaser, the proceeds of disposition of that property, and 
  (ii) in any other case, the fair market value of the property or the other property at the time of the conversion or disposition. 
  
  ### Transitional application of investment tax credit recapture
  
  (36) For the purpose of applying each of subsection (27) or (29) in respect of a taxpayer, subsection (28) in respect of a partnership or subsection (34) or (35) in respect of a purchaser and an original user, as the case may be, (which taxpayer, partnership or original user is, in this subsection, referred to as the “taxpayer”), the reference to “10” in that subsection is to be read as a reference to the number that is the lesser of 
  (a) 20, and 
  (b) the number that is the total of 10 and the number of taxation years or fiscal periods, as the case may be, by which the number of taxation years or fiscal periods of the taxpayer that have ended after 1997 exceeds 11. 
  
  ### Refundable investment tax credit
  
  127.1 (1) Where a taxpayer (other than a person exempt from tax under section 149) files 
  (a) with the taxpayer’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(f) or subsection 150(4)) for a taxation year, or 
  (b) with a prescribed form amending a return referred to in paragraph 127.1(1)(a) a prescribed form containing prescribed information, the taxpayer is deemed to have paid on the taxpayer’s balance-due day for the year an amount on account of the taxpayer’s tax payable under this Part for the year equal to the lesser of 
  (c) the taxpayer’s refundable investment tax credit for the year, and 
  (d) the amount designated by the taxpayer in the prescribed form. 
  
  ### Definitions
  
  (2) In this section,  
  *excluded corporation* for a taxation year means a corporation that is, at any time in the year,  
  (a) controlled directly or indirectly, in any manner whatever, by 
  (i) one or more persons exempt from tax under this Part by virtue of section 149, 
  (ii) Her Majesty in right of a province, a Canadian municipality or any other public authority, or 
  (iii) any combination of persons each of whom is a person referred to in subparagraph (i) or (ii), or 
  (b) related to any person referred to in paragraph (a); ( société exclue)   
  *qualifying corporation*, for a particular taxation year that ends in a calendar year, means a particular corporation that is a Canadian-controlled private corporation in the particular taxation year the taxable income of which for its immediately preceding taxation year  —  together with, if the particular corporation is associated in the particular taxation year with one or more other corporations (in this subsection referred to as “associated corporations”), the taxable income of each associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year)  —  does not exceed the qualifying income limit, if any, of the particular corporation for the particular taxation year; (société admissible)   
  *qualifying income limit* of a corporation for a particular taxation year is the amount determined by the formula  is 
  (a) nil, if $10 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or 
  (b) in any other case, the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million; ( plafond de revenu admissible)   
  *refundable investment tax credit* of a taxpayer for a taxation year means, in the case of a taxpayer who is  
  (a) a qualifying corporation for the year, 
  (b) an individual other than a trust, or 
  (c) a trust each beneficiary of which is a person referred to in paragraph (a) or (b), an amount equal to 40% of the amount, if any, by which 
  (d) the total of all amounts included in computing the taxpayer’s investment tax credit at the end of the year 
  (i) in respect of property (other than qualified small-business property) acquired, or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred, by the taxpayer in the year, or 
  (ii) because of paragraph (b) of the definition investment tax credit in subsection 127(9) in respect of a property (other than qualified small-business property) acquired or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred  exceeds 
  (e) the total of 
  (i) the portion of the total of all amounts deducted under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (d), and 
  (ii) the portion of the total of all amounts required by subsection 127(6) or 127(7) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (d), plus where the taxpayer is a qualifying corporation (other than an excluded corporation) for the year, the amount, if any, by which 
  (f) the total of 
  (i) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and 
  (ii) all amounts determined under paragraph (a.1) of the definition investment tax credit in subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)  exceeds 
  (g) the total of 
  (i) the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (f), and 
  (ii) the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (f). ( crédit d’impôt à l’investissement remboursable)  
  
  ### Addition to refundable investment tax credit
  
  (2.01) In the case of a taxpayer that is a Canadian-controlled private corporation other than a qualifying corporation or an excluded corporation, the refundable investment tax credit of the taxpayer for a taxation year is the amount, if any, by which 
  (a) the total of 
  (i) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and 
  (ii) all amounts determined under paragraph (a.1) of the definition investment tax credit in subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)  exceeds 
  (b) the total of 
  (i) the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (a), and 
  (ii) the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (a). 
  
  ### Application of s. 127(9)
  
  (2.1) The definitions in subsection 127(9) apply to this section. 
  
  ### Refundable investment tax credit — associated CCPCs
  
  (2.2) If a particular Canadian-controlled private corporation is associated with another corporation in circumstances where those corporations would not be associated if the Act were read without reference to paragraph 256(1.2)(a), the particular corporation has issued shares to one or more persons who have been issued shares by the other corporation and there is at least one shareholder of the particular corporation who is not a shareholder of the other corporation or one shareholder of the other corporation who is not a shareholder of the particular corporation, the particular corporation is not associated with the other corporation for the purpose of calculating that portion of the particular corporation’s refundable investment tax credit that is in respect of qualified expenditures. 
  
  ### Application of subsection (2.2)
  
  (2.3) Subsection (2.2) applies to the particular corporation and the other corporation referred to in that subsection only if the Minister is satisfied that 
  (a) the particular corporation and the other corporation are not otherwise associated under this Act; and 
  (b) the existence of one or more shareholders of the particular corporation who is not a shareholder of the other corporation, or the existence of one or more shareholders of the other corporation who is not a shareholder of the particular corporation, is not for the purpose of satisfying the requirements of subsection (2.2) or 127(10.22). 
  
  ### Deemed deduction
  
  (3) For the purposes of this Act, the amount deemed under subsection 127.1(1) to have been paid by a taxpayer for a taxation year shall be deemed to have been deducted by the taxpayer under subsection 127(5) for the year. 
  
  ### Qualifying income limit determined in certain cases
  
  (4) For the purpose of the definition of qualifying corporation in subsection (2), where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, the taxable income of the corporation for the year shall be determined by multiplying that amount by the ratio that 365 is of the number of days in that year.  
  
  ### Share-purchase tax credit
  
  127.2 (1) There may be deducted from the tax otherwise payable under this Part by a taxpayer for a taxation year an amount not exceeding the total of 
  (a) the taxpayer’s share-purchase tax credit for the year, and 
  (b) the taxpayer’s unused share-purchase tax credit for the taxation year immediately following the year. 
  
  ### Persons exempt from tax
  
  (2) Where a taxpayer who was throughout a taxation year a person described in any of paragraphs 149(1)(e) to (y) files with the taxpayer’s return of income under this Part for the year a prescribed form containing prescribed information, the taxpayer shall be deemed to have paid, on the day on which the return is filed, an amount, on account of the taxpayer’s tax under this Part for the year, equal to the taxpayer’s share-purchase tax credit for the year. 
  
  ### Trust
  
  (3) Where, in a particular taxation year of a taxpayer who is a beneficiary under a trust, an amount is included in computing the share-purchase tax credit of the trust for its taxation year ending in that particular taxation year, the trust may, in its return of income for its taxation year ending in that particular taxation year, designate as attributable to the taxpayer such portion of that amount 
  (a) as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer, and 
  (b) as was not designated by the trust in respect of any other beneficiary of that trust, and, where the trust so designates such a portion, an amount equal to that portion shall be 
  (c) added in computing the share-purchase tax credit of the taxpayer for the particular taxation year, and 
  (d) deducted in computing the share-purchase tax credit of the trust for its taxation year ending in the particular taxation year. 
  
  ### Exclusion of certain trusts
  
  (3.1) For the purposes of subsection 127.2(3), a trust does not include a trust that is 
  (a) governed by an employee benefit plan or a revoked deferred profit sharing plan; or 
  (b) exempt from tax under section 149. 
  
  ### Partnership
  
  (4) Where, in a taxation year of a taxpayer who is a member of a partnership, an amount is included in computing the share-purchase tax credit of the partnership for its fiscal period ending in that year, such portion of that amount as may reasonably be considered to be the taxpayer’s share thereof shall be 
  (a) added in computing the share-purchase tax credit of the taxpayer for that year; and 
  (b) deducted in computing the share-purchase tax credit of the partnership for that fiscal period. 
  
  ### Cooperative corporation
  
  (5) Where at any particular time in a taxation year a taxpayer that is a cooperative corporation (within the meaning assigned by subsection 136(2)) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by subsection 135(3) to be remitted to the Receiver General, an amount not exceeding the amount, if any, by which 
  (a) the amount that would, but for this subsection, be its share-purchase tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular time exceeds 
  (b) the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year, and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) shall be 
  (c) deducted in computing the share-purchase tax credit of the taxpayer for the taxation year, and 
  (d) deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made. 
  
  ### Definitions
  
  (6) In this section,  
  *share-purchase tax credit* of a taxpayer for a taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount designated by a corporation under subsection 192(4) in respect of a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder, is the total of all amounts each of which is an amount required by subsection 127.2(3) or (4) to be added in computing the taxpayer’s share-purchase tax credit for the year, and is the total of all amounts each of which is an amount required by subsection 127.2(3), (4) or (5) to be deducted in computing the taxpayer’s share-purchase tax credit for the year; ( crédit d’impôt à l’achat d’actions)   
  *unused share-purchase tax credit* of a taxpayer for a taxation year means the amount determined by the formula  is the taxpayer’s share-purchase tax credit for the year, is the taxpayer’s tax otherwise payable under this Part for the year, the amount deemed by subsection 127.2(2) to have been paid on account of the taxpayer’s tax payable under this Part for the year or, where Division E.1 is applicable to the taxpayer for the year, the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the taxpayer’s minimum amount for the year determined under section 127.51, as the case may be, and is the taxpayer’s refundable Part VII tax on hand at the end of the year. ( partie inutilisée du crédit d’impôt à l’achat d’actions)  
  
  ### Definition of tax otherwise payable 
  
  (7) In this section, 
  *tax otherwise payable* under this Part by a taxpayer means the amount that would, but for this section and section 120.1, be the tax payable under this Part by the taxpayer.  
  
  ### Deemed cost of acquisition
  
  (8) For the purposes of this Act, where, at any time in a taxation year, a taxpayer has acquired a share and is the first registered holder of the share, other than a broker or dealer in securities, and an amount is, at any time, designated by a corporation under subsection 192(4) in respect of the share, the following rules apply: 
  (a) the taxpayer shall be deemed to have acquired the share at a cost to the taxpayer equal to the amount by which 
  (i) its cost to the taxpayer as otherwise determined exceeds 
  (ii) the amount so designated in respect of the share; and 
  (b) where the amount determined under subparagraph 127.2(8)(a)(ii) exceeds the amount determined under subparagraph 127.2(8)(a)(i), the excess shall 
  (i) where the share is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and 
  (ii) in any other case, be included in computing the income of the taxpayer for the year, and the cost to the taxpayer of the share shall be deemed to be nil. 
  
  ### Partnership
  
  (9) For the purposes of this section and subsection 193(5), a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period. 
  
  ### Election re first holder
  
  (10) Where a share of a public corporation has been lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with a public authority in Canada pursuant to and in accordance with the law of Canada or of any province, and, where required by law, accepted for filing by such a public authority, the corporation, if it has designated an amount under subsection 192(4) in respect of the share, may, in the prescribed form required to be filed under that subsection, elect that, for the purposes of this section, the first person, other than a broker or dealer in securities, to have acquired the share (and no other person) shall be considered to be the first person to be a registered holder of the share. 
  
  ### Calculation of consideration
  
  (11) For greater certainty, 
  (a) for the purposes of this section and Part VII, the amount of consideration for which a share is acquired and issued includes the amount of any consideration for the designation under subsection 192(4) in respect of the share; and 
  (b) the amount received by a corporation as consideration for a designation under subsection 192(4) in respect of a share issued by it shall not be included in computing its income. 
  
  ### Scientific research and experimental development tax credit
  
  127.3 (1) There may be deducted from the tax otherwise payable under this Part by a taxpayer for a taxation year an amount not exceeding the total of the taxpayer’s 
  (a) scientific research and experimental development tax credit for the year, and 
  (b) unused scientific research and experimental development tax credit for the taxation year immediately following the year. 
  
  ### Definitions
  
  (2) In this section,  
  *scientific research and experimental development tax credit* of a taxpayer for a taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount equal to 
  (a) where the taxpayer is a corporation, 50%, or 
  (b) where the taxpayer is an individual other than a trust, 34% of an amount designated by a corporation under subsection 194(4) in respect of 
  (c) a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder thereof, 
  (d) a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation (in this section referred to as a “debt obligation”) acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of that debt obligation, or 
  (e) a right acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to have acquired that right, and is the total of all amounts required by subsection 127.3(5) to be deducted in computing the taxpayer’s scientific research and experimental development tax credit for the year; ( crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)   
  *unused scientific research and experimental development tax credit* of a taxpayer for a taxation year means the amount determined by the formula  is the taxpayer’s scientific research and experimental development tax credit for the year, is the taxpayer’s tax otherwise payable under this Part for the year or, where Division E.1 is applicable to the taxpayer for the year, the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the taxpayer’s minimum amount for the year determined under section 127.51, as the case may be, and is the taxpayer’s refundable Part VIII tax on hand at the end of the year. ( partie inutilisée du crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)  
  
  ### Trust
  
  (3) For the purposes of this section and section 53, where a taxpayer, other than a broker or dealer in securities, is a beneficiary under a trust and an amount is designated by a corporation under subsection 194(4) in respect of a share, debt obligation or right acquired by the trust in a taxation year of the trust where the trust is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be, 
  (a) the trust may, in its return of income for that year, specify such portion of that amount as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer and as was not specified by the trust in respect of any other beneficiary under that trust; and 
  (b) the portion specified pursuant to paragraph 127.3(3)(a) shall be deemed to be an amount designated on the last day of that year by the corporation under subsection 194(4) in respect of a share, debt obligation or right, as the case may be, acquired by the taxpayer on that day where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be. 
  
  ### Exclusion of certain trusts
  
  (3.1) For the purposes of subsection (3), a trust does not include a trust that is 
  (a) governed by an employee benefit plan or a revoked deferred profit sharing plan; or 
  (b) exempt from tax under section 149. 
  
  ### Partnership
  
  (4) For the purposes of this section and section 53, where a taxpayer, other than a broker or dealer in securities, is a member of a partnership and an amount is designated by a corporation under subsection 194(4) in respect of a share, debt obligation or right acquired by the partnership in a taxation year of the partnership where the partnership is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be, such portion of that amount as may reasonably be considered to be the taxpayer’s share thereof shall be deemed to be an amount designated on the last day of that year by the corporation under subsection 194(4) in respect of a share, debt obligation or right, as the case may be, acquired by the taxpayer on that day where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be. 
  
  ### Cooperative corporation
  
  (5) Where at any particular time in a taxation year a taxpayer that is a cooperative corporation (within the meaning assigned by subsection 136(2)) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by subsection 135(3) to be remitted to the Receiver General, an amount not exceeding the amount, if any, by which 
  (a) the amount that would, but for this subsection, be its scientific research and experimental development tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular time exceeds 
  (b) the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year, and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) shall be 
  (c) deducted in computing the scientific research and experimental development tax credit of the taxpayer for the taxation year, and 
  (d) deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made. 
  
  ### Deduction from cost
  
  (6) For the purposes of this Act, where at any time in a taxation year a taxpayer has acquired a share, debt obligation or right and is the first registered holder of the share or debt obligation or the first person to have acquired the right, as the case may be, other than a broker or dealer in securities, and an amount is, at any time, designated by a corporation under subsection 194(4), in respect of the share, debt obligation or right, the following rules apply: 
  (a) the taxpayer shall be deemed to have acquired the share, debt obligation or right at a cost to the taxpayer equal to the amount by which 
  (i) its cost to the taxpayer as otherwise determined exceeds 
  (ii) 50% of the amount so designated in respect thereof; and 
  (b) where the amount determined under subparagraph 127.3(6)(a)(ii) exceeds the amount determined under subparagraph (a)(i), the excess shall 
  (i) where the share, debt obligation or right, as the case may be, is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and 
  (ii) in any other case, be included in computing the income of the taxpayer for the year, and the cost to the taxpayer of the share, debt obligation or right, as the case may be, shall be deemed to be nil. 
  
  ### Partnership
  
  (7) For the purposes of this section and Part VIII, a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period. 
  
  ### Definition of 
  *tax otherwise payable* 
  
  (8) In this section, 
  *tax otherwise payable* under this Part by a taxpayer means the amount that would, but for this section and section 120.1, be the tax payable under this Part by the taxpayer.  
  
  ### Election re first holder
  
  (9) Where a share or debt obligation of a public corporation has been lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with a public authority in Canada pursuant to and in accordance with the law of Canada or of any province, and, where required by law, accepted for filing by that public authority, the corporation, if it has designated an amount under subsection 194(4) in respect of the share or debt obligation, may, in the prescribed form required to be filed under that subsection, elect that, for the purposes of this section, the first person, other than a broker or dealer in securities, to have acquired the share or debt obligation, as the case may be, (and no other person) shall be considered to be the first person to be a registered holder thereof. 
  
  ### Calculation of consideration
  
  (10) For greater certainty, 
  (a) for the purposes of this section and Part VIII, the amount of consideration for which a share, debt obligation or right was acquired and issued or granted includes the amount of any consideration for the designation under subsection 194(4) in respect of the share, debt obligation or right; and 
  (b) the amount received by a corporation as consideration for a designation under subsection 194(4) in respect of a share, debt obligation or right issued or granted by it shall not be included in computing its income. 
  
  ### Definitions
  
  127.4 (1) In this section,  
  *approved share* means a share of the capital stock of a prescribed labour-sponsored venture capital corporation, but does not include  
  (a) a share issued by a registered labour-sponsored venture capital corporation the venture capital business of which was discontinued before the time of the issue, and 
  (b) a share issued by a prescribed labour-sponsored venture capital corporation that is not a registered labour-sponsored venture capital corporation if, at the time of the issue, no province under the laws (described in section 6701 of the Income Tax Regulations) of which the corporation is registered or established provides assistance in respect of the acquisition of the share; (action approuvée)   
  *labour-sponsored funds tax credit* [Repealed, 1997, c. 25, s. 37]   
  *net cost* to an individual of an approved share means the amount, if any, by which  
  (a) the amount of consideration paid by the individual to acquire or subscribe for the share exceeds 
  (b) the amount of any assistance (other than an amount included in computing a tax credit of the individual in respect of that share) provided or to be provided by a government, municipality or any public authority in respect of, or for the acquisition of, the share; ( coût net)   
  *original acquisition* of a share means the first acquisition of the share, except that  
  (a) where the share is irrevocably subscribed and paid for before its first acquisition, subject to paragraphs (b) and (c), the original acquisition of the share is the first transaction whereby the share is irrevocably subscribed and paid for, 
  (b) a share is deemed never to have been acquired and never to have been irrevocably subscribed and paid for unless the first registered holder of the share is, subject to paragraph (c), the first person to either acquire or irrevocably subscribe and pay for the share, and 
  (c) for the purpose of this definition, a broker or dealer in securities acting in that capacity is deemed never to acquire or subscribe and pay for the share and never to be the registered holder of the share; ( acquisition initiale)   
  *qualifying trust* for an individual in respect of a share means  
  (a) a trust governed by a registered retirement savings plan, under which the individual is the annuitant, that is not a spousal or common-law partner plan (in this definition having the meaning assigned by subsection 146(1)) in relation to another individual, 
  (b) a trust governed by a registered retirement savings plan, under which the individual or the individual’s spouse or common-law partner is the annuitant, that is a spousal or common-law partner plan in relation to the individual or the individual’s spouse or common-law partner, if the individual and no other person claims a deduction under subsection (2) in respect of the share, or 
  (c) a trust governed by a TFSA of which the individual is the holder; ( fiducie admissible)   
  *tax otherwise payable* by an individual means the amount that, but for this section, would be the individual’s tax payable under this Part. (impôt payable par ailleurs)  
  
  ### Amalgamations or mergers
  
  (1.1) Subsections 204.8(2) and 204.85(3) apply for the purpose of this section. 
  
  ### Deduction of labour-sponsored funds tax credit
  
  (2) There may be deducted from the tax otherwise payable by an individual (other than a trust) for a taxation year such amount as the individual claims not exceeding the individual’s labour-sponsored funds tax credit limit for the year. 
  (3) and (4)  [Repealed, 1999, c. 22, s. 49]  
  
  ### Labour-sponsored funds tax credit limit
  
  (5) For the purpose of subsection 127.4(2), an individual’s labour-sponsored funds tax credit limit for a taxation year is the lesser of 
  (a) $750, and 
  (b) the amount, if any, by which 
  (i) the total of all amounts each of which is the individual’s labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved share exceeds 
  (ii) the portion of the total described in subparagraph 127.4(5)(b)(i) that was deducted under subsection 127.4(2) in computing the individual’s tax payable under this Part for the preceding taxation year. 
  
  ### Deemed original acquisition
  
  (5.1) If the Minister so directs, an original acquisition of an approved share that occurs in an individual’s taxation year (other than in the first 60 days of the year) is deemed for the purpose of this section to have occurred at the beginning of the year and not at the time it actually occurred. 
  
  ### Labour-sponsored funds tax credit
  
  (6) For the purpose of subsection (5), an individual’s labour-sponsored funds tax credit in respect of an original acquisition of an approved share is equal to the least of 
  (a) 15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation), 
  (a.1) 5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if 
  (i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and 
  (ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation, 
  (a.2) nil, if 
  (i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and 
  (ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation, 
  (b) nil, where the share was issued by a registered labour-sponsored venture capital corporation unless the information return described in paragraph 204.81(6)(c) is filed with the individual’s return of income for the taxation year for which a claim is made under subsection 127.4(2) in respect of the original acquisition of the share (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)), 
  (c) nil, where the individual dies after December 5, 1996 and before the original acquisition of the share, 
  (d) nil, where a payment in respect of the disposition of the share has been made under section 211.9, and 
  (e) nil, if the share is issued in exchange for another share of the corporation. 
  
  ### Part XII.4 tax credit
  
  127.41 (1) In this section, the Part XII.4 tax credit of a taxpayer for a particular taxation year means the total of 
  (a) all amounts each of which is an amount determined by the formula is the tax payable under Part XII.4 by a qualifying environmental trust for a taxation year (in this paragraph referred to as the “trust’s year”) that ends in the particular year, is the amount, if any, by which the total of all amounts in respect of the trust that were included (otherwise than because of being a member of a partnership) because of the application of subsection 107.3(1) in computing the taxpayer’s income for the particular year exceeds the total of all amounts in respect of the trust that were deducted (otherwise than because of being a member of a partnership) because of the application of subsection 107.3(1) in computing that income, and is the trust’s income for the trust’s year, computed without reference to subsections 104(4) to 104(31) and sections 105 to 107, and 
  (b) in respect of each partnership of which the taxpayer was a member, the total of all amounts each of which is the amount that can reasonably be considered to be the taxpayer’s share of the relevant credit in respect of the partnership and, for this purpose, the relevant credit in respect of a partnership is the amount that would, if a partnership were a person and its fiscal period were its taxation year, be the Part XII.4 tax credit of the partnership for its taxation year that ends in the particular year. 
  
  ### Reduction of Part I tax
  
  (2) There may be deducted from a taxpayer’s tax otherwise payable under this Part for a taxation year such amount as the taxpayer claims not exceeding the taxpayer’s Part XII.4 tax credit for the year. 
  
  ### Deemed payment of Part I tax
  
  (3) There is deemed to have been paid on account of the tax payable under this Part by a taxpayer (other than a taxpayer exempt from such tax) for a taxation year on the taxpayer’s balance-due day for the year, such amount as the taxpayer claims not exceeding the amount, if any, by which 
  (a) the taxpayer’s Part XII.4 tax credit for the year exceeds 
  (b) the amount deducted under subsection 127.41(2) in computing the taxpayer’s tax payable under this Part for the year. 
  
  ### Definitions
  
  127.42 (1) The following definitions apply in this section.  
  *designated province* means a province specified by the Minister of Finance for a calendar year. (province déterminée)   
  *eligible farming expenses*, of a taxpayer for a designated province for a taxation year, means the amount determined by the formula  is 
  (a) nil, if the total of all amounts deducted in the year by the taxpayer in computing income under this Part from farming activities, excluding any deductions arising from inventory adjustments under section 28 and from transactions with persons that do not deal at arm’s length with the taxpayer, is less than $25,000, and 
  (b) in any other case, the total of all amounts deducted in the year by the taxpayer in computing income under this Part from farming activities, excluding any deductions arising from inventory adjustments under section 28 and from transactions with persons that do not deal at arm’s length with the taxpayer; and is the taxpayer’s relevant proportion for the designated province for the taxation year. ( dépenses agricoles admissibles)   
  *farming activities* means a farming business, including or excluding activities prescribed by regulation. (activités agricoles)   
  *payment rate*, for a calendar year for a designated province, means the rate specified by the Minister of Finance for the calendar year for the designated province. (taux de paiement)   
  *relevant proportion*, of eligible farming expenses of a taxpayer for a designated province for a taxation year, means  
  (a) if the taxpayer is an individual, the proportion determined by the formula is the individual’s income for the year from farming activities that is deemed to have been earned in the year in the designated province in accordance with Part XXVI of the Income Tax Regulations, and  is the whole of the individual’s income from farming activities for the year; 
  (b) if the taxpayer is a corporation, the proportion determined by the formula is the corporation’s taxable income that is deemed to have been earned in the year in the designated province in accordance with Part IV of the Income Tax Regulations, and  is the whole of the corporation’s taxable income for the year; and 
  (c) if the taxpayer is a partnership, the proportion determined by the formula is the partnership’s income for the fiscal period of the partnership from farming activities that would be deemed to have been earned in the year in the designated province, computed in accordance with Part XXVI of the Income Tax Regulations as if the partnership were an individual, and  is the whole of the partnership’s income from farming activities for the fiscal period of the partnership. ( proportion pertinente)  
  
  ### Deemed payment on account of tax
  
  (2) A taxpayer (other than a partnership) that files a prescribed form containing prescribed information with their return of income for a taxation year is deemed, on their balance-due day for the year, to have paid on account of their tax payable under this Part for the year, the total of all amounts each of which is an amount, for each designated province and for each calendar year a portion of which falls within the taxation year, determined by the formula is the payment rate for the calendar year for the designated province; is the taxpayer’s eligible farming expenses for the designated province for the taxation year; is the number of days within the taxation year that fall within the calendar year; and is the number of days in the taxation year. 
  
  ### Deemed payment on account of tax — partnership
  
  (3) If a taxpayer (other than a partnership) is a member of a partnership at the end of a fiscal period of the partnership that ends in a taxation year of the taxpayer — and the partnership files a prescribed form containing prescribed information for that fiscal period and the taxpayer files a prescribed form containing prescribed information with its return of income for the taxation year — the taxpayer is deemed, on the taxpayer’s balance-due day for the taxation year, to have paid on account of their tax payable under this Part for the year, the total of all amounts each of which is an amount, for each designated province and for each calendar year a portion of which falls within the partnership’s fiscal period, determined by the formula is the payment rate for the calendar year for the designated province; is the partnership’s eligible farming expenses for the designated province for the fiscal period; is the number of days within the fiscal period that fall within the calendar year; is the number of days in the fiscal period; and is the specified proportion of the taxpayer for the fiscal period. 
  
  ### Partnerships
  
  (4) For the purposes of this section, 
  (a) a taxpayer includes a partnership; 
  (b) the fiscal period of a partnership is deemed to be its taxation year; and 
  (c) if a taxpayer is a member of a particular partnership that is a member of another partnership, the taxpayer is deemed 
  (i) to be a member of the other partnership, and 
  (ii) to have a specified proportion in the other partnership for a fiscal period of the other partnership equal to its specified proportion of the particular partnership — for the last fiscal period of the particular partnership that ends in the fiscal period of the other partnership — multiplied by the particular partnership’s specified proportion of the other partnership for the fiscal period of the other partnership. 
  
  ### Authority to specify
  
  (5) For the purposes of this section, the Minister of Finance may specify for a calendar year 
  (a) the designated provinces; and 
  (b) the payment rate for a designated province. 
  
  ### Payment rate not specified
  
  (6) For the purposes of this section, if the Minister of Finance does not specify the payment rate for a designated province under paragraph (5)(b), the payment rate is deemed to be nil. 
  
  ### When assistance received
  
  (7) For the purposes of this Act, and for greater certainty, an amount that a taxpayer is deemed under subsection (2) or (3) to have paid for a taxation year is assistance received by the taxpayer from a government immediately before the end of the year. 
  
  ### Relevant proportion — special rule
  
  (8) For purposes of determining the relevant proportion of eligible farming expenses of a taxpayer for a designated province in a taxation year, 
  (a) if the income of an individual or partnership from farming activities for the year is nil, the income for the year from farming activities that is deemed to have been earned in the year in the designated province shall be computed in accordance with Part XXVI of the Income Tax Regulations as if the individual or partnership earned $1,000,000 of income from farming activities; and  
  (b) if the taxable income of a corporation is nil, the corporation’s taxable income that is deemed to have been earned in the year in the designated province shall be computed in accordance with Part IV of the Income Tax Regulations as if the corporation had taxable income for the year in the amount of $1,000,000.  
  
  ## COVID-19 – Air Quality Improvement Tax Credit 
  
  ### Definitions
  
  127.43 (1) The following definitions apply in this section.  
  *assistance* means an amount, other than a prescribed amount or an amount deemed under subsection (2) to have been paid, that would be included under paragraph 12(1)(x) in computing an eligible entity’s income for any taxation year if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to (vii). (montant d’aide)   
  *eligible entity*, for a taxation year, means  
  (a) a qualifying corporation for the taxation year; 
  (b) an individual other than a trust; or 
  (c) a partnership. ( entité déterminée)   
  *qualifying corporation*, for a particular taxation year, means a particular corporation that meets the following conditions:  
  (a) it is a Canadian-controlled private corporation or would be a Canadian-controlled private corporation absent the application of subsection 136(1); and 
  (b) it is the case that is the particular corporation’s taxable capital employed in Canada (in this formula, within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year, and is the total of all amounts, each of which is the taxable capital employed in Canada of a corporation that is associated in the particular taxation year with the particular corporation for the associated corporation’s last taxation year that ended before the beginning of the particular taxation year. ( société admissible)   
  *qualifying expenditure* means an outlay or expense prescribed by regulation that is made or incurred by an eligible entity during the qualifying period in the course of the eligible entity’s ordinary commercial activities. (dépense admissible)   
  *qualifying location*, of an eligible entity, means real or immovable property (other than property that is a self-contained domestic establishment, or part of such a self-contained domestic establishment, the land subjacent to the self-contained domestic establishment and such portion of any immediately contiguous land as can reasonably be regarded as contributing to the use and enjoyment of the self-contained domestic establishment as a residence) in Canada used by the eligible entity primarily in the course of its ordinary commercial activities. (emplacement admissible)   
  *qualifying period* means the period that begins on September 1, 2021 and ends on December 31, 2022. (période d’admissibilité)   
  *total per location expense*, for a qualifying location of an eligible entity for a taxation year, means the lesser of  
  (a) the amount determined by the formula is the total of all amounts, each of which is a qualifying expenditure of the eligible entity made or incurred in the taxation year in respect of the qualifying location (or, for the first taxation year that ends after 2021, the qualifying expenditures made or incurred in respect of the qualifying location from the start of the qualifying period to the end of that first taxation year), and is the total of all amounts, each of which is an amount of assistance that 
  (i) the eligible entity has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in A, and 
  (ii) has not been repaid before the end of the taxation year pursuant to a legal obligation to do so; and 
  (b) the amount determined by the formula is the total of all amounts, each of which is a qualifying expenditure in respect of the qualifying location and 
  (i) is a qualifying expenditure of the eligible entity, in respect of which an amount under subsection (2) or (3) is deemed to have been paid in a prior taxation year, or 
  (ii) is a qualifying expenditure of another eligible entity that is affiliated during the qualifying period with the eligible entity, in respect of which an amount under subsection (2) or (3) is deemed to have been paid in any taxation year. ( dépense totale par emplacement)   
  *total ventilation expense*, of an eligible entity for a taxation year, means the lesser of  
  (a) the total of all amounts, each of which is a total per location expense for a qualifying location of the eligible entity for the taxation year; and 
  (b) the amount determined by the formula is 
  (i) 100%, unless the eligible entity is affiliated at any time in the qualifying period with one or more other eligible entities that are deemed to have paid an amount under subsection (2) in respect of the qualifying period, or, in the case of a partnership, has a member that is deemed to have paid an amount under subsection (3) in respect of the partnership, 
  (ii) a percentage assigned to the eligible entity under an agreement, if 
  (A) the agreement is entered into by the eligible entity and each eligible entity that 
  (I) is affiliated with the eligible entity in the qualifying period, and 
  (II) is deemed to have paid an amount under subsection (2) in respect of the qualifying period, or, in the case of a partnership, has a member that is deemed to have paid an amount under subsection (3) in respect of the partnership, 
  (B) the agreement is filed in prescribed form and manner with the Minister by the eligible entity and each eligible entity referred to in clause (A), 
  (C) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A), and 
  (D) the total of all the percentages assigned under the agreement does not exceed 100%, and 
  (iii) in any other case, nil, and is the total of all amounts, each of which is the total ventilation expense of the eligible entity for a prior taxation year in respect of which an amount is deemed to have been paid under subsection (2) or (3). ( dépense totale de ventilation)  
  
  ### Refundable tax credit
  
  (2) An eligible entity (other than a partnership) that files a prescribed form containing prescribed information with its return of income for a taxation year that ends after 2021 is deemed to have, on its balance-due day for the year, paid on account of its tax payable under this Part for the year an amount equal to 25% of its total ventilation expense for the taxation year. 
  
  ### Refundable tax credit — partnership
  
  (3) If an eligible entity (other than a partnership) is a member of a partnership at the end of a fiscal period of the partnership that ends after 2021 and that ends in a taxation year of the eligible entity — and the partnership files an information return in prescribed form containing prescribed information for that fiscal period and the eligible entity files a prescribed form containing prescribed information with its return of income for the taxation year — then the eligible entity is deemed to have paid, on the eligible entity’s balance-due day for the taxation year on account of the eligible entity’s tax payable under this Part for the taxation year, an amount determined by the formula is the total ventilation expense of the partnership for the fiscal period; and is the specified proportion of the eligible entity for the fiscal period of the partnership. 
  
  ### Partnerships
  
  (4) For the purposes of this section, 
  (a) the fiscal period of a partnership is deemed to be its taxation year; and 
  (b) if an eligible entity is a member of a particular partnership that is a member of another partnership, the eligible entity is deemed 
  (i) to be a member of the other partnership, and 
  (ii) to have a specified proportion in the other partnership for a fiscal period of the other partnership equal to its specified proportion of the particular partnership — for the last fiscal period of the particular partnership that ends in the fiscal period of the other partnership — multiplied by the particular partnership’s specified proportion of the other partnership for the fiscal period of the other partnership. 
  
  ### When assistance received
  
  (5) For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is deemed under subsection (2) or (3) to have paid is assistance received by it from a government immediately before the end of the taxation year to which it relates. 
  
  ### Affiliated entities
  
  (6) For the purposes of this section, if two eligible entities are affiliated with the same eligible entity, they are deemed to be affiliated with each other. 
  
  # DIVISION E.1 
  
  ## Minimum Tax 
  
  ### Obligation to pay minimum tax
  
  127.5 Notwithstanding any other provision of this Act but subject to subsection 120.4(3) and section 127.55, where the amount that, but for section 120, would be determined under Division E to be an individual’s tax payable for a taxation year is less than the amount determined under paragraph (a) in respect of the individual for the year, the individual’s tax payable under this Part for the year is the total of 
  (a) the amount, if any, by which 
  (i) the individual’s minimum amount for the year determined under section 127.51 exceeds 
  (ii) the individual’s special foreign tax credit determined under section 127.54 for the year, and 
  (b) the amount, if any, required by section 120 to be added to the individual’s tax otherwise payable under this Part for the year. 
  
  ### Minimum amount determined
  
  127.51 An individual’s minimum amount for a taxation year is the amount determined by the formula is the appropriate percentage for the year; is the individual’s adjusted taxable income for the year determined under section 127.52; is 
  (a) $40,000, in the case of an individual (other than a trust) or a graduated rate estate; and 
  (b) nil, in any other case; and is the individual’s basic minimum tax credit for the year determined under section 127.531. 
  
  ### Adjusted taxable income determined
  
  127.52 (1) Subject to subsection 127.52(2), an individual’s adjusted taxable income for a taxation year is the amount that would be the individual’s taxable income for the year or the individual’s taxable income earned in Canada for the year, as the case may be, if it were computed on the assumption that 
  (a)  [Repealed, 1999, c. 22, s. 50(2)]  
  (b) the total of all amounts each of which is an amount deductible under paragraph 20(1)(a) or any of paragraphs 20(1)(c) to 20(1)(f) in computing the individual’s income for the year in respect of a rental or leasing property (other than an amount included in the individual’s share of a loss referred to in paragraph 127.52(1)(c.1)) were the lesser of the total of all amounts otherwise so deductible and the amount, if any, by which the total of 
  (i) the total of all amounts each of which is the individual’s income for the year from the renting or leasing of a rental or leasing property owned by the individual or by a partnership, computed without reference to paragraphs 20(1)(a) and 20(1)(c) to 20(1)(f), and 
  (ii) the amount, if any, by which 
  (A) the total of all amounts each of which is the individual’s taxable capital gain for the year from the disposition of a rental or leasing property owned by the individual or by a partnership exceeds 
  (B) the total of all amounts each of which is the individual’s allowable capital loss for the year from the disposition of a rental or leasing property owned by the individual or by a partnership exceeds the total of all amounts each of which is the individual’s loss for the year from the renting or leasing of a rental or leasing property owned by the individual or by a partnership (other than an amount included in the individual’s share of a loss referred to in paragraph 127.52(1)(c.1)), computed without reference to paragraphs 20(1)(a) and 20(1)(c) to 20(1)(f); 
  (c) the total of all amounts each of which is an amount deductible under paragraph 20(1)(a) or any of paragraphs 20(1)(c) to 20(1)(f) in computing the individual’s income for the year in respect of a film property referred to in paragraph 127.52(1)(w) of Class 10 of Schedule II to the Income Tax Regulations (other than an amount included in the individual’s share of a loss referred to in paragraph 127.52(1)(c.1)) were the lesser of the total of all amounts otherwise so deductible by the individual for the year and the amount, if any, by which the total of  
  (i) the total of all amounts each of which is the individual’s income for the year from the renting or leasing of a film property owned by the individual or by a partnership, computed without reference to paragraphs 20(1)(a) and 20(1)(c) to 20(1)(f), and 
  (ii) the amount, if any, by which 
  (A) the total of all amounts each of which is the individual’s taxable capital gain for the year from the disposition of such a film property owned by the individual or by a partnership exceeds 
  (B) the total of all amounts each of which is the individual’s allowable capital loss for the year from the disposition of such a film property owned by the individual or by a partnership exceeds the total of all amounts each of which is the individual’s loss for the year from such a film property owned by the individual or by a partnership (other than amounts included in the individual’s share of a loss referred to in paragraph 127.52(1)(c.1)), computed without reference to paragraphs 20(1)(a) and 20(1)(c) to 20(1)(f); 
  (c.1) if, during a partnership’s fiscal period that ends in the year (other than a fiscal period that ends because of subsection 99(1)), the individual’s interest in the partnership is an interest for which an identification number is required to be, or has been, obtained under section 237.1, 
  (i) the individual’s share of allowable capital losses of the partnership for the fiscal period were the lesser of 
  (A) the total of all amounts each of which is the individual’s 
  (I) share of a taxable capital gain for the fiscal period from the disposition of property (other than property acquired by the partnership in a transaction to which subsection 97(2) applied), or 
  (II) taxable capital gain for the year from the disposition of the individual’s interest in the partnership if the individual, or a person who does not deal at arm’s length with the individual, does not have an interest in the partnership (otherwise than because of the application of paragraph 98(1)(a) or 98.1(1)(a)) throughout the following taxation year, and 
  (B) the individual’s share of allowable capital losses of the partnership for the fiscal period, 
  (ii) the individual’s share of each loss from a business of the partnership for the fiscal period were the lesser of 
  (A) the individual’s share of the loss, and 
  (B) the amount, if any, by which 
  (I) the total of all amounts each of which is the individual’s 
  1 share of a taxable capital gain for the fiscal period from the disposition of property used by the partnership in the business (other than property acquired by the partnership in a transaction to which subsection 97(2) applied), or 
  2 taxable capital gain for the year from the disposition of the individual’s interest in the partnership if the individual, or a person who does not deal at arm’s length with the individual, does not have an interest in the partnership (otherwise than because of the application of paragraph 98(1)(a) or 98.1(1)(a)) throughout the following taxation year exceeds 
  (II) the total of all amounts each of which is the individual’s share of an allowable capital loss for the fiscal period, and 
  (iii) the individual’s share of losses from property of the partnership for the fiscal period were the lesser of 
  (A) the total of 
  (I) the individual’s share of incomes for the fiscal period from properties of the partnership, and 
  (II) the amount, if any, by which the total of all amounts each of which is the individual’s 
  1 share of a taxable capital gain for the fiscal period from the disposition of property held by the partnership for the purpose of earning income from property (other than property acquired by the partnership in a transaction to which subsection 97(2) applied), or 
  2 taxable capital gain for the year from the disposition of the individual’s interest in the partnership if the individual, or a person who does not deal at arm’s length with the individual, does not have an interest in the partnership (otherwise than because of the application of paragraph 98(1)(a) or 98.1(1)(a)) throughout the following taxation year, exceeds the total of all amounts each of which is the individual’s share of an allowable capital loss for the fiscal period, and 
  (B) the individual’s share of losses from property of the partnership for the fiscal period; 
  (c.2) where, during a fiscal period of a partnership that ends in the year (other than a fiscal period that ends because of the application of subsection 99(1)), 
  (i) the individual is a limited partner of the partnership, or is a member of the partnership who was a specified member of the partnership at all times since becoming a member of the partnership, or 
  (ii) the partnership owns a rental or leasing property or a film property and the individual is a member of the partnership, the total of all amounts each of which is an amount deductible under any of paragraphs 20(1)(c) to 20(1)(f) in computing the individual’s income for the year in respect of the individual’s acquisition of the partnership interest were the lesser of 
  (iii) the total of all amounts otherwise so deductible, and 
  (iv) the total of all amounts each of which is the individual’s share of any income of the partnership for the fiscal period, determined in accordance with subsection 96(1); 
  (c.3) the total of all amounts each of which is an amount deductible in computing the individual’s income for the year in respect of a property for which an identification number is required to be, or has been, obtained under section 237.1 (other than an amount to which any of paragraphs 127.52(1)(b) to 127.52(1)(c.2) applies) were nil; 
  (d) except in respect of dispositions of property occurring before 1986 or to which section 79 applies, 
  (i) the references to the fraction applicable to the individual for the year in each of paragraphs 38(a), (b) and (c) and section 41 were read as a reference to “4/5”, other than in the case of a capital gain from a disposition that is the making of a gift of property to a qualified donee, and 
  (ii) each amount that is designated by a trust for a particular year of the trust in respect of the individual and deemed by subsection 104(21) to be a taxable capital gain for the year of the individual were equal to the amount obtained by the formula is the amount so deemed to be a taxable capital gain for the year of the individual, and is the fraction in paragraph 38(a) applicable to the trust for the particular year of the trust for which the designation is made; 
  (iii)  [Repealed, 2013, c. 34, s. 271]  
  (e) the total of all amounts deductible under section 65, 66, 66.1, 66.2, 66.21 or 66.4 or under subsection 29(10) or (12) of the Income Tax Application Rules in computing the individual’s income for the year were the lesser of the amounts otherwise so deductible by the individual for the year and the total of  
  (i) the individual’s income for the year from royalties in respect of, and such part of the individual’s income, other than royalties, for the year as may reasonably be considered as attributable to, the production of petroleum, natural gas and minerals, determined before deducting those amounts, 
  (i.1) the individual’s income for the year from property, or from the business of selling the product of property, described in Class 43.1 or 43.2 in Schedule II to the Income Tax Regulations, determined before deducting those amounts, and  
  (ii) all amounts included in computing the individual’s income for the year under section 59; 
  (e.1) the total of all amounts each of which is an amount deductible under any of paragraphs 20(1)(c) to 20(1)(f) in computing the individual’s income for the year in respect of a property that is a flow-through share (if the individual is the person to whom the share was issued under an agreement referred to in the definition 
  *flow-through share* in subsection 66(15)), a Canadian resource property or a foreign resource property were the lesser of the total of the amounts otherwise so determined for the year and the amount, if any, by which  
  (i) the total of all amounts each of which is an amount described in subparagraph 127.52(1)(e)(i) or 127.52(1)(e)(ii), determined without reference to paragraphs 20(1)(c) to 20(1)(f), exceeds 
  (ii) the total of all amounts each of which is an amount deductible under section 65, 66, 66.1, 66.2, 66.21 or 66.4 or under subsection 29(10) or (12) of the Income Tax Application Rules in computing the individual’s income for the year;  
  (f) subsection 82(1) were read without reference to paragraph 82(1)(b); 
  (g) the total of all amounts deductible under section 104 in computing the income of a trust for the year were equal to the total of 
  (i) the total of all amounts otherwise deductible under that section, and 
  (ii) the total of all amounts each of which is 3/5 of 
  (A) an amount designated by the trust under subsection 104(21) for the year, or 
  (B) that portion of a net taxable capital gain of the trust that may reasonably be considered to 
  (I) be part of an amount included, by virtue of subsection 104(13) or section 105, in computing the income for the year of a non-resident beneficiary of the trust, or 
  (II) have been paid in the year by a trust governed by an employee benefit plan to a beneficiary thereunder; 
  (h) the only amounts deductible under sections 110 to 110.7 in computing the individual’s taxable income for the year or taxable income earned in Canada for the year, as the case may be, were 
  (i) the amounts deducted under any of subsections 110(2), 110.6(2) and (2.1) and 110.7(1), 
  (ii) the amount deducted under paragraph 110(1)(d), not exceeding the total of 
  (A) the amount deducted under paragraph 110(1)(d.01), and 
  (B) 2/5 of the amount, if any, by which 
  (I) the amount deducted under paragraph 110(1)(d) exceeds 
  (II) the amount determined under clause (A), 
  (iii) the amount deducted under paragraph 110(1)(d.01), 
  (iv) 2/5 of the amounts deducted under any of paragraphs 110(1)(d.1) to (d.3), 
  (v) the amount that would be deductible under paragraph 110(1)(f) if paragraph (d) were applicable in computing the individual’s income for the year, and 
  (vi) the amount deducted under paragraph 110(1)(g); 
  (h.1) the formula in paragraph 110.6(21)(a) were read as 
  (i) in computing the individual’s taxable income for the year or the individual’s taxable income earned in Canada for the year, as the case may be, the only amounts deductible under 
  (i) paragraphs 111(1)(a), 111(1)(c), 111(1)(d) and 111(1)(e) were the lesser of 
  (A) the amount deducted under those paragraphs for the year, and 
  (B) the total of all amounts that would be deductible under those paragraphs for the year if 
  (I) paragraphs (b), (c) and (e) of this subsection, as they read in respect of taxation years that began after 1985 and before 1995, applied in computing the individual’s non-capital loss, restricted farm loss, farm loss and limited partnership loss for any of those years, 
  (II) paragraphs (b) to (c.3), (e) and (e.1) of this subsection, as they read in respect of taxation years that began after 1994 and ended before 2012, applied in computing the individual’s non-capital loss, restricted farm loss, farm loss and limited partnership loss for any of those years, and 
  (III) paragraphs (b) to (c.3), (e) and (e.1) of this subsection applied in computing the individual’s non-capital loss, restricted farm loss, farm loss and limited partnership loss for any taxation year that ends after 2011, and 
  (ii) paragraph 111(1)(b) were the lesser of 
  (A) the total of all amounts each of which is an amount that can reasonably be considered to be the amount that the individual would have deducted under paragraph 111(1)(b) had paragraph (d) of this subsection been applicable in computing the amount deductible under paragraph 111(1)(b), and 
  (B) the total of all amounts that would be deductible under that paragraph for the year if 
  (I) paragraph (d) of this subsection applied in computing the individual’s net capital loss for any taxation year that began before 1995, 
  (II) paragraphs (c.1) and (d) of this subsection, as they read in respect of taxation years that began after 1994 and ended before 2012, applied in computing the individual’s net capital loss for any of those years, and 
  (III) paragraphs (c.1) and (d) of this subsection applied in computing the individual’s net capital loss for any taxation year that ends after 2011; and 
  (j) the Income Tax Application Rules were read without reference to section 40 of that Act.  
  
  ### Partnerships
  
  (2) For the purposes of subsection 127.52(1) and this subsection, any amount deductible under a provision of this Act in computing the income or loss of a partnership for a fiscal period is, to the extent of a member’s share of the partnership’s income or loss, deemed to be deductible by the member under that provision in computing the member’s income for the taxation year in which the fiscal period ends. 
  
  ### Specified member of a partnership
  
  (2.1) Where it can reasonably be considered that one of the main reasons that a member of a partnership was not a specified member of the partnership at all times since becoming a member of the partnership is to avoid the application of this section to the member’s interest in the partnership, the member is deemed for the purpose of this section to have been a specified member of the partnership at all times since becoming a member of the partnership. 
  
  ### Definitions
  
  (3) For the purposes of this section,  
  *film property* means a property described in paragraph (n) of Class 12, or paragraph (w) of Class 10, of Schedule II to the Income Tax Regulations ; (production cinématographique)   
  *limited partner* has the meaning that would be assigned by subsection 96(2.4) if that subsection were read without reference to “if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection 127.52(2.5)) at that time and”; (commanditaire)   
  *rental or leasing property* means a property that is a rental property or a leasing property for the purpose of section 1100 of the Income Tax Regulations. (bien de location)   
  *residential property* [Repealed, 1998, c. 19, s. 150(8)]  
  127.53  [Repealed, 2014, c. 39, s. 45]  
  
  ### Basic minimum tax credit determined
  
  127.531 An individual’s basic minimum tax credit for a taxation year is the total of all amounts each of which is 
  (a) an amount deducted under any of subsections 118(1), (2) and (10), sections 118.01 to 118.07, subsection 118.3(1), sections 118.5 to 118.7 and 119 and subsection 127(1) in computing the individual’s tax payable for the year under this Part; or 
  (b) the amount that was claimed under section 118.1 or 118.2 in computing the individual’s tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual’s tax payable for the year under this Part, determined without reference to this Division. 
  
  ### Definitions
  
  127.54 (1) In this section,  
  *foreign income* of an individual for a taxation year means the total of  
  (a) the individual’s incomes for the year from businesses carried on by the individual in countries other than Canada, and 
  (b) the individual’s incomes for the year from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, within the meaning assigned by subsection 126(7), to governments of countries other than Canada; ( impôts payés à l’étranger)   
  *foreign taxes* of an individual for a taxation year means the total of the business-income taxes, within the meaning assigned by subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, within the meaning assigned by that subsection, paid by the individual for the year to the governments of countries other than Canada. (revenu de source étrangère)  
  
  ### Foreign tax credit
  
  (2) For the purposes of section 127.5, an individual’s special foreign tax credit for a taxation year is the greater of 
  (a) the total of all amounts deductible under section 126 from the individual’s tax for the year, and 
  (b) the lesser of 
  (i) the individual’s foreign taxes for the year, and 
  (ii) the amount determined by the formula is the appropriate percentage for the taxation year, and is the individual’s foreign income for the year. 
  
  ### Application of s. 127.5
  
  127.55 Section 127.5 does not apply in respect of 
  (a) a return of income of an individual filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4); 
  (b)  [Repealed, 2001, c. 17, s. 121(1)]  
  (c) an individual for the taxation year in which the individual dies; 
  (d) an individual for the 1986 taxation year if the individual dies in 1987; 
  (e) a trust described in paragraph 104(4)(a) or (a.1) for its taxation year that includes the day determined in respect of the trust under that paragraph; and 
  (f) a taxation year of a trust throughout which the trust is 
  (i) a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), 
  (ii) a mutual fund trust, 
  (iii) a trust prescribed to be a master trust, or 
  (iv) an employee life and health trust. 
  
  # DIVISION F 
  
  ## Special Rules Applicable in Certain Circumstances 
  
  ## Bankruptcies 
  
  ### Where corporation bankrupt
  
  128 (1) Where a corporation has become a bankrupt, the following rules are applicable: 
  (a) the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act; 
  (b) the estate of the bankrupt shall be deemed not to be a trust or an estate for the purposes of this Act; 
  (c) the income and the taxable income of the corporation for any taxation year of the corporation during which it was a bankrupt and for any subsequent year shall be calculated as if 
  (i) the property of the bankrupt did not pass to and vest in the trustee in bankruptcy on the bankruptcy order being made or the assignment filed but remained vested in the bankrupt, and 
  (ii) any dealing in the estate of the bankrupt or any act performed in the carrying on of the business of the bankrupt estate by the trustee was done as agent on behalf of the bankrupt and any income of the trustee from such dealing or carrying on is income of the bankrupt and not of the trustee; 
  (d) a taxation year of the corporation shall be deemed to have commenced on the day the corporation became a bankrupt and a taxation year of the corporation that would otherwise have ended after the corporation became a bankrupt shall be deemed to have ended on the day immediately before the day on which the corporation became a bankrupt; 
  (e) if, in the case of any taxation year of the corporation ending during the period the corporation is a bankrupt, the corporation fails to pay any tax payable by it under this Act for any such year, the corporation and the trustee in bankruptcy are jointly and severally, or solidarily, liable to pay the tax, except that 
  (i) the trustee is only liable to the extent of the property of the bankrupt in the trustee’s possession, and 
  (ii) payment by either of them discharges the liability to the extent of the amount paid; 
  (f) in the case of any taxation year of the corporation ending during the period the corporation is a bankrupt, the corporation shall be deemed not to be associated with any other corporation in the year; and 
  (g) where an absolute order of discharge is granted in respect of the corporation, for the purposes of section 111 any loss of the corporation for any taxation year preceding the year in which the order of discharge was granted is not deductible by the corporation in computing its taxable income for the taxation year of the corporation in which the order was granted or any subsequent year. 
  
  ### Where individual bankrupt
  
  (2) Where an individual has become a bankrupt, the following rules are applicable: 
  (a) the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act; 
  (b) the estate of the bankrupt shall be deemed not to be a trust or an estate for the purposes of this Act; 
  (c) the income and the taxable income of the individual for any taxation year during which the individual was a bankrupt and for any subsequent year shall be calculated as if 
  (i) the property of the bankrupt did not pass to and vest in the trustee in bankruptcy on the bankruptcy order being made or the assignment filed but remained vested in the bankrupt, and 
  (ii) any dealing in the estate of the bankrupt or any act performed in the carrying on of the business of the bankrupt estate by the trustee was done as agent on behalf of the bankrupt and any income of the trustee from such dealing or carrying on is income of the bankrupt and not of the trustee; 
  (d) except for the purposes of subsections 146(1), 146.01(4) and 146.02(4) and Part X.1, 
  (i) a taxation year of the individual is deemed to have begun at the beginning of the day on which the individual became a bankrupt, and 
  (ii) the individual’s last taxation year that began before that day is deemed to have ended immediately before that day; 
  (d.1) where, by reason of paragraph (d), a taxation year of the individual is not a calendar year, 
  (i) paragraph 146(5)(b) shall, for the purpose of the application of subsection 146(5) to the taxation year, be read as follows: 
  “(b) the amount, if any, by which 
  (i) the amount, if any, by which the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends exceeds the total of all contributions made by an employer in the particular calendar year to a pooled registered pension plan in respect of the taxpayer exceeds 
  (ii) the total of the amounts deducted under this subsection and subsection (5.1) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”, and 
  (ii) paragraph 146(5.1)(b) shall, for the purpose of the application of subsection 146(5.1) to the taxation year, be read as follows: 
  “(b) the amount, if any, by which 
  (i) the amount, if any, by which the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends exceeds the total of all contributions made by an employer in the particular calendar year to a pooled registered pension plan in respect of the taxpayer exceeds 
  (ii) the total of the amount deducted under subsection (5) in computing the taxpayer’s income for the year and the amounts deducted under this subsection and subsection (5) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”; 
  (d.2) where, by reason of paragraph 128(2)(d), the individual has two taxation years ending in a calendar year, each amount deducted in computing the individual’s income for either of the taxation years shall be deemed, for the purposes of the definition unused RRSP deduction room in subsection 146(1) and Part X.1, to have been deducted in computing the individual’s income for the calendar year;  
  (e) where the individual was a bankrupt at any time in a calendar year the trustee shall, within 90 days from the end of the year, file a return with the Minister, in prescribed form, on behalf of the individual of the individual’s income for any taxation year occurring in the calendar year computed as if 
  (i) the only income of the individual for that taxation year was the income for the year, if any, arising from dealings in the estate of the bankrupt or acts performed in the carrying on of the business of the bankrupt by the trustee, 
  (ii) in computing the individual’s taxable income for that taxation year, no deduction were permitted by Division C, other than 
  (A) an amount under any of paragraphs 110(1)(d) to (d.3) and section 110.6 to the extent that the amount is in respect of an amount included in income under subparagraph (i) for that taxation year, and 
  (B) an amount under section 111 to the extent that the amount was in respect of a loss of the individual for any taxation year that ended before the individual was discharged absolutely from bankruptcy, 
  (iii) in computing the individual’s tax payable under this Part for that taxation year, no deduction were allowed 
  (A) under any of sections 118 to 118.07, 118.2, 118.3, 118.5, 118.8 and 118.9, 
  (B) under section 118.1 with respect to a gift made by the individual on or after the day the individual became bankrupt, 
  (B.1) under section 118.62 with respect to interest paid on or after the day on which the individual became bankrupt, and 
  (C) under subsection 127(5) with respect to an expenditure incurred or property acquired by the individual in any taxation year that ends after the individual was discharged absolutely from bankruptcy, and the trustee is liable to pay any tax so determined for that taxation year; 
  (f) notwithstanding paragraph 128(2)(e), the individual shall file a separate return of the individual’s income for any taxation year during which the individual was a bankrupt, computed as if 
  (i) the income required to be reported in respect of the year by the trustee under paragraph 128(2)(e) was not the income of the individual, 
  (ii) in computing income, the individual was not entitled to deduct any loss sustained by the trustee in the year in dealing with the estate of the bankrupt or in carrying on the business of the bankrupt, 
  (iii) in computing the individual’s taxable income for the year, no amount were deductible under any of paragraphs 110(1)(d) to (d.3) and section 110.6 in respect of an amount included in income under subparagraph (e)(i), and no amount were deductible under section 111, and 
  (iv) in computing the individual’s tax payable under this Part for the year, no amount were deductible under 
  (A) section 118.1 in respect of a gift made before the day on which the individual became bankrupt, 
  (B) section 118.62 in respect of interest paid before the day on which the individual became bankrupt, or 
  (C) section 118.61 or 120.2 or subsection 127(5), and the individual is liable to pay any tax so determined for that taxation year; 
  (g) notwithstanding subparagraphs 128(2)(e)(ii) and 128(2)(e)(iii) and 128(2)(f)(iii) and 128(2)(f)(iv), where at any time an individual was discharged absolutely from bankruptcy, 
  (i) in computing the individual’s taxable income for any taxation year that ends after that time, no amount shall be deducted under section 111 in respect of losses for taxation years that ended before that time, 
  (ii) in computing the individual’s tax payable under this Part for any taxation year that ends after that time, 
  (A) no amount shall be deducted under section 118.61 or 120.2 in respect of an amount for any taxation year that ended before that time, 
  (B) no amount shall be deducted under section 118.1 in respect of a gift made before the individual became bankrupt, 
  (B.1) no amount shall be deducted under section 118.62 in respect of interest paid before the day on which the individual became bankrupt, and 
  (C) no amount shall be deducted under subsection 127(5) in respect of an expenditure incurred or a property acquired by the individual in any taxation year that ended before that time, and 
  (iii) the individual’s unused tuition, textbook and education tax credits (as determined under subsection 118.61(1)) at the end of the last taxation year that ended before that time is deemed to be nil; 
  (h) where, in a taxation year commencing after an order of discharge has been granted in respect of the individual, the trustee deals in the estate of the individual who was a bankrupt or performs any act in the carrying on of the business of the individual, paragraphs 128(2)(e), 128(2)(f) and 128(2)(g) shall apply as if the individual were a bankrupt in the year; and 
  (i) the portion of the individual’s non-capital loss for a particular taxation year in which paragraph 128(2)(e) applied in respect of the individual and any preceding taxation year that does not exceed the lesser of 
  (i) the amount of the individual’s allowable business investment losses for the particular taxation year, and 
  (ii) any portion of the individual’s non-capital loss for that particular year that was not deducted in computing the individual’s taxable income for any taxation year in which paragraph 128(2)(e) applied in respect of the individual or any preceding taxation year, shall, for the purpose of determining the individual’s cumulative gains limit under section 110.6 for taxation years following the taxation year in which paragraph 128(2)(e) was last applicable in respect of the individual, be deemed not to have been an allowable business investment loss. 
  (3)  [Repealed, 1998, c. 19, s. 152]  
  
  ## Changes in Residence 
  
  ### Immigration
  
  128.1 (1) For the purposes of this Act, where at a particular time a taxpayer becomes resident in Canada, 
  
  ### Year-end, fiscal period
  
  (a) where the taxpayer is a corporation or a trust, 
  (i) the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and 
  (ii) for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time; 
  
  ### Deemed disposition
  
  (b) the taxpayer is deemed to have disposed, at the time (in this subsection referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer, other than, if the taxpayer is an individual, 
  (i) property that is a taxable Canadian property, 
  (ii) property that is described in the inventory of a business carried on by the taxpayer in Canada at the time of disposition, 
  (iii) property included in Class 14.1 of Schedule II to the Income Tax Regulations, in respect of a business carried on by the taxpayer in Canada at the time of disposition, and  
  (iv) an excluded right or interest of the taxpayer, other than an interest described in paragraph (k) of the definition 
  *excluded right or interest* in subsection (10),  
  (v)  [Repealed, 2001, c. 17, s. 123]  for proceeds equal to its fair market value at the time of disposition; 
  
  ### Deemed acquisition
  
  (c) the taxpayer shall be deemed to have acquired at the particular time each property deemed by paragraph 128.1(1)(b) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property; 
  
  ### Deemed dividend to immigrating corporation
  
  (c.1) if the taxpayer is a particular corporation that immediately before the time of disposition owned a share of the capital stock of another corporation resident in Canada, a dividend is deemed to have been paid by the other corporation, and received by the particular corporation, immediately before the time of disposition, equal to the amount, if any, by which the fair market value of the share immediately before the time of disposition exceeds the total of 
  (i) the paid-up capital in respect of the share immediately before the time of disposition, and 
  (ii) if the share immediately before the time of disposition was taxable Canadian property that is not treaty-protected property, the amount by which, at the time of disposition, the fair market value of the share exceeds its cost amount; 
  
  ### Deemed dividend to shareholder of immigrating corporation
  
  (c.2) if the taxpayer is a corporation and an amount has been added to the paid-up capital in respect of a class of shares of the corporation’s capital stock because of paragraph (2)(b), 
  (i) the corporation is deemed to have paid, immediately before the time of disposition, a dividend on the issued shares of the class equal to the amount of the paid-up capital adjustment in respect of the class, and 
  (ii) a dividend is deemed to have been received, immediately before the time of disposition, by each person (other than a person in respect of whom the corporation is a foreign affiliate) who held any of the issued shares of the class equal to that proportion of the dividend so deemed to have been paid that the number of shares of the class held by the person immediately before the time of disposition is of the number of issued shares of the class outstanding immediately before the time of disposition; 
  
  ### Foreign affiliate dumping — immigrating corporation
  
  (c.3) if the taxpayer is a corporation that was, immediately before the particular time, controlled by one non-resident person or, if no single non-resident person controlled the CRIC, a group of non-resident persons not dealing with each other at arm’s length (in this section, that one non-resident person, or each member of the group of non-resident persons, as the case may be, is referred to as a “parent”, and the group of non-resident persons, if any, is referred to as the “group of parents”) and the taxpayer owned, immediately before the particular time, one or more shares of one or more non-resident corporations (each of which is in this paragraph referred to as a “subject affiliate”) that, immediately after the particular time, were — or that became, as part of a transaction or event or series of transactions or events that includes the taxpayer having become resident in Canada — foreign affiliates of the taxpayer, then 
  (i) in computing the paid-up capital, at any time after the time that is immediately after the particular time, of any particular class of shares of the capital stock of the taxpayer there is to be deducted the amount determined by the formula is the lesser of 
  (A) the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and 
  (B) the total of all amounts each of which is the fair market value at the particular time of 
  (I) a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or 
  (II) an amount owing by the subject affiliate to the taxpayer at the particular time, is the paid-up capital in respect of the particular class of shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and is the paid-up capital in respect of all the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and 
  (ii) for the purposes of Part XIII, the taxpayer is deemed, immediately after the particular time, to have paid to each parent, and each parent is deemed, immediately after the particular time, to have received from the taxpayer, a dividend in an amount determined by the formula is the amount determined under clause (B) of the description of A in subparagraph (i), is the amount determined under clause (A) of the description of A in subparagraph (i), is the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by the parent, and is the total of all amounts each of which is the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by a parent. 
  
  ### Foreign affiliate
  
  (d) where the taxpayer was, immediately before the particular time, a foreign affiliate of another taxpayer that is resident in Canada, 
  (i) the affiliate is deemed to have been a controlled foreign affiliate of the other taxpayer immediately before the particular time, and 
  (ii) the prescribed amount is to be included in the foreign accrual property income of the affiliate for its taxation year that ends immediately before the particular time. 
  
  ### Trusts subject to subsection 94(3)
  
  (1.1) Paragraph (1)(b) does not apply, at a time in a trust’s particular taxation year, to the trust if the trust is resident in Canada for the particular taxation year for the purpose of computing its income. 
  
  ### Trusts and partnerships look-through rule
  
  (1.2) For the purposes of this subsection and paragraph (1)(c.1), if at any time shares of the capital stock of a corporation resident in Canada are owned by a trust or a partnership (each referred to in this subsection as a “conduit”), each person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a “holder”), as the case may be, is deemed to own the shares of each class of the capital stock of the corporation that are owned by the conduit the number of which is determined by the formula is the total number of shares of the class of the capital stock of the corporation that is owned by the conduit at that time; is the fair market value, at that time, of the holder’s interest in the conduit; and is the total fair market value, at that time, of all interests in the conduit. 
  
  ### Paid-up capital adjustment
  
  (2) If a corporation becomes resident in Canada at a particular time, 
  (a) for the purposes of subsection (1) and this subsection, the 
  *paid-up capital adjustment* in respect of a particular class of shares of the corporation’s capital stock in respect of that acquisition of residence is the positive or negative amount determined by the formula  is the amount, if any, by which 
  (i) the total of all amounts each of which is an amount deemed by paragraph (1)(c) to be the cost to the corporation of property deemed under that paragraph to have been acquired by the corporation at the particular time exceeds 
  (ii) the total of all amounts each of which is the amount of a debt owing by the corporation, or any other obligation of the corporation to pay an amount, that is outstanding at the particular time, is the fair market value at the particular time of all of the shares of the particular class, is the total of all amounts each of which is the fair market value at the particular time of all of the shares of a class of shares of the corporation’s capital stock, and is the paid-up capital at the particular time, determined without reference to this subsection, in respect of the particular class; and 
  (b) for the purposes of this Act, in computing the paid-up capital in respect of a class of shares of the corporation’s capital stock at any time after the particular time and before the time, if any, at which the corporation next becomes resident in Canada, there shall be 
  (i) added the amount of the paid-up capital adjustment in respect of the particular class, if that amount is positive and the corporation so elects for all such classes in respect of that acquisition of residence by notifying the Minister in writing within 90 days after the particular time, and 
  (ii) deducted, if the amount of the paid-up capital adjustment in respect of the particular class is negative, the absolute value of that amount. 
  
  ### Paid-up capital adjustment
  
  (3) In computing the paid-up capital at any time in respect of a class of shares of the capital stock of a corporation 
  (a) there is to be deducted an amount equal to the lesser of A and B, and added an amount equal to the lesser of A and C, where is the absolute value of the difference between 
  (i) the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid before that time by the corporation, and 
  (ii) the total that would be determined under subparagraph (i) if this Act were read without reference to subsection (2), is the total of all amounts required by subsection (2) to be added in computing the paid-up capital in respect of the class before that time, and is the total of all amounts required by subsection (2) to be deducted in computing the paid-up capital in respect of the class before that time; and 
  (b) there is to be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporation exceeds 
  (B) the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and 
  (ii) the total of all amounts required by subparagraph (c.3)(i) to be deducted in computing the paid-up capital in respect of the class before that time. 
  
  ### Emigration
  
  (4) For the purposes of this Act, where at a particular time a taxpayer ceases to be resident in Canada, 
  
  ### Year-end, fiscal period
  
  (a) where the taxpayer is a corporation or a trust, 
  (i) the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and 
  (ii) for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time; 
  
  ### Fiscal period
  
  (a.1) if the taxpayer is an individual (other than a trust) and carries on a business at the particular time, otherwise than through a permanent establishment (as defined by regulation) in Canada, 
  (i) the fiscal period of the business is deemed to have ended immediately before the particular time and a new fiscal period of the business is deemed to have begun at the particular time, and 
  (ii) for the purpose of determining the fiscal period of the business after the particular time, the taxpayer is deemed not to have established a fiscal period of the business before the particular time; 
  
  ### Deemed disposition
  
  (b) the taxpayer is deemed to have disposed, at the time (in this paragraph and paragraph (d) referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer other than, if the taxpayer is an individual, 
  (i) real or immovable property situated in Canada, a Canadian resource property or a timber resource property, 
  (ii) capital property used in, property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of or property described in the inventory of, a business carried on by the taxpayer through a 
  *permanent establishment* (as defined by regulation) in Canada at the particular time,  
  (iii) an excluded right or interest of the taxpayer, 
  (iv) if the taxpayer is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property that was owned by the taxpayer at the time the taxpayer last became resident in Canada or that was acquired by the taxpayer by inheritance or bequest after the taxpayer last became resident in Canada, and 
  (v) any property in respect of which the taxpayer elects under paragraph (6)(a) for the taxation year that includes the first time, after the particular time, at which the taxpayer becomes resident in Canada, for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition; 
  
  ### Employee life and health trust
  
  (b.1) notwithstanding paragraph (b), if the taxpayer is or was at any time an employee life and health trust, 
  (i) the taxpayer is deemed 
  (A) to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and 
  (B) to have carried on a business at the time of disposition, and 
  (ii) each property of the taxpayer is deemed 
  (A) to have been described in the inventory of the business referred to in clause (i)(B), and 
  (B) to have a cost of nil at the time of disposition; 
  
  ### Reacquisition
  
  (c) the taxpayer is deemed to have reacquired, at the particular time, each property deemed by paragraph (b) or (b.1) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property; 
  
  ### Individual — elective disposition
  
  (d) notwithstanding paragraphs (b) to (c), if the taxpayer is an individual (other than a trust) and so elects in prescribed form and manner in respect of a property described in subparagraph (b)(i) or (ii), 
  (i) the taxpayer is deemed to have disposed of the property at the time of disposition for proceeds equal to its fair market value at that time and to have reacquired the property at the particular time at a cost equal to those proceeds, 
  (ii) the taxpayer’s income for the taxation year that includes the particular time is deemed to be the greater of 
  (A) that income determined without reference to this subparagraph, and 
  (B) the lesser of 
  (I) that income determined without reference to this subsection, and 
  (II) that income determined without reference to subparagraph (i), and 
  (iii) each of the taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for the taxation year that includes the particular time is deemed to be the lesser of 
  (A) that amount determined without reference to this subparagraph, and 
  (B) the greater of 
  (I) that amount determined without reference to this subsection, and 
  (II) that amount determined without reference to subparagraph (i); and 
  
  ### Employee CCPC stock option shares
  
  (d.1) if the taxpayer is deemed by paragraph (b) to have disposed of a share that was acquired before February 28, 2000 under circumstances to which subsection 7(1.1) applied, there shall be deducted from the taxpayer’s proceeds of disposition the amount that would, if section 7 were read without reference to subsection 7(1.6), be added under paragraph 53(1)(j) in computing the adjusted cost base to the taxpayer of the share as a consequence of the deemed disposition. 
  (e) and (f)  [Repealed, 2001, c. 17, s. 123]  
  
  ### Instalment interest
  
  (5) If an individual is deemed by subsection (4) to have disposed of a property in a taxation year, in applying sections 155 and 156 and subsections 156.1(1) to (3) and 161(2), (4) and (4.01) and any regulations made for the purposes of those provisions, the individual’s total tax payable under this Part for the year is deemed to be the lesser of 
  (a) the individual’s total tax payable under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, and 
  (b) the amount that would be determined under paragraph (a) if subsection (4) did not apply to the individual for the year. 
  
  ### Returning former resident
  
  (6) If an individual (other than a trust) becomes resident in Canada at a particular time in a taxation year and the last time (in this subsection referred to as the “emigration time”), before the particular time, at which the individual ceased to be resident in Canada was after October 1, 1996, 
  (a) subject to paragraph (b), if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, paragraphs (4)(b) and (c) do not apply to the individual’s cessation of residence at the emigration time in respect of all properties that were taxable Canadian properties of the individual throughout the period that began at the emigration time and that ends at the particular time; 
  (b) where, if a property in respect of which an election under paragraph (a) is made had been acquired by the individual at the emigration time at a cost equal to its fair market value at the emigration time and had been disposed of by the individual immediately before the particular time for proceeds of disposition equal to its fair market value immediately before the particular time, the application of subsection 40(3.7) would reduce the amount that would, but for that subsection and this subsection, be the individual’s loss from the disposition, 
  (i) the individual is deemed to have disposed of the property at the time of disposition (within the meaning assigned by paragraph (4)(b)) in respect of the emigration time for proceeds of disposition equal to the total of 
  (A) the adjusted cost base to the individual of the property immediately before the time of disposition, and 
  (B) the amount, if any, by which that reduction exceeds the lesser of 
  (I) the adjusted cost base to the individual of the property immediately before the time of disposition, and 
  (II) the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property, 
  (ii) the individual is deemed to have reacquired the property at the emigration time at a cost equal to the amount, if any, by which the amount determined under clause (i)(A) exceeds the lesser of that reduction and the amount specified by the individual under subclause (i)(B)(II), and 
  (iii) for the purpose of section 119, the individual is deemed to have disposed of the property immediately before the particular time; 
  (c) if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, in respect of each property that the individual owned throughout the period that began at the emigration time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs (1)(c) and (4)(b) the individual’s proceeds of disposition at the time of disposition (within the meaning assigned by paragraph (4)(b)), and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost, determined without reference to this paragraph, minus the least of 
  (i) the amount that would, but for this paragraph, have been the individual’s gain from the disposition of the property deemed by paragraph (4)(b) to have occurred, 
  (ii) the fair market value of the property at the particular time, and 
  (iii) the amount that the individual specifies for the purposes of this paragraph in the election; and 
  (d) notwithstanding subsections 152(4) to (5), any assessment of tax that is payable under this Act by the individual for any taxation year that is before the year that includes the particular time and that is not before the year that includes the emigration time shall be made that is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of 
  (i) interest payable under this Act to or by a taxpayer in respect of any period that is before the day on which the taxpayer’s return of income for the taxation year that includes the particular time is filed, or 
  (ii) any penalty payable under this Act. 
  
  ### Deemed taxable Canadian property
  
  (6.1) For the purposes of paragraph (6)(a), a property is deemed to be taxable Canadian property of the individual throughout the period that began at the emigration time and that ends at the particular time if 
  (a) the emigration time is before March 5, 2010; and 
  (b) the property was taxable Canadian property of the individual on March 4, 2010. 
  
  ### Returning trust beneficiary
  
  (7) If an individual (other than a trust) 
  (a) becomes resident in Canada at a particular time in a taxation year, 
  (b) owns at the particular time a property that the individual last acquired on a trust distribution to which subsection 107(2) would, but for subsection 107(5), have applied and at a time (in this subsection referred to as the “distribution time”) that was after October 1, 1996 and before the particular time, and 
  (c) was a beneficiary of the trust at the last time, before the particular time, at which the individual ceased to be resident in Canada, the following rules apply: 
  (d) subject to paragraphs (e) and (f), if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the earlier of their filing-due dates for their taxation years that include the particular time, subsection 107(2.1) does not apply to the distribution in respect of all properties acquired by the individual on the distribution that were taxable Canadian properties of the individual throughout the period that began at the distribution time and that ends at the particular time, 
  (e) paragraph (f) applies in respect of the individual, the trust and a property in respect of which an election under paragraph (d) is made where, if the individual 
  (i) had been resident in Canada at the distribution time, 
  (ii) had acquired the property at the distribution time at a cost equal to its fair market value at that time, 
  (iii) had ceased to be resident in Canada immediately after the distribution time, and 
  (iv) had, immediately before the particular time, disposed of the property for proceeds of disposition equal to its fair market value immediately before the particular time, the application of subsection 40(3.7) would reduce the amount that would, but for that subsection and this subsection, have been the individual’s loss from the disposition, 
  (f) where this paragraph applies in respect of an individual, a trust and a property, 
  (i) notwithstanding paragraph 107(2.1)(a), the trust is deemed to have disposed of the property at the distribution time for proceeds of disposition equal to the total of 
  (A) the cost amount to the trust of the property immediately before the distribution time, and 
  (B) the amount, if any, by which the reduction under subsection 40(3.7) described in paragraph (e) exceeds the lesser of 
  (I) the cost amount to the trust of the property immediately before the distribution time, and 
  (II) the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and 
  (ii) notwithstanding paragraph 107(2.1)(b), the individual is deemed to have acquired the property at the distribution time at a cost equal to the amount, if any, by which the amount otherwise determined under paragraph 107(2)(b) exceeds the lesser of the reduction under subsection 40(3.7) described in paragraph (e) and the amount specified under subclause (i)(B)(II), 
  (g) if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the later of their filing-due dates for their taxation years that include the particular time, in respect of each property that the individual owned throughout the period that began at the distribution time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs 107(2.1)(a) and (b), the trust’s proceeds of disposition under paragraph 107(2.1)(a) at the distribution time, and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost determined without reference to this paragraph, minus the least of 
  (i) the amount that would, but for this paragraph, have been the trust’s gain from the disposition of the property deemed by paragraph 107(2.1)(a) to have occurred, 
  (ii) the fair market value of the property at the particular time, and 
  (iii) the amount that the individual and the trust jointly specify for the purposes of this paragraph in the election, 
  (h) if the trust ceases to exist before the individual’s filing-due date for the individual’s taxation year that includes the particular time, 
  (i) an election or specification described in this subsection may be made by the individual alone in writing if the election is filed with the Minister on or before that filing-due date, and 
  (ii) if the individual alone makes such an election or specification, the individual and the trust are jointly and severally, or solidarily, liable for any amount payable under this Act by the trust as a result of the election or specification, and 
  (i) notwithstanding subsections 152(4) to (5), such assessment of tax payable under the Act by the trust or the individual for any year that is before the year that includes the particular time and that is not before the year that includes the distribution time shall be made as is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of 
  (i) interest payable under this Act to or by the trust or the individual in respect of any period that is before the individual’s filing-due date for the taxation year that includes the particular time, or 
  (ii) any penalty payable under this Act. 
  
  ### Post-emigration loss
  
  (8) If an individual (other than a trust) 
  (a) was deemed by paragraph (4)(b) to have disposed of a capital property at any particular time after October 1, 1996, 
  (b) has disposed of the property at a later time at which the property was a taxable Canadian property of the individual, and 
  (c) so elects in writing in the individual’s return of income for the taxation year that includes the later time, there shall, except for the purpose of paragraph (4)(c), be deducted from the individual’s proceeds of disposition of the property at the particular time, and added to the individual’s proceeds of disposition of the property at the later time, an amount equal to the least of 
  (d) the amount specified in respect of the property in the election, 
  (e) the amount that would, but for the election, be the individual’s gain from the disposition of the property at the particular time, and 
  (f) the amount that would be the individual’s loss from the disposition of the property at the later time, if the loss were determined having reference to every other provision of this Act including, for greater certainty, subsection 40(3.7) and section 112, but without reference to the election. 
  
  ### Information reporting
  
  (9) An individual who ceases at a particular time in a taxation year to be resident in Canada, and who owns immediately after the particular time one or more reportable properties the total fair market value of which at the particular time is greater than $25,000, shall file with the Minister in prescribed form, on or before the individual’s filing-due date for the year, a list of all the reportable properties that the individual owned immediately after the particular time. 
  
  ### Definitions
  
  (10) The definitions in this subsection apply in this section.  
  *excluded right or interest* of a taxpayer who is an individual means  
  (a) a right of the individual under, or an interest of the individual in a trust governed by, 
  (i) a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan”, 
  (ii) a registered retirement income fund, 
  (iii) a registered education savings plan, 
  (iii.1) a registered disability savings plan, 
  (iii.2) a TFSA, 
  (iii.3) a FHSA, 
  (iv) a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”, 
  (v) an employees profit sharing plan, 
  (vi) an employee benefit plan (other than a plan described in subparagraph (b)(i) or (ii)), 
  (vi.1) an employee life and health trust, 
  (vii) a plan or arrangement (other than an employee benefit plan) under which the individual has a right to receive in a year remuneration in respect of services rendered by the individual in the year or a prior year, 
  (viii) a superannuation or pension fund or plan (other than an employee benefit plan), 
  (ix) a retirement compensation arrangement, 
  (x) a foreign retirement arrangement, or 
  (xi) a registered supplementary unemployment benefit plan; 
  (b) a right of the individual to a benefit under an employee benefit plan that is 
  (i) a plan or arrangement described in paragraph (j) of the definition 
  *salary deferral arrangement* in subsection 248(1) that would, but for paragraphs (j) and (k) of that definition, be a salary deferral arrangement, or  
  (ii) a plan or arrangement that would, but for paragraph 6801(c) of the Income Tax Regulations, be a salary deferral arrangement,  to the extent that the benefit can reasonably be considered to be attributable to services rendered by the individual in Canada; 
  (c) a right of the individual under an agreement referred to in subsection 7(1); 
  (d) a right of the individual to a retiring allowance; 
  (e) a right of the individual under, or an interest of the individual in, a trust that is 
  (i) an employee trust, 
  (ii) an amateur athlete trust, 
  (iii) a cemetery care trust, or 
  (iv) a trust governed by an eligible funeral arrangement; 
  (f) a right of the individual to receive a payment under 
  (i) an annuity contract, or 
  (ii) an income-averaging annuity contract; 
  (g) a right of the individual to a benefit under 
  (i) the Canada Pension Plan or a provincial plan described in section 3 of that Act,  
  (ii) the Old Age Security Act, or  
  (iii)  [Repealed, 2011, c. 24, s. 43]  
  (iv) a plan or arrangement instituted by the social security legislation of a country other than Canada or of a state, province or other political subdivision of such a country; 
  (h) a right of the individual to a benefit described in any of subparagraphs 56(1)(a)(iii) to (vi); 
  (i) a right of the individual to a payment out of a NISA Fund No. 2; 
  (j) an interest of the individual in a personal trust resident in Canada if the interest was never acquired for consideration and did not arise as a consequence of a qualifying disposition by the individual (within the meaning that would be assigned by subsection 107.4(1) if that subsection were read without reference to paragraphs 107.4(1)(h) and (i)); 
  (k) an interest of the individual in a non-resident testamentary trust that is an estate that arose on and as a consequence of a death if 
  (i) the interest was never acquired for consideration, and 
  (ii) the estate has been in existence for no more than 36 months; or 
  (l) an interest of the individual in a life insurance policy in Canada, except for that part of the policy in respect of which the individual is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust. ( droit, participation ou intérêt exclu)   
  *reportable property* of an individual at a particular time means any property other than  
  (a) money that is legal tender in Canada and deposits of such money; 
  (b) property that would be an excluded right or interest of the individual if the definition 
  *excluded right or interest* in this subsection were read without reference to paragraphs (c), (j) and (l) of that definition;  
  (c) if the individual is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property described in subparagraph (4)(b)(iv) that is not taxable Canadian property; and 
  (d) any item of personal-use property the fair market value of which, at the particular time, is less than $10,000. ( bien à déclarer)  
  
  ### Cross-border mergers
  
  128.2 (1) Where a corporation formed at a particular time by the amalgamation or merger of, or by a plan of arrangement or other corporate reorganization in respect of, 2 or more corporations (each of which is referred to in this section as a “predecessor”) is at the particular time resident in Canada, a predecessor that was not immediately before the particular time resident in Canada shall be deemed to have become resident in Canada immediately before the particular time. 
  
  ### Idem
  
  (2) Where a corporation formed at a particular time by the amalgamation or merger of, or by a plan of arrangement or other corporate reorganization in respect of, 2 or more corporations is at the particular time not resident in Canada, a predecessor that was immediately before the particular timeresident in Canada shall be deemed to have ceased to be resident in Canada immediately before the particular time. 
  
  ### Windings-up excluded
  
  (3) For greater certainty, subsections 128.2(1) and (2) do not apply to reorganizations occurring solely because of the acquisition of property of one corporation by another corporation, pursuant to the purchase of the property by the other corporation or because of the distribution of the property to the other corporation on the winding-up of the corporation. 
  
  ### Former resident — replaced shares
  
  128.3 If, in a transaction to which section 51, subparagraphs 85.1(1)(a)(i) and (ii), subsection 85.1(8) or section 86 or 87 applies, a person acquires a share (in this section referred to as the “new share”) in exchange for another share or equity in a SIFT wind-up entity (in this section referred to as the “old share”), for the purposes of section 119, subsections 126(2.21) to (2.23), subparagraph 128.1(4)(b)(iv) and subsections 128.1(6) to (8), 180.1(1.4) and 220(4.5) and (4.6), the person is deemed not to have disposed of the old share, and the new share is deemed to be the same share as the old share. 
  
  ## Private Corporations 
  
  ### Dividend refund to private corporation
  
  129 (1) Where a return of a corporation’s income under this Part for a taxation year is made within 3 years after the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) in respect of taxable dividends paid by the corporation on shares of its capital stock in the year, and at a time when it was a private corporation, equal to the total of 
  (i) in respect of eligible dividends, an amount equal to the lesser of 
  (A) 38 1/3% of the total of all eligible dividends paid by it in the year, and 
  (B) its eligible refundable dividend tax on hand at the end of the year, and 
  (ii) in respect of taxable dividends (other than eligible dividends), an amount equal to the total of 
  (A) the lesser of 
  (I) 38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and 
  (II) its non-eligible refundable dividend tax on hand at the end of the year, and 
  (B) either 
  (I) if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of 
  1 the amount of the excess, and 
  2 the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and 
  (II) in any other case, nil; and 
  (b) shall, with all due dispatch, make the dividend refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a). 
  
  ### Dividends paid to bankrupt controlling corporation
  
  (1.1) In determining the dividend refund for a taxation year ending after 1977 of a particular corporation, no amount may be included under clause (1)(a)(i)(A), subclause (1)(a)(ii)(A)(I) or sub-subclause (1)(a)(ii)(B)(I)1 in respect of a taxable dividend paid to a shareholder that 
  (a) was a corporation that controlled (within the meaning assigned by subsection 186(2)) the particular corporation at the time the dividend was paid; and 
  (b) was a bankrupt at any time during that taxation year of the particular corporation. 
  
  ### Dividends deemed not to be taxable dividends
  
  (1.2) Where a dividend is paid on a share of the capital stock of a corporation and the share (or another share for which the share was substituted) was acquired by its holder in a transaction or as part of a series of transactions one of the main purposes of which was to enable the corporation to obtain a dividend refund, the dividend shall, for the purpose of subsection 129(1), be deemed not to be a taxable dividend. 
  
  ### Application to other liability
  
  (2) Instead of making a refund that might otherwise be made under subsection 129(1), the Minister may, where the corporation is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refundable to that other liability and notify the corporation of that action. 
  
  ### Interest on dividend refund
  
  (2.1) Where a dividend refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of 
  (a) the day that is 120 days after the end of the year, and 
  (b) the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed, and ending on the day on which the refund is paid or applied. 
  
  ### Excess interest on dividend refund
  
  (2.2) Where, at any particular time, interest has been paid to, or applied to a liability of, a corporation under subsection 129(2.1) in respect of a dividend refund and it is determined at a subsequent time that the dividend refund was less than that in respect of which interest was so paid or applied, 
  (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the dividend refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time; 
  (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and 
  (c) the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  (3)  [Repealed, 2018, c. 12, s. 22]  
  
  ### Application
  
  (3.1) Where, in a taxation year that begins after November 12, 1981, a corporation that last became a private corporation on or before that date and that was throughout the year a private corporation, other than a Canadian-controlled private corporation, has included in its income for the year an amount in respect of property that the corporation 
  (a) disposed of before November 13, 1981, 
  (b) was obligated to dispose of under the terms of an agreement in writing entered into before November 13, 1981, or 
  (c) is deemed by subsection 44(2) to have disposed of at any time after November 12, 1981 because of an event referred to in paragraph (b), (c) or (d) of the definition 
  *proceeds of disposition* in section 54 in respect of the disposition that occurred before November 13, 1981,  paragraph 3(a) shall apply as if the corporation were a Canadian-controlled private corporation throughout the year, except that the total of the amounts determined under that paragraph in respect of the corporation for the year shall not exceed the amount that would be so determined if the only income of the corporation for the year were the amount included in respect of the disposition of such property. 
  (3.2) to (3.5)  [Repealed, 1996, c. 21, s. 32]  
  
  ### Definitions
  
  (4) The definitions in this subsection apply in this section.  
  *aggregate investment income* of a corporation for a taxation year means the amount, if any, by which the total of all amounts, each of which is  
  (a) the amount, if any, by which 
  (i) the eligible portion of the corporation’s taxable capital gains for the year exceeds the total of 
  (ii) the eligible portion of its allowable capital losses for the year, and 
  (iii) the amount, if any, deducted under paragraph 111(1)(b) in computing its taxable income for the year, or 
  (b) the corporation’s income for the year from a source that is a property, other than 
  (i) exempt income, 
  (ii) an amount included under subsection 12(10.2) in computing the corporation’s income for the year, 
  (iii) the portion of any dividend that was deductible in computing the corporation’s taxable income for the year, and 
  (iv) income that, but for paragraph 108(5)(a), would not be income from a property, exceeds the total of all amounts, each of which is the corporation’s loss for the year from a source that is a property. ( revenu de placement total)   
  *Canadian investment income* [Repealed, 1996, c. 21, s. 32]   
  *eligible portion* of a corporation’s taxable capital gains or allowable capital losses for a taxation year is the total of all amounts each of which is the portion of a taxable capital gain or an allowable capital loss, as the case may be, of the corporation for the year from a disposition of a property that, except where the property was a designated property (within the meaning assigned by subsection 89(1)), cannot reasonably be regarded as having accrued while the property, or a property for which it was substituted, was property of a corporation other than a Canadian-controlled private corporation, an investment corporation, a mortgage investment corporation or a mutual fund corporation. (fraction admissible)   
  *eligible refundable dividend tax on hand*, of a particular corporation at the end of a taxation year, means the amount, if any, by which the total of  
  (a) the total of the taxes payable under Part IV by the particular corporation for the year in respect of 
  (i) eligible dividends received by the particular corporation in the year from corporations other than corporations with which the particular corporation is connected (in this paragraph, within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and 
  (ii) taxable dividends received by the particular corporation in the year from corporations that are connected with the particular corporation to the extent that such dividends caused a dividend refund to those corporations from their eligible refundable dividend tax on hand, and 
  (b) where the particular corporation was a private corporation at the end of its preceding taxation year, the particular corporation’s eligible refundable dividend tax on hand at the end of that preceding year exceeds 
  (c) the total of all amounts each of which is the portion, if any, of the particular corporation’s dividend refund from its eligible refundable dividend tax on hand determined, for its preceding taxation year, under 
  (i) subparagraph (1)(a)(i), and 
  (ii) clause (1)(a)(ii)(B). ( impôt en main remboursable au titre de dividendes déterminés)   
  *foreign investment income* of a corporation for a taxation year is the amount that would be its aggregate investment income for the year if  
  (a) every amount of its income, loss, capital gain or capital loss for the year that can reasonably be regarded as being from a source in Canada were nil, 
  (b) no amount were deducted under paragraph 111(1)(b) in computing its taxable income for the year, and 
  (c) this Act were read without reference to paragraph (a) of the definition 
  *income* or 
  *loss* in this subsection. (revenu de placement étranger)   
  *income* or 
  *loss* of a corporation for a taxation year from a source that is a property  
  (a) includes the income or loss from a specified investment business carried on by it in Canada other than income or loss from a source outside Canada, but 
  (b) does not include the income or loss from any property 
  (i) that is incident to or pertains to an active business carried on by it, or 
  (ii) that is used or held principally for the purpose of gaining or producing income from an active business carried on by it. ( perte ou revenu)   
  *non-eligible refundable dividend tax on hand*, of a corporation at the end of a taxation year, means the amount, if any, by which the total of  
  (a) if the corporation was a Canadian-controlled private corporation throughout the year, the least of 
  (i) the amount determined by the formula is 30 2/3% of the corporation’s aggregate investment income for the year, and is the amount, if any, by which 
  (A) the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Part exceeds 
  (B) 8% of its foreign investment income for the year, 
  (ii) 30 2/3% of the amount, if any, by which the corporation’s taxable income for the year exceeds the total of 
  (A) the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year, 
  (B) 100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and 
  (C) the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and 
  (iii) the corporation’s tax for the year payable under this Part, 
  (b) the total of the taxes payable under Part IV by the corporation for the year less the amount determined under paragraph (a) of the definition eligible refundable dividend tax on hand in respect of the corporation for the year, and  
  (c) if the corporation was a private corporation at the end of its preceding taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of that preceding year exceeds 
  (d) the portion, if any, of the corporation’s dividend refund from its non-eligible refundable dividend tax on hand determined, for its preceding taxation year, under clause (1)(a)(ii)(A). ( impôt en main remboursable au titre de dividendes non déterminés)  
  
  ### Conditions for subsection (4.2)
  
  (4.1) Subsection (4.2) applies in respect of a particular taxation year of a particular corporation if the following conditions are met: 
  (a) the particular corporation has an amount of tax payable for the year under Part IV; 
  (b) the particular corporation has claimed amounts under paragraph 186(1)(c) or (d) in respect of the year; and 
  (c) the particular corporation would, in the absence of paragraphs 186(1)(c) and (d), have an amount determined, at the end of the year, under both paragraph (a) of the definition eligible refundable dividend tax on hand and paragraph (b) of the definition non-eligible refundable dividend tax on hand in subsection (4).  
  
  ### Part IV tax — allocation of losses
  
  (4.2) If this subsection applies in respect of a particular taxation year of a corporation, for the purpose of determining the amount under paragraph (a) of the definition eligible refundable dividend tax on hand in subsection (4), in respect of the corporation at the end of the year, the amount determined under subsection 186(1) in respect of the corporation for the year is deemed to be the amount determined by the formula  is the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of eligible dividends; is the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the eligible refundable dividend tax on hand of other corporations; and is the amount determined by the formula is the amount claimed by the corporation under paragraph 186(1)(c) for the year, is the amount claimed by the corporation under paragraph 186(1)(d) for the year, is the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of taxable dividends (other than eligible dividends), and is the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the non-eligible refundable dividend tax on hand of other corporations. 
  (4.3)  [Repealed, 1996, c. 21, s. 32]  
  
  ### 2019 transitional RDTOH
  
  (5) The following rules apply to a corporation’s first taxation year in respect of which the definition eligible refundable dividend tax on hand in subsection (4) applies:  
  (a) if the corporation is a Canadian-controlled private corporation throughout the taxation year and its preceding taxation year and is not a corporation in respect of which an election under subsection 89(11) applies to the taxation year or the preceding taxation year, 
  (i) for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of  
  (A) the amount determined by the formula is the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, and is the corporation’s dividend refund for its preceding taxation year, and 
  (B) the amount determined by the formula is the corporation’s general rate income pool at the end of its preceding taxation year, is the amount, if any, by which 
  (I) the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation year exceeds 
  (II) the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, and is 38 1/3%, and 
  (ii) for the purpose of applying paragraph (c) of the definition non-eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formula  is the amount determined under clause (a)(i)(A) in respect of the corporation at the end of the preceding taxation year, and is the amount determined under clause (a)(i)(B) in respect of the corporation at the end of the preceding taxation year; and 
  (b) in any other case, for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount that would be determined for clause (a)(i)(A) if paragraph (a) applied to the corporation in respect of the taxation year.  
  
  ### 2019 transitional RDTOH — amalgamations
  
  (5.1) Subsection (5) applies with such modifications as are necessary for the purpose of applying paragraph 87(2)(aa) in respect of a corporation if 
  (a) the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1)); 
  (b) the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)(a); and 
  (c) the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definition eligible refundable dividend tax on hand in subsection (4) applies.  
  
  ### Investment income from associated corporation deemed to be active business income
  
  (6) Where any particular amount paid or payable to a corporation (in this subsection referred to as the “recipient corporation”) by another corporation (in this subsection referred to as the “associated corporation”) with which the recipient corporation was associated in any particular taxation year commencing after 1972, would otherwise be included in computing the income of the recipient corporation for the particular year from a source in Canada that is a property, the following rules apply: 
  (a) for the purposes of subsection 129(4), in computing the recipient corporation’s income for the year from a source in Canada that is a property, 
  (i) there shall not be included any portion (in this subsection referred to as the “deductible portion”) of the particular amount that was or may be deductible in computing the income of the associated corporation for any taxation year from an active business carried on by it in Canada, and 
  (ii) no deduction shall be made in respect of any outlay or expense, to the extent that that outlay or expense may reasonably be regarded as having been made or incurred by the recipient corporation for the purpose of gaining or producing the deductible portion; and 
  (b) for the purposes of this subsection and section 125, 
  (i) the deductible portion shall be deemed to be income of the recipient corporation for the particular year from an active business carried on by it in Canada, and 
  (ii) any outlay or expense, to the extent described in subparagraph 129(6)(a)(ii), shall be deemed to have been made or incurred by the recipient corporation for the purpose of gaining or producing that income. 
  
  ### Meaning of taxable dividend 
  
  (7) For the purposes of this section, 
  *taxable dividend* does not include a capital gains dividend within the meaning assigned by subsection 131(1).  
  
  ### Application of s. 125
  
  (8) Expressions used in this section and not otherwise defined for the purposes of this section have the same meanings as in section 125. 
  
  ## Investment Corporations 
  
  ### Deduction from tax
  
  130 (1) A corporation that was, throughout a taxation year, an investment corporation may deduct from the tax otherwise payable by it under this Part for the year an amount equal to 20% of the amount, if any, by which its taxable income for the year exceeds its taxed capital gains for the year. 
  
  ### Application of subsections 131(1) to (3.2), (4.1) and (6)
  
  (2) Where a corporation was an investment corporation throughout a taxation year (other than a corporation that was a mutual fund corporation throughout the year), subsections 131(1) to (3.2), (4.1) and (6) apply in respect of the corporation for the year 
  (a) as if the corporation had been a mutual fund corporation throughout that and all previous taxation years ending after 1971 throughout which it was an investment corporation; and 
  (b) as if its capital gains redemptions for that and all previous taxation years ending after 1971, throughout which it would, but for the assumption made by paragraph 130(2)(a), not have been a mutual fund corporation, were nil. 
  
  ### Meaning of expressions 
  *investment corporation* and 
  *taxed capital gains* 
  
  (3) For the purposes of this section, 
  (a) a corporation is an 
  *investment corporation* throughout any taxation year in respect of which the expression is being applied if it complied with the following conditions:  
  (i) it was throughout the year a Canadian corporation that was a public corporation, 
  (ii) at least 80% of its property throughout the year consisted of shares, bonds, marketable securities or cash, 
  (iii) not less than 95% of its income (determined without reference to subsection 49(2)) for the year was derived from, or from dispositions of, investments described in subparagraph 130(3)(a)(ii), 
  (iv) not less than 85% of its gross revenue for the year was from sources in Canada, 
  (v) not more than 25% of its gross revenue for the year was from interest, 
  (vi) at no time in the year did more than 10% of its property consist of shares, bonds or securities of any one corporation or debtor other than Her Majesty in right of Canada or of a province or a Canadian municipality, 
  (vii) no person would have been a specified shareholder of the corporation in the year if 
  (A) the portion of the definition 
  *specified shareholder* in subsection 248(1) before paragraph (a) were read as follows:  “ 
  *specified shareholder* of a corporation in a taxation year means a taxpayer who owns, directly or indirectly, at any time in the year, more than 25% of the issued shares of any class of the capital stock of the corporation and, for the purposes of this definition,”  
  (B) paragraph (a) of that definition were read as follows: 
  “(a) a taxpayer is deemed to own each share of the capital stock of a corporation owned at that time by a person related to the taxpayer,” 
  (B.1)  [Repealed, 2013, c. 34, s. 371]  
  (C) that definition were read without reference to paragraph (d) of that definition, 
  (C.1)  [Repealed, 2013, c. 34, s. 371]  and 
  (D) paragraph 251(2)(a) were read as follows: 
  “(a) an individual and 
  (i) the individual’s child (as defined in subsection 70(10)) who is under 19 years of age, or 
  (ii) the individual’s spouse or common-law partner;” 
  (viii) an amount not less than 85% of the total of 
  (A) 2/3 of the amount, if any, by which its taxable income for the year exceeds its taxed capital gains for the year, and 
  (B) the amount, if any, by which all taxable dividends received by it in the year to the extent of the amount thereof deductible under section 112 or 113 from its income for the year exceeds the amount that the corporation’s non-capital loss for the year would be if the amount determined in respect of the corporation for the year under paragraph 3(b) was nil, (less any dividends or interest received by it in the form of shares, bonds or other securities that had not been sold before the end of the year) was distributed, otherwise than by way of capital gains dividends, to its shareholders before the end of the year; and 
  (b) the amount of the 
  *taxed capital gains* of a taxpayer for a taxation year is the amount, if any, by which  
  (i) its taxable capital gains for the year from dispositions of property exceeds 
  (ii) the total of its allowable capital losses for the year from dispositions of property and the amount, if any, deducted under paragraph 111(1)(b) for the purpose of computing its taxable income for the year. 
  
  ### Wholly owned subsidiaries
  
  (4) Where a corporation so elects in its return of income under this Part for a taxation year, each of the corporation’s properties that is a share or indebtedness of another Canadian corporation that is at any time in the year a subsidiary wholly owned corporation of the corporation shall, for the purposes of subparagraphs 130(3)(a)(ii) and (vi), be deemed not to be owned by the corporation at any such time in the year, and each property owned by the other corporation at that time shall, for the purposes of those subparagraphs, be deemed to be owned by the corporation at that time. 
  
  ## Mortgage Investment Corporations 
  
  ### Deduction from tax
  
  130.1 (1) In computing the income for a taxation year of a corporation that was, throughout the year, a mortgage investment corporation, 
  (a) there may be deducted the total of 
  (i) all taxable dividends, other than capital gains dividends, paid by the corporation during the year or within 90 days after the end of the year to the extent that those dividends were not deductible by the corporation in computing its income for the preceding year, and 
  (ii) 1/2 of all capital gains dividends paid by the corporation during the period commencing 91 days after the commencement of the year and ending 90 days after the end of the year; and 
  (b) no deduction may be made under section 112 in respect of taxable dividends received by it from other corporations. 
  
  ### Dividend equated to bond interest
  
  (2) For the purposes of this Act, any amount received from a mortgage investment corporation by a shareholder of the corporation as or on account of a taxable dividend, other than a capital gains dividend, shall be deemed to have been received by the shareholder as interest payable on a bond issued by the corporation after 1971. 
  
  ### Application of s. (2)
  
  (3) Subsection 130.1(2) applies where the taxable dividend (other than a capital gains dividend) described in that subsection was paid during a taxation year throughout which the paying corporation was a mortgage investment corporation or within 90 days thereafter. 
  
  ### Election re capital gains dividend
  
  (4) Where at any particular time during the period that begins 91 days after the beginning of a taxation year of a corporation that was, throughout the year, a mortgage investment corporation and ends 90 days after the end of the year, a dividend is paid by the corporation to shareholders of the corporation, if the corporation so elects in respect of the full amount of the dividend in prescribed manner and at or before the earlier of the particular time and the first day on which any part of the dividend was paid, 
  (a) the dividend shall be deemed to be a capital gains dividend to the extent that it does not exceed the amount, if any, by which 
  (i) twice the taxed capital gains of the corporation for the year exceeds 
  (ii) the total of all dividends, and parts of dividends, paid by the corporation during the period and before the particular time that are deemed by this paragraph to be capital gains dividends; and 
  (b) notwithstanding any other provision of this Act, if an amount is received by a taxpayer in a taxation year as, on account of, in lieu of payment of or in satisfaction of, the dividend, the amount 
  (i) shall not be included in computing the taxpayer’s income for the year as income from a share of the capital stock of the corporation, and 
  (ii) is deemed to be a capital gain of the taxpayer from the disposition of capital property in the year. 
  
  ### Application of ss. 131(1.1) to (1.4)
  
  (4.1) Where at any particular time a mortgage investment corporation paid a dividend to its shareholders and subsection 130.1(4) would have applied to the dividend except that the corporation did not make an election under that subsection on or before the day on or before which it was required by that subsection to be made, subsections 131(1.1) to 131(1.4) apply with such modifications as the circumstances require. 
  (4.2) to (4.5)  [Repealed, 2013, c. 34, s. 276]  
  
  ### Public corporation
  
  (5) Notwithstanding any other provision of this Act, a mortgage investment corporation shall be deemed to be a public corporation. 
  
  ### Meaning of 
  *mortgage investment corporation* 
  
  (6) For the purposes of this section, a corporation is a 
  *mortgage investment corporation* throughout a taxation year if, throughout the year,  
  (a) it was a Canadian corporation; 
  (b) its only undertaking was the investing of funds of the corporation and it did not manage or develop any real or immovable property; 
  (c) none of the property of the corporation consisted of 
  (i) debts owing to the corporation that were secured on real or immovable property situated outside Canada, 
  (ii) debts owing to the corporation by non-resident persons, except any such debts that were secured on real or immovable property situated in Canada, 
  (iii) shares of the capital stock of corporations not resident in Canada, or 
  (iv) real or immovable property situated outside Canada, or any leasehold interest in such property; 
  (d) there were 20 or more shareholders of the corporation and no person would have been a specified shareholder of the corporation at any time in the year if 
  (i) the portion of the definition 
  *specified shareholder* in subsection 248(1) before paragraph (a) were read as follows:  “ 
  *specified shareholder* of a corporation at any time means a taxpayer who owns, directly or indirectly, at that time, more than 25% of the issued shares of any class of the capital stock of the corporation and, for the purposes of this definition,”  
  (ii) paragraph (a) of that definition were read as follows: 
  “(a) a taxpayer is deemed to own each share of the capital stock of a corporation owned at that time by a person related to the taxpayer,” 
  (iii) that definition were read without reference to paragraph (d) of that definition, and 
  (iv) paragraph 251(2)(a) were read as follows: 
  “(a) an individual and 
  (i) the individual’s child (as defined in subsection 70(10)) who is under 18 years of age, or 
  (ii) the individual’s spouse or common-law partner;” 
  (e) any holders of preferred shares of the corporation had a right, after payment to them of their preferred dividends, and payment of dividends in a like amount per share to the holders of the common shares of the corporation, to participate pari passu with the holders of the common shares in any further payment of dividends;  
  (f) the cost amount to the corporation of such of its property as consisted of 
  (i) debts owing to the corporation that were secured, whether by mortgages, hypothecs or in any other manner, on houses (as defined in section 2 of the National Housing Act) or on property included within a housing project (as defined in that section as it read on June 16, 1999), and  
  (ii) amounts of any deposits standing to the corporation’s credit in the records of 
  (A) a bank or other corporation any of whose deposits are insured by the Canada Deposit Insurance Corporation or the Régie de l’assurance-dépôts du Québec, or 
  (B) a credit union, plus the amount of any money of the corporation was at least 50% of the cost amount to it of all its property; 
  (g) the cost amount to the corporation of all real or immovable property of the corporation, including leasehold interests in such property (except real or immovable property acquired by the corporation by foreclosure or otherwise after default made on a mortgage, hypothec or agreement of sale of real or immovable property) did not exceed 25% of the cost amount to it of all its property; 
  (h) its liabilities did not exceed 3 times the amount by which the cost amount to it of all its property exceeded its liabilities, where at any time in the year the cost amount to it of such of its property as consisted of property described in subparagraphs 130.1(6)(f)(i) and 130.1(6)(f)(ii) plus the amount of any money of the corporation was less than 2/3 of the cost amount to it of all of its property; and 
  (i) its liabilities did not exceed 5 times the amount by which the cost amount to it of all its property exceeded its liabilities, where paragraph 130.1(6)(h) is not applicable. 
  
  ### How shareholders counted
  
  (7) In paragraph (6)(d), a trust governed by a registered pension plan or deferred profit sharing plan by which shares of the capital stock of a corporation are held shall be counted as four shareholders of the corporation for the purpose of determining the number of shareholders of the corporation, but as one shareholder for the purpose of determining whether any person is a specified shareholder (as defined for the purpose of that paragraph). 
  
  ### First taxation year
  
  (8) For the purposes of subsection 130.1(6), a corporation that was incorporated after 1971 shall be deemed to have complied with paragraph 130.1(6)(d) throughout the first taxation year of the corporation in which it carried on business if it complied with that paragraph on the last day of that taxation year. 
  
  ### Definitions
  
  (9) In this section,  
  *liabilities* of a corporation at any particular time means the total of all debts owing by the corporation, and all other obligations of the corporation to pay an amount, that were outstanding at that time; (passif)   
  *non-qualifying real property* [Repealed, 1995, c. 3, s. 40(2)]   
  *non-qualifying taxed capital gains* [Repealed, 1995, c. 3, s. 40(2)]   
  *qualifying taxed capital gains* [Repealed, 1995, c. 3, s. 40(2)]   
  *taxed capital gains* has the meaning assigned by paragraph 130(3)(b). (gains en capital imposés)  
  
  ## Mutual Fund Corporations 
  
  ### Election re capital gains dividend
  
  131 (1) Where at any particular time a dividend became payable by a corporation, that was throughout the taxation year in which the dividend became payable a mutual fund corporation, to shareholders of any class of its capital stock, if the corporation so elects in respect of the full amount of the dividend in prescribed manner and at or before the earlier of the particular time and the first day on which any part of the dividend was paid, 
  (a) the dividend shall be deemed to be a capital gains dividend payable out of the corporation’s capital gains dividend account to the extent that it does not exceed the corporation’s capital gains dividend account atthe particular time; and 
  (b) notwithstanding any other provision of this Act (other than paragraph (5.1)(b)), if an amount is received by a taxpayer in a taxation year as, on account of, in lieu of payment of or in satisfaction of, the dividend, the amount 
  (i) shall not be included in computing the taxpayer’s income for the year as income from a share of the capital stock of the corporation, and 
  (ii) is deemed to be a capital gain of the taxpayer from the disposition of capital property in the year. 
  
  ### Deemed date of election
  
  (1.1) Where at any particular time a dividend has become payable by a mutual fund corporation to shareholders of any class of shares of its capital stock and subsection 131(1) would have applied to the dividend except that the election referred to in that subsection was not made on or before the day on or before which the election was required by that subsection to be made, the election shall be deemed to have been made at the particular time or on the first day on which any part of the dividend was paid, whichever is the earlier, if 
  (a) the election is thereafter made in prescribed manner and prescribed form; 
  (b) an estimate of the penalty in respect of the election is paid by the corporation when the election is made; and 
  (c) the directors or other person or persons legally entitled to administer the affairs of the corporation have, before the time the election is made, authorized the election to be made. 
  
  ### Request to make election
  
  (1.2) The Minister may at any time, by written request served personally or by registered mail, request that an election referred to in paragraph 131(1.1)(a) be made by a mutual fund corporation and where the mutual fund corporation on which such a request is served does not comply therewith within 90 days after service of the request, subsection 131(1.1) does not apply to such an election made thereafter by it. 
  
  ### Penalty
  
  (1.3) For the purposes of this section, the penalty in respect of an election referred to in paragraph 131(1.1)(b) is an amount equal to the lesser of 
  (a) 1% per annum of the amount of the dividend referred to in the election for each month or part of a month during the period commencing with the time that the dividend became payable, or the first day on which any part of the dividend was paid if that day is earlier, and ending with the day on which the election was made, and 
  (b) the product obtained when $500 is multiplied by the proportion that the number of months or parts of months during the period referred to in paragraph 131(1.3)(a) bears to 12. 
  
  ### Assessment and payment of penalty
  
  (1.4) The Minister shall, with all due dispatch, examine each election referred to in paragraph 131(1.1)(a), assess the penalty payable and send a notice of assessment to the mutual fund corporation and the corporation shall pay forthwith to the Receiver General, the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  (1.5) to (1.9)  [Repealed, 2013, c. 34, s. 277]  
  
  ### Capital gains refund to mutual fund corporation
  
  (2) Where a corporation was, throughout a taxation year, a mutual fund corporation and a return of its income for the year has been made within 3 years from the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year, refund an amount (in this subsection referred to as its “capital gains refund” for the year) equal to the lesser of 
  (i) the total of 
  (A) 14% of the total of 
  (I) all capital gains dividends paid by the corporation in the period commencing 60 days after the beginning of the year and ending 60 days after the end of the year, and 
  (II) its capital gains redemptions for the year, and 
  (B) the amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the corporation’s capital gains refund for the year and preceding taxation years and the percentages applicable in determining the corporation’s refundable capital gains tax on hand at the end of the year, and 
  (ii) the corporation’s refundable capital gains tax on hand at the end of the year; and 
  (b) shall, with all due dispatch, make that capital gains refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a). 
  
  ### Application to other liability
  
  (3) Instead of making a refund that might otherwise be made under subsection 131(2), the Minister may, where the corporation is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the corporation of that action. 
  
  ### Interest on capital gains refund
  
  (3.1) Where a capital gains refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of 
  (a) the day that is 120 days after the end of the year, and 
  (b) the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed, and ending on the day the refund is paid or applied. 
  
  ### Excess interest on capital gains refund
  
  (3.2) Where at any particular time interest has been paid to, or applied to a liability of, a corporation under subsection 131(3.1) in respect of a capital gains refund and it is determined at a subsequent time that the capital gains refund was less than that in respect of which interest was so paid or applied, 
  (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the capital gains refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time; 
  (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and 
  (c) the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  
  ### Application of s. 84
  
  (4) Section 84 does not apply to deem a dividend to have been paid by a corporation to any of its shareholders, or to deem any of the shareholders of a corporation to have received a dividend on any shares of the capital stock of the corporation, if at the time the dividend would, but for this subsection, be deemed by that section to have been so paid or received, as the case may be, the corporation was a mutual fund corporation. 
  
  ### Sections not applicable
  
  (4.1) Sections 51, 85, 85.1, 86 and 87 do not apply to a taxpayer that holds a share (in this subsection referred to as the 
  *old share*) of a class of shares, that is recognized under securities legislation as or as part of an investment fund, of a mutual fund corporation if the taxpayer exchanges or otherwise disposes of the old share for another share (in this subsection referred to as the 
  *new share*) of a mutual fund corporation, unless  
  (a) if the exchange or disposition occurs in the course of a transaction, event or series of transactions or events described in subsections 86(1) or 87(1), 
  (i) all shares of the class (determined without reference to subsection 248(6)) that includes the old share at the time of the exchange or disposition are exchanged for shares of the class that includes the new share, 
  (ii) the old share and the new share derive their value in the same proportion from the same property or group of properties, and 
  (iii) the transaction, event or series was undertaken solely for bona fide purposes and not to cause this paragraph to apply; or  
  (b) if the old share and the new share are shares of the same class (determined without reference to subsection 248(6)) of shares of the same mutual fund corporation, 
  (i) the old share and the new share derive their value in the same proportion from the same property or group of properties held by the corporation that is allocated to that class, and 
  (ii) that class is recognized under securities legislation as or as part of a single investment fund. 
  
  ### Dividend refund to mutual fund corporation
  
  (5) A corporation that was a mutual fund corporation throughout a taxation year 
  (a) is deemed for the purposes of paragraph 87(2)(aa) and section 129 to have been a private corporation throughout the year, except that its non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) at the end of the year shall be determined without reference to paragraph (a) of that definition; and  
  (b) where it was not an investment corporation throughout the year, is deemed for the purposes of Part IV to have been a private corporation throughout the year except that, in applying subsection 186(1) to the corporation in respect of the year, that subsection shall be read without reference to paragraph 186(1)(b). 
  
  ### TCP gains distribution
  
  (5.1) If a mutual fund corporation elects under subsection (1) to treat a dividend as a capital gains dividend, for the purposes of this Part and Part XIII, 
  (a) each shareholder to whom the dividend is paid is deemed to receive from the corporation, at the time the dividend is paid, a TCP gains distribution equal to the lesser of the amount of the dividend and the shareholder’s pro rata portion at that time of the mutual fund corporation’s TCP gains balance; and 
  (b) where the dividend is paid to a shareholder who is a non-resident person or a partnership that is not a Canadian partnership, 
  (i) subparagraph (1)(b)(ii) does not apply in respect of the dividend, to the extent of the TCP gains distribution, and 
  (ii) the TCP gains distribution is a taxable dividend that, except for the purpose of the definition of 
  *capital gains dividend account* in subsection (6), is not a capital gains dividend.  
  
  ### Application of subsection (5.1)
  
  (5.2) Subsection (5.1) applies to a dividend paid by a mutual fund corporation in a taxation year only if more than 5% of the dividend is received by or on behalf of shareholders each of whom is a non-resident person or is a partnership that is not a Canadian partnership. 
  
  ### Definitions
  
  (6) In this section,  
  *capital gains dividend account* of a mutual fund corporation at any time means the amount, if any, by which  
  (a) the total of 
  (i) its capital gains, for all taxation years that began more than 60 days before that time, from dispositions of property after 1971 and before that time while it was a mutual fund corporation, and 
  (ii) all amounts each of which is an amount in respect of a distribution made by a trust to the corporation, at a time that is after its 2004 taxation year and at which it is a mutual fund corporation, in respect of capital gains of the trust equal to twice the amount determined by the following formula: is the amount of the distribution, and is the amount designated under subsection 104(21) by the trust in respect of the net taxable capital gains of the trust attributable to those capital gains exceeds 
  (b) the total of 
  (i) its capital losses, for all taxation years that began more than 60 days before that time, from dispositions of property after 1971 and before that time while it was a mutual fund corporation, 
  (ii) all capital gains dividends that became payable by the corporation before that time and more than 60 days after the end of the last taxation year that ended more than 60 days before that time, and 
  (iii) an amount equal to 100/14 of its capital gains refund for any taxation year throughout which it was a mutual fund corporation where the year ended more than 60 days before that time; ( compte de dividendes sur les gains en capital)   
  *capital gains redemptions* of a mutual fund corporation for a taxation year means the amount determined by the formula  is the sum of 
  (a) the total of all amounts paid by the corporation in the year on the redemption of shares of its capital stock, and 
  (b) the total of all amounts each of which is an amount equal to the fair market value of the shares of the corporation’s capital stock that were exchanged in the year for other shares of the corporation’s capital stock if 
  (i) paragraph (4.1) applies to the exchange, and 
  (ii) the amount is not included in the amount determined for paragraph (a), is the total of the fair market value at the end of the year of all the issued shares of its capital stock and the amount determined for A in respect of the corporation for the year, is 100/14 of the corporation’s refundable capital gains tax on hand at the end of the year, and is the amount determined by the formula is the amount of the fair market value at the end of the year of all the issued shares of the corporation’s capital stock, is the total of all amounts each of which is the amount of any debt owing by the corporation, or of any other obligation of the corporation to pay an amount, that was outstanding at that time, is the total of the cost amounts to the corporation at that time of all its properties, and is the amount of any money of the corporation on hand at that time; ( rachats au titre des gains en capital)   
  *non-qualifying real property* [Repealed, 1995, c. 3, s. 41]   
  *non-qualifying real property capital gains dividend account* [Repealed, 1995, c. 3, s. 41]   
  *pro rata portion*, of a shareholder at any time, of a mutual fund corporation’s TCP gains balance, in respect of a dividend paid by the mutual fund corporation on a class of shares of its capital stock, means the amount determined by the formula  is the mutual fund corporation’s TCP gains balance immediately before that time, is the amount received in respect of the dividend by the shareholder, and is the total amount of the dividend; ( partie proportionnelle)   
  *refundable capital gains tax on hand* of a mutual fund corporation at the end of a taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount in respect of that or any previous taxation year throughout which the corporation was a mutual fund corporation, equal to the least of 
  (a) 28% of its taxable income for the year, 
  (b) 28% of its taxed capital gains for the year, and 
  (c) the tax payable by it under this Part for the year determined without reference to section 123.2, and is the total of all amounts each of which is an amount in respect of any previous taxation year throughout which the corporation was a mutual fund corporation, equal to its capital gains refund for the year; ( impôt en main remboursable au titre des gains en capital)   
  *TCP gains balance*, of a mutual fund corporation at any time, means the amount, if any, by which  
  (a) the total of 
  (i) the mutual fund corporation’s capital gains from dispositions, after March 22, 2004 and at or before that time, of taxable Canadian properties, and 
  (ii) the TCP gains distributions (including those defined in section 132) received by the mutual fund corporation at or before that time exceeds 
  (b) the total of 
  (i) the mutual fund corporation’s capital losses from dispositions, after March 22, 2004 and at or before that time, of taxable Canadian properties, and 
  (ii) the total of all amounts deemed, in respect of dividends paid by the mutual fund corporation before that time, to be TCP gains distributions received by shareholders from the mutual fund corporation; ( solde des gains provenant de BCI)   
  *TCP gains distribution* means a TCP gains distribution described in subsection (5.1). (distribution de gains provenant de BCI)  
  
  ### Definition of taxed capital gains 
  
  (7) In subsection 131(6), 
  *taxed capital gains* of a taxpayer for a taxation year has the meaning assigned by subsection 130(3).  
  
  ### Meaning of mutual fund corporation 
  
  (8) Subject to subsection 131(8.1), a corporation is, for the purposes of this section, a mutual fund corporation at any time in a taxation year if, at that time, it was a prescribed labour-sponsored venture capital corporation or 
  (a) it was a Canadian corporation that was a public corporation; 
  (b) its only undertaking was 
  (i) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable), 
  (ii) the acquiring, holding, maintaining, improving, leasing or managing of any real property (or interest in real property) or of any immovable (or real right in immovables) that is capital property of the corporation, or 
  (iii) any combination of the activities described in subparagraphs 131(8)(b)(i) and 131(8)(b)(ii), and 
  (c) the issued shares of the capital stock of the corporation included shares 
  (i) having conditions attached thereto that included conditions requiring the corporation to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the shares, or fractions or parts thereof, that are fully paid, or 
  (ii) qualified in accordance with prescribed conditions relating to the redemption of the shares, and the fair market value of such of the issued shares of its capital stock as had conditions attached thereto that included such conditions or as were so qualified, as the case may be, was not less than 95% of the fair market value of all of the issued shares of the capital stock of the corporation (such fair market values being determined without regard to any voting rights attaching to shares of the capital stock of the corporation). 
  
  ### Election to be a mutual fund corporation
  
  (8.01) A corporation is deemed to be a mutual fund corporation, from the date it was incorporated until the earlier of the date the corporation meets the conditions to qualify as a mutual fund corporation under subsection (8) and December 31, 2017, if the corporation 
  (a) was incorporated after 2014 and before March 22, 2016; 
  (b) would have been a mutual fund corporation on March 22, 2016 if it could have elected on or before that date to be a public corporation under paragraph (b) of the definition 
  *public corporation* in subsection 89(1), had the conditions prescribed in paragraph 4800(1)(b) of the Income Tax Regulations been satisfied;  
  (c) on March 22, 2016, had at least one class of shares that was recognized under securities legislation as an investment fund; and 
  (d) elects to have this subsection apply in the corporation’s return of income for the corporation’s first taxation year that ends after March 21, 2016. 
  
  ### Idem
  
  (8.1) Where, at any time, it can reasonably be considered that a corporation, having regard to all the circumstances, including the terms and conditions of the shares of its capital stock, was established or is maintained primarily for the benefit of non-resident persons, the corporation shall be deemed not to be a mutual fund corporation after that time unless 
  (a) throughout the period that begins on the later of February 21, 1990 and the day of its incorporation and ends at that time, all or substantially all of its property consisted of property other than property that would be taxable Canadian property if the definition 
  *taxable Canadian property* in subsection 248(1) were read without reference to paragraph (b) of that definition; or  
  (b) it has not issued a share (other than a share issued as a stock dividend) of its capital stock after February 20, 1990 and before that time to a person who, after reasonable inquiry, it had reason to believe was non-resident, except where the share was issued to that person under an agreement in writing entered into before February 21, 1990. 
  
  ### Reduction of refundable capital gains tax on hand
  
  (9) Notwithstanding any other provision of this section, the amount determined for A in the definition refundable capital gains tax on hand in subsection 131(6) in respect of the 1972 or 1973 taxation year of a corporation is,  
  (a) in respect of its 1972 taxation year, 91.25% of the amount so determined; and 
  (b) in respect of its 1973 taxation year, the total of 
  (i) 91.25% of that proportion of the amount so determined that the number of days in that portion of the year that is before 1973 is of the number of days in the whole year, and 
  (ii) 100% of that proportion of the amount so determined that the number of days in that portion of the year that is after 1972 is of the number of days in the whole year. 
  
  ### Restricted financial institution
  
  (10) Notwithstanding any other provision of this Act, a mutual fund corporation or an investment corporation that at any time would, but for this subsection, be a restricted financial institution shall, if it has so elected in prescribed manner and prescribed form before that time, be deemed not to be a restricted financial institution at that time. 
  
  ### Rules respecting prescribed labour-sponsored venture capital corporations
  
  (11) Notwithstanding any other provision of this Act, in applying this Act to a corporation that was at any time a prescribed labour-sponsored venture capital corporation, 
  (a) for the purposes of subparagraphs (a)(i) and (ii) of the definition non-eligible refundable dividend tax on hand in subsection 129(4), the amount deducted under paragraph 111(1)(b) from the corporation’s income for each taxation year ending after that time shall be deemed to be nil;  
  (b) the definition aggregate investment income in subsection 129(4) shall be read without reference to paragraph (a) of that definition in its application to taxation years that end after that time;  
  (c) notwithstanding subsection 131(4), if it so elects in its return of income under this Part for a taxation year ending after that time, subsection 84(1) applies for that year and all subsequent taxation years; 
  (d) subsection 131(5) does not apply for taxation years ending after that time; and 
  (e) the amount of the corporation’s capital dividend account at any time after that time shall be deemed to be nil. 
  
  ## Mutual Fund Trusts 
  
  ### Capital gains refund to mutual fund trust
  
  132 (1) Where a trust was, throughout a taxation year, a mutual fund trust and a return of its income for the year has been made within 3 years from the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year, refund an amount (in this subsection referred to as its “capital gains refund” for the year) equal to the lesser of 
  (i) the total of 
  (A) 16.5% of the total of the trust’s capital gains redemptions for the year, and 
  (B) the positive or negative amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the trust’s capital gains refunds for the year or any previous taxation year and the percentages applicable in determining the trust’s refundable capital gains tax on hand at the end of the year, and 
  (ii) the trust’s refundable capital gains tax on hand at the end of the year; and 
  (b) shall, with all due dispatch, make that capital gains refund after sending the notice of assessment if an application for it has been made in writing by the trust within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the trust for the year if that subsection were read without reference to paragraph 152(4)(a). 
  
  ### Application to other liability
  
  (2) Instead of making a refund that might otherwise be made under subsection 132(1) the Minister may, where the trust is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the trust of that action. 
  
  ### Interest on capital gains refund
  
  (2.1) If a capital gains refund for a taxation year is paid to, or applied to a liability of, a mutual fund trust, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is 30 days after the later of 
  (a) the day that is 90 days after the end of the year, and 
  (b) the day on which the trust’s return of income under this Part for the year was filed under section 150 and ending on the day on which the refund is paid or applied. 
  
  ### Excess interest on capital gains refund
  
  (2.2) Where at any particular time interest has been paid to, or applied to a liability of, a trust under subsection 132(2.1) in respect of a capital gains refund and it is determined at a subsequent time that the capital gains refund was less than that in respect of which interest was so paid or applied, 
  (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the capital gains refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the trust at the particular time; 
  (b) the trust shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and 
  (c) the Minister may at any time assess the trust in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  
  ### Application of s. 104(20)
  
  (3) In its application in respect of a mutual fund trust, subsection 104(20) shall be read as if the reference therein to “a dividend (other than a taxable dividend)” were read as a reference to “a capital dividend”. 
  
  ### Definitions
  
  (4) In this section,  
  *capital gains redemptions* of a mutual fund trust for a taxation year means the amount determined by the formula  is the total of all amounts each of which is the portion of an amount paid by the trust in the year on the redemption of a unit in the trust that is included in the proceeds of disposition in respect of that redemption, is the total of the fair market value at the end of the year of all the issued units of the trust and the amount determined for A in respect of the trust for the year, is 100/16.5 of the trust’s refundable capital gains tax on hand at the end of the year, is the amount determined by the formula is the amount of the fair market value at the end of the year of all the issued units of the trust, is the total of all amounts each of which is the amount of any debt owing by the trust, or of any other obligation of the trust to pay an amount, that was outstanding at that time, is the total of the cost amounts to the trust at that time of all its properties, and is the amount of any money of the trust on hand at that time, and is twice the total of all amounts each of which is an amount designated under subsection 104(21) for the year by the trust in respect of a unit of the trust redeemed by the trust at any time in the year and after December 21, 2000; ( rachats au titre des gains en capital)   
  *net asset value* has the same meaning as in National Instrument 81-102 Investment Funds, as amended from time to time, of the Canadian Securities Administrators; (valeur liquidative)   
  *pro rata portion*, of a beneficiary, of a mutual fund trust’s TCP gains balance for a taxation year, in respect of an amount designated under subsection 104(21) by the mutual fund trust for the taxation year, means the amount determined by the formula  is the mutual fund trust’s TCP gains balance for the taxation year, is the amount the mutual fund trust has designated under that subsection in respect of the beneficiary for the taxation year, and is the total of all amounts designated under that subsection by the mutual fund trust for the taxation year; ( partie proportionnelle)   
  *refundable capital gains tax on hand* of a mutual fund trust at the end of a taxation year means the amount determined by the formula  is the total of all amounts each of which is an amount in respect of that or any previous taxation year throughout which the trust was a mutual fund trust, equal to the least of 
  (a) the highest individual percentage for the year multiplied by its taxable income for the year, 
  (b) the highest individual percentage for the year multiplied by its taxed capital gains for the year, and 
  (c) where the taxation year ended after May 6, 1974, the tax payable under this Part by it for the year, and is the total of all amounts each of which is an amount in respect of any previous taxation year throughout which the trust was a mutual fund trust, equal to its capital gains refund for the year; ( impôt en main remboursable au titre des gains en capital)   
  *TCP gains balance*, of a mutual fund trust for a particular taxation year, means the amount, if any, by which  
  (a) the total of 
  (i) the mutual fund trust’s capital gains from dispositions, after March 22, 2004 and at or before the end of the particular taxation year, of taxable Canadian properties, and 
  (ii) the TCP gains distributions (including those defined in section 131) received by the mutual fund trust at or before the end of the particular taxation year exceeds 
  (b) the total of 
  (i) the mutual fund trust’s capital losses from dispositions, after March 22, 2004 and at or before the end of the particular taxation year, of taxable Canadian properties, and 
  (ii) the total of all amounts deemed, in respect of amounts designated by the mutual fund trust under subsection 104(21) for taxation years that preceded the particular taxation year, to be TCP gains distributions received by beneficiaries under the mutual fund trust; ( solde des gains provenant de BCI)   
  *TCP gains distribution* means a TCP gains distribution described in subsection (5.1). (distribution de gains provenant de BCI)  
  
  ### Definition of taxed capital gains 
  
  (5) In subsection 132(4), 
  *taxed capital gains* of a taxpayer for a taxation year has the meaning assigned by subsection 130(3).  
  
  ### TCP gains distribution
  
  (5.1) If a mutual fund trust designates an amount under subsection 104(21) for a taxation year of the trust in respect of a beneficiary under the trust, for the purposes of this Part and Part XIII, 
  (a) the beneficiary is deemed to have received from the mutual fund trust a TCP gains distribution equal to the lesser of 
  (i) twice the amount designated, and 
  (ii) the beneficiary’s pro rata portion of the mutual fund trust’s TCP gains balance for the taxation year; and 
  (b) where the beneficiary is a non-resident person or a partnership that is not a Canadian partnership, 
  (i) the amount designated is deemed by subsection 104(21) to be a taxable capital gain of the beneficiary only to the extent that it exceeds one half of the TCP gains distribution, and 
  (ii) one half of the TCP gains distribution is to be added to the amount otherwise included under subsection 104(13) in computing the income of the beneficiary, and is deemed to be an amount to which paragraph 212(1)(c) applies. 
  
  ### Application of subsection (5.1)
  
  (5.2) Subsection (5.1) applies to an amount designated under subsection 104(21) by a mutual fund trust for a taxation year only if more than 5% of the total of all amounts each of which is an amount designated under that subsection by the mutual fund trust for the taxation year was designated in respect of beneficiaries under the mutual fund trust each of whom is a non-resident person or is a partnership that is not a Canadian partnership. 
  
  ### Allocation to redeemers
  
  (5.3) If a trust that is a mutual fund trust throughout a taxation year paid or made payable, at any time in the taxation year, to a beneficiary an amount on a redemption by that beneficiary of a unit of the trust (in this subsection and subsection (5.31) referred to as the “allocated amount”) and the beneficiary’s proceeds from the disposition of that unit do not include the allocated amount, in computing its income for the taxation year no deduction may be made by the trust in respect of 
  (a) the portion of the allocated amount that would be, without reference to subsection 104(6), an amount paid out of the income (other than taxable capital gains) of the trust; and 
  (b) the portion of the allocated amount determined by the formula is the portion of the allocated amount that would be, without reference to subsection 104(6), an amount paid out of the taxable capital gains of the trust, is the beneficiary’s proceeds from the disposition of the unit on the redemption, is the allocated amount, and is the amount determined by the trustee to be the beneficiary’s cost amount of that unit, using reasonable efforts to obtain the information required to determine the cost amount. 
  
  ### Allocations by ETFs
  
  (5.31) If in a taxation year referred to in subsection (5.3) 
  (a) all of the units offered in the taxation year by a mutual fund trust are listed on a designated stock exchange in Canada and are in continuous distribution (in this subsection referred to as “ETF units”), then paragraph 132(5.3)(b) does not apply and, in computing its income for the taxation year, no deduction may be made by the trust in respect of the amount determined by the formula is the portion of the total of all allocated amounts for the taxation year in respect of redemptions of ETF units by beneficiaries of the trust during that year that would be, without reference to subsection 104(6), amounts paid out of the taxable capital gains of the trust, is the lesser of 
  (i) the total amount paid for redemptions of the ETF units in the taxation year, and 
  (ii) the greater of 
  (A) the amount determined for C, and 
  (B) the net asset value of the trust at the end of the previous taxation year, is the net asset value of the trust at the end of the taxation year, and is the amount that would be, without reference to subsection 104(6), the trust’s net taxable capital gains (as determined under subsection 104(21.3)) for the taxation year; or 
  (b) units offered by a mutual fund trust include units that are not ETF units (in this paragraph referred to as “non-ETF units”) and units that are ETF units, then 
  (i) in respect of redemptions of ETF units, paragraph (5.3)(b) does not apply and paragraph (a) applies, except that 
  (A) the description of C is to be read as “is the portion of the net asset value of the trust at the end of the taxation year that is referable to the ETF units,”, 
  (B) clause (ii)(B) of the description of B shall be read as “the portion of the net asset value of the trust at the end of the previous taxation year that is referable to the ETF units,”, and 
  (C) the amount determined for D shall be the amount determined by the formula is the portion of the net asset value of the trust at the end of the taxation year that is referable to the ETF units, is the net asset value of the trust at the end of the taxation year, and is the amount that would be, without reference to subsection 104(6), the trust’s net taxable capital gains (as determined under subsection 104(21.3)) for the taxation year; and 
  (ii) in respect of redemptions of non-ETF units, in addition to the limitation applicable under paragraph (5.3)(b), the total amount of the deductions that may be claimed by the trust for the taxation year for the portion of the allocated amounts described in the description of A in paragraph (5.3)(b) in respect of non-ETF units shall not exceed the amount determined by the formula is the portion of the net asset value of the trust at the end of the taxation year that is referable to the non-ETF units, is the net asset value of the trust at the end of the taxation year, and is the amount that would be, without reference to subsection 104(6), the trust’s net taxable capital gains (as determined under subsection 104(21.3)) for the taxation year. 
  
  ### Meaning of mutual fund trust 
  
  (6) Subject to subsection 132(7), for the purposes of this section, a trust is a mutual fund trust at any time if at that time 
  (a) it was a unit trust resident in Canada, 
  (b) its only undertaking was 
  (i) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable), 
  (ii) the acquiring, holding, maintaining, improving, leasing or managing of any real property (or interest in real property) or of any immovable (or real right in immovables) that is capital property of the trust, or 
  (iii) any combination of the activities described in subparagraphs 132(6)(b)(i) and 132(6)(b)(ii), and 
  (c) it complied with prescribed conditions. 
  
  ### Election to be mutual fund
  
  (6.1) Where a trust becomes a mutual fund trust at any particular time before the 91st day after the end of its first taxation year, and the trust so elects in its return of income for that year, the trust is deemed to have been a mutual fund trust from the beginning of that year until the particular time. 
  
  ### Retention of status as mutual fund trust
  
  (6.2) A trust is deemed to be a mutual fund trust throughout a calendar year where 
  (a) at any time in the year, the trust would, if this section were read without reference to this subsection, have ceased to be a mutual fund trust 
  (i) because the condition described in paragraph 108(2)(a) ceased to be satisfied, 
  (ii) because of the application of paragraph (6)(c), or 
  (iii) because the trust ceased to exist; 
  (b) the trust was a mutual fund trust at the beginning of the year; and 
  (c) the trust would, throughout the portion of the year throughout which it was in existence, have been a mutual fund trust if 
  (i) in the case where the condition described in paragraph 108(2)(a) was satisfied at any time in the year, that condition were satisfied throughout the year, 
  (ii) subsection (6) were read without reference to paragraph (c) of that subsection, and 
  (iii) this section were read without reference to this subsection. 
  
  ### Idem
  
  (7) Where, at any time, it can reasonably be considered that a trust, having regard to all the circumstances, including the terms and conditions of the units of the trust, was established or is maintained primarily for the benefit of non-resident persons, the trust shall be deemed not to be a mutual fund trust after that time unless 
  (a) at that time, all or substantially all of its property consisted of property other than property that would be taxable Canadian property if the definition 
  *taxable Canadian property* in subsection 248(1) were read without reference to paragraph (b) of that definition; or  
  (b) it has not issued any unit (other than a unit issued to a person as a payment, or in satisfaction of the person’s right to enforce payment, of an amount out of the trust’s income determined before the application of subsection 104(6), or out of the trust’s capital gains) of the trust after February 20, 1990 and before that time to a person who, after reasonable inquiry, it had reason to believe was non-resident, except where the unit was issued to that person under an agreement in writing entered into before February 21, 1990. 
  
  ### Amounts designated by mutual fund trust
  
  132.1 (1) Where a trust in its return of income under this Part for a taxation year throughout which it was a mutual fund trust designates an amount in respect of a particular unit of the trust owned by a taxpayer at any time in the year equal to the total of 
  (a) such amount as the trust may determine in respect of the particular unit for the year not exceeding the amount, if any, by which 
  (i) the total of all amounts that were determined by the trust under subsection 104(16) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, for taxation years of the trust commencing before 1988  exceeds 
  (ii) the total of all amounts determined by the trust under this paragraph for the year or a preceding taxation year in respect of all units of the trust, other than amounts determined in respect of the particular unit for the year under this paragraph, and 
  (b) such amount as the trust may determine in respect of the particular unit for the year not exceeding the amount, if any, by which 
  (i) the total of all amounts described in subparagraph 53(2)(h)(i.1) that became payable by the trust after 1987 and before the year exceeds 
  (ii) the total of all amounts determined by the trust under this paragraph for the year or a preceding taxation year in respect of all units of the trust, other than amounts determined in respect of the particular unit for the year under this paragraph, the amount so designated shall 
  (c) subject to subsection 132.1(3), be deductible in computing the income of the trust for the year, and 
  (d) be included in computing the income of the taxpayer for the taxpayer’s taxation year in which the year of the trust ends, except that where the particular unit was owned by two or more taxpayers during the year, such part of the amount so designated as the trust may determine shall be included in computing the income of each such taxpayer for the taxpayer’s taxation year in which the year of the trust ends if the total of the parts so determined is equal to the amount so designated. 
  
  ### Adjusted cost base of unit where designation made
  
  (2) In computing, at any time in a taxation year of a taxpayer, the adjusted cost base to the taxpayer of a unit in a mutual fund trust, there shall be added that part of the amount included under subsection 132.1(1) in computing the taxpayer’s income that is reasonably attributable to the amount determined under paragraph 132.1(1)(b) by the trust for its taxation year ending in the year in respect of the unit owned by the taxpayer. 
  
  ### Limitation on current year deduction
  
  (3) The total of amounts deductible by reason of paragraph 132.1(1)(c) in computing the income of a trust for a taxation year shall not exceed the amount that would be the income of the trust for the year if no deductions were made under this section and subsection 104(6). 
  
  ### Carryover of excess
  
  (4) The amount, if any, by which the total of all amounts each of which is an amount designated for the year under subsection 132.1(1) exceeds the amount deductible under this section in computing the income of the trust for the year, shall, for the purposes of paragraph 132.1(1)(c) and subsection 132.1(3), be deemed designated under subsection 132.1(1) by the trust for its immediately following taxation year. 
  
  ### Where designation has no effect
  
  (5) Where it is reasonable to conclude that an amount determined by a mutual fund trust 
  (a) under paragraph 132.1(1)(a) or 132.1(1)(b) for a taxation year of the trust in respect of a unit owned at any time in the year by a taxpayer who was a person exempt from tax under this Part by reason of subsection 149(1), or 
  (b) under paragraph 132.1(1)(d) for the year in respect of the amount designated under subsection 132.1(1) for the year in respect of the unit differs from the amount that would have been so determined for the year in respect of the taxpayer had the taxpayer not been a person exempt from tax under this Part by reason of subsection 149(1), the amount designated for the year in respect of the unit under subsection 132.1(1) shall have no effect for the purposes of paragraph 132.1(1)(c). 
  
  ### Taxation year of mutual fund trust
  
  132.11 (1) Notwithstanding any other provision of this Act, where a trust (other than a prescribed trust) that was a mutual fund trust on the 74th day after the end of a particular calendar year so elects in writing filed with the Minister with the trust’s return of income for the trust’s taxation year that includes December 15 of the particular year, 
  (a) the trust’s taxation year that began before December 16 of the particular year and, but for this paragraph, would end at the end of the particular year (or, where the first taxation year of the trust began after December 15 of the preceding calendar year and no return of income was filed for a taxation year of the trust that ended at the end of the preceding calendar year, at the end of the preceding calendar year) is deemed to end at the end of December 15 of the particular year; 
  (b) if the trust’s taxation year ends on December 15 because of paragraph (a), subject to subsection (1.1), each subsequent taxation year of the trust is deemed to be the period that begins at the beginning of December 16 of a calendar year and that ends at the end of December 15 of the following calendar year or at any earlier time that is determined under paragraph 128.1(4)(a), 132.2(3)(b), 142.6(1)(a) or 249(4)(a); and 
  (c) each fiscal period of the trust that begins in a taxation year of the trust that ends on December 15 because of paragraph (a) or that ends in a subsequent taxation year of the trust shall end no later than the end of the year or the subsequent year, as the case may be. 
  
  ### Revocation of election
  
  (1.1) Where a particular taxation year of a trust ends on December 15 of a calendar year because of an election made under paragraph (1)(a), the trust applies to the Minister in writing before December 15 of that calendar year (or before a later time that is acceptable to the Minister) to have this subsection apply to the trust, with the concurrence of the Minister 
  (a) the trust’s taxation year following the particular taxation year is deemed to begin immediately after the end of the particular taxation year and end at the end of that calendar year; and 
  (b) each subsequent taxation year of the trust is deemed to be determined as if that election had not been made. 
  
  ### Electing trust’s share of partnership income and losses
  
  (2) Where a trust is a member of a partnership a fiscal period of which ends in a calendar year after December 15 of the year and a particular taxation year of the trust ends on December 15 of the year because of subsection (1), each amount otherwise determined under paragraph 96(1)(f) or (g) to be the trust’s income or loss for a subsequent taxation year of the trust is deemed to be the trust’s income or loss determined under paragraph 96(1)(f) or (g) for the particular year and not for the subsequent year. 
  
  ### Electing trust’s income from other trusts
  
  (3) Where a particular trust is a beneficiary under another trust a taxation year of which (in this subsection referred to as the “other year”) ends in a calendar year after December 15 of the year and a particular taxation year of the trust ends on December 15 of the year because of subsection (1), each amount determined or designated under subsection 104(13), (19), (21), (22) or (29) for the other year that would otherwise be included, or taken into account, in computing the income of the particular trust for a subsequent taxation year of the trust shall 
  (a) be included, or taken into account, in computing the particular trust’s income for the particular year; and 
  (b) not be included, or taken into account, in computing the particular trust’s income for the subsequent year. 
  
  ### Amounts paid or payable to beneficiaries
  
  (4) Notwithstanding subsection 104(24), for the purposes of subsections (5) and (6) and 104(6) and (13) and paragraph (i) of the definition 
  *disposition* in subsection 248(1) each amount that is paid, or that becomes payable, by a trust to a beneficiary after the end of a particular taxation year of the trust that ends on December 15 of a calendar year because of subsection (1) and before the end of that calendar year, is deemed to have been paid or to have become payable, as the case may be, to the beneficiary at the end of the particular year and not at any other time.  
  
  ### Special rules where change in status of beneficiary
  
  (5) Where an amount is deemed by subsection (4) to have been paid or to have become payable at the end of December 15 of a calendar year by a trust to a beneficiary who was not a beneficiary under the trust at that time, 
  (a) notwithstanding any other provision of this Act, where the beneficiary did not exist at that time, except for the purpose of this paragraph, the first taxation year of the beneficiary is deemed to include the period that begins at that time and ends immediately before the beginning of the first taxation year of the beneficiary; 
  (b) the beneficiary is deemed to exist throughout the period described in paragraph (a); and 
  (c) where the beneficiary was not a beneficiary under the trust at that time, the beneficiary is deemed to have been a beneficiary under the trust at that time. 
  
  ### Additional income of electing trust
  
  (6) Where a particular amount is designated under this subsection by a trust in its return of income for a particular taxation year that ends on December 15 because of subsection (1) or throughout which the trust was a mutual fund trust and the trust does not designate an amount under subsection 104(13.1) or (13.2) for the particular year, 
  (a) the particular amount shall be added in computing its income for the particular year; and 
  (b) for the purposes of subsections 104(6) and (13), each portion of the particular amount that is allocated under this paragraph to a beneficiary under the trust in the trust’s return of income for the particular year in respect of an amount paid or payable to the beneficiary in the particular year shall be considered to be additional income of the trust for the particular year (determined without reference to subsection 104(6)) that was paid or payable, as the case may be, to the beneficiary at the end of the particular year. 
  (c)  [Repealed, 2001, c. 17, s. 130(4)]  
  
  ### Deduction
  
  (7) Subject to subsection (8), the lesser of the amount designated under subsection (6) by a trust for a taxation year and the total of all amounts each of which is allocated by the trust under paragraph (6)(b) in respect of the year shall be deducted in computing the trust’s income for the following taxation year. 
  
  ### Anti-avoidance
  
  (8) Subsection (7) does not apply in computing the income of a trust for a taxation year where it is reasonable to consider that the designation under subsection (6) for the preceding taxation year was part of a series of transactions or events that includes a change in the composition of beneficiaries under the trust. 
  
  ### Definitions re qualifying exchange of mutual funds
  
  132.2 (1) The following definitions apply in this section.  
  *first post-exchange year*, of a fund in respect of a qualifying exchange, means the taxation year of the fund that begins immediately after the acquisition time. (première année suivant l’échange)   
  *qualifying exchange* means a transfer at any time (in this section referred to as the “transfer time”) if  
  (a) the transfer is a transfer of all or substantially all of the property (including an exchange of a unit of a mutual fund trust for another unit of that trust) of 
  (i) a mutual fund corporation (other than a SIFT wind-up corporation) to one or more mutual fund trusts, or 
  (ii) a mutual fund trust to a mutual fund trust; 
  (b) all or substantially all of the shares issued by the mutual fund corporation referred to in subparagraph (a)(i) or the first mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as the “transferor”) and outstanding immediately before the transfer time are within 60 days after the transfer time disposed of to the transferor; 
  (c) no person disposing of shares of the transferor to the transferor within that 60-day period (otherwise than pursuant to the exercise of a statutory right of dissent) receives any consideration for the shares other than units of one or more mutual fund trusts referred to in subparagraph (a)(i) or the second mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as a “transferee” and, together with the transferor, as the “funds”); 
  (d) if property of the transferor has been transferred to more than one transferee, 
  (i) all shares of each class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are disposed of to the transferor within 60 days after the transfer time, and 
  (ii) the units received in consideration for a particular share of a class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are units of the transferee to which all or substantially all of the assets that were allocated to that investment fund immediately before the transfer time were transferred; and 
  (e) the funds jointly so elect, by filing a prescribed form with the Minister on or before the election’s due date. ( échange admissible)   
  *share* means a share of the capital stock of a mutual fund corporation and a unit of a mutual fund trust. (action)  
  
  ### Timing
  
  (2) In respect of a qualifying exchange, a time referred to in the following list immediately follows the time that precedes it in the list 
  (a) the transfer time; 
  (b) the first intervening time; 
  (c) the acquisition time; 
  (d) the beginning of the funds’ first post-exchange years; 
  (e) the depreciables disposition time; 
  (f) the second intervening time; and 
  (g) the depreciables acquisition time. 
  
  ### General
  
  (3) In respect of a qualifying exchange, 
  (a) each property of a fund, other than property disposed of by the transferor to a transferee at the transfer time and depreciable property, is deemed to have been disposed of, and to have been reacquired by the fund, at the first intervening time, for an amount equal to the lesser of 
  (i) the fair market value of the property at the transfer time, and 
  (ii) the greater of 
  (A) its cost amount, and 
  (B) the amount that the fund designates in respect of the property in a notification to the Minister accompanying the election in respect of the qualifying exchange; 
  (a.1) in respect of each property transferred by the transferor to a transferee, including an exchange of a unit of a transferee for another unit of that transferee, the transferor is deemed to have disposed of the property to the transferee, and to have received units of the transferee as consideration for the disposition of the property, at the transfer time; 
  (b) subject to paragraph (l), the last taxation years of the funds that began before the transfer time are deemed to have ended at the acquisition time, and their first post-exchange years are deemed to have begun immediately after those last taxation years ended; 
  (c) each depreciable property of a fund (other than property to which subsection (5) applies and property to which paragraph (d) would, if this Act were read without reference to this paragraph, apply) is deemed to have been disposed of, and to have been reacquired, by the fund at the second intervening time for an amount equal to the lesser of 
  (i) the fair market value of the property at the depreciables disposition time, and 
  (ii) the greater of 
  (A) the lesser of its capital cost and its cost amount to the disposing fund at the depreciables disposition time, and 
  (B) the amount that the fund designates in respect of the property in a notification to the Minister accompanying the election in respect of the qualifying exchange; 
  (d) if at the second intervening time the undepreciated capital cost to a fund of depreciable property of a prescribed class exceeds the fair market value of all the property of that class, the excess is to be deducted in computing the fund’s income for the taxation year that includes the transfer time and is deemed to have been allowed in respect of property of that class under regulations made for the purpose of paragraph 20(1)(a); 
  (e) except as provided in paragraph (m), the transferor’s cost of any particular property received by the transferor from a transferee as consideration for the disposition of the property is deemed to be 
  (i) nil, if the particular property is a unit of the transferee, and 
  (ii) the particular property’s fair market value at the transfer time, in any other case; 
  (f) the transferor’s proceeds of disposition of any units of a transferee that were disposed of by the transferor at any particular time that is within 60 days after the transfer time in exchange for shares of the transferor, are deemed to be equal to the cost amount of the units to the transferor immediately before the particular time; 
  (g) if, at any particular time that is within 60 days after the transfer time, a taxpayer disposes of shares of the transferor to the transferor in exchange for units of a transferee 
  (i) the taxpayer’s proceeds of disposition of the shares and the cost to the taxpayer of the units are deemed to be equal to the cost amount to the taxpayer of the shares immediately before the particular time, 
  (ii) for the purposes of applying section 116 in respect of the disposition, the shares are deemed to be excluded property of the taxpayer, 
  (iii) where the qualifying exchange occurs after 2004, for the purposes of applying section 218.3 in respect of that exchange, the payment or crediting of the units to the taxpayer by the transferor is deemed not to be an assessable distribution, 
  (iv) where all of the taxpayer’s shares of the transferor have been so disposed of, for the purpose of applying section 39.1 in respect of the taxpayer after that disposition, the transferee is deemed to be the same entity as the transferor, 
  (v) for the purpose of the definition 
  *designated beneficiary* in section 210, the units are deemed not to have been held at any time by the transferor, and  
  (vi) if the taxpayer is at the particular time affiliated with the transferor or the transferee, 
  (A) those units are deemed not to be identical to any other units of the transferee, 
  (B) if the taxpayer is the transferee, and the units cease to exist when the taxpayer acquires them (or, for greater certainty, when the taxpayer would but for that cessation have acquired them), the taxpayer is deemed 
  (I) to have acquired those units at the particular time, and 
  (II) to have disposed of those units immediately after the particular time for proceeds of disposition equal to the cost amount to the taxpayer of those units at the particular time, and 
  (C) in any other case, for the purpose of computing any gain or loss of the taxpayer from the taxpayer’s first disposition, after the particular time, of each of those units, 
  (I) if that disposition is a renunciation or surrender of the unit by the taxpayer for no consideration, and is not in favour of any person other than the transferee, the taxpayer’s proceeds of disposition of that unit are deemed to be equal to that unit’s cost amount to the taxpayer immediately before that disposition, and 
  (II) if subclause (I) does not apply, the taxpayer’s proceeds of disposition of that unit are deemed to be equal to the greater of that unit’s fair market value and its cost amount to the taxpayer immediately before that disposition; 
  (h) where a share to which paragraph (g) applies would, if this Act were read without reference to this paragraph, cease to be a qualified investment (within the meaning assigned by subsection 146(1), 146.1(1), 146.3(1) or 146.4(1), section 204 or subsection 207.01(1)) as a consequence of the qualifying exchange, the share is deemed to be a qualified investment until the earlier of the day that is 60 days after the day that includes the transfer time and the time at which it is disposed of in accordance with paragraph (g);  
  (i) there shall be added to the amount determined under the description of A in the definition refundable capital gains tax on hand in subsection 132(4) in respect of a transferee for its taxation years that begin after the transfer time the amount determined by the formula  is the transferor’s refundable capital gains tax on hand (within the meaning assigned by subsection 131(6) or 132(4), as the case may be) at the end of its taxation year that includes the transfer time,  is the transferor’s capital gains refund (within the meaning assigned by paragraph 131(2)(a) or 132(1)(a), as the case may be) for that year,  is the total fair market value of property of the transferor disposed of to, net of liabilities assumed by, the transferee on the qualifying exchange, and is the total fair market value of property of the transferor disposed of to, net of liabilities assumed by, all transferees on the qualifying exchange; 
  (j) no amount in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss of a fund for a taxation year that began before the transfer time is deductible in computing the taxable income of any of the funds for a taxation year that begins after the transfer time; 
  (k) if the transferor is a mutual fund trust, for the purposes of subsections 132.1(1) and (3) to (5), the transferee is deemed after the transfer time to be the same mutual fund trust as, and a continuation of, the transferor; 
  (l) if the transferor is a mutual fund corporation 
  (i) for the purpose of subsection 131(4) but, for greater certainty, without having any effect on the computation of any amount determined under this Part, the transferor is deemed in respect of any share disposed of in accordance with paragraph (g) to be a mutual fund corporation at the time of the disposition, 
  (ii) for the purpose of Part I.3 but, for greater certainty, without having any effect on the computation of any amount determined under this Part, the transferor’s taxation year that, if this Act were read without reference to this paragraph, would have included the transfer time is deemed to have ended immediately before the transfer time, and 
  (iii) for the purpose of subsection 131(1), a dividend that is made payable at a particular time after the acquisition time but within the 60-day period commencing immediately after the transfer time, and paid before the end of that period, by the transferor to taxpayers that held shares of a class of shares of the transferor, that was recognized under securities legislation as or as part of an investment fund, immediately before the transfer time is deemed to have become payable at the first intervening time if the transferor so elects in respect of the full amount of the dividend in prescribed manner on or before the day on which any part of the dividend was paid; 
  (m) for the purpose of determining the funds’ capital gains redemptions (as defined in subsection 131(6) or 132(4), as the case may be), for their taxation years that include the transfer time, 
  (i) the total of the cost amounts to the transferor of all its properties at the end of the year is deemed to be the total of all amounts each of which is 
  (A) the transferor’s proceeds of disposition of a property that was transferred to a transferee on the qualifying exchange, or 
  (B) the cost amount to the transferor at the end of the year of a property that was not transferred on the qualifying exchange, 
  (ii) a transferee is deemed not to have acquired any property that was transferred to it on the qualifying exchange, and 
  (iii) the amounts determined under the descriptions of A and B in the definition capital gains redemptions shall be determined as if the year ended immediately before the transfer time;  
  (n) except as provided in subparagraph (l)(i), the transferor is, notwithstanding subsections 131(8) and (8.01) and 132(6), deemed to be neither a mutual fund corporation nor a mutual fund trust for taxation years that begin after the transfer time; and 
  (o) for the purpose of applying subsection 132(5.31) to a fund for a taxation year that includes the transfer time, the following amounts are to be determined as if the taxation year ended immediately before the transfer time: 
  (i) if paragraph 132(5.31)(a) applies, the amounts determined under the descriptions of B, C and D in that paragraph, and 
  (ii) if paragraph 132(5.31)(b) applies, 
  (A) the amounts determined for B and C in paragraph 132(5.31)(a), for the purpose of subparagraph 132(5.31)(b)(i), 
  (B) the amounts determined for D, E, F and G in clause 132(5.31)(b)(i)(C), and 
  (C) the amounts determined for H, I and J in subparagraph 132(5.31)(b)(ii). 
  
  ### Qualifying exchange — non-depreciable property
  
  (4) If a transferor transfers a property, other than a depreciable property, to a transferee in a qualifying exchange, 
  (a) the transferee is deemed to have acquired the property at the acquisition time and not to have acquired the property at the transfer time; 
  (b) the transferor’s proceeds of disposition of the property and the transferee’s cost of the property are deemed to be the lesser of 
  (i) the fair market value of the property at the transfer time, and 
  (ii) the greatest of 
  (A) the cost amount to the transferor of the property at the transfer time, 
  (B) the amount that the transferor and the transferee agree on in respect of the property in their election, and 
  (C) the fair market value at the transfer time of the consideration (other than units of the transferee) received by the transferor for the disposition of the property; and 
  (c) if the property is a unit of the transferee and the unit ceases to exist when the transferee acquires it (or, for greater certainty, when the transferee would but for that cessation have acquired it), paragraphs (a) and (b) do not apply to the transferee. 
  
  ### Depreciable property
  
  (5) If a transferor transfers a depreciable property to a transferee in a qualifying exchange, 
  (a) the transferor is deemed to have disposed of the property at the depreciables disposition time, and not to have disposed of the property at the transfer time; 
  (b) the transferee is deemed to have acquired the property at the depreciables acquisition time, and not to have acquired the property at the transfer time; 
  (c) the transferor’s proceeds of disposition of the property and the transferee’s cost of the property are deemed to be the lesser of 
  (i) the fair market value of the property at the transfer time, and 
  (ii) the greatest of 
  (A) the lesser of its capital cost and its cost amount to the transferor immediately before the depreciables disposition time, 
  (B) the amount that the transferor and the transferee agree on in respect of the property in their election, and 
  (C) the fair market value at the transfer time of the consideration (other than units of the transferee) received by the transferor for the disposition of the property; 
  (d) where the capital cost of the property to the transferor exceeds the transferor’s proceeds of disposition of the property under paragraph (c), for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a), 
  (i) the property’s capital cost to the transferee is deemed to be the amount that was its capital cost to the transferor, and 
  (ii) the excess is deemed to have been allowed to the transferee in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years ending before the transfer time; and 
  (e) where two or more depreciable properties of a prescribed class are disposed of by the transferor to the transferee in the same qualifying exchange, paragraph (c) applies as if each property so disposed of had been separately disposed of in the order designated by the transferor at the time of making the election in respect of the qualifying exchange or, if the transferor does not so designate any such order, in the order designated by the Minister. 
  
  ### Due date
  
  (6) The due date of an election referred to in paragraph (c) of the definition 
  *qualifying exchange* in subsection (1) is  
  (a) the day that is six months after the day that includes the transfer time; and 
  (b) on joint application by the funds, any later day that the Minister accepts. 
  
  ### Amendment or revocation of election
  
  (7) The Minister may, on joint application by the funds on or before the due date of an election referred to in paragraph (e) of the definition qualifying exchange in subsection (1), grant permission to amend or revoke the election.  
  
  ## Non-Resident-Owned Investment Corporations 
  
  ### Computation of income
  
  133 (1) In computing the income of a non-resident-owned investment corporation for a taxation year, 
  (a) no deduction may be made in respect of interest on its bonds, debentures, securities or other indebtedness, and 
  (b) no deduction may be made under subsection 65(1), and its income and taxable income shall be computed as if 
  (c) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from dispositions of taxable Canadian property, 
  (d) any taxable capital gain or allowable capital loss of the corporation were an amount equal to twice the amount thereof otherwise determined, and 
  (e) subsection 83(2) were read without reference to paragraph 83(2)(b). 
  
  ### Non-resident-owned investment corporations
  
  (2) In computing the taxable income of a non-resident-owned investment corporation for a taxation year, no deduction may be made from its income for the year, except 
  (a) interest received in the year from other non-resident-owned investment corporations; 
  (b) taxes paid to the government of a country other than Canada in respect of any part of the income of the corporation for the year derived from sources therein; and 
  (c) net capital losses as provided for by section 111. 
  
  ### Special tax rate
  
  (3) The tax payable under this Part by a corporation for a taxation year when it was a non-resident-owned investment corporation is an amount equal to 25% of its taxable income for the year. 
  
  ### No deduction for foreign taxes
  
  (4) No deduction from the tax payable under this Part by a non-resident-owned investment corporation may be made under section 124 or in respect of taxes paid to the government of a country other than Canada. 
  
  ### Allowable refund to non-resident-owned investment corporations
  
  (6) If the return of a non-resident-owned investment corporation’s income for a taxation year has been made within 3 years from the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year, refund without application its allowable refund for the year; and 
  (b) shall, with all due dispatch, make that allowable refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a). 
  
  ### Application to other liability
  
  (7) Instead of making a refund that might otherwise be made under subsection 133(6), the Minister may, where the taxpayer is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the taxpayer of that action. 
  
  ### Interest on allowable refund
  
  (7.01) Where an allowable refund for a taxation year is paid to, or applied to a liability of, a non-resident-owned investment corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of 
  (a) the day that is 120 days after the end of the year, and 
  (b) the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed, and ending on the day the refund is paid or applied. 
  
  ### Excess interest on allowable refund
  
  (7.02) Where at any particular time interest has been paid to, or applied to a liability of, a corporation under subsection 133(7.01) in respect of an allowable refund and it is determined at a subsequent time that the allowable refund was less than that in respect of which interest was so paid or applied, 
  (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the allowable refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time; 
  (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and 
  (c) the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  
  ### Election re capital gains dividend
  
  (7.1) Where at any particular time after 1971 a dividend has become payable by a non-resident-owned investment corporation to shareholders of any class of shares of its capital stock, if the corporation so elects in respect of the full amount of the dividend, in prescribed manner and prescribed form and at or before the particular time or the first day on which any part of the dividend was paid if that day is earlier than the particular time, the following rules apply: 
  (a) the dividend shall be deemed to be a capital gains dividend to the extent that it does not exceed the corporation’s capital gains dividend account immediately before the particular time; and 
  (b) any amount received by another non-resident-owned investment corporation in a taxation year as, on account or in lieu of payment of, or in satisfaction of the capital gains dividend shall not be included in computing its income for the year. 
  
  ### Simultaneous dividends
  
  (7.2) Where a dividend becomes payable at the same time on more than one class of shares of the capital stock of a non-resident-owned investment corporation, for the purposes of subsection 133(7.1), the dividend on any such class of shares shall be deemed to become payable at a different time than the dividend on the other class or classes of shares and to become payable in the order designated 
  (a) by the corporation on or before the day on or before which the election described in subsection 133(7.1) is required to be filed; or 
  (b) in any other case, by the Minister. 
  
  ### Application of ss. 131(1.1) to (1.4)
  
  (7.3) Where at any particular time a non-resident-owned investment corporation paid a dividend to its shareholders and subsection 133(7.1) would have applied to the dividend except that the corporation did not make an election under that subsection on or before the day on or before which it was required by that subsection to be made, subsections 131(1.1) to 131(1.4) apply with such modifications as the circumstances require. 
  
  ### Definitions
  
  (8) In this section,  
  *allowable refund* of a non-resident-owned investment corporation for a taxation year means the total of amounts each of which is an amount in respect of a taxable dividend paid by the corporation in the year on a share of its capital stock, determined by the formula  is the corporation’s allowable refundable tax on hand immediately before the dividend was paid, is the greater of the amount of the dividend so paid and the corporation’s cumulative taxable income immediately before the dividend was paid, and is the amount of the dividend so paid; ( remboursement admissible)   
  *Canadian property* means  
  (a) taxable Canadian property, and 
  (b) any other property not being foreign property within the meaning assigned by section 206; ( biens canadiens)   
  *capital gains dividend account* of a non-resident-owned investment corporation at any particular time means the amount determined by the formula  is the total of the following amounts in respect of the period commencing January 1, 1972 and ending immediately after the corporation’s last taxation year ending before the particular time: 
  (a) the corporation’s capital gains for taxation years ending in the period from dispositions in the period of Canadian property or shares of another non-resident-owned investment corporation, and 
  (b) amounts received by the corporation in the period as, on account or in lieu of payment of, or in satisfaction of capital gains dividends from other non-resident-owned investment corporations, and is the total of the following amounts in respect of the period referred to in the description of A: 
  (a) the corporation’s capital losses for taxation years ending in the period from dispositions in the period of Canadian property or shares of another non-resident-owned investment corporation, 
  (b) all capital gains dividends that became payable by the corporation before the particular time, and 
  (c) the amount determined by the formula is the total of the corporation’s capital gains for taxation years ending in the period from dispositions in the period of taxable Canadian property, and is the total of the corporation’s capital losses for the taxation years ending in the period from dispositions in the period of property of the kinds referred to in the description of M; ( compte de dividendes sur les gains en capital)   
  *increase in capital* in respect of a corporation means a transaction (other than a transaction carried out pursuant to an agreement in writing made before February 28, 2000, referred to in this definition as a “specified transaction”) in the course of which the corporation issues additional shares of its capital stock or incurs indebtedness, if the transaction has the effect of increasing the total of  
  (a) the corporation’s liabilities, and 
  (b) the fair market value of all the shares of its capital stock to an amount that is substantially greater than that total would have been on February 27, 2000 if all specified transactions had been carried out immediately before that day; ( augmentation de capital)   
  *non-resident-owned investment corporation* means a corporation incorporated in Canada that, throughout the whole of the period commencing on the later of June 18, 1971 and the day on which it was incorporated and ending on the last day of the taxation year in respect of which the expression is being applied, complied with the following conditions:  
  (a) all of its issued shares and all of its bonds, debentures and other funded indebtedness were 
  (i) beneficially owned by non-resident persons (other than any foreign affiliate of a taxpayer resident in Canada), 
  (ii) owned by trustees for the benefit of non-resident persons or their unborn issue, or 
  (iii) owned by a non-resident-owned investment corporation, all of the issued shares of which and all of the bonds, debentures and other funded indebtedness of which were beneficially owned by non-resident persons or owned by trustees for the benefit of non-resident persons or their unborn issue, or by two or more such corporations, 
  (b) its income for each taxation year ending in the period was derived from 
  (i) ownership of, or trading or dealing in, bonds, shares, debentures, mortgages, hypothecary claims, bills, notes or other similar property or any interest, or for civil law any right, therein, 
  (ii) lending money with or without security, 
  (iii) rents, hire of chattels, charterparty fees or remunerations, annuities, royalties, interest or dividends, 
  (iv) estates or trusts, or 
  (v) disposition of capital property, 
  (c) not more than 10% of its gross revenue for each taxation year ending in the period was derived from rents, hire of chattels, charterparty fees or charterparty remunerations, 
  (d) its principal business in each taxation year ending in the period was not 
  (i) the making of loans, or 
  (ii) trading or dealing in bonds, shares, debentures, mortgages, hypothecary claims, bills, notes or other similar property or any interest therein, 
  (e) it has, on or before the earlier of February 27, 2000 and the day that is 90 days after the beginning of its first taxation year that begins after 1971, elected in prescribed manner to be taxed under this section, and 
  (f) it has not, before the end of the last taxation year in the period, revoked in prescribed manner its election, except that 
  (g) a new corporation (within the meaning assigned by section 87) formed as a result of an amalgamation after June 18, 1971 of two or more predecessor corporations is not a non-resident-owned investment corporation unless each of the predecessor corporations was, immediately before the amalgamation, a non-resident-owned investment corporation, 
  (h) where a corporation is a new corporation described in paragraph (g), and each of the predecessor corporations elected in a timely manner under paragraph (e), paragraph (e) shall be read, in its application to the new corporation, without reference to the words “the earlier of February 27, 2000 and”, and 
  (i) subject to section 134.1, a corporation is not a non-resident-owned investment corporation in any taxation year that ends after the earlier of, 
  (i) the first time, if any, after February 27, 2000 at which the corporation effects an increase in capital, and 
  (ii) the corporation’s last taxation year that begins before 2003; ( société de placement appartenant à des non-résidents)   
  *taxable dividend* does not include a capital gains dividend. (dividende imposable)  
  
  ### Definitions
  
  (9) In the definition 
  *allowable refund* in subsection 133(8),   
  *allowable refundable tax on hand* of a corporation at any particular time means the amount determined by the formula  is the total of all amounts each of which is an amount in respect of any taxation year commencing after 1971 and ending before the particular time, equal to the tax under this Part payable by the corporation for the year, is an amount equal to 15% of the amount determined for B in the definition 
  *cumulative taxable income* in this subsection in respect of the corporation,  where the corporation’s 1972 taxation year commenced before 1972, is an amount equal to 10% of the amount that would be determined for C in the definition 
  *cumulative taxable income* in this subsection if the reference in the description of C in that definition to “the 1972 taxation year or any taxation year commencing after 1971 and ending before the particular time” were read as a reference to “the 1972 taxation year”,  is the total of all amounts each of which is an amount, in respect of the 1972 taxation year or any taxation year commencing after 1971 and ending before the particular time, determined by the formula is the total of the corporation’s taxable capital gains for the year from dispositions after 1971 of property described in paragraph 133(1)(c), computed in accordance with the assumption set out in paragraph 133(1)(d), is the total of the corporation’s allowable capital losses for the year from dispositions after 1971 of property described in paragraph 133(1)(c), computed in accordance with the same assumption, and is the amount deductible from the corporation’s income for the year by virtue of paragraph 133(2)(c), is the total of all amounts each of which is an amount equal to 1/3 of any amount paid or credited by the corporation after the commencement of its 1972 taxation year and before the particular time, as, on account or in lieu of payment of, or in satisfaction of interest, and is the total of all amounts each of which is an amount in respect of any taxable dividend paid by the corporation on a share of its capital stock before the particular time and after the commencement of its first taxation year commencing after 1971, equal to the amount in respect of the dividend determined under the definition 
  *allowable refund* in subsection 133(8); (montant admissible de l’impôt en main remboursable)   
  *cumulative taxable income* of a corporation at any particular time means the amount determined by the formula  is the total of the corporation’s taxable incomes for taxation years commencing after 1971 and ending before the particular time, where the corporation’s 1972 taxation year commenced before 1972, is the amount determined by the formula is the corporation’s taxable income for its 1972 taxation year is the total of all amounts received by the corporation as described in paragraph 196(4)(b), and is the lesser of the amount determined under paragraph 196(4)(e) in respect of the corporation and the amount, if any, by which the total of amounts determined under paragraphs 196(4)(d) to 196(4)(f) in respect of the corporation exceeds the total of amounts determined under paragraphs 196(4)(a) to 196(4)(c) in respect of the corporation, is the total of all amounts each of which is an amount, in respect of the 1972 taxation year or any taxation year commencing after 1971 and ending before the particular time, determined by the formula is the total of the corporation’s taxable capital gains for the year from dispositions after 1971 of property described in paragraph 133(1)(c), computed in accordance with the assumption set out in paragraph 133(1)(d), is the total of the corporation’s allowable capital losses for the year from dispositions after 1971 of property described in paragraph 133(1)(c), computed in accordance with the same assumption, and is the amount deductible from the corporation’s income for the year by virtue of paragraph 133(2)(c), is the total of all amounts each of which is an amount equal to 4/3 of any amount paid or credited by the corporation, after the commencement of its 1972 taxation year and before the particular time, as, on account or in lieu of payment of, or in satisfaction of interest, and is the total of all amounts each of which is the amount of any taxable dividend paid by the corporation on a share of its capital stock before the particular time and after the commencement of its firs t taxation year commencing after 1971. ( revenu imposable cumulatif)  
  
  ### Non-resident-owned corporation not a Canadian corporation, etc.
  
  134 Notwithstanding any other provision of this Act, a non-resident-owned investment corporation that would, but for this section, be a Canadian corporation, taxable Canadian corporation or private corporation shall be deemed not to be a Canadian corporation, taxable Canadian corporation or private corporation, as the case may be, except for the purposes of section 87, subsection 88(2) and sections 212.1 and 219. 
  
  ### NRO — transition
  
  134.1 (1) This section applies to a corporation that 
  (a) was a non-resident-owned investment corporation in a taxation year; 
  (b) is not a non-resident-owned investment corporation in the following taxation year (in this section referred to as the corporation’s “first non-NRO year”); and 
  (c) elects in writing filed with the Minister on or before the corporation’s filing-due date for its first non-NRO year to have this section apply. 
  
  ### Application
  
  (2) For the purposes of applying subsections 104(10) and (11) and 133(6) to (9) (other than the definition 
  *non-resident-owned investment corporation* in subsection 133(8)), section 212 and any tax treaty, a corporation described in subsection (1) is deemed to be a non-resident-owned investment corporation in its first non-NRO year in respect of dividends paid in that year on shares of its capital stock to a non-resident person, to a trust for the benefit of non-resident persons or their unborn issue or to a non-resident-owned investment corporation.  
  
  ### Revocation
  
  134.2 (1) This section applies to a corporation that 
  (a) revokes at any time (in this section described as the “revocation time”) its election to be taxed under section 133; 
  (b) elects to have this section apply, by filing an election in writing with the Minister on or before the corporation’s filing-due date for the taxation year of the corporation (in this section referred to as the “revocation year”) that would have included the revocation time if the corporation had not so elected; and 
  (c) specifies in the election a time (in this section referred to as the “elected time”) that is in the revocation year and is not after the revocation time. 
  
  ### Consequences
  
  (2) Where this section applies to a corporation, 
  (a) the corporation’s taxation year that would have included the elected time, if the corporation had not elected to have this section apply, is deemed to end immediately before the elected time; 
  (b) a new taxation year of the corporation is deemed to begin at the elected time; and 
  (c) notwithstanding paragraph (f) of the definition 
  *non-resident-owned investment corporation* in subsection 133(8), the corporation is deemed to be a non-resident-owned investment corporation for the period that begins at the beginning of the revocation year and ends immediately before the elected time.  
  
  ## Patronage Dividends 
  
  ### Deduction in computing income
  
  135 (1) Notwithstanding anything in this Part, other than subsections (1.1) to (2.1) and 135.1(3), there may be deducted, in computing the income of a taxpayer for a taxation year, the total of the payments made, pursuant to allocations in proportion to patronage, by the taxpayer 
  (a) within the year or within 12 months thereafter to the taxpayer’s customers of the year; and 
  (b) within the year or within 12 months thereafter to the taxpayer’s customers of a previous year, the deduction of which from income of a previous taxation year was not permitted. 
  
  ### Limitation where non-arm’s length customer
  
  (1.1) Subsection (1) applies to a payment made by a taxpayer to a customer with whom the taxpayer does not deal at arm’s length only if 
  (a) the taxpayer is a cooperative corporation described in subsection 136(2) or a credit union; or 
  (b) the payment is prescribed. 
  
  ### Limitation where non-member customer
  
  (2) If a taxpayer has not made allocations in proportion to patronage in respect of all of the taxpayer’s customers of the year, at the same rate, with appropriate differences for different types, classes, grades or qualities of goods, products or services, the amount that may be deducted by the taxpayer under subsection (1) is an amount equal to the lesser of 
  (a) the total of the payments mentioned in that subsection, and 
  (b) the total of 
  (i) the part of the income of the taxpayer for the year attributable to business done with members, and 
  (ii) the allocations in proportion to patronage made to non-member customers of the year. 
  
  ### Deduction carried over
  
  (2.1) Where, in a taxation year ending after 1985, all or a portion of a payment made by a taxpayer pursuant to an allocation in proportion to patronage to the taxpayer’s customers who are members is not deductible in computing the taxpayer’s income for the year because of the application of subsection 135(2) (in this subsection referred to as the “undeducted amount”), there may be deducted in computing the taxpayer’s income for a subsequent taxation year, an amount equal to the lesser of 
  (a) the undeducted amount, except to the extent that that amount was deducted in computing the taxpayer’s income for any preceding taxation year, and 
  (b) the amount, if any, by which 
  (i) the taxpayer’s income for the subsequent taxation year (computed without reference to this subsection) attributable to business done with the taxpayer’s customers of that year who are members exceeds 
  (ii) the amount deducted in computing the taxpayer’s income for the subsequent taxation year by virtue of subsection 135(1) in respect of payments made by the taxpayer pursuant to allocations in proportion to patronage to the taxpayer’s customers of that year who are members. 
  
  ### Amount to be deducted or withheld from payment to customer
  
  (3) Subject to subsection 135.1(6), a taxpayer who makes at any particular time in a calendar year a payment pursuant to an allocation in proportion to patronage to a person who is resident in Canada and is not exempt from tax under section 149 shall, notwithstanding any agreement or any law to the contrary, deduct or withhold from the payment an amount equal to 15% of the lesser of the amount of the payment and the amount, if any, by which 
  (a) the total of the amount of the payment and the amounts of all other payments pursuant to allocations in proportion to patronage made by the taxpayer to that person in the calendar year and before the particular time exceeds 
  (b) $100, and forthwith remit that amount to the Receiver General on behalf of that person on account of that person’s tax under this Part. 
  
  ### Definitions
  
  (4) For the purposes of this section and section 135.1,  
  *allocation in proportion to patronage* for a taxation year means an amount credited by a taxpayer to a customer of that year on terms that the customer is entitled to or will receive payment thereof, computed at a rate in relation to the quantity, quality or value of the goods or products acquired, marketed, handled, dealt in or sold, or services rendered by the taxpayer from, on behalf of or to the customer, whether as principal or as agent of the customer or otherwise, with appropriate differences in the rate for different classes, grades or qualities thereof, if  
  (a) the amount was credited 
  (i) within the year or within 12 months thereafter, and 
  (ii) at the same rate in relation to quantity, quality or value aforesaid as the rate at which amounts were similarly credited to all other customers of that year who were members or to all other customers of that year, as the case may be, with appropriate differences aforesaid for different classes, grades or qualities, and 
  (b) the prospect that amounts would be so credited was held out by the taxpayer to the taxpayer’s customers of that year who were members or non-member customers of that year, as the case may be; ( répartition proportionnelle à l’apport commercial)   
  *consumer goods or services* means goods or services the cost of which was not deductible by the taxpayer in computing the income from a business or property; (marchandises de consommation ou services)   
  *customer* means a customer of a taxpayer and includes a person who sells or delivers goods or products to the taxpayer, or for whom the taxpayer renders services; (client)   
  *income of the taxpayer attributable to business done with members* of any taxation year means that proportion of the income of the taxpayer for the year (before making any deduction under this section) that the value of the goods or products acquired, marketed, handled, dealt in or sold or services rendered by the taxpayer from, on behalf of, or for members, is of the total value of goods or products acquired, marketed, handled, dealt in or sold or services rendered by the taxpayer from, on behalf of, or for all customers during the year; (revenu du contribuable attribuable aux affaires faites avec ses membres)   
  *member* means a person who is entitled as a member or shareholder to full voting rights in the conduct of the affairs of the taxpayer (being a corporation) or of a corporation of which the taxpayer is a subsidiary wholly-owned corporation; (membre)   
  *non-member customer* means a customer who is not a member; (client non membre)   
  *payment* includes  
  (a) the issue of a certificate of indebtedness or shares of the taxpayer or of a corporation of which the taxpayer is a subsidiary wholly-owned corporation if the taxpayer or that corporation has in the year or within 12 months thereafter disbursed an amount of money equal to the total face value of all certificates or shares so issued in the course of redeeming or purchasing certificates of indebtedness or shares of the taxpayer or that corporation previously issued, 
  (b) the application by the taxpayer of an amount to a member’s liability to the taxpayer (including, without restricting the generality of the foregoing, an amount applied in fulfilment of an obligation of the member to make a loan to the taxpayer and an amount applied on account of payment for shares issued to a member) pursuant to a by-law of the taxpayer, pursuant to statutory authority or at the request of the member, or 
  (c) the amount of a payment or transfer by the taxpayer that, under subsection 56(2), is required to be included in computing the income of a member. ( paiement)  
  
  ### Holding out prospect of allocations
  
  (5) For the purpose of this section a taxpayer shall be deemed to have held out the prospect that amounts would be credited to a customer of a taxation year by way of allocation in proportion to patronage, if 
  (a) throughout the year the statute under which the taxpayer was incorporated or registered, its charter, articles of association or by-laws or its contract with the customer held out the prospect that amounts would be so credited to customers who are members or non-member customers, as the case may be; or 
  (b) prior to the commencement of the year or prior to such other day as may be prescribed for the class of business in which the taxpayer is engaged, the taxpayer has published an advertisement in prescribed form in a newspaper or newspapers of general circulation throughout the greater part of the area in which the taxpayer carried on business holding out that prospect to customers who are members or non-member customers, as the case may be, and has filed copies of the newspapers with the Minister before the end of the 30th day of the taxation year or within 30 days from the prescribed day, as the case may be. 
  
  ### Amount of payment to customer
  
  (6) For greater certainty, the amount of any payment pursuant to an allocation in proportion to patronage is the amount thereof determined before deducting any amount required by subsection 135(3) to be deducted or withheld from that payment. 
  
  ### Payment to customer to be included in income
  
  (7) Where a payment pursuant to an allocation in proportion to patronage (other than an allocation in respect of consumer goods or services) has been received by a taxpayer, the amount of the payment shall, subject to subsection 135.1(2), be included in computing the recipient’s income for the taxation year in which the payment was received and, without restricting the generality of the foregoing, where a certificate of indebtedness or a share was issued to a person pursuant to an allocation in proportion to patronage, the amount of the payment by virtue of that issuance shall be included in computing the recipient’s income for the taxation year in which the certificate or share was received and not in computing the recipient’s income for the year in which the indebtedness was subsequently discharged or the share was redeemed. 
  
  ### Patronage dividends
  
  (8) For the purposes of this section, where 
  (a) a person has sold or delivered a quantity of goods or products to a marketing board established by or pursuant to a law of Canada or a province, 
  (b) the marketing board has sold or delivered the same quantity of goods or products of the same class, grade or quality to a taxpayer of which the person is a member, and 
  (c) the taxpayer has credited that person with an amount based on the quantity of goods or products of that class, grade or quality sold or delivered to it by the marketing board, the quantity of goods or products referred to in paragraph 135(8)(c) shall be deemed to have been sold or delivered by that person to the taxpayer and to have been acquired by the taxpayer from that person. 
  
  ## Agricultural Cooperatives — Tax-deferred Patronage Dividends 
  
  ### Definitions
  
  135.1 (1) The following definitions apply in this section and section 135.  
  *agricultural business* means a business, carried on in Canada, that consists of one or any combination of  
  (a) farming (including, if the person carrying on the business is a corporation described in paragraph (a) of the definition 
  *agricultural cooperative corporation*, the production, processing, storing and wholesale marketing of the products of its members’ farming activities); or  
  (b) the provision of goods or services (other than financial services) that are required for farming. ( entreprise d’agriculture)   
  *agricultural cooperative corporation* at any time means a corporation  
  (a) that was incorporated or continued by or under the provisions of a law, of Canada or of a province, that provide for the establishment of the corporation as a cooperative corporation or that provide for the establishment of cooperative corporations; and 
  (b) that has at that time 
  (i) as its principal business an agricultural business, or 
  (ii) members, making up at least 75% of all members of the corporation, each of whom 
  (A) is an agricultural cooperative corporation, or 
  (B) has as their principal business a farming business. ( coopérative agricole)   
  *allowable disposition* means a disposition by a taxpayer of a tax deferred cooperative share less than five years after the day on which the share was issued if  
  (a) before the disposition, 
  (i) the agricultural cooperative corporation is notified in writing that the taxpayer has after the share was issued become disabled and permanently unfit for work, or termi­nally ill, or 
  (ii) the taxpayer ceases to be a member of the agricultural cooperative corporation; or 
  (b) the agricultural cooperative corporation is notified in writing that the share is held by a person on whom the share has devolved as a consequence of the death of the taxpayer. ( disposition admissible)   
  *eligible member* of an agricultural cooperative corporation means a member who carries on an agricultural business and who is  
  (a) an individual resident in Canada; 
  (b) an agricultural cooperative corporation; 
  (c) a corporation resident in Canada that carries on the business of farming in Canada; or 
  (d) a partnership that carries on the business of farming in Canada, all of the members of which are described in any of paragraphs (a) to (c) or this paragraph. ( membre admissible)   
  *tax deferred cooperative share* at any time means a share  
  (a) issued, after 2005 and before 2026, by an agricultural cooperative corporation to a person or partnership that is at the time the share is issued an eligible member of the agricultural cooperative corporation, pursuant to an allocation in proportion to patronage; 
  (b) the holder of which is not entitled to receive on the redemption, cancellation or acquisition of the share by the agricultural cooperative corporation or by any person with whom the agricultural cooperative corporation does not deal at arm’s length an amount that is greater than the amount that would, if this Act were read without reference to this section, be included under subsection 135(7) in computing the eligible member’s income for their taxation year in which the share was issued; 
  (c) that has not before that time been deemed by subsection (4) to have been disposed of; and 
  (d) that is of a class 
  (i) the terms of which provide that the agricultural cooperative corporation shall not, otherwise than pursuant to an allowable disposition, redeem, acquire or cancel a share of the class before the day that is five years after the day on which the share was issued, and 
  (ii) that is identified by the agricultural cooperative corporation in prescribed form and manner as a class of tax deferred cooperative shares. ( part à imposition différée)   
  *tax paid balance* of a taxpayer at the end of a particular taxation year of the taxpayer means the amount, if any, by which  
  (a) the total of 
  (i) the taxpayer’s tax paid balance at the end of the immediately preceding taxation year, and 
  (ii) the amount, if any, that is included in computing the taxpayer’s income under this Part for the particular taxation year because of an election described in subparagraph (2)(a)(ii), exceeds 
  (b) the total of all amounts each of which is the taxpayer’s proceeds of disposition of a tax deferred cooperative share that the taxpayer disposed of in the particular taxation year. ( solde libéré d’impôt)  
  
  ### Income inclusion
  
  (2) In computing the income of a taxpayer for a particular taxation year, there shall be included under subsection 135(7), in respect of the taxpayer’s receipt, as an eligible member, of tax deferred cooperative shares of an agricultural cooperative corporation in the particular taxation year, only the total of 
  (a) the lesser of 
  (i) the total of all amounts, in respect of the taxpayer’s receipt in the particular taxation year of tax deferred cooperative shares, that would, if this Act were read without reference to this section, be included under subsection 135(7) in computing the taxpayer’s income for the particular taxation year, and 
  (ii) the greater of nil and the amount, if any, specified by the taxpayer in an election in prescribed form that is filed with the taxpayer’s return of income for the particular taxation year, and 
  (b) the amount, if any, by which 
  (i) the total of all amounts each of which is the taxpayer’s proceeds of disposition of a tax deferred cooperative share disposed of by the taxpayer in the particular taxation year exceeds 
  (ii) the total of 
  (A) the taxpayer’s tax paid balance at the end of the immediately preceding taxation year, and 
  (B) the amount, if any, that is included in computing the taxpayer’s income for the particular taxation year because of an election described in subparagraph (a)(ii). 
  
  ### Deductibility limit
  
  (3) The amount that may be deducted under subsection 135(1) for a particular taxation year by an agricultural cooperative corporation in respect of payments, in the form of tax deferred cooperative shares, made pursuant to allocations in proportion to patronage shall not exceed 85% of the agricultural cooperative corporation’s income of the taxation year attributable to business done with members. 
  
  ### Deemed disposition
  
  (4) A taxpayer who holds a tax deferred cooperative share is deemed to have disposed of the share, for proceeds of disposition equal to the amount that would, if this Act were read without reference to this section, have been included under subsection 135(7), in respect of the share, in computing the taxpayer’s income for the taxation year in which the share was issued, at the earliest time at which 
  (a) the paid-up capital of the share is reduced otherwise than by way of a redemption of the share; or 
  (b) the taxpayer pledges, or for civil law hypothecates, assigns or in any way alienates the share as security for indebtedness of any kind. 
  
  ### Reacquisition
  
  (5) A taxpayer who is deemed by subsection (4) to have disposed at any time of a tax deferred cooperative share is deemed to have reacquired the share, immediately after that time, at a cost equal to the taxpayer’s proceeds of disposition from that disposition. 
  
  ### Exclusion from withholding obligation
  
  (6) Subsection 135(3) does not apply to a payment pursuant to an allocation in proportion to patronage that is paid by an agricultural cooperative corporation through the issuance of a tax deferred cooperative share. 
  
  ### Withholding on redemption
  
  (7) A person or partnership (in this subsection referred to as the “redeeming entity”) that redeems, acquires or cancels a shareholder’s share shall withhold and forthwith remit to the Receiver General, on account of the shareholder’s tax liability, 15% from the amount otherwise payable on the redemption, acquisition or cancellation, if 
  (a) the share was, at the time it was issued, a tax deferred cooperative share; 
  (b) the redeeming entity is the corporation that issued the share, or a person or partnership with whom the corporation does not deal at arm’s length; and 
  (c) the shareholder is not a trust whose taxable income is exempt from tax under this Part because of paragraph 149(1)(r) or (x). 
  
  ### Application of subsections 84(2) and (3)
  
  (8) Subsections 84(2) and (3) do not apply to a tax deferred cooperative share. 
  
  ### Application of subsection (10)
  
  (9) Subsection (10) applies in respect of the disposition, after September 28, 2009, by a taxpayer of a tax deferred cooperative share (in this subsection and subsection (10) referred to as the “old share”) of an agricultural cooperative corporation if 
  (a) the disposition results from the acquisition, cancellation or redemption of the old share in the course of a reorganization of the capital of the corporation; 
  (b) in exchange for the old share the corporation issues to the taxpayer a share (in this subsection and subsection (10) referred to as the “new share”) that is described in all of paragraphs (b) to (d) of the definition 
  *tax deferred cooperative share* in subsection (1); and  
  (c) the amount of paid-up capital, and the amount, if any, that the taxpayer is entitled to receive on a redemption, acquisition or cancellation, of the new share are equal to those amounts, respectively, in respect of the old share. 
  
  ### Shares issued on corporate reorganizations
  
  (10) If this subsection applies in respect of an exchange of a taxpayer’s old share for a new share, for the purposes of this section (other than subsection (9)), 
  (a) the new share issued in exchange for the old share is deemed to have been issued, pursuant to an allocation in proportion to patronage, at the time the old share was issued; and 
  (b) provided that no person or partnership receives at any time any consideration (other than the new share) in exchange for the old share, for the purposes of subsections (2) and (7) the taxpayer is deemed to have disposed of the old share for nil proceeds. 
  
  ## Continuance of the Canadian Wheat Board 
  
  ### Definitions
  
  135.2 (1) The following definitions apply in this section.  
  *application for continuance* means the application for continuance referred to in paragraph (a) of the definition Canadian Wheat Board continuance. (demande de prorogation)   
  *Canadian Wheat Board* means the corporation referred to in subsection 4(1) of the Canadian Wheat Board (Interim Operations) Act, as it read before its repeal, that is continued under the Canada Business Corporations Act pursuant to the application for continuance. (Commission canadienne du blé)   
  *Canadian Wheat Board continuance* means the series of transactions or events that includes  
  (a) the application for continuance under the Canada Business Corporations Act that is  
  (i) made by the corporation referred to in subsection 4(1) of the Canadian Wheat Board (Interim Operations) Act, as it read before its repeal, and  
  (ii) approved by the Minister of Agriculture and Agri-Food under Part III of the Marketing Freedom for Grain Farmers Act ;  
  (b) the issuance of a promissory note or other evidence of indebtedness by the Canadian Wheat Board to the eligible trust; and 
  (c) the disposition of the eligible debt by the eligible trust, in the same taxation year of the trust in which the eligible debt is issued to it, in exchange for consideration that includes the issuance of shares by the Canadian Wheat Board that have a total fair market value at the time of their issuance that is equal to the amount by which the principal amount of the eligible debt exceeds $10 million. ( prorogation de la Commission canadienne du blé)   
  *eligible debt* means the promissory note or other evidence of indebtedness referred to in paragraph (b) of the definition Canadian Wheat Board continuance. (dette admissible)   
  *eligible share* means a common share of the capital stock of the Canadian Wheat Board that is issued in exchange for the eligible debt, as referred to in paragraph (c) of the definition Canadian Wheat Board continuance. (action admissible)   
  *eligible trust*, at any time, means a trust that meets the following conditions:  
  (a) it was established in connection with the application for continuance; 
  (b) it is resident in Canada at that time; 
  (c) immediately before it acquired the eligible debt, it held only property of nominal value; 
  (d) it is not exempt because of subsection 149(1) from tax on its taxable income for any period in its taxation year that includes that time; 
  (e) all of the interests of beneficiaries under it at that time are described by reference to units that are eligible units in it; 
  (f) the only persons who have acquired an interest as a beneficiary under the trust from it before that time are persons who were participating farmers at the time they acquired the interest; 
  (g) all or substantially all of the fair market value of its property at that time is based on the value of property that is 
  (i) eligible debt, 
  (ii) shares of the capital stock of the Canadian Wheat Board, or 
  (iii) property described in paragraph (a) or (b) of the definition qualified investment if in section 204 or a deposit with a credit union;  
  (h) the property that it has paid or distributed at or before that time to a beneficiary under the trust in satisfaction of the beneficiary’s eligible unit in the trust is 
  (i) money denominated in Canadian dollars, or 
  (ii) shares distributed as an eligible wind-up distribution of the trust; and 
  (i) at no time in its taxation year that includes that time is any other trust an eligible trust. ( fiducie admissible)   
  *eligible unit*, in a trust at any time, means a unit that describes all or part of an interest as a beneficiary under the trust, if  
  (a) the total of all amounts each of which is the value of a unit at the time it was issued by the trust to a participating farmer does not exceed the amount by which the principal amount of the eligible debt exceeds $10 million; and 
  (b) all of the interests as a beneficiary under the trust are fixed interests if (as defined in subsection 251.2(1)) in the trust. (unité admissible)   
  *eligible wind-up distribution*, of a trust, means a distribution of property by the trust to a person if  
  (a) the distribution includes a share of the capital stock of the Canadian Wheat Board that is listed on a designated stock exchange; 
  (b) the only property (other than a share described in paragraph (a)) distributed by the trust on the distribution is money denominated in Canadian dollars; 
  (c) the distribution results in the disposition of all of the person’s interest as a beneficiary under the trust; and 
  (d) the trust ceases to exist immediately after the distribution or immediately after the last of a series of eligible wind-up distributions (determined without reference to this paragraph) of the trust that includes the distribution. ( distribution admissible sur liquidation)   
  *participating farmer*, in respect of a trust at any time, means a person  
  (a) who is eligible to receive units of the trust pursuant to the plan under which the trust directs its trustees to grant units to persons who have delivered grain under a contract with the Canadian Wheat Board on or after August 1, 2013; and 
  (b) engaged in the production of grain or any person entitled, as landlord, vendor or mortgagee or hypothecary creditor, to grain produced by a person engaged in the production of grain or to any share of that grain. ( agriculteur participant)   
  *person* includes a partnership. (personne)  
  
  ### Trust acquires an eligible debt
  
  (2) If, at any time, an eligible trust acquires eligible debt, the principal amount of the eligible debt is deemed not to be included in computing the income of the eligible trust for the taxation year of the eligible trust that includes that time. 
  
  ### Disposition of eligible debt
  
  (3) If, at any time, an eligible trust disposes of eligible debt in exchange for consideration that includes the issuance of eligible shares 
  (a) for the purpose of computing the income of the eligible trust for its taxation year that includes that time 
  (i) an amount, in respect of the disposition of the eligible debt, equal to the fair market value of all property (other than eligible shares) received on the exchange by the trust is included, 
  (ii) no amount in respect of the disposition of the eligible debt is included (other than the amount described in subparagraph (i)), and 
  (iii) no amount in respect of the receipt of the eligible shares is included; 
  (b) the cost to the eligible trust of each eligible share is deemed to be nil; 
  (c) in computing the paid-up capital in respect of the class of the capital stock of the Canadian Wheat Board that includes the eligible shares, at any time after the shares are issued, there shall be deducted an amount equal to the amount of the paid-up capital in respect of that class at the time the shares are issued; 
  (d) subsection 75(2) does not apply to property 
  (i) that is held by the trust in a taxation year that ends at or after that time, and 
  (ii) that is 
  (A) received by the trust on the exchange, or 
  (B) a substitute for property described in subparagraph (i); and 
  (e) subsections 84(2) and (3) and section 85 do not apply at any time to eligible shares. 
  
  ### Eligible trust
  
  (4) The following rules apply in respect of a trust that is an eligible trust at any time in a taxation year of the trust: 
  (a) in computing the trust’s income for the year 
  (i) no deduction may be made by the trust under subsection 104(6), except to the extent of the income of the trust (determined without reference to subsection 104(6)) for the year that is paid in the year, and 
  (ii) no deduction may be made by the trust under subsection 104(6), if the trust ceased to be an eligible trust at the beginning of the following taxation year; 
  (b) for the purposes of applying Part XII.2 in respect of the year 
  (i) the trust’s designated income for the year is deemed to be the trust’s income for the year determined without reference to subsections 104(6) and (30), and 
  (ii) the designated beneficiaries under the trust at any time in the year are deemed to include any beneficiary under the trust that is at that time 
  (A) non-resident, 
  (B) a partnership (other than a partnership that is, throughout its fiscal period that includes that time, a Canadian partnership), or 
  (C) exempt because of subsection 149(1) from tax under this Part on the person’s taxable income; 
  (c) each property held by the trust that is the eligible debt or an eligible share is deemed to have a cost amount to the trust of nil; 
  (d) if the trust disposes of a property, 
  (i) subject to subsection (14), the disposition is deemed to occur for proceeds equal to the fair market value of the property immediately before the disposition, 
  (ii) the gain, if any, of the trust from the disposition is 
  (A) deemed not to be a capital gain, and 
  (B) to be included in computing the trust’s income for the trust’s taxation year that includes the time of disposition, and 
  (iii) the loss, if any, of the trust from the disposition is 
  (A) deemed not to be a capital loss, and 
  (B) to be deducted in computing the trust’s income for the trust’s taxation year that includes the time of disposition; 
  (e) the trust is deemed not to be a 
  (i) personal trust, 
  (ii) unit trust, 
  (iii) trust prescribed for the purpose of subsection 107(2), or 
  (iv) trust any interest in which is an excluded right or interest in applying section 128.1; 
  (f) any 
  *security* (in this paragraph and paragraph (g), as defined in subsection 122.1(1)) of the trust that is held by a trust governed by a deferred profit sharing plan, RDSP, RESP, RRIF, RRSP or TFSA (referred to in this paragraph and paragraph (g) as the 
  *registered plan trust*) is deemed not to be a qualified investment for the registered plan trust;  
  (g) if a registered plan trust governed by a TFSA acquires at any time a security of the trust, Part XI.01 applies in respect of the security as though the acquisition is an advantage 
  (i) in relation to the TFSA that is extended at that time to the controlling individual of the TFSA, and 
  (ii) that is a benefit the fair market value of which is the fair market value of the security at that time; and 
  (h) paragraph (h) of the definition 
  *disposition* in subsection 248(1) does not apply in respect of eligible units of the trust.  
  
  ### Participating farmer — acquisition of eligible unit
  
  (5) If, at any time, a participating farmer acquires an eligible unit in an eligible trust from the trust, 
  (a) no amount in respect of the acquisition of the eligible unit is included in computing the income of the participating farmer; and 
  (b) the cost amount to the participating farmer of the eligible unit is deemed to be nil. 
  
  ### Eligible unit issued to estate
  
  (6) If a participating farmer has, immediately before the participating farmer’s death, not received an eligible unit of an eligible trust for which the participating farmer was eligible — pursuant to the plan under which the eligible trust directs its trustees to grant units to persons who have delivered grain under a contract with the Canadian Wheat Board on or after August 1, 2013 — and the eligible trust issues the unit to the estate that arose on and as a consequence of the death, 
  (a) the participating farmer is deemed to have acquired the unit at the time that is immediately before the time that is immediately before the death, as a participating farmer from the eligible trust, and to own the unit at the time that is immediately before the death; 
  (b) for the purpose of paragraph (f) of the definition 
  *eligible trust* in subsection (1), the estate is deemed not to have acquired the unit from the trust; and  
  (c) for the purposes of paragraphs (8)(b) and (c), the estate is deemed to have acquired the eligible unit on and as a consequence of the death. 
  
  ### Eligible unit — gain (loss)
  
  (7) If a person disposes of an eligible unit in a trust that is an eligible trust at the time of the disposition 
  (a) the gain, if any, of the person from the disposition is 
  (i) deemed not to be a capital gain, and 
  (ii) to be included in computing the person’s income for the person’s taxation year that includes that time; and 
  (b) the loss, if any, of the person from the disposition is 
  (i) deemed not to be a capital loss, and 
  (ii) to be deducted in computing the person’s income for the person’s taxation year that includes that time. 
  
  ### Death of a participating farmer
  
  (8) If, immediately before an individual’s death, the individual owns an eligible unit that the individual acquired as a participating farmer from an eligible trust 
  (a) the individual is deemed to dispose (referred to in this subsection as the 
  *particular disposition*) of the eligible unit immediately before death;  
  (b) if paragraph (d) does not apply, 
  (i) the individual’s proceeds from the particular disposition are deemed to be equal to the unit’s fair market value immediately before the particular disposition, 
  (ii) the gain from the particular disposition is deemed to be included, under subsection 70(1) and not under any other provision, in the individual’s income for the individual’s taxation year in which the individual dies, 
  (iii) subsection 159(5) applies in respect of the individual who has died (determined as though a reference in that subsection to subsection 70(5.2) includes a reference to subsection 70(1) in the application of subsection 159(5) to the gain from the particular disposition) in respect of the particular disposition, and 
  (iv) the person who acquires the eligible unit as a consequence of the individual’s death is deemed to have acquired the eligible unit at the time of the death at a cost equal to the individual’s proceeds, described in subparagraph (i), from the particular disposition; 
  (c) paragraph (d) applies if 
  (i) the individual is resident in Canada immediately before the individual’s death, 
  (ii) the individual’s graduated rate estate acquires the eligible unit on and as a consequence of the death, 
  (iii) the individual’s legal representative elects in prescribed form in the course of administering the individual’s graduated rate estate that paragraph (b) not apply to the individual in respect of the particular disposition, 
  (iv) the election is filed with the individual’s return of income under this Part for the individual’s taxation year in which the death occurred, 
  (v) the estate distributes the eligible unit to the individual’s spouse or common-law partner at a time at which it is the individual’s graduated rate estate, 
  (vi) the individual’s spouse or common-law partner is resident in Canada at the time of the distribution, and 
  (vii) the estate does not dispose of the unit before the distribution; and 
  (d) if this paragraph applies, 
  (i) the individual’s gain from the disposition is deemed to be nil, 
  (ii) the cost amount to the estate of the eligible unit is deemed to be nil, 
  (iii) any amount that is included in the estate’s income (determined without reference to this subparagraph and subsections 104(6) and (12)) for a taxation year from a source that is the eligible unit is, notwithstanding subsection 104(24), deemed 
  (A) to have become payable in that taxation year by the estate to the spouse or common-law partner, and 
  (B) not be have become payable to any other beneficiary, 
  (iv) the distribution is deemed to be a disposition by the estate of the eligible unit for proceeds equal to the cost amount to the estate of the unit, 
  (v) the part of the spouse or common-law partner’s interest as a beneficiary under the estate that is disposed of as a result of the distribution is deemed to be disposed of for proceeds of disposition equal to the cost amount to the spouse or common-law partner of that part immediately before the disposition, 
  (vi) the cost amount to the spouse or common-law partner of the eligible unit is deemed to be nil, and 
  (vii) the spouse or common-law partner is, except for the purposes of paragraph (c), deemed to have acquired the eligible unit as a participating farmer from an eligible trust. 
  
  ### Participating farmer — disposition of eligible unit
  
  (9) If, at any time, an eligible unit of an eligible trust that was acquired by a participating farmer from the eligible trust is disposed of by the participating farmer (other than a disposition described in paragraph (8)(a), (10)(d) or (11)(b)), 
  (a) the participating farmer’s proceeds from the disposition are deemed to be equal to the fair market value of the unit immediately before its disposition; 
  (b) if the disposition results from a distribution of money denominated in Canadian dollars by the trust to the participating farmer in a taxation year of the trust, the money is proceeds from the disposition in that taxation year by the trust of other property and, at the time of the disposition, the participating farmer is not a person described in any of clauses (4)(b)(ii)(A) to (C), the trust’s gain, if any, from the disposition of the other property is reduced to the extent that the proceeds so distributed would, in the absence of this paragraph, be included under subsection 104(13) in the participating farmer’s income for the taxation year of the participating farmer in which the taxation year of the trust ends; and 
  (c) if the participating farmer is a Canadian-controlled private corporation, for the purposes of section 125, the gain from the disposition is deemed to be income from an active business carried on by the corporation. 
  
  ### Eligible wind-up distribution
  
  (10) If, at any time, an eligible trust distributes property as an eligible wind-up distribution of the trust to a person 
  (a) subsection 107(2.1) does not apply in respect of the distribution; 
  (b) the trust is deemed to have disposed of the property for proceeds equal to its fair market value at that time; 
  (c) the trust’s gain from the disposition of the property is, notwithstanding subsection 104(24), deemed 
  (i) to have become payable at that time by the trust to the person, and 
  (ii) not to have become payable to any other beneficiary; 
  (d) the person is deemed to acquire the property at a cost equal to the trust’s proceeds from the disposition; 
  (e) the person’s proceeds from the disposition of the eligible unit, or part of it, that results from the distribution are deemed to be equal to the cost amount of the unit to the person immediately before that time; and 
  (f) for greater certainty, no part of the trust’s gain from the disposition is to be included in the cost to the person of the property, other than as determined by paragraph (d). 
  
  ### Ceasing to be an eligible trust
  
  (11) If a trust ceases to be an eligible trust at a particular time 
  (a) subsection 149(10) applies to the trust as if 
  (i) it ceased at that particular time to be exempt from tax under this Part on its taxable income, and 
  (ii) the list of provisions in paragraph 149(10)(c) included a reference to this section; and 
  (b) each person who holds at the particular time an eligible unit in the trust is deemed to have 
  (i) disposed of, at the time that is immediately before the time that is immediately before the particular time, each of the eligible units for proceeds equal to the cost amount of the unit to the person, and 
  (ii) reacquired the eligible unit at the time that is immediately before the particular time at a cost equal to the fair market value of the unit at the time that is immediately before the particular time. 
  
  ### Stock dividends — Canadian Wheat Board shares
  
  (12) If, at any time, the eligible trust holds an eligible share (or another share of the Canadian Wheat Board acquired before that time as a stock dividend) and the Canadian Wheat Board issues, as a stock dividend paid in respect of such a share, a share of a class of its capital stock, the amount by which the paid-up capital is increased — in respect of the issuance of all shares paid by the Canadian Wheat Board to the eligible trust as the stock dividend or any other stock dividend paid to other shareholders in connection with that stock dividend — for all classes of shares of the Canadian Wheat Board is, for the purposes of this Act, deemed to be no more than $1. 
  
  ### Reorganization of capital — Canadian Wheat Board
  
  (13) Subsection (14) applies in respect of the disposition by an eligible trust of all of the shares (in this subsection and subsection (14) referred to collectively as the 
  *old shares* and individually as an 
  *old share*) of a class of the capital stock of the Canadian Wheat Board owned by the eligible trust if  
  (a) the disposition of the old shares results from the acquisition, cancellation or redemption in the course of a reorganization of the capital of the Canadian Wheat Board; 
  (b) the Canadian Wheat Board issues to the eligible trust, in exchange for the old shares, shares (in this subsection and subsection (14) referred to collectively as the 
  *new shares* and individually as a 
  *new share*) of a class of the capital stock of the Canadian Wheat Board the terms and conditions of which — including the entitlement to receive an amount on a redemption, acquisition or cancellation — are in all material respects the same as those of the old shares;  
  (c) the amount that is the total fair market value of all of the new shares acquired by the eligible trust on the exchange equals the total fair market value of all of the old shares disposed of by the eligible trust; and 
  (d) the amount that is the total paid-up capital in respect of all of the new shares acquired by the eligible trust on the exchange is equal to the amount that is the total paid-up capital in respect of all of the old shares disposed of on the exchange. 
  
  ### Rollover of shares on reorganization
  
  (14) If this subsection applies in respect of an exchange of an eligible trust’s old share for a new share, 
  (a) the old share is deemed to be disposed of by the eligible trust for proceeds equal to its cost amount to the eligible trust; 
  (b) the new share acquired for the old share referred to in paragraph (a) is deemed to be acquired for a cost equal to the amount referred to in paragraph (a); 
  (c) if the old share was an eligible share, the new share is deemed to be an eligible share; and 
  (d) if new shares are deemed to be eligible shares because of paragraph (c) and those shares are included in a class of shares that also includes other shares that are not eligible shares, those eligible shares are deemed to have been issued in a separate series of the class and the other shares are deemed to have been issued in a separate series of the class. 
  
  ### Information filing requirement
  
  (15) A trust shall file with the Minister a prescribed form in prescribed manner in respect of each taxation year of the trust in which it is an eligible trust on or before the trust’s filing-due date for the year. 
  
  ### Failure to file prescribed form
  
  (16) If a trust fails to file the form required by subsection (15) on or before the day that is the trust’s filing-due date for a taxation year, 
  (a) in addition to any other penalty for which the trust may be liable under this Act in respect of the failure, the trust is liable to a penalty equal to the product obtained when $1,000 is multiplied by the number of days during which the failure continues; and 
  (b) if, within 30 days after the trust is served personally or by registered mail with a demand in writing from the Minister for the form to be filed, the trust has not filed the form with the Minister, the trust is deemed to cease to be an eligible trust at the end of the day on which the demand was served. 
  
  ## Cooperative Corporations 
  
  ### Cooperative not private corporation
  
  136 (1) Notwithstanding any other provision of this Act, a cooperative corporation that would, but for this section, be a private corporation is deemed not to be a private corporation except for the purposes of paragraphs 87(2)(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)(e.2)), the definitions excessive eligible dividend designation, general rate income pool and low rate income pool in subsection 89(1), subsections 89(4) to (6) and (8) to (10), sections 123.4, 125, 125.1, 127 and 127.1, the definition mark-to-market property in subsection 142.2(1), sections 152 and 157, subsection 185.2(3), the definition small business corporation in subsection 248(1) (as it applies for the purposes of paragraph 39(1)(c)) and subsection 249(3.1).  
  
  ### Definition of 
  *cooperative corporation* 
  
  (2) In this section, 
  *cooperative corporation* means a corporation that was incorporated or continued by or under the provisions of a law, of Canada or of a province, that provide for the establishment of the corporation as a cooperative corporation or that provide for the establishment of cooperative corporations, for the purpose of marketing (including processing incident to or connected to the marketing) natural products belonging to or acquired from its members or customers, of purchasing supplies, equipment or household necessaries for or to be sold to its members or customers or of performing services for its members or customers, if  
  (a) the statute by or under which it was incorporated, its charter, articles of association or by-laws or its contracts with its members or its members and customers held out the prospect that payments would be made to them in proportion to patronage; 
  (b) none of its members (except other cooperative corporations) have more than one vote in the conduct of the affairs of the corporation; 
  (c) at least 90% of its members are individuals, other cooperative corporations, or corporations or partnerships that carry on the business of farming; and 
  (d) at least 90% of its shares, if any, are held by members described in paragraph (c) or by trusts governed by registered retirement savings plans, registered retirement income funds, TFSAs or registered education savings plans, the annuitants, holders or subscribers under which are members described in that paragraph. 
  
  ## Credit Unions, Savings and Credit Unions and Deposit Insurance Corporations 
  
  ### Payments pursuant to allocations in proportion to borrowing
  
  137 (2) Notwithstanding anything in this Part, there may be deducted, in computing the income for a taxation year of a credit union, the total of bonus interest payments and payments pursuant to allocations in proportion to borrowing made by the credit union within the year or within 12 months thereafter to members of the credit union, to the extent that those payments were not deductible under this subsection in computing the income of the credit union for the immediately preceding taxation year. 
  
  ### Additional deduction
  
  (3) There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation that was, throughout the year, a credit union, an amount equal to the amount determined by the formula is the rate that would, if subsection 125(1.1) applied to the corporation for the year, be its small business deduction rate for the year within the meaning assigned by that subsection, is the amount, if any, determined by the formula is the lesser of 
  (a) the corporation’s taxable income for the year, and 
  (b) the amount, if any, by which 4/3 of the corporation’s maximum cumulative reserve at the end of the year exceeds the corporation’s preferred-rate amount at the end of the immediately preceding taxation year, and is the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year, and is the percentage that is the total of 
  (a) the proportion of 100% that the number of days in the year that are before March 21, 2013 is of the number of days in the year, 
  (b) the proportion of 80% that the number of days in the year that are after March 20, 2013 and before 2014 is of the number of days in the year, 
  (c) the proportion of 60% that the number of days in the year that are in 2014 is of the number of days in the year, 
  (d) the proportion of 40% that the number of days in the year in 2015 is of the number of days in the year, 
  (e) the proportion of 20% that the number of days in the year in 2016 is of the number of days in the year, and 
  (f) if one or more days in the year are after 2016, 0%. 
  
  ### Amount deemed deductible under s. 125
  
  (4) For the purposes of this Act, any amount deductible or any deduction under subsection 137(3) from the tax otherwise payable by a credit union under this Part for a taxation year shall be deemed to be an amount deductible or a deduction, as the case may be, under section 125 from that tax. 
  
  ### Payments in respect of shares
  
  (4.1) Notwithstanding any other provision of this Act, an amount paid or payable by a credit union to a person is deemed to be paid or payable, as the case may be, by the credit union as interest and to be received or receivable, as the case may be, by the person as interest, if 
  (a) the amount is in respect of a share held by the person of the capital stock of the credit union, other than an amount paid or payable as or on account of a reduction of the paid-up capital, redemption, acquisition or cancellation of the share by the credit union to the extent of the paid-up capital of the share; 
  (b) the share is not listed on a stock exchange; and 
  (c) the person is 
  (i) a member of the credit union, or 
  (ii) a member of another credit union if the share is issued by the credit union after March 28, 2012 and the other credit union is a member of the credit union. 
  
  ### Deemed interest not a dividend
  
  (4.2) Notwithstanding any other provision of this Act, an amount that is deemed by subsection 137(4.1) to be interest shall be deemed not to be a dividend. 
  
  ### Determination of preferred-rate amount of a corporation
  
  (4.3) For the purposes of subsection 137(3), 
  (a) the preferred-rate amount of a corporation at the end of a taxation year is determined by the formula is its preferred-rate amount at the end of its immediately preceding taxation year, is the amount deductible under section 125 from the tax for the taxation year otherwise payable by it under this Part, and is its small business deduction rate for the taxation year within the meaning of subsection 125(1.1); 
  (b) where at any time a new corporation has been formed as a result of an amalgamation of two or more predecessor corporations, within the meaning of subsection 87(1), it shall be deemed to have had a taxation year ending immediately before that time and to have had, at the end of that year, a preferred-rate amount equal to the total of the preferred-rate amounts of each of the predecessor corporations at the end of their last taxation years; and 
  (c) where there has been a winding-up as described in subsection 88(1), the preferred-rate amount of the parent (referred to in that subsection) at the end of its taxation year immediately preceding its taxation year in which it received the assets of the subsidiary (referred to in that subsection) on the winding-up shall be deemed to be the total of the amount that would otherwise be its preferred-rate amount at the end of that year and the preferred-rate amount of the subsidiary at the end of its taxation year in which its assets were distributed to the parent on the winding-up. 
  
  ### Member’s income
  
  (5) Where a payment has been received by a taxpayer from a credit union in a taxation year in respect of an allocation in proportion to borrowing, the amount thereof shall, if the money so borrowed was used by the taxpayer for the purpose of earning income from a business or property (otherwise than to acquire property the income from which would be exempt or to acquire a life insurance policy), be included in computing the taxpayer’s income for the year. 
  
  ### Allocations of taxable dividends and capital gains
  
  (5.1) A credit union (referred to in this subsection and in subsection 137(5.2) as the “payer”) may, at any time within 120 days after the end of its taxation year, elect in prescribed form to allocate in respect of the year to a member that is a credit union such portion of each of the following amounts as may reasonably be regarded as attributable to the member: 
  (a) the total of all amounts each of which is the amount of a taxable dividend received by the payer from a taxable Canadian corporation in the year; 
  (b) the amount, if any, by which 
  (i) the total of all amounts each of which is the amount by which the payer’s capital gain from the disposition of a property in the year exceeds the payer’s taxable capital gain from the disposition exceeds 
  (ii) the total of all amounts each of which is the amount by which the payer’s capital loss from the disposition of a property in the year exceeds the payer’s allowable capital loss from the disposition; and 
  (c) each amount deductible under paragraph 137(5.2)(c) in computing the payer’s taxable income for the year. 
  
  ### Idem
  
  (5.2) Notwithstanding any other provision of this Act, 
  (a) there shall be deducted from the amount that would, but for this subsection, be deductible under section 112 in computing a payer’s taxable income for a taxation year such portion of the total referred to in paragraph 137(5.1)(a) as the payer allocated to its members under subsection 137(5.1) in respect of the year; 
  (b) there shall be included in computing the income of a payer for a taxation year an amount equal to that portion of the amounts referred to in paragraphs 137(5.1)(b) and 137(5.1)(c) that the payer allocated under subsection 137(5.1) in respect of the year to its members; and 
  (c) each amount allocated under subsection 137(5.1) to a member may be deducted by that member in computing the member’s taxable income for its taxation year that includes the last day of the payer’s taxation year in respect of which the amount was so allocated. 
  
  ### Definitions
  
  (6) In this section,  
  *allocation in proportion to borrowing* for a taxation year means an amount credited by a credit union to a person who was a member of the credit union in the year on terms that the member is entitled to or will receive payment thereof, computed at a rate in relation to  
  (a) the amount of interest payable by the member on money borrowed from the credit union, or 
  (b) the amount of money borrowed by the member from the credit union, if the amount was credited at the same rate in relation to the amount of interest or money, as the case may be, as the rate at which amounts were similarly credited for the year to all other members of the credit union of the same class; ( répartition proportionnelle à l’importance de l’emprunt)   
  *bonus interest payment* for a taxation year means an amount credited by a credit union to a person who was a member of the credit union in the year on terms that the member is entitled to or will receive payment thereof, computed at a rate in relation to  
  (a) the amount of interest payable in respect of the year by the credit union to the member on money standing to the member’s credit from time to time in the records or books of account of the credit union, or 
  (b) the amount of money standing to the member’s credit from time to time in the year in the records or books of account of the credit union, if the amount was credited at the same rate in relation to the amount of interest or money, as the case may be, as the rate at which amounts were similarly credited in the year to all other members of the credit union of the same class; ( paiement d’intérêts supplémentaires)   
  *credit union* means a corporation, association or federation incorporated or organized as a credit union or cooperative credit society if  
  (a) it derived all or substantially all of its revenues from 
  (i) loans made to, or cashing cheques for, members, 
  (ii) debt obligations or securities of, or guaranteed by, the Government of Canada or a province, a Canadian municipality, or an agency thereof, or debt obligations or securities of a municipal or public body performing a function of government in Canada or an agency thereof, 
  (iii) debt obligations of or deposits with, or guaranteed by, a corporation, commission or association not less than 90% of the shares or capital of which was owned by the Government of Canada or a province or by a municipality in Canada, 
  (iv) debt obligations of or deposits with, or guaranteed by, a bank, or debt obligations of or deposits with a corporation licensed or otherwise authorized under a law of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (v) charges, fees and dues levied against members or members of members, 
  (vi) loans made to or deposits with a credit union or cooperative credit society of which it is a member, or 
  (vii) a prescribed revenue source, 
  (b) all or substantially all the members thereof having full voting rights therein were corporations, associations or federations 
  (i) incorporated as credit unions or cooperative credit societies, all of which derived all or substantially all of their revenues from the sources described in paragraph (a), or all or substantially all of the members of which were credit unions, cooperatives or a combination thereof, 
  (ii) incorporated, organized or registered under, or governed by a law of Canada or a province with respect to cooperatives, or 
  (iii) incorporated or organized for charitable purposes, or were corporations, associations or federations no part of the income of which was payable to, or otherwise available for the personal benefit of, any shareholder or member thereof, or 
  (c) the corporation, association or federation would be a credit union by virtue of paragraph (b) if all the members (other than individuals) having full voting rights in each member thereof that is a credit union were members having full voting rights in the corporation, association or federation; ( caisse de crédit)   
  *maximum cumulative reserve* of a credit union at the end of any particular taxation year means an amount determined by the formula  is the total of all amounts each of which is the amount of any debt owing by the credit union to a member thereof or of any other obligation of the credit union to pay an amount to a member thereof, that was outstanding at the end of the year, including, for greater certainty, the amount of any deposit standing to the credit of a member of the credit union in the records of the credit union, but excluding, for greater certainty, any share in the credit union of any member thereof, and is the total of all amounts each of which is the amount, as of the end of the year, of any share in the credit union of any member thereof; ( provision cumulative maximale)   
  *member*, of a credit union, means  
  (a) a person who is recorded as a member on the records of the credit union and is entitled to participate in and use the services of the credit union, and 
  (b) a registered retirement savings plan, a registered retirement income fund, a TFSA or a registered education savings plan, the annuitant, holder or subscriber under which is a person described in paragraph (a). ( membre)  
  
  ### Credit union not private corporation
  
  (7) Notwithstanding any other provision of this Act, a credit union that would, if this Act were read without reference to this section, be a private corporation is deemed not to be a private corporation except for the purposes of sections 123.1, 123.4, 125, 127, 127.1, 152 and 157 and the definition 
  *small business corporation* in subsection 248(1) as it applies for the purpose of paragraph 39(1)(c).  
  
  ### Amounts included in income of deposit insurance corporation
  
  137.1 (1) For the purpose of computing the income for a taxation year of a taxpayer that is a deposit insurance corporation, the following rules apply: 
  (a) the corporation’s income shall, except as otherwise provided in this section, be computed in accordance with the rules applicable in computing income for the purposes of this Part; and 
  (b) there shall be included in computing the corporation’s income such of the following amounts as are applicable: 
  (i) the total of profits or gains made in the year by the corporation in respect of bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations owned by it that were disposed of by it in the year, and 
  (ii) the total of each such portion of each amount, if any, by which the principal amount, at the time it was acquired by the corporation, of a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by the corporation at the end of the year exceeds the cost to the corporation of acquiring it as was included by the corporation in computing its profit for the year. 
  
  ### Amounts not included in income
  
  (2) The following amounts shall not be included in computing the income of a deposit insurance corporation for a taxation year: 
  (a) any premium or assessment received, or receivable, by the corporation in the year from a member institution; and 
  (b) any amount received by the corporation in the year from another deposit insurance corporation to the extent that that amount can reasonably be considered to have been paid out of amounts referred to in paragraph (a) received by that other deposit insurance corporation in any taxation year. 
  
  ### Amounts deductible in computing income of deposit insurance corporation
  
  (3) There may be deducted in computing the income for a taxation year of a taxpayer that is a deposit insurance corporation such of the following amounts as are applicable: 
  (a) the total of losses sustained in the year by the corporation in respect of bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations owned by it and issued by a person other than a member institution that were disposed of by it in the year; 
  (b) the total of each such portion of each amount, if any, by which the cost to the corporation of acquiring a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by the corporation at the end of the year exceeds the principal amount of the bond, debenture, mortgage, hypothecary claim, note or other similar obligation, as the case may be, at the time it was so acquired as was deducted by the corporation in computing its profit for the year; 
  (d) the total of all expenses incurred by the taxpayer in collecting premiums or assessments from member institutions; 
  (e) the total of all expenses incurred by the taxpayer 
  (i) in the performance of its duties as curator of a bank, or as liquidator or receiver of a member institution when duly appointed as such a curator, liquidator or receiver, 
  (ii) in the course of making or causing to be made such inspections as may reasonably be considered to be appropriate for the purposes of assessing the solvency or financial stability of a member institution, and 
  (iii) in supervising or administering a member institution in financial difficulty; and 
  (f) the total of all amounts each of which is an amount that is not otherwise deductible by the taxpayer for the year or any other taxation year and that is 
  (i) an amount paid by the taxpayer in the year pursuant to a legal obligation to pay interest on borrowed money used 
  (A) to lend money to, or otherwise provide assistance to, a member institution in financial difficulty, 
  (B) to assist in the payment of any losses suffered by members or depositors of a member institution in financial difficulty, 
  (C) to lend money to a subsidiary wholly-owned corporation of the taxpayer where the subsidiary is deemed by subsection 137.1(5.1) to be a deposit insurance corporation, 
  (D) to acquire property from a member institution in financial difficulty, or 
  (E) to acquire shares of the capital stock of a member institution in financial difficulty, or 
  (ii) an amount paid by the taxpayer in the year pursuant to a legal obligation to pay interest on an amount that would be deductible under subparagraph 137.1(3)(f)(i) if it were paid in the year. 
  
  ### Limitation on deduction
  
  (4) No deduction shall be made in computing the income for a taxation year of a taxpayer that is a deposit insurance corporation in respect of 
  (a) any grant, subsidy or other assistance to member institutions provided by it; 
  (b) an amount equal to the amount, if any, by which the amount paid or payable by it to acquire property exceeds the fair market value of the property at the time it was so acquired; 
  (c) any amounts paid to its member institutions as allocations in proportion to any amounts described in subsection 137.1(2); 
  (d) any amount paid by it to another deposit insurance corporation that is, because of paragraph (2)(b), not included in computing the income of that other deposit insurance corporation; or 
  (e) any amount that may otherwise be deductible under paragraph 20(1)(p) in respect of debts owing to it by any of its member institutions that has not been included in computing its income for the year or a preceding taxation year. 
  
  ### Definitions
  
  (5) In this section,  
  *deposit insurance corporation* means  
  (a) a corporation that was incorporated by or under a law of Canada or a province respecting the establishment of a stabilization fund or board if 
  (i) it was incorporated primarily 
  (A) to provide or administer a stabilization, liquidity or mutual aid fund for credit unions, and 
  (B) to assist in the payment of any losses suffered by members of credit unions in liquidation, and 
  (ii) throughout any taxation year in respect of which the expression is being applied, 
  (A) it was a Canadian corporation, and 
  (B) the cost amount to the corporation of its investment property was at least 50% of the cost amount to it of all its property (other than a debt obligation of, or a share of the capital stock of, a member institution issued by the member institution at a time when it was in financial difficulty, or 
  (b) a corporation incorporated by the Canada Deposit Insurance Corporation Act ; (compagnie d’assurance-dépôts)   
  *investment property* means  
  (a) bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations 
  (i) of or guaranteed by the Government of Canada, 
  (ii) of the government of a province or an agent thereof, 
  (iii) of a municipality in Canada or a municipal or public body performing a function of government in Canada, 
  (iv) of a corporation, commission or association not less than 90% of the shares or capital of which is owned by Her Majesty in right of a province or by a Canadian municipality, or of a subsidiary wholly-owned corporation that is subsidiary to such a corporation, commission or association, or 
  (v) of an educational institution or a hospital if repayment of the principal amount thereof and payment of the interest thereon is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province, 
  (b) any deposits, deposit certificates or guaranteed investment certificates with 
  (i) a bank, 
  (ii) a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, or 
  (iii) a credit union or central that is a member of the Canadian Payments Association or a credit union that is a shareholder or member of a central that is a member of the Canadian Payments Association, 
  (c) any money of the corporation, and 
  (d) in relation to a particular deposit insurance corporation, debt obligations of, and shares of the capital stock of, a subsidiary wholly-owned corporation of the particular corporation where the subsidiary is deemed by subsection 137.1(5.1) to be a deposit insurance corporation; ( bien de placement)   
  *member institution*, in relation to a particular deposit insurance corporation, means  
  (a) a corporation whose liabilities in respect of deposits are insured by, or 
  (b) a credit union that is qualified for assistance from that deposit insurance corporation. ( institution membre)  
  
  ### Deeming provision
  
  (5.1) For the purposes of this section, other than subsection 137.1(2), paragraph 137.1(3)(d), subparagraph 137.1(3)(e)(i), subsection 137.1(9) and paragraph 11(a), a subsidiary wholly-owned corporation of a particular corporation described in the definition 
  *deposit insurance corporation* in subsection 137.1(5) shall be deemed to be a deposit insurance corporation, and any member institution of the particular corporation shall be deemed to be a member institution of the subsidiary, where all or substantially all of the property of the subsidiary has at all times since the subsidiary was incorporated consisted of  
  (a) investment property; 
  (b) shares of the capital stock of a member institution of the particular corporation obtained by the subsidiary at a time when the member institution was in financial difficulty; 
  (c) debt obligations issued by a member institution of the particular corporation at a time when the member institution was in financial difficulty; 
  (d) property acquired from a member institution of the particular corporation at a time when the member institution was in financial difficulty; or 
  (e) any combination of property described in paragraphs 137.1(5.1)(a) to 137.1(5.1)(d). 
  
  ### Deemed not to be a private corporation
  
  (6) Notwithstanding any other provision of this Act, a deposit insurance corporation that would, but for this subsection, be a private corporation shall be deemed not to be a private corporation. 
  
  ### Deposit insurance corporation deemed not a credit union
  
  (7) Notwithstanding any other provision of this Act, a deposit insurance corporation that would, but for this subsection, be a credit union shall be deemed not to be a credit union. 
  
  ### Deemed compliance
  
  (8) For the purposes of subsection 137.1(5), a corporation shall be deemed to have complied with clause (a)(ii)(B) of the definition 
  *deposit insurance corporation* in subsection 137.1(5) throughout the 1975 taxation year if it complied with that clause on the last day of that taxation year.  
  
  ### Special tax rate
  
  (9) The tax payable under this Part by a corporation for a taxation year throughout which it was a deposit insurance corporation (other than a corporation incorporated under the Canada Deposit Insurance Corporation Act) is the amount determined by the formula:  is the rate that would, if subsection 125(1.1) applied to the corporation for the taxation year, be the corporation’s small business deduction rate for the taxation year within the meaning assigned by that subsection; and is the corporation’s taxable income for the taxation year. 
  
  ### Amounts paid by a deposit insurance corporation
  
  (10) Where in a taxation year a taxpayer is a member institution, there shall be included in computing its income for the year the total of all amounts each of which is 
  (a) an amount received by the taxpayer in the year from a deposit insurance corporation that is an amount described in any of paragraphs 137.1(4)(a) to 137.1(4)(c), to the extent that the taxpayer has not repaid the amount to the deposit insurance corporation in the year, 
  (b) an amount received from a deposit insurance corporation in the year by a depositor or member of the taxpayer as, on account of, in lieu of payment of, or in satisfaction of, deposits with, or share capital of, the taxpayer, to the extent that the taxpayer has not repaid the amount to the deposit insurance corporation in the year, or 
  (c) the amount by which 
  (i) the principal amount of any obligation of the taxpayer to pay an amount to a deposit insurance corporation that is settled or extinguished in the year without any payment by the taxpayer or by the payment by the taxpayer of an amount less than the principal amount exceeds 
  (ii) the amount, if any, paid by the taxpayer on the settlement or extinguishment of the obligation to the extent that the excess is not otherwise required to be included in computing the taxpayer’s income for the year or a preceding taxation year. 
  
  ### Principal amount of an obligation to pay interest
  
  (10.1) For the purposes of paragraph 137.1(10)(c), an amount of interest payable by a member institution to a deposit insurance corporation on an obligation shall be deemed to have a principal amount equal to that amount. 
  
  ### Deduction by member institutions
  
  (11) There may be deducted in computing the income for a taxation year of a taxpayer that is a member institution such of the following amounts as are applicable: 
  (a) any amount paid or payable by the taxpayer in the year that is described in subsection 137.1(2) to the extent that it was not deducted in computing the taxpayer’s income for a preceding taxation year; and 
  (b) any amount repaid by the taxpayer in the year to a deposit insurance corporation on account of an amount described in paragraph 137.1(10)(a) or 137.1(10)(b) that was received in a preceding taxation year to the extent that it was not, by reason of subsection 137.1(12), excluded from the taxpayer’s income for the preceding year. 
  
  ### Repayment excluded
  
  (12) Where 
  (a) a member institution has in a taxation year repaid an amount to a deposit insurance corporation on account of an amount that was included by virtue of paragraph 137.1(10)(a) or 137.1(10)(b) in computing its income for a preceding taxation year, 
  (b) the member institution has filed its return of income required by section 150 for the preceding year, and 
  (c) on or before the day on or before which the member institution is required by section 150 to file a return of income for the taxation year, it has filed an amended return for the preceding year excluding from its income for that year the amount repaid, the amount repaid shall be excluded from the amount otherwise included by virtue of paragraph 137.1(10)(a) or 137.1(10)(b) in computing the member institution’s income for the preceding year and the Minister shall make such reassessment of the tax, interest and penalties payable by the member institution for preceding taxation years as is necessary to give effect to the exclusion. 
  
  ### Computation of income for 1975 and subsequent years
  
  137.2 For the purpose of computing the income of a deposit insurance corporation for the 1975 and subsequent taxation years, 
  (a) property of the corporation that is a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by it at the commencement of the corporation’s 1975 taxation year shall be valued at its cost to the corporation less the total of all amounts that, before that time, the corporation was entitled to receive as, on account or in lieu of payment of, or in satisfaction of, the principal amount of the bond, debenture, mortgage, hypothecary claim, note or other similar obligation, 
  (i) plus a reasonable amount in respect of the amortization of the amount by which the principal amount of the property at the time it was acquired by the corporation exceeded its actual cost to the corporation, or 
  (ii) minus a reasonable amount in respect of the amortization of the amount by which its actual cost to the corporation exceeded the principal amount of the property at the time it was acquired by the corporation; 
  (b) property of the corporation that is a debt owing to the corporation (other than property described in paragraph 137.2(a) or a debt that became a bad debt before its 1975 taxation year) acquired by it before the commencement of its 1975 taxation year shall be valued at any time at the amount thereof outstanding at that time; 
  (c) property of the corporation (other than property in respect of which any amount for the year has been included under paragraph (a)) that was acquired, by foreclosure or otherwise, after default made under a mortgage or hypothec shall be valued at its cost amount to the corporation; and 
  (d) any other property shall be valued at its cost amount to the corporation. 
  
  ## Insurance Corporations 
  
  ### Insurance corporations
  
  138 (1) It is hereby declared that a corporation, whether or not it is a mutual corporation, that has, in a taxation year, been a party to insurance contracts or other arrangements or relationships of a particular class whereby it can reasonably be regarded as undertaking 
  (a) to insure other persons against loss, damage or expense of any kind, or 
  (b) to pay insurance moneys to other persons 
  (i) on the death of any person, 
  (ii) on the happening of an event or contingency dependent on human life, 
  (iii) for a term dependent on human life, or 
  (iv) at a fixed or determinable future time, whether or not such persons are members or shareholders of the corporation, shall, regardless of the form or legal effect of those contracts, arrangements or relationships, be deemed, for the purposes of this Act, to have been carrying on an insurance business of that class in the year for profit, and in any such case, for the purpose of computing the income of the corporation, the following rules apply: 
  (c) every amount received by the corporation under, in consideration of, in respect of or on account of such a contract, arrangement or relationship shall be deemed to have been received by it in the course of that business, 
  (d) the income shall, except as otherwise provided in this section, be computed in accordance with the rules applicable in computing income for the purposes of this Part, 
  (e) all income from property vested in the corporation shall be deemed to be income of the corporation, and 
  (f) all taxable capital gains and allowable capital losses from dispositions of property vested in the corporation shall be deemed to be taxable capital gains or allowable capital losses, as the case may be, of the corporation. 
  
  ### Insurer’s income or loss
  
  (2) Notwithstanding any other provision of this Act, 
  (a) if a life insurer resident in Canada carries on an insurance business in Canada and in a country other than Canada in a taxation year, its income or loss for the year from carrying on an insurance business is the amount of its income or loss for the taxation year from carrying on the insurance business in Canada; 
  (b) if a life insurer resident in Canada carries on an insurance business in Canada and in a country other than Canada in a taxation year, for greater certainty, 
  (i) in computing the insurer’s income or loss for the taxation year from the insurance business carried on by it in Canada, no amount is to be included in respect of the insurer’s gross investment revenue for the taxation year derived from property used or held by it in the course of carrying on an insurance business that is not designated insurance property for the taxation year of the insurer, and 
  (ii) in computing the insurer’s taxable capital gains or allowable capital losses for the taxation year from dispositions of capital property (referred to in this subparagraph as “insurance business property”) that, at the time of the disposition, was used or held by the insurer in the course of carrying on an insurance business, 
  (A) there is to be included each taxable capital gain or allowable capital loss of the insurer for the taxation year from a disposition in the taxation year of an insurance business property that was a designated insurance property for the taxation year of the insurer, and 
  (B) there is not to be included any taxable capital gain or allowable capital loss of the insurer for the taxation year from a disposition in the taxation year of an insurance business property that was not a designated insurance property for the taxation year of the insurer; 
  (c) if a non-resident insurer carries on an insurance business in Canada in a taxation year, its income or loss for the taxation year from carrying on an insurance business is the amount of its income or loss for the taxation year from carrying on the insurance business in Canada; and 
  (d) if a non-resident insurer carries on an insurance business in Canada in a taxation year, 
  (i) in computing the non-resident insurer’s income or loss for the taxation year from the insurance business carried on by it in Canada, no amount is to be included in respect of the non-resident insurer’s gross investment revenue for the taxation year derived from property used or held by it in the course of carrying on an insurance business that is not designated insurance property for the taxation year of the non-resident insurer, and 
  (ii) in computing the non-resident insurer’s taxable capital gains or allowable capital losses for the taxation year from dispositions of capital property (referred to in this subparagraph as “insurance business property”) that, at the time of the disposition, was used or held by the non-resident insurer in the course of carrying on an insurance business, 
  (A) there is to be included each taxable capital gain or allowable capital loss of the non-resident insurer for the taxation year from a disposition in the taxation year of an insurance business property that was a designated insurance property for the taxation year of the non-resident insurer, and 
  (B) there is not to be included any taxable capital gain or allowable capital loss of the non-resident insurer for the taxation year from a disposition in the taxation year of an insurance business property that was not a designated insurance property for the taxation year of the non-resident insurer. 
  
  ### Income — designated foreign insurance business
  
  (2.1) If a life insurer resident in Canada has a designated foreign insurance business in a taxation year, 
  (a) for the purposes of computing the life insurer’s income or loss from carrying on an insurance business in Canada for that taxation year, the life insurer’s insurance business carried on in Canada is deemed to include the insurance of the specified Canadian risks that are insured as part of the designated foreign insurance business; 
  (b) if, in the immediately preceding taxation year, the designated foreign insurance business was not a designated foreign insurance business, for the purposes of paragraph (4)(a), subsection (9), the definition designated insurance property in subsection (12) and paragraphs 12(1)(d) to (e), the life insurer is deemed to have carried on the business in Canada in that immediately preceding year and to have claimed the maximum amounts to which it would have been entitled under subparagraph (3)(a)(i) and paragraphs 20(1)(l) and (l.1) and 20(7)(c) in respect of those specified Canadian risks if that designated foreign insurance business had been a designated foreign insurance business in that immediately preceding year; and  
  (c) for the purposes of subparagraph (3)(a)(ii.1) and subsection 20(22), 
  (i) the life insurer is deemed to have carried on the business in Canada in that immediately preceding year, and 
  (ii) the amounts, if any, that would have been prescribed in respect of the insurer for the purposes of paragraphs (4)(b) and 12(1)(e.1) for that immediately preceding year in respect of the insurance policies in respect of those specified Canadian risks are deemed to have been included in computing its income for that year. 
  
  ### Insurance swaps
  
  (2.2) For the purposes of this section, one or more risks insured by a life insurer resident in Canada, as part of an insurance business carried on in a country other than Canada, that would not be specified Canadian risks if this Act were read without reference to this subsection, are deemed to be specified Canadian risks if those risks would be deemed to be specified Canadian risks because of paragraph 95(2)(a.21) if the life insurer were a foreign affiliate of a taxpayer. 
  
  ### Insurance swaps
  
  (2.3) Subsection (2.4) applies in respect of one or more agreements or arrangements if 
  (a) subsection (2.2) applies to deem one or more risks insured by a particular life insurer resident in Canada to be specified Canadian risks; and 
  (b) those agreements or arrangements are in respect of risks described in paragraph (a) and have been entered into by any of the following (in subsection (2.4), referred to as an “agreeing party”): 
  (i) the particular life insurer, 
  (ii) another life insurer resident in Canada that does not deal at arm’s length with the particular life insurer, 
  (iii) a partnership of which a life insurer described in subparagraph (i) or (ii) is a member, 
  (iv) a foreign affiliate of either the particular life insurer or a person that does not deal at arm’s length with the particular life insurer, and 
  (v) a partnership of which a foreign affiliate described in subparagraph (iv) is a member. 
  
  ### Insurance swaps
  
  (2.4) If this subsection applies in respect of one or more agreements or arrangements, 
  (a) to the extent that activities performed in connection with those agreements or arrangements can reasonably be considered to be performed for the purpose of obtaining the result described in subparagraph 95(2)(a.21)(ii) (with any modifications that the circumstances require), those activities are deemed to be, 
  (i) if the agreeing party is a life insurer resident in Canada, or a partnership of which such a life insurer is a member, part of the life insurer’s insurance business carried on in Canada, and 
  (ii) if the agreeing party is a foreign affiliate of a taxpayer, or a partnership of which such an affiliate is a member, a separate business, other than an active business, carried on by the affiliate; and 
  (b) any income from those activities (including income that pertains to or is incident to those activities) is deemed to be, 
  (i) if the agreeing party is a life insurer resident in Canada, income from the life insurer’s insurance business carried on in Canada, and 
  (ii) if the agreeing party is a foreign affiliate of a taxpayer, income from the business, other than an active business. 
  
  ### Ceding of Canadian risks
  
  (2.5) Any income of a life insurer resident in Canada for a taxation year, from its insurance business carried on in a country other than Canada, in respect of the ceding of specified Canadian risks that would, if the life insurer were a foreign affiliate of a taxpayer, be included in computing the life insurer’s income from a business, other than an active business, for the taxation year because of subparagraph 95(2)(a.2)(iii), is to be included in computing the life insurer’s income or loss for that taxation year from its insurance business carried on in Canada, except to the extent it is already included because of subsection (2.1), (2.2) or (2.4). 
  
  ### Anti-avoidance
  
  (2.6) For the purposes of this section, 
  (a) a risk is deemed to be a specified Canadian risk that is insured as part of an insurance business carried on in Canada by a particular life insurer resident in Canada if 
  (i) the particular life insurer insured the risk as part of a transaction or series of transactions, 
  (ii) the risk would not be a specified Canadian risk if this Act were read without reference to this subsection, and 
  (iii) it can reasonably be concluded that one of the purposes of the transaction or series of transactions was to avoid 
  (A) having a designated foreign insurance business, or 
  (B) the application of any of subsections (2.1) to (2.5) to the risk; and 
  (b) if one or more agreements or arrangements in respect of the risk have been entered into by any of the persons or partnerships described in subparagraphs (2.3)(b)(i) to (v) (in this paragraph, referred to as an “agreeing party”), 
  (i) any activities performed in connection with those agreements or arrangements are deemed to be 
  (A) if the agreeing party is a life insurer resident in Canada, or a partnership of which such a life insurer is a member, part of the life insurer’s insurance business carried on in Canada, and 
  (B) if the agreeing party is a foreign affiliate of a taxpayer, or a partnership of which such an affiliate is a member, a separate business, other than an active business, carried on by the affiliate, and 
  (ii) any income from those activities (including income that pertains to or is incident to those activities) is deemed to be, 
  (A) if the agreeing party is a life insurer resident in Canada, income from the life insurer’s insurance business carried on in Canada, and 
  (B) if the agreeing party is a foreign affiliate of a taxpayer, income from the business, other than an active business. 
  
  ### Deductions allowed in computing income
  
  (3) In computing a life insurer’s income for a taxation year from carrying on its life insurance business in Canada, there may be deducted 
  (a) such of the following amounts as are applicable: 
  (i) any amount that the insurer claims as a policy reserve for the year in respect of its groups of life insurance contracts in Canada at the end of the year, not exceeding the total of amounts that the insurer is allowed by regulation to deduct in respect of those groups, 
  (ii)  [Repealed, 2022, c. 19, s. 26]  
  (ii.1) the amount included under paragraph 138(4)(b) in computing the insurer’s income for the taxation year preceding the year, 
  (iii) the amount determined by the following formula: is the total of policy dividends (except the portion paid out of segregated funds) that became payable by the insurer after its 1968 taxation year and before the end of the year under its participating life insurance policies, and is the total of amounts deductible under this subparagraph (including as determined under subsection (3.1) as it read in its application to the insurer’s last taxation year that began before November 2011) in computing its incomes for taxation years before the year, and 
  (iv)  [Repealed, 2013, c. 34, s. 286]  
  (v) each amount (other than an amount credited under a participating life insurance policy) that would be deductible under section 140 in computing the insurer’s income for the year if the reference in that section to “an insurance business other than a life insurance business” were read as a reference to “a life insurance business in Canada”; 
  (b) the total of amounts each of which is a policy loan made by the insurer in the year and after 1977; and 
  (c) the amount of tax under Part XII.3 payable by the insurer in respect of its taxable Canadian life investment income for the year. 
  (d)  [Repealed, 1995, c. 21, s. 57(2)]  
  (e) to (g)  [Repealed, 2013, c. 34, s. 286]  
  (3.1)  [Repealed, 2013, c. 34, s. 286]  
  
  ### Amounts included in computing income
  
  (4) In computing a life insurer’s income for a taxation year from carrying on its life insurance business in Canada, there shall be included 
  (a) each amount deducted under subparagraph (3)(a)(i) in computing the insurer’s income for the preceding taxation year; 
  (b) the amount prescribed in respect of the insurer for the year in respect of its groups of life insurance contracts in Canada at the end of the year; and 
  (c) the total of all amounts received by the insurer in the year in respect of the repayment of policy loans or in respect of interest on policy loans. 
  
  ### Life insurance policy
  
  (4.01) For the purposes of subsections 138(3) and 138(4), a life insurance policy includes a benefit under a group life insurance policy or a group annuity contract. 
  (4.1) to (4.3)  [Repealed, 2013, c. 34, s. 286]  
  
  ### Income inclusion
  
  (4.4) If, for a period of time in a taxation year, a life insurer 
  (a) owned land (other than land referred to in paragraph (c) or (d)) or an interest, or for civil law a right, therein that was not held primarily for the purpose of gaining or producing income from the land for the period, 
  (b) had an interest, or for civil law a right, in a building that was being constructed, renovated or altered, 
  (c) owned land subjacent to the building referred to in paragraph (b) or an interest, or for civil law a right, therein, or 
  (d) owned land immediately contiguous to the land referred to in paragraph (c) or an interest, or for civil law a right, therein that was used or was intended to be used for a parking area, driveway, yard, garden or other use necessary for the use or intended use of the building referred to in paragraph (b), there shall be included in computing the insurer’s income for the year, where the land, building, or interest or right, was designated insurance property of the insurer for the year, or property used or held by it in the year in the course of carrying on an insurance business in Canada, the total of all amounts each of which is the amount prescribed in respect of the insurer’s cost or capital cost, as the case may be, of the land, building, or interest or right, for the period, and the amount prescribed shall, at the end of the period, be included in computing 
  (e) where the land, or interest or right therein, is property described in paragraph (a), the cost to the insurer of the land, or of the interest or right therein, and 
  (f) where the land, building, or interest or right therein, is property described in paragraphs (b) to (d), the capital cost to the insurer of the interest or right in the building described in paragraph (b). 
  
  ### Application
  
  (4.5) Where a life insurer transfers or lends property, directly or indirectly in any manner whatever, to a person or partnership (in this subsection referred to as the “transferee”) that is affiliated with the insurer or a person or partnership that does not deal at arm’s length with the insurer and 
  (a) that property, 
  (b) property substituted for that property, or 
  (c) property the acquisition of which was assisted by the transfer or loan of that property was property described in paragraph (4.4)(a), (b), (c) or (d) of the transferee for a period of time in a taxation year of the insurer, the following rules apply: 
  (d) subsection 138(4.4) shall apply to include an amount in the insurer’s income for the year on the assumption that the property was owned by the insurer for the period, was property described in paragraph (4.4)(a), (b), (c) or (d) of the insurer and was used or held by it in the year in the course of carrying on an insurance business in Canada, and 
  (e) an amount included in the insurer’s income for the year under subsection 138(4.4) by reason of the application of this subsection shall 
  (i) where subparagraph 138(4.5)(e)(ii) does not apply, be added by the insurer in computing the cost to it of shares of the capital stock of or an interest in the transferee at the end of the year, or 
  (ii) where the insurer and the transferee have jointly elected in prescribed form on or before the day that is the earliest of the days on or before which any taxpayer making the election is required to file a return pursuant to section 150 for the taxation year that includes the period, be added in computing 
  (A) where the property is land or an interest, or for civil law a right, therein of the transferee described in paragraph (4.4)(a), the cost to the transferee of the land, or of the interest or right therein, and 
  (B) where the property is land or a building, or an interest therein or for civil law a right therein, described in paragraphs (4.4)(b) to (d), the capital cost to the transferee of the interest or of the right in the building described in paragraph (4.4)(b). 
  
  ### Completion
  
  (4.6) For the purposes of subsection 138(4.4), the construction, renovation or alteration of a building is completed at the earlier of the day on which the construction, renovation or alteration is actually completed and the day on which all or substantially all of the building is used for the purpose for which it was constructed, renovated or altered. 
  
  ### Deductions not allowed
  
  (5) Notwithstanding any other provision of this Act, 
  (a) in the case of an insurer, no deduction may be made under paragraph 20(1)(l) in computing its income for a taxation year from an insurance business in Canada in respect of a premium or other consideration for a life insurance policy in Canada or an interest therein; and 
  (b) in the case of a non-resident insurer or a life insurer resident in Canada that carries on any of its insurance business in a country other than Canada, no deduction may be made under paragraph 20(1)(c) or 20(1)(d) in computing its income for a taxation year from carrying on an insurance business in Canada, except in respect of 
  (i) interest on borrowed money used to acquire designated insurance property for the year, or to acquire property for which designated insurance property for the year was substituted property, for the period in the year during which the designated insurance property was held by the insurer in respect of the business, 
  (ii) interest on amounts payable for designated insurance property for the year in respect of the business, or 
  (iii) interest on deposits received or other amounts held by the insurer that arose in connection with life insurance policies in Canada or with policies insuring Canadian risks. 
  (iv)  [Repealed, 2001, c. 17, s. 133(2)]  
  
  ### No deduction
  
  (5.1) No deduction shall be made under subsection 20(12) in computing the income of a life insurer resident in Canada in respect of foreign taxes attributable to its insurance business. 
  (5.2)  [Repealed, 1995, c. 21, s. 57(5)]  
  
  ### Deduction for dividends from taxable corporations
  
  (6) In computing the taxable income of a life insurer for a taxation year, no deduction from the income of the insurer for the year may be made under section 112 but, except as otherwise provided by that section, there may be deducted from that income the total of taxable dividends (other than dividends on term preferred shares that are acquired in the ordinary course of the business carried on by the life insurer) included in computing the insurer’s income for the year and received by the insurer in the year from taxable Canadian corporations. 
  (7)  [Repealed, 1997, c. 25, s. 39(8)]  
  
  ### No deduction for foreign tax
  
  (8) No deduction shall be made under section 126 from the tax payable under this Part for a taxation year by a life insurer resident in Canada in respect of such part of an income or profits tax as can reasonably be attributable to income from its insurance business. 
  
  ### Computation of income
  
  (9) Where in a taxation year an insurer (other than an insurer resident in Canada that does not carry on a life insurance business) carries on an insurance business in Canada and in a country other than Canada, there shall be included in computing its income for the year from carrying on its insurance businesses in Canada the total of 
  (a) its gross investment revenue for the year from its designated insurance property for the year, and 
  (b) the amount prescribed in respect of the insurer for the year. 
  
  ### Application of financial institution rules
  
  (10) Notwithstanding sections 142.3, 142.4, 142.5 and 142.51, where in a taxation year an insurer (other than an insurer resident in Canada that does not carry on a life insurance business) carries on an insurance business in Canada and in a country other than Canada, in computing its income for the year from carrying on an insurance business in Canada, 
  (a) sections 142.3, 142.5 and 142.51 apply only in respect of property that is designated insurance property for the year in respect of the business; and 
  (b) section 142.4 applies only in respect of the disposition of property that, for the taxation year in which the insurer disposed of it, was designated insurance property in respect of the business. 
  (11)  [Repealed, 1995, c. 21, s. 57(7)]  
  
  ### Identical properties
  
  (11.1) For the purpose of section 47, any property of a life insurance corporation that would, but for this subsection, be identical to any other property of the corporation is deemed not to be identical to the other property unless both properties are 
  (a) designated insurance property of the insurer in respect of a life insurance business carried on in Canada; or 
  (b) designated insurance property of the insurer in respect of an insurance business in Canada other than a life insurance business. 
  
  ### Computation of capital gain on pre-1969 depreciable property
  
  (11.2) For the purposes of computing the amount of a capital gain from the disposition of any depreciable property acquired by a life insurer before 1969, the capital cost of the property to the insurer shall be its capital cost determined without reference to paragraph 32(1)(a) of An Act to amend the Income Tax Act, chapter 44 of the Statutes of Canada, 1968-69, as it read in its application to the 1971 taxation year.  
  
  ### Deemed disposition
  
  (11.3) Subject to subsection 138(11.31), where a property of a life insurer resident in Canada that carries on an insurance business in Canada and in a country other than Canada or of a non-resident insurer is 
  (a) designated insurance property of the insurer for a taxation year, was owned by the insurer at the end of the preceding taxation year and was not designated insurance property of the insurer for that preceding year, or 
  (b) not designated insurance property for a taxation year, was owned by the insurer at the end of the preceding taxation year and was designated insurance property of the insurer for that preceding year, the following rules apply: 
  (c) the insurer is deemed to have disposed of the property at the beginning of the year for proceeds of disposition equal to its fair market value at that time and to have reacquired the property immediately after that time at a cost equal to that fair market value, 
  (d) where paragraph (a) applies, any gain or loss arising from the disposition is deemed not to be a gain or loss from designated insurance property of the insurer in the year, and 
  (e) where paragraph (b) applies, any gain or loss arising from the disposition is deemed to be a gain or loss from designated insurance property of the insurer in the year. 
  
  ### Exclusion from deemed disposition
  
  (11.31) Subsection 138(11.3) does not apply 
  (a) to deem a disposition in a taxation year of a property of an insurer where subsection 142.5(2) deemed the insurer to have disposed of the property in its preceding taxation year; nor 
  (b) for the purposes of paragraph 20(1)(l), the description of A and paragraph (b) of the description of F in the definition 
  *undepreciated capital cost* in subsection 13(21) and the definition 
  *designated insurance property* in subsection 138(12).  
  
  ### Deduction of loss
  
  (11.4) Notwithstanding any other provision of this Act, where an insurer has a loss for a taxation year from the disposition, because of subsection 138(11.3), of a property other than a specified debt obligation (as defined in subsection 142.2(1)), and the loss would, but for this subsection, have been deductible in the year, the loss shall be deductible only in the taxation year in which the taxpayer disposes of the property otherwise than because of subsection 138(11.3). 
  (11.41)  [Repealed, 1995, c. 21, s. 57(12)]  
  
  ### Transfer of insurance business by non-resident insurer
  
  (11.5) Where 
  (a) a non-resident insurer (in this subsection referred to as the “transferor”) has, at any time in a taxation year, ceased to carry on all or substantially all of an insurance business carried on by it in Canada in that year, 
  (b) the transferor has, at that time or within 60 days after that time, transferred all or substantially all of the property (in this subsection referred to as the “transferred property) that is owned by it at that time and that was designated insurance property in respect of the business for the taxation year that, because of paragraph (h), ended immediately before that time 
  (i) to a corporation (in this subsection referred to as the “transferee”) that is a qualified related corporation (within the meaning assigned by subsection 219(8)) of the transferor that began immediately after that time to carry on that insurance business in Canada, and 
  (ii) for consideration that includes shares of the capital stock of the transferee, 
  (c) the transferee has, at that time or within 60 days thereafter, assumed or reinsured all or substantially all of the obligations of the transferor that arose in the course of carrying on that insurance business in Canada, and 
  (d) the transferor and the transferee have jointly elected in prescribed form and in accordance with subsection 138(11.6), the following rules apply: 
  (e) subject to paragraph 138(11.5)(k.1), where the fair market value, at that time, of the consideration (other than shares of the capital stock of the transferee or a right to receive any such shares) received or receivable by the transferor for the transferred property does not exceed the total of the cost amounts to the transferor, at that time, of the transferred property, the proceeds of disposition of the transferor and the cost to the transferee of the transferred property shall be deemed to be the cost amount, at that time, to the transferor of the transferred property, and in any other case, the provisions of subsection 85(1) shall be applied in respect of the transfer, 
  (f) where the provisions of subsection 85(1) are not required to be applied in respect of the transfer, the cost to the transferor of any particular property (other than shares of the capital stock of the transferee or a right to receive any such shares) received or receivable by it as consideration for the transferred property shall be deemed to be the fair market value, at that time, of the particular property, 
  (g) where the provisions of subsection 85(1) are not required to be applied in respect of the transfer, the cost to the transferor of any shares of the capital stock of the transferee received or receivable by the transferor as consideration for the transferred property shall be deemed to be 
  (i) where the shares are preferred shares of any class of the capital stock of the transferee, the lesser of 
  (A) the fair market value of those shares immediately after the transfer of the transferred property, and 
  (B) the amount determined by the formula is the amount, if any, by which the proceeds of disposition of the transferor of the transferred property determined under paragraph 138(11.5)(e) exceed the fair market value, at that time, of the consideration (other than shares of the capital stock of the transferee or a right to receive any such shares) received or receivable by the transferor for the transferred property, is the fair market value, immediately after the transfer of the transferred property, of those preferred shares of that class, and is the fair market value, immediately after the transfer of the transferred property, of all preferred shares of the capital stock of the transferee receivable by the transferor as consideration for the transferred property, and 
  (ii) where the shares are common shares of any class of the capital stock of the transferee, the amount determined by the formula is the amount, if any, by which the proceeds of disposition of the transferor of the transferred property determined under paragraph 138(11.5)(e) exceed the total of the fair market value, at that time, of the consideration (other than shares of the capital stock of the transferee or a right to receive any such shares) received or receivable by the transferor for the transferred property and the cost to the transferor of all preferred shares of the capital stock of the transferee receivable by the transferor as consideration for the transferred property, is the fair market value, immediately after the transfer of the transferred property, of those shares of that class, and is the fair market value, immediately after the transfer of the transferred property, of all common shares of the capital stock of the transferee receivable by the transferor as consideration for the transferred property, 
  (h) for the purposes of this Act, the transferor and the transferee shall be deemed to have had taxation years ending immediately before that time and, for the purposes of determining the fiscal periods of the transferor and transferee after that time, they shall be deemed not to have established fiscal periods before that time, 
  (i) for the purpose of determining the amount of gross investment revenue required by subsection 138(9) to be included in computing the transferor’s income for the particular taxation year referred to in paragraph 138(11.5)(h) and its gains and losses from its designated insurance property for its subsequent taxation years, the transferor is deemed to have transferred the business referred to in paragraph 138(11.5)(a), the property referred to in paragraph 138(11.5)(b) and the obligations referred to in paragraph 138(11.5)(c) to the transferee on the last day of the particular year, 
  (j) for the purpose of determining the income of the transferor and the transferee for their taxation years following their taxation years referred to in paragraph (h), amounts deducted by the transferor as reserves under subparagraph (3)(a)(i) and paragraphs 20(1)(l) and (l.1) and 20(7)(c) of this Act and section 33 and paragraph 138(3)(c) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in its taxation year referred to in paragraph (h) in respect of the transferred property referred to in paragraph (b) or the obligations referred to in paragraph (c) are deemed to have been deducted by the transferee, and not the transferor, for its taxation year referred to in paragraph (h),  
  (j.1) for the purpose of determining the income of the transferor and the transferee for their taxation years following their taxation years referred to in paragraph 138(11.5)(h), amounts included under paragraphs 138(4)(b) and 12(1)(e.1) in computing the transferor’s income for its taxation year referred to in paragraph 138(11.5)(h) in respect of the insurance policies of the business referred to in paragraph 138(11.5)(a) are deemed to have been included in computing the income of the transferee, and not of the transferor, for their taxation years referred to in paragraph 138(11.5)(h), 
  (k) for the purposes of this section, sections 12, 12.4, 20, 138.1, 140 and 142, paragraphs 142.4(4)(c) and (d), section 148 and Part XII.3, the transferee is, in its taxation years following its taxation year referred to in paragraph (h), deemed to be the same person as, and a continuation of, the transferor in respect of the business referred to in paragraph (a), the transferred property referred to in paragraph (b) and the obligations referred to in paragraph (c), 
  (k.1) except for the purpose of this subsection, where the provisions of subsection 85(1) are not required to be applied in respect of the transfer, 
  (i) the transferor shall be deemed not to have disposed of a transferred property that is a specified debt obligation (other than a mark-to-market property), and 
  (ii) the transferee shall be deemed, in respect of a transferred property that is a specified debt obligation (other than a mark-to-market property), to be the same person as, and a continuation of, the transferor, and for the purpose of this paragraph, 
  *mark-to-market property* and 
  *specified debt obligation* have the meanings assigned by subsection 142.2(1),  
  (k.2) for the purposes of subsections 112(5) to 112(5.2) and 112(5.4) and the definition 
  *mark-to-market property* in subsection 142.2(1), the transferee shall be deemed, in respect of the transferred property, to be the same person as, and a continuation of, the transferor,  
  (l) for the purposes of this subsection and subsections (11.7) and (11.9), the fair market value of consideration received by the transferor from the transferee in respect of the assumption or reinsurance of a particular obligation referred to in paragraph (c) is deemed to be the total of the amounts deducted by the transferor as a reserve under subparagraph (3)(a)(i) and paragraph 20(7)(c) in its taxation year referred to in paragraph (h) in respect of the particular obligation, and 
  (m) for the purpose of computing the income of the transferor or the transferee for their taxation years following their taxation years referred to in paragraph 138(11.5)(h), 
  (i) an amount in respect of a reinsurance premium paid or payable by the transferor to the transferee in respect of the obligations referred to in paragraph 138(11.5)(c), or 
  (ii) an amount in respect of a reinsurance commission paid or payable by the transferee to the transferor in respect of the amount referred to in subparagraph 138(11.5)(m)(i) under a reinsurance arrangement undertaken to effect the transfer of the insurance business to which this subsection applied shall be included or deducted, as the case may be, only to the extent that may be reasonably regarded as necessary to determine the appropriate amount of income of both the transferor and the transferee. 
  
  ### Time of election
  
  (11.6) Any election under subsection 138(11.5) shall be made on or before the day that is the earliest of the days on or before which any taxpayer making the election is required to file a return of income pursuant to section 150 for the taxation year in which the transactions to which the election relates occurred. 
  
  ### Computation of paid-up capital
  
  (11.7) Where, after December 15, 1987, subsection 138(11.5) is applicable in respect of a transfer of property by a non-resident insurer to a qualified related corporation of the insurer and the provisions of subsection 85(1) were not required to be applied in respect of the transfer, the following rules apply: 
  (a) in computing the paid-up capital, at any time after the transfer, in respect of any particular class of shares of the capital stock of the qualified related corporation, there shall be deducted an amount determined by the formula is the increase, if any, determined without reference to this subsection as it applies to the transfer, in the paid-up capital in respect of all the shares of the capital stock of the corporation as a result of the transfer, is the amount, if any, by which the cost of the transferred property to the corporation, immediately after the transfer, exceeds the fair market value, immediately after the transfer, of any consideration (other than shares of the capital stock of the corporation) received or receivable by the insurer from the corporation for the property, and is the increase, if any, determined without reference to this subsection as it applies to the transfer, in the paid-up capital in respect of the particular class of shares as a result of the acquisition by the corporation of the transferred property; and 
  (b) in computing the paid-up capital, at any time after December 15, 1987, in respect of any particular class of shares of the capital stock of the qualified related corporation, there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid after December 15, 1987 and before that time by the corporation exceeds 
  (B) the total of such dividends that would have been determined under clause 138(11.7)(b)(i)(A) if this Act were read without reference to paragraph 138(11.7)(a), and 
  (ii) the total of all amounts each of which is an amount required by paragraph 138(11.7)(a) to be deducted in computing the paid-up capital in respect of that class of shares after December 15, 1987 and before that time. 
  
  ### Rules on transfers of depreciable property
  
  (11.8) Where 
  (a) subsection 138(11.5) is applicable in respect of a transfer of depreciable property by a non-resident insurer to a qualified related corporation, 
  (b) the provisions of subsection 85(1) were not required to be applied in respect of the transfer, and 
  (c) the capital cost to the insurer of the depreciable property exceeds its proceeds of disposition therefor, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a), the following rules apply: 
  (d) the capital cost of the depreciable property to the corporation shall be deemed to be the amount that was the capital cost thereof to the insurer, and 
  (e) the excess shall be deemed to have been allowed to the corporation in respect of the property under regulations made under paragraph 20(1)(a) in computing its income for taxation years ending before the transfer. 
  
  ### Computation of contributed surplus
  
  (11.9) Where, after December 15, 1987, subsection 138(11.5) or 85(1) is applicable in respect of a transfer of property by a person or partnership to an insurance corporation resident in Canada and 
  (a) the total of 
  (i) the fair market value, immediately after the transfer, of any consideration (other than shares of the capital stock of the corporation) received or receivable by the person or partnership from the corporation for the transferred property, 
  (ii) the increase, if any, in the paid-up capital of all the shares of the capital stock of the corporation (determined without reference to subsection 138(11.7) or 85(2.1) as it applies in respect of the transfer) arising on the transfer, and 
  (iii) the increase, if any, in the contributed surplus of the corporation (determined without reference to this subsection as it applies in respect of the transfer) arising on the transfer exceeds 
  (b) the total of 
  (i) the total of all amounts each of which is an amount required to be deducted in computing the paid-up capital of a class of shares of the capital stock of the corporation under subsection 138(11.7) or 85(2.1), as the case may be, as it applies in respect of the transfer, and 
  (ii) the cost to the corporation of the transferred property, for the purposes of paragraph 84(1)(c.1) and subsections 219(5.2) and 219(5.3), the contributed surplus of the corporation arising on the transfer shall be deemed to be the amount, if any, by which the amount of the contributed surplus otherwise determined exceeds the amount, if any, by which the total determined under paragraph 138(11.9)(a) exceeds the total determined under paragraph 138(11.9)(b). 
  
  ### Computation of income of non-resident insurer
  
  (11.91) Where, at any time in a particular taxation year, 
  (a) a non-resident insurer carries on an insurance business in Canada, and 
  (b) immediately before that time, the insurer was not carrying on an insurance business in Canada or ceased to be exempt from tax under this Part on any income from such business by reason of any Act of Parliament or anything approved, made or declared to have the force of law thereunder, for the purpose of computing the income of the insurer for the particular taxation year, 
  (c) the insurer shall be deemed to have had a taxation year ending immediately before the commencement of the particular taxation year, 
  (d) for the purposes of paragraph (4)(a), subsection (9), the definition designated insurance property in subsection (12) and paragraphs 12(1)(d), (d.1) and (e), the insurer is deemed to have carried on the business in Canada in that preceding year and to have claimed the maximum amounts to which it would have been entitled under subparagraph (3)(a)(i) and paragraphs 20(1)(l) and (l.1) and 20(7)(c) for that year,  
  (d.1) for the purposes of subsection 20(22) and subparagraph 138(3)(a)(ii.1), 
  (i) the insurer is deemed to have carried on the business referred to in paragraph 138(11.91)(a) in Canada in the preceding taxation year referred to in paragraph 138(11.91)(c), and 
  (ii) the amounts, if any, that would have been prescribed in respect of the insurer for the purposes of paragraphs 138(4)(b) and 12(1)(e.1) for that preceding year in respect of the insurance policies of that business are deemed to have been included in computing its income for that year, and 
  (e) the insurer is deemed to have disposed, immediately before the beginning of the particular taxation year, of each property owned by it at that time that is designated insurance property in respect of the business referred to in paragraph (a) for the particular taxation year, for proceeds of disposition equal to the fair market value at that time and to have reacquired, at the beginning of the particular taxation year, the property at a cost equal to that fair market value. 
  (f)  [Repealed, 2013, c. 34, s. 286]  
  
  ### Computation of income where insurance business is transferred
  
  (11.92) Where, at any time in a taxation year, an insurer (in this subsection referred to as the “vendor”) has disposed of 
  (a) all or substantially all of an insurance business carried on by it in Canada, or 
  (b) all or substantially all of a line of business of an insurance business carried on by it in Canada to a person (in this subsection referred to as the “purchaser”) and obligations in respect of the business or line of business, as the case may be, in respect of which a reserve may be claimed under subparagraph (3)(a)(i) or paragraph 20(7)(c) (in this subsection referred to as the “obligations”) were assumed by the purchaser, the following rules apply: 
  (c) for the purpose of determining the amount of the gross investment revenue required to be included in computing the income of the vendor and the purchaser under subsection 138(9) and the amount of the gains and losses of the vendor and the purchaser from designated insurance property for the year 
  (i) the vendor and the purchaser shall, in addition to their normal taxation years, be deemed to have had a taxation year ending immediately before that time, and 
  (ii) for the taxation years of the vendor and the purchaser following that time, the business or line of business, as the case may be, disposed of to, and the obligations assumed by, the purchaser shall be deemed to have been disposed of or assumed, as the case may be, on the last day of the taxation year referred to in subparagraph 138(11.92)(c)(i), 
  (d) for the purpose of computing the income of the vendor and the purchaser for taxation years ending after that time, 
  (i) an amount paid or payable by the vendor to the purchaser in respect of the obligations, or 
  (ii) an amount in respect of a commission paid or payable by the purchaser to the vendor in respect of the amount referred to in subparagraph 138(11.92)(d)(i) shall be deemed to have been paid or payable or received or receivable, as the case may be, by the vendor or the purchaser, as the case may be, in the course of carrying on the business or line of business, as the case may be, and 
  (e) where the vendor has disposed of all or substantially all of an insurance business referred to in paragraph 138(11.92)(a), the vendor shall, for the purposes of section 219, be deemed to have ceased to carry on that business at that time. 
  
  ### Property acquired on default in payment
  
  (11.93) Where, at any time in a taxation year of an insurer, the beneficial ownership of property is acquired or reacquired by the insurer in consequence of the failure to pay all or any part of an amount (in this subsection referred to as the “insurer’s claim”) owing to the insurer at that time in respect of a bond, debenture, mortgage, hypothecary claim, agreement of sale or any other form of indebtedness owned by the insurer, the following rules apply to the insurer: 
  (a) section 79.1 does not apply in respect of the acquisition or reacquisition; 
  (b) the insurer shall be deemed to have acquired or reacquired, as the case may be, the property at an amount equal to the fair market value of the property, immediately before that time; 
  (c) the insurer shall be deemed to have disposed at that time of the portion of the indebtedness represented by the insurer’s claim for proceeds of disposition equal to that fair market value and, immediately after that time, to have reacquired that portion of the indebtedness at a cost of nil; 
  (d) the acquisition or reacquisition shall be deemed to have no effect on the form of the indebtedness; and 
  (e) in computing the insurer’s income for the year or a subsequent taxation year, no amount is deductible under paragraph 20(1)(l) in respect of the insurer’s claim. 
  
  ### Transfer of insurance business by resident insurer
  
  (11.94) Where 
  (a) an insurer resident in Canada (in this subsection referred to as the “transferor”) has, at any time in a taxation year, ceased to carry on all or substantially all of an insurance business carried on by it in Canada in that year, 
  (b) the transferor has, at that time or within 60 days after that time, 
  (i) in the case of a transferor that is a life insurer and that carries on an insurance business in Canada and in a country other than Canada in the year, transferred all or substantially all of the property (in subsection (11.5) referred to as the “transferred property”) that is owned by it at that time and that was designated insurance property in respect of the business for the taxation year that, because of paragraph (11.5)(h), ended immediately before that time, or 
  (ii) in any other case, transferred all or substantially all of the property owned by it at that time and used by it in the year in, or held by it in the year in the course of, carrying on that insurance business in Canada in that year (in subsection (11.5) referred to as the “transferred property”) to a corporation resident in Canada (in this subsection referred to as the “transferee”) that is a qualified related corporation (within the meaning assigned by subsection 219(8)) of the transferor that, immediately after that time, began to carry on that insurance business in Canada for consideration that includes shares of the capital stock of the transferee, 
  (c) the transferee has, at that time or within 60 days thereafter, assumed or reinsured all or substantially all of the obligations of the transferor that arose in the course of carrying on that insurance business in Canada, and 
  (d) the transferor and the transferee have jointly elected in prescribed form and in accordance with subsection 138(11.6), paragraphs 138(11.5)(e) to 138(11.5)(m) and subsections 138(11.7) to 138(11.9) apply in respect of the transfer. 
  
  ### Definitions
  
  (12) In this section,  
  *accumulated 1968 deficit* [Repealed, 1997, c. 25, s. 39(16)]   
  *amount payable*, in respect of a policy loan at a particular time, means the amount of the policy loan and the interest thereon that is outstanding at that time; (montant payable)   
  *base year* of an insurer means the insurer’s taxation year that immediately precedes its transition year; (année de base)   
  *Canada security* [Repealed, 1995, c. 21, s. 57(15)]   
  *contractual service margin* for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by the insurer, at the end of a taxation year, means the greater of the positive or negative amount of the contractual service margin for the group  
  (a) that would be reported as at the end of the taxation year if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection, and  
  (b) that would be determined at the end of the taxation year in respect of the group in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection; (marge sur services contractuels)   
  *cost* [Repealed, 1995, c. 21, s. 57(15)]   
  *deposit accounting insurance policy* in respect of an insurer’s taxation year means an insurance policy of the insurer that, according to International Financial Reporting Standards, is not an insurance contract for that taxation year; (police d’assurance à comptabilité de dépôt)   
  *designated foreign insurance business*, of a life insurer resident in Canada in a taxation year, means an insurance business that is carried on by the life insurer in a country other than Canada in the year unless more than 90% of the gross premium revenue from the business for the year from the insurance of risks (net of reinsurance ceded) is in respect of the insurance of risks (other than specified Canadian risks) of persons with whom the life insurer deals at arm’s length; (entreprise d’assurance étrangère désignée)   
  *designated insurance property* for a taxation year of an insurer (other than an insurer resident in Canada that at no time in the year carried on a life insurance business) that, at any time in the year, carried on an insurance business in Canada and in a country other than Canada, means property determined in accordance with prescribed rules except that, in its application to any taxation year, 
  *designated insurance property* for the 1998 or a preceding taxation year means property that was, under this subsection as it read in its application to taxation years that ended in 1996, property used by it in the year in, or held by it in the year in the course of, carrying on an insurance business in Canada; (bien d’assurance désigné)   
  *excluded policy* in respect of an insurer’s base year means an insurance policy of the insurer that would be a deposit accounting insurance policy for the insurer’s base year if International Financial Reporting Standards applied for that base year; (police exclue)   
  *gross investment revenue* of an insurer for a taxation year means the amount determined by the formula  is the total of the following amounts included in its gross revenue for the year: 
  (a) taxable dividends, and 
  (b) amounts received or receivable as, on account of, in lieu of or in satisfaction of, interest, rentals or royalties, other than amounts in respect of debt obligations to which subsection 142.3(1) applies for the year, is its income for the year from each trust of which it is a beneficiary, is its income for the year from each partnership of which it is a member, is the total of all amounts required by subsection 16(1) to be included in computing its income for the year, is the total of 
  (a) all amounts required by paragraph 142.3(1)(a) to be included in computing its income for the year, and 
  (b) all amounts required by subsection 12(3) or 20(14) to be included in computing its income for the year except to the extent that those amounts are included in the computation of A, is the amount determined by the formula is the total of all amounts included under paragraph 56(1)(d) in computing its income for the year, and is the total of all amounts deducted under paragraph 60(a) in computing its income for the year; and is the total of all amounts each of which is 
  (a) an amount deemed by subparagraph 16(6)(a)(ii) to be paid by it in respect of the year as interest, or 
  (b) an amount deductible under paragraph 142.3(1)(b) in computing its income for the year; ( revenus bruts de placements)   
  *group of insurance contracts* of an insurer means a group of insurance contracts of the insurer, determined according to International Financial Reporting Standards, that is a group for the purposes of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year and, for greater certainty, includes a group of insurance contracts that include reinsurance contracts under which the insurer has assumed reinsurance risk; (groupe de contrats d’assurance)   
  *group of life insurance contracts* of an insurer means a group of life insurance contracts of the insurer, determined according to International Financial Reporting Standards, that is a group for the purposes of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year and, for greater certainty, includes a group of life insurance contracts that include reinsurance contracts under which the insurer has assumed reinsurance risk; (groupe de contrats d’assurance-vie)   
  *group of life insurance contracts in Canada* of an insurer means a group of life insurance contracts of the insurer that includes only life insurance contracts issued or effected by the insurer on the life of a person resident in Canada at the time the contract was issued or effected; (groupe de contrats d’assurance-vie au Canada)   
  *group of reinsurance contracts* held by an insurer means a group of reinsurance insurance contracts held by the insurer, determined according to International Financial Reporting Standards, that is a group for the purposes of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year; (groupe de contrats de réassurance)   
  *group of segregated fund policies* of an insurer means a group of insurance contracts of the insurer that includes only segregated fund policies (within the meaning assigned by paragraph 138.1(1)(a)); (groupe de polices à fonds réservé)   
  *insurance*, of a risk, includes the reinsurance of the risk; (assurance)   
  *interest*, in relation to a policy loan, means the amount in respect of the policy loan that is required to be paid under the terms and conditions of the policy in order to maintain the policyholder’s interest in the policy; (intérêt)   
  *liability for incurred claims*, for a group of insurance contracts of an insurer at the end of a taxation year, means the lesser of the positive or negative amount of the liability for incurred claims for the group  
  (a) that would be reported as at the end of the taxation year if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection, and  
  (b) that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection; (passif au titre des sinistres survenus)   
  *liability for remaining coverage*, for a group of insurance contracts of an insurer at the end of a taxation year, means the lesser of the positive or negative amount of the liability for remaining coverage for the group  
  (a) that would be reported as at the end of the taxation year if the amount were determined without reference to 
  (i) projected 
  (A) income and capital taxes (other than the tax payable under Part XII.3), 
  (B) taxes on premiums that are not deductible under Part I, 
  (C) amounts not deductible after the taxation year in computing income under Part I, and 
  (D) cash flows in respect of funds withheld arrangements, 
  (ii) amounts payable that are deductible for the taxation year, or a previous taxation year, in computing income under Part I, and 
  (iii) amounts receivable to the extent they have been included for the taxation year, or a previous taxation year, in computing income under Part I, and 
  (b) that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii); ( passif au titre de la couverture restante)   
  *life insurance policy* includes an annuity contract and a contract all or any part of the insurer’s reserves for which vary in amount depending on the fair market value of a specified group of assets; (police d’assurance-vie)   
  *life insurance policy in Canada* means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected; (police d’assurance-vie au Canada)   
  *maximum tax actuarial reserve* for a particular class of life insurance policy for a taxation year of a life insurer means, except as otherwise expressly prescribed, the maximum amount allowable under subparagraph 138(3)(a)(i) as a policy reserve for the year in respect of policies of that class; (provision actuarielle maximale aux fins d’impôt)   
  *1975 branch accounting election deficiency* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess additional group term reserve* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess capital cost allowance* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess investment reserve* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess policy dividend deduction* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess policy dividend reserve* [Repealed, 2013, c. 34, s. 286]   
  *1975-76 excess policy reserves* [Repealed, 2013, c. 34, s. 286]   
  *non-segregated property* of an insurer means its property other than property included in a segregated fund; (biens non réservés)   
  *participating life insurance policy* means a life insurance policy under which the policyholder is entitled to share (other than by way of an experience rating refund) in the profits of the insurer other than profits in respect of property in a segregated fund; (police d’assurance-vie avec participation)   
  *policyholders’ liabilities*, of an insurer as at the end of a taxation year, means the amount reported as policyholders’ liabilities as at the end of the year; (obligation envers les titulaires de polices)   
  *policy loan* means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada; (avance sur police)   
  *property used by it in the year in, or held by it in the year in the course of* [Repealed, 1997, c. 25, s. 39(16)]   
  *qualified related corporation* of a non-resident insurer has the meaning assigned by subsection 219(8); (société liée admissible)   
  *reinsurance contract held amount*, for a group of reinsurance contracts held by an insurer at the end of a taxation year, means the lesser of the positive or negative amount of the reinsurance contract held asset for the group  
  (a) that would be reported as at the end of the taxation year if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection, and  
  (b) that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs (a)(i) to (iii) of the definition liability for remaining coverage in this subsection; (montant au titre des contrats de réassurance détenus)   
  *relevant authority* of an insurer means  
  (a) the Superintendent of Financial Institutions, if the insurer is required by law to report to the Superintendent of Financial Institutions, and 
  (b) in any other case, the Superintendent of Insurance or other similar officer or authority of the province under whose laws the insurer is incorporated; ( autorité compétente)   
  *reserve transition amount* of an insurer, in respect of an insurance business carried on by it in its transition year, means the positive or negative amount determined by the formula  is the maximum amount that the insurer would be permitted to claim under subparagraph (3)(a)(i) for its base year in respect of a policy reserve for its groups of life insurance contracts in Canada at the end of the base year if 
  (a) the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and 
  (b) sections 1404 and 1406 of the Income Tax Regulations were read in respect of the insurer’s base year as they read in respect of its transition year,  is the maximum amount that the insurer would be permitted to claim under paragraph 20(7)(c) for its base year in respect of a policy reserve for its groups of insurance contracts at the end of the base year if 
  (a) the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and 
  (b) sections 1400 and 1402 of the Income Tax Regulations were read in respect of the insurer’s base year as they read in respect of its transition year,  is the maximum amount that the insurer is permitted to claim under subparagraphs (3)(a)(i) and (ii) (as they read in their application to taxation years that begin before 2023) as a policy reserve for its base year, is the maximum amount that the insurer is permitted to claim under paragraph 20(7)(c) as a policy reserve for its base year, is the amount that would be included under paragraph (4)(b) in computing the insurer’s income for its base year in respect of its groups of life insurance contracts in Canada at the end of the base year if 
  (a) the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and 
  (b) sections 1404 and 1406 of the Income Tax Regulations were read in respect of the insurer’s base year as they read in respect of its transition year,  is the amount that would be included under paragraph 12(1)(e.1) in computing the insurer’s income for its base year if 
  (a) the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and 
  (b) sections 1400 and 1402 of the Income Tax Regulations were read in respect of the insurer’s base year as they read in respect of its transition year,  is the amount included under paragraph (4)(b) (as it read in its application to taxation years that begin before 2023) in computing the insurer’s income for its base year in respect of its life insurance policies, and is the amount included under paragraph 12(1)(e.1) in computing the insurer’s income for its base year; ( montant transitoire)   
  *segregated fund* has the meaning given that expression in subsection 138.1(1); (fonds réservé)   
  *specified Canadian risk* has the same meaning as in paragraph 95(2)(a.23); (risques canadiens déterminés)   
  *surplus funds derived from operations* of an insurer as of the end of a particular taxation year means the amount determined by the formula  is the total of the insurer’s income for each taxation year in the period beginning with its 1969 taxation year and ending with the particular year from all insurance businesses carried on by it, is the total of all amounts each of which is a portion of a non-capital loss that was deemed by subsection 111(7.1) as it read in its application to the 1976 taxation year to have been deductible in computing the insurer’s income for a taxation year that ended before 1977, is the total of all profits or gains made by the insurer in the period in respect of non-segregated property of the insurer disposed of by it that was used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss, if any, for any taxation year in the period from carrying on an insurance business, is the total of its loss, if any, for each taxation year in the period from all insurance businesses carried on by it, is the total of all losses sustained by the insurer in the period in respect of non-segregated property disposed of by it that was used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss, if any, for any taxation year in the period from carrying on an insurance business, is the total of 
  (a) all taxes payable under this Part by the insurer, and all income taxes payable by it under the laws of each province, for each taxation year in the period, except such portion thereof as would not have been payable by it if subsection 138(7) had not been enacted, and 
  (b) all taxes payable under Parts I.3 and VI by the insurer for each taxation year in the period, and is the total of all gifts made in the period by the insurer to a qualified donee; ( fonds excédentaire résultant de l’activité)   
  *transition year* of an insurer means the insurer’s first taxation year that begins after 2022. (année transitoire)  
  
  ### Assets and liabilities
  
  (12.1) For greater certainty, in determining the amount of 
  (a) the contractual service margin, liability for incurred claims and liability for remaining coverage for a group of insurance contracts of an insurer, the amount is 
  (i) a positive amount if the amount is reported as a liability, and 
  (ii) a negative amount if the amount is reported as an asset; and 
  (b) the contractual service margin and reinsurance contract held amount for a group of reinsurance contracts held by an insurer, the amount is 
  (i) a positive amount if the amount is reported as an asset, and 
  (ii) a negative amount if the amount is reported as a liability. 
  
  ### IFRS reference
  
  (12.2) Except as otherwise provided, references to International Financial Reporting Standards in this section refer to the International Financial Reporting Standards adopted by the Accounting Standards Board and effective for years that begin on or after January 1, 2023. 
  
  ### Amount reported
  
  (12.3) A reference in subsections (12) and 138.1(1) of this Act and Parts XIV, XXIV and LXXXVI of the Income Tax Regulations to an amount that is reported, or that would be reported, of an insurer as at the end of a taxation year means  
  (a) if the insurer is the Canada Mortgage and Housing Corporation or a foreign affiliate of a taxpayer resident in Canada, an amount that is reported, or that would be reported, in the insurer’s financial statements for the year if those statements were prepared in accordance with International Financial Reporting Standards; 
  (b) if paragraph (a) does not apply and reporting by the insurer to the insurer’s relevant authority is required at the end of the year, an amount that is reported, or that would be reported, in the insurer’s non-consolidated balance sheet for the year accepted by the insurer’s relevant authority; 
  (c) if paragraphs (a) and (b) do not apply and the insurer is, throughout the year, subject to the supervision of its relevant authority, an amount that is reported, or that would be reported, in a non-consolidated balance sheet for the year that is prepared in a manner consistent with the requirements that would have applied had reporting to the insurer’s relevant authority been required at the end of the year; and 
  (d) in any other case, nil. 
  
  ### Variation in 
  *tax basis* and 
  *amortized cost* 
  
  (13) Where 
  (a) in a taxation year that ended after 1968 and before 1978 an insurer carried on a life insurance business in Canada and an insurance business in a country other than Canada, 
  (b) the insurer did not make an election in respect of the year under subsection 138(9) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it applied to that year, and  
  (c) the ratio of the value for the year of the insurer’s specified Canadian assets to its Canadian investment fund for the year exceeded one, each of the amounts included or deducted as follows in respect of the year shall be multiplied by the ratio referred to in paragraph 138(13)(c): 
  (d) under paragraph (c), (d), (k) or (l) of the definition 
  *tax basis* in subsection 142.4(1) in determining the tax basis of a debt obligation to the insurer, or  
  (e) under paragraph (c), (d), (f) or (h) of the definition 
  *amortized cost* in subsection 248(1) in determining the amortized cost of a debt obligation to the insurer.  
  
  ### Meaning of certain expressions
  
  (14) For the purposes of subsection 138(13), the expressions 
  *Canadian investment fund for a taxation year*, 
  *specified Canadian assets* and 
  *value for the taxation year* have the meanings prescribed therefor.  
  
  ### Definition not to apply
  
  (15) In this section, in construing the meaning of the expression 
  *group term insurance policy*, the definition 
  *group term life insurance policy* in subsection 248(1) does not apply.  
  
  ### Transition year income inclusion
  
  (16) There shall be included in computing an insurer’s income for its transition year from an insurance business carried on by it in the transition year the positive amount, if any, of the insurer’s reserve transition amount in respect of that insurance business. 
  
  ### Transition year income deduction
  
  (17) There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in the transition year the absolute value of the negative amount, if any, of the insurer’s reserve transition amount in respect of that insurance business. 
  
  ### IFRS transition — reversals
  
  (17.1) In applying subsections (18) and (19) to an insurer for a taxation year of the insurer in respect of International Financial Reporting Standards, 
  (a) the reference to “policy reserve” in the description of C in the definition reserve transition amount in subsection (12) is to be read as a reference to “policy reserve determined without reference to the insurer’s excluded policies”;  
  (b) the description of D in the definition reserve transition amount in subsection (12) is to be read as follows:  is the amount determined by the formula is the maximum amount that the insurer is permitted to claim under paragraph 20(7)(c) as a policy reserve determined without reference to the insurer’s excluded policies, and is the amount of policy acquisition costs of the insurer that is not deductible, but in the absence of subsection 18(9.02) (as it read in the base year) would have been deductible, in the base year or a preceding taxation year; 
  (c) the reference to “life insurance policies” in the description of G in the definition reserve transition amount in subsection (12) is to be read as a reference to “life insurance policies other than excluded policies”; and  
  (d) the amount included in the description of H in the definition reserve transition amount in subsection (12) is to be determined without reference to excluded policies.  
  
  ### Transition year income inclusion reversal
  
  (18) If an amount has been included under subsection (16) in computing an insurer’s income for its transition year from an insurance business carried on by it, there shall be deducted in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula is the amount included under subsection (16) in computing the insurer’s income for the transition year from that insurance business; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Transition year income deduction reversal
  
  (19) If an amount has been deducted under subsection (17) in computing an insurer’s income for its transition year from an insurance business carried on by it, there shall be included in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula is the amount deducted under subsection (17) in computing the insurer’s income for the transition year from that insurance business; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Winding-up
  
  (20) If an insurer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the “parent”), and immediately after the winding-up the parent carries on an insurance business, in applying subsections (18) and (19) in computing the income of the insurer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the “start day”) on which assets of the insurer were distributed to the parent on the winding-up, 
  (a) the parent is, on and after the start day, deemed to be the same corporation as and a continuation of the insurer in respect of 
  (i) any amount included under subsection (16) or deducted under subsection (17) in computing the insurer’s income from an insurance business for its transition year, 
  (ii) any amount deducted under subsection (18) or included under subsection (19) in computing the insurer’s income from an insurance business for a taxation year of the insurer that begins before the start day, and 
  (iii) any amount that would — in the absence of this subsection and if the insurer existed and carried on an insurance business on each day that is the start day or a subsequent day and on which the parent carries on an insurance business — be required to be deducted or included, in respect of any of those days, under subsection (18) or (19) in computing the insurer’s income from an insurance business; and 
  (b) the insurer is, in respect of each of its particular taxation years, to determine the value for B in the formulas in subsections (18) and (19) without reference to the start day and days after the start day. 
  
  ### Amalgamations
  
  (21) If there is an amalgamation (within the meaning assigned by subsection 87(1)) of an insurer with one or more other corporations to form one corporation (referred to in this subsection as the “new corporation”), and immediately after the amalgamation the new corporation carries on an insurance business, in applying subsections (18) and (19) in computing the income of the new corporation for particular taxation years of the new corporation that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the insurer in respect of 
  (a) any amount included under subsection (16) or deducted under subsection (17) in computing the insurer’s income from an insurance business for its transition year; 
  (b) any amount deducted under subsection (18) or included under subsection (19) in computing the insurer’s income from an insurance business for a taxation year that begins before the day on which the amalgamation occurred; and 
  (c) any amount that would — in the absence of this subsection and if the insurer existed and carried on an insurance business on each day that is the day on which the amalgamation occurred or a subsequent day and on which the new corporation carries on an insurance business — be required to be deducted or included, in respect of any of those days, under subsection (18) or (19) in computing the insurer’s income from an insurance business. 
  
  ### Application of subsection (23)
  
  (22) Subsection (23) applies if, at any time, an insurer (referred to in this subsection and subsection (23) as the “transferor”) transfers, to a corporation (referred to in this subsection and subsection (23) as the “transferee”) that is related to the transferor, property in respect of an insurance business carried on by the transferor (referred to in this subsection and subsection (23) as the “transferred business”) and 
  (a) subsection 138(11.5) or (11.94) applies to the transfer; or 
  (b) subsection 85(1) applies to the transfer, the transfer includes all or substantially all of the property and liabilities of the transferred business and, immediately after the transfer, the transferee carries on an insurance business. 
  
  ### Transfer of life insurance business
  
  (23) If this subsection applies in respect of the transfer, at any time, of property 
  (a) the transferee is, at and after that time, deemed to be the same corporation as and a continuation of the transferor in respect of 
  (i) any amount included under subsection (16) or deducted under subsection (17) in computing the transferor’s income for its transition year that can reasonably be attributed to the transferred business, 
  (ii) any amount deducted under subsection (18) or included under subsection (19) in computing the transferor’s income for a taxation year of the transferor that begins before that time that can reasonably be attributed to the transferred business, and 
  (iii) any amount that would — in the absence of this subsection and if the transferor existed and carried on an insurance business on each day that includes that time or is a subsequent day and on which the transferee carries on an insurance business — be required to be deducted or included, in respect of any of those days, under subsection (18) or (19) in computing the transferor’s income that can reasonably be attributed to the transferred business; and 
  (b) in determining, in respect of the day that includes that time or any subsequent day, any amount that is required under subsection (18) or (19) to be deducted or included in computing the transferor’s income for each particular taxation year from the transferred business, the description of A in the formulas in those subsections is deemed to be nil. 
  
  ### Ceasing to carry on business
  
  (24) If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the “discontinued business”), and none of subsections (20) to (22) apply, 
  (a) there shall be deducted, in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula is the amount included under subsection (16) in computing the insurer’s income from the discontinued business for its transition year, and is the total of all amounts each of which is an amount deducted under subsection (18) in computing the insurer’s income from the discontinued business for a taxation year that began before that time; and 
  (b) there shall be included, in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula is the amount deducted under subsection (17) in computing the insurer’s income from the discontinued business for its transition year, and is the total of all amounts each of which is an amount included under subsection (19) in computing the insurer’s income from the discontinued business for a taxation year that began before that time. 
  
  ### Ceasing to exist
  
  (25) If at any time an insurer that carried on an insurance business ceases to exist (otherwise than as a result of a winding-up or amalgamation described in subsection (20) or (21)), for the purposes of subsection (24), the insurer is deemed to have ceased to carry on the insurance business at the earlier of 
  (a) the time (determined without reference to this subsection) at which the insurer ceased to carry on the insurance business, and 
  (b) the time that is immediately before the end of the last taxation year of the insurer that ended at or before the time at which the insurer ceased to exist. 
  (26)  [Repealed, 2022, c. 19, s. 26]  
  
  ### Rules relating to segregated funds
  
  138.1 (1) In respect of life insurance policies for which all or any part of an insurer’s reserves vary in amount depending on the fair market value of a specified group of properties that is reported to a relevant authority (as defined in subsection 138(12)) as a segregated fund (in this section referred to as a “segregated fund”), for the purposes of this Part, the following rules apply:  
  (a) a trust (in this section and section 138.2 referred to as the “related segregated fund trust”) is deemed to be created at the time that is the later of 
  (i) the day that the segregated fund is created, and 
  (ii) the day on which the insurer’s 1978 taxation year commences, and to continue in existence throughout the period during which the fund determines any portion of the benefits under those policies that vary in amount depending on the fair market value of the property in the segregated fund (in this section referred to as “segregated fund policies”); 
  (b) property that has been allocated to and that remains a part of the segregated fund, and any income that has accrued on that property is deemed to be the property and income of the related segregated fund trust and not to be the property and income of the insurer; 
  (c) the insurer is deemed to be 
  (i) the trustee who has ownership or control of the related segregated fund trust property, 
  (ii) a resident of Canada in respect of the related segregated fund trust property used or held by it in the course of carrying on the insurer’s life insurance business in Canada, and 
  (iii) a non-resident of Canada in respect of the related segregated fund trust property not used or held by it in the course of carrying on the insurer’s life insurance business in Canada; 
  (d) where at a particular time there is property in the segregated fund that was not funded with premiums paid under a segregated fund policy, 
  (i) the insurer is deemed to have an interest in the related segregated fund trust that is not in respect of any particular property or source of income, and 
  (ii) the cost at any time of that interest to the insurer is deemed to be the total of 
  (A) for property of the trust at that time allocated by the insurer to the segregated fund prior to 1978, the amount that would be its adjusted cost base to the insurer if the interest had been a capital property at all relevant times prior to 1978 and if the rules in this section had been applicable for the taxation years after 1971 and before 1978, and 
  (B) for property of the trust at that time allocated by the insurer to the segregated fund after 1977, the fair market value of the property at the time it was last allocated to the segregated fund by the insurer; 
  (e) where at any particular time there is property in the segregated fund that was funded with a portion of the premiums paid before that time under a segregated fund policy, 
  (i) the respective segregated fund policyholder is deemed to have an interest in the related segregated fund trust that is not in respect of any particular property or source of income, 
  (ii) the cost of that interest is deemed to be the amount that is the total of 
  (A) the amount that would be its adjusted cost base to the insurer at December 31, 1977 if the interest had been a capital property at all relevant times prior to 1978 and if the rules in this section (if subsection 138.1(3) were read without reference to the expressions “or capital loss” and “or loss”) had been applicable for taxation years after 1971 and before 1978, and 
  (B) the total of amounts each of which is that portion of a premium paid before that time and after the day referred to in subparagraph 138.1(1)(a)(ii) under a segregated fund policy that was or is to be used by the insurer to fund property allocated to the segregated fund (other than the portion of the premium that is an acquisition fee), and 
  (iii) the portion of a premium included in a segregated fund is deemed not to be an amount paid in respect of a premium under the policy; 
  (f) the taxable income of the related segregated fund trust is deemed for the purposes of subsections 104(6), (13) and (24) to be an amount that has become payable in the year to the beneficiaries under the segregated fund trust and the amount therefor in respect of any particular beneficiary is equal to the amount determined by reference to the terms and conditions of the segregated fund policy; 
  (g) where at a particular time the fair market value of property transferred by the insurer to the segregated fund results in an increase at that time in the portion of the insurer’s reserves for a segregated fund policy held by a policyholder that vary with the fair market value of the segregated fund and a decrease in the portion of its reserves for the policy that do not so vary, the amount of that increase shall, 
  (i) for the purpose of the determination of H in the definition 
  *adjusted cost basis* in subsection 148(9), be deemed to be proceeds of disposition that the policyholder became entitled to receive at that time,  
  (ii) for the purpose of computing the adjusted cost base to the policyholder of the policyholder’s interest in the related segregated fund trust, be added at that time to the cost to the policyholder of that interest, and 
  (iii) for the purpose of computing the insurer’s income, be deemed to be a payment under the terms and conditions of the policy at that time; 
  (h) where at a particular time the fair market value of property transferred by the insurer from the segregated fund results in an increase at that time in the portion of the insurer’s reserves for a segregated fund policy that do not vary with the fair market value of the segregated fund and a decrease in the portion of its reserves for the policy that so vary, the amount of that increase shall, for the purpose of calculating the insurer’s income, be deemed to be a premium received by the insurer at that time; 
  (i) where at a particular time the policyholder of a segregated fund policy disposes of all or a portion of the policyholder’s interest in the related segregated fund trust, that proportion of the amount, if any, by which the acquisition fee with respect to the particular policy exceeds the total of amounts each of which is an amount determined under this paragraph with respect to the particular policy before that time, that 
  (i) the fair market value of the interest disposed of at that time is of 
  (ii) the fair market value of the policyholder’s interest in the particular segregated fund trust immediately before that time, is deemed to be a capital loss of the related segregated fund trust that reduces the policyholder’s benefits under the particular policy by that amount for the purposes of subsection 138.1(3); 
  (j) the obligations of an insurer in respect of a benefit that is payable under a segregated fund policy, the amount of which benefit varies with the fair market value of the segregated fund at the time the benefit becomes payable, are deemed to be obligations of the trustee under the related segregated fund trust and not of the insurer and any amount received by the policyholder or that the policyholder became entitled to receive at any particular time in a year in respect of those obligations is deemed to be proceeds from the disposition of an interest in the related segregated fund trust; 
  (k) a reference to “the terms and conditions of the trust arrangement” in section 104 or subsection 127.2(3) is deemed to include a reference to the terms and conditions of the related segregated fund policy and the trustee is deemed to have designated the amounts referred to in that section in accordance with those terms and conditions; and 
  (l) where at any time an insurer acquires a share as a first registered holder thereof and allocates the share to a related segregated fund trust, the trust shall be deemed to have acquired the share at that time as the first registered holder thereof for the purpose of computing its share-purchase tax credit and the insurer shall be deemed not to have acquired the share for the purpose of computing its share-purchase tax credit. 
  
  ### Rules relating to property in segregated funds at end of 1977 taxation year
  
  (2) Where an insurer holds property at the end of its 1977 taxation year in connection with a segregated fund, the following rules apply: 
  (a) the property is deemed to have been acquired by the related segregated fund trust on the day determined under paragraph 138.1(1)(a) at a cost equal to the adjusted cost base of the property to the insurer on that day and that transaction is deemed to be a transaction between persons not dealing at arm’s length; 
  (b) the property is deemed to have been disposed of by the insurer on the day referred to in paragraph 138.1(2)(a) for proceeds equal to the adjusted cost base of the property to the insurer on that day; and 
  (c) for the purpose of computing the insurer’s income for its 1978 taxation year it shall be deemed to have made a payment to its policyholders in satisfaction of their rights under their segregated fund policies in that year equal to that portion of the amount deducted under subparagraph 138(3)(a)(i) in computing its income for its 1977 taxation year that is in respect of segregated fund policies. 
  
  ### Transition — pre-2018 non-capital losses
  
  (2.1) For the purpose of determining the taxable income of a related segregated fund trust for a taxation year that begins after 2017, the non-capital losses of the related segregated fund trust that arise in a taxation year that begins before 2018 are deemed to be nil. 
  
  ### Capital gains and capital losses of related segregated fund trusts
  
  (3) A capital gain or capital loss of a related segregated fund trust from the disposition of any property shall, to the extent that a policyholder’s benefits under a policy or the interest in the trust of any other beneficiary is affected by that gain or loss, be deemed to be a capital gain or capital loss, as the case may be, of the policyholder or other beneficiary and not that of the trust. 
  (3.1) and (3.2)  [Repealed, 2013, c. 34, s. 287]  
  
  ### Election and allocation
  
  (4) Where at any particular time after 1977, a policyholder withdraws all or part of the policyholder’s interest in a segregated fund policy, the trustee of a related segregated fund trust may elect in prescribed manner and prescribed form to treat any capital property of the trust as having been disposed of, whereupon the property shall be deemed to have been disposed of on any day designated by the trustee for proceeds of disposition equal to 
  (a) the fair market value of the property on that day, 
  (b) the adjusted cost base to the trust of the property on that day, or 
  (c) an amount that is neither greater than the greater of nor less than the lesser of the amounts determined under paragraphs 138.1(4)(a) and 138.1(4)(b), whichever is designated by the trustee, and to have been reacquired by the trust immediately thereafter at a cost equal to those proceeds, and where the trustee of a related segregated fund trust has made such an election, the following rules apply: 
  (d) the amount of any capital gain or capital loss resulting from the deemed disposition shall be allocated by the trustee to any policyholder withdrawing all or part of the policyholder’s interest in the policyholder’s policy at that time to the extent that the amount of the policyholder’s benefits under the policy at that time is affected by the capital gain or capital loss in respect of property held by the related segregated fund trust at that time, 
  (e) the allocation referred to in paragraph 138.1(4)(d) is deemed to have been made immediately before the withdrawal, 
  (f) any capital gain not so allocated is deemed to be allocated in accordance with the terms and conditions of the policy, and 
  (g) any capital loss not so allocated is deemed to be a superficial loss of each policyholder to the extent that the policyholder’s benefits under the policy would be affected by the loss. 
  
  ### Adjusted cost base of property in related segregated fund trust
  
  (5) At any particular time, the adjusted cost base of each capital property of a related segregated fund trust shall be deemed to be the amount, if any, by which 
  (a) the adjusted cost base of the property to the trust immediately before that time exceeds 
  (b) the total of amounts each of which is an amount in respect of the disposition by a policyholder of all or part of the policyholder’s interest in the related segregated fund trust at that time equal to that proportion of the amount, if any, by which 
  (i) the adjusted cost base to the policyholder of that interest at that time exceeds 
  (ii) the policyholder’s proceeds of the disposition of that interest in the trust that 
  (iii) the fair market value of the capital property at that time is of 
  (iv) the total of amounts each of which is the fair market value of a capital property of the related segregated fund trust at that time. 
  
  ### Definition of 
  *acquisition fee* 
  
  (6) In this section, 
  *acquisition fee* means the amount, if any, by which the total of amounts each of which is  
  (a) that portion of a premium charged by the insurer under a segregated fund policy that is not included in the related segregated fund or cannot reasonably be regarded as an amount required to fund a mortality or maturity benefit, 
  (b) a transfer from the segregated fund that cannot reasonably be regarded as an amount required to fund a mortality or maturity benefit other than an annual administration fee or charge, or 
  (c) any amount by which the proceeds payable to the policyholder under a particular segregated fund policy is reduced on the surrender or partial surrender of the policy that may reasonably be regarded as a surrender fee, exceeds 
  (d) the total of amounts each of which is that portion of an amount described in paragraph 138.1(6)(a), 138.1(6)(b) or 138.1(6)(c) that may reasonably be considered to be in respect of an interest in the segregated fund that was disposed of before 1978. 
  
  ### Non-application of subsections (1) to (6)
  
  (7) Subsections (1) to (6) do not apply to the holder of a segregated fund policy with respect to such a policy that is issued or effected as or under a FHSA, pooled registered pension plan, registered pension plan, registered retirement income fund, registered retirement savings plan or TFSA. 
  
  ### Qualifying transfer of funds
  
  138.2 (1) For the purposes of this section, a qualifying transfer occurs at a particular time (in this section referred to as the “transfer time”) if 
  (a) all of the property that, immediately before the transfer time, was property of a related segregated fund trust has become, at the transfer time, the property of another related segregated fund trust (in this section referred to as the “transferor” and “transferee”, respectively, and collectively as the “funds”); 
  (b) every person that had an interest in the transferor immediately before the transfer time (in this section referred to as a “beneficiary”) has ceased to be a beneficiary of the transferor at the transfer time and has received no consideration for the interest other than an interest in the transferee; 
  (c) the trustee of the funds is a resident of Canada; and 
  (d) the trustee of the funds so elects, by filing a prescribed form with the Minister on or before the election’s due date. 
  
  ### General
  
  (2) If there has been a qualifying transfer, 
  (a) the last taxation years of the funds that began before the transfer time are deemed to have ended at the transfer time and the next taxation year of the transferee is deemed to have begun immediately after the transfer time; 
  (b) no amount in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss of a fund for a taxation year that began before the transfer time is deductible in computing the taxable income of the funds for a taxation year that begins after the transfer time; 
  (c) each beneficiary’s interest in the transferor is deemed to have been disposed of at the transfer time for proceeds of disposition, and each beneficiary’s interest in the transferee received in the qualifying transfer is deemed to have been acquired at a cost, equal to the cost amount to the beneficiary of the interest in the transferor immediately before the transfer time; 
  (d) any amount determined under subsection 138.1(6) in respect of a policyholder’s interest in the transferor is deemed 
  (i) to have been charged, transferred or paid in respect of the policyholder’s interest in the transferee that is acquired on the qualifying transfer, and 
  (ii) to not have been charged, transferred or paid in respect of the policyholder’s interest in the transferor; and 
  (e) subsections 138.1(4) and (5) do not apply in respect of any disposition of an interest in the transferor arising on the qualifying transfer. 
  
  ### Transferor – capital gains and losses
  
  (3) In respect of a qualifying transfer, each property of the transferor held immediately before the transfer time is deemed to have been disposed of by the transferor immediately before the transfer time for proceeds of disposition, and to have been acquired by the transferee at the transfer time for a cost, equal to the lesser of 
  (a) the fair market value of the property immediately before the transfer time, and 
  (b) the greater of 
  (i) the cost amount of the property to the transferor immediately before the transfer time, and 
  (ii) the amount that is designated in respect of the property in the election in respect of the qualifying transfer. 
  
  ### Transferee – capital gains and losses
  
  (4) In respect of a qualifying transfer, each property of the transferee held immediately before the transfer time is deemed to have been disposed of by the transferee immediately before the transfer time for proceeds of disposition, and to have been reacquired by the transferee at the transfer time for a cost, equal to the lesser of 
  (a) the fair market value of the property immediately before the transfer time, and 
  (b) the greater of 
  (i) the cost amount of the property to the transferee immediately before the transfer time, and 
  (ii) the amount that is designated in respect of the property in the election in respect of the qualifying transfer. 
  
  ### Loss limitation
  
  (5) Subsection 138.1(3) does not apply to capital losses of a fund from the disposition of property on a qualifying transfer under subsection (3) or (4) to the extent that the amount of such capital losses exceeds the amount of capital gains of the fund from the disposition of property on the qualifying transfer under subsection (3) or (4), as the case may be. 
  
  ### Due date
  
  (6) The due date of an election referred to in paragraph (1)(d) is the later of 
  (a) the day that is six months after the day that includes the transfer time, and 
  (b) a day that the Minister may specify. 
  
  ### Conversion of insurance corporations into mutual corporations
  
  139 Where an insurance corporation that is a Canadian corporation applies an amount in payment for shares of the corporation purchased or otherwise acquired by it under a mutualization proposal under Division III of Part VI of the Insurance Companies Act or under a law of the province under the laws of which the corporation is incorporated that provides for the conversion of the corporation into a mutual corporation by the purchase of its shares in accordance with that law,  
  (a) section 15 does not apply to require the inclusion, in computing the income of a shareholder of the corporation, of any part of that amount; and 
  (b) no part of that amount shall be deemed, for the purpose of subsection 138(7), to have been paid to shareholders or, for the purpose of section 84, to have been received as a dividend. 
  
  ## Demutualization of Insurance Corporations 
  
  ### Definitions
  
  139.1 (1) The definitions in this subsection apply in this section and sections 139.2 and 147.4.  
  *conversion benefit* means a benefit received in connection with the demutualization of an insurance corporation because of an interest, before the demutualization, of any person in an insurance policy to which the insurance corporation has been a party. (avantage de transformation)   
  *deadline* for a payment in respect of a demutualization of an insurance corporation means the latest of  
  (a) the end of the day that is 13 months after the time of the demutualization, 
  (b) where the entire amount of the payment depends on the outcome of an initial public offering of shares of the corporation or a holding corporation in respect of the insurance corporation, the end of the day that is 60 days after the day on which the offering is completed, 
  (c) where the payment is made after the initial deadline for the payment and it is reasonable to conclude that the payment was postponed beyond that initial deadline because there was not sufficient information available 60 days before that initial deadline with regard to the location of a person, the end of the day that is six months after such information becomes available, and 
  (d) the end of any other day that is acceptable to the Minister. ( échéance)   
  *demutualization* means the conversion of an insurance corporation from a mutual company into a corporation that is not a mutual company. (démutualisation)   
  *holding corporation* means a corporation that  
  (a) in connection with the demutualization of an insurance corporation, has issued shares of its capital stock to stakeholders; and 
  (b) owns shares of the capital stock of the insurance corporation acquired in connection with the demutualization that entitle it to 90% or more of the votes that could be cast in respect of shares under all circumstances at an annual meeting of 
  (i) shareholders of the insurance corporation, or 
  (ii) shareholders of the insurance corporation and holders of insurance policies to which the insurance corporation is a party. ( société de portefeuille)   
  *initial deadline* for a payment is the time that would, if the definition 
  *deadline* were read without reference to paragraph (c) of that definition, be the deadline for the payment. (échéance initiale)   
  *mutual holding corporation*, in respect of an insurance corporation, means a mutual company established to hold shares of the capital stock of the insurance corporation, where the only persons entitled to vote at an annual meeting of the mutual company are policyholders of the insurance corporation. (société mutuelle de portefeuille)   
  *ownership rights* means  
  (a) in a particular mutual holding corporation, the following rights and interests held by a person in respect of the particular corporation because of an interest or former interest of any person in an insurance policy to which an insurance corporation, in respect of which the particular corporation is the mutual holding corporation, has been a party: 
  (i) rights that are similar to rights attached to shares of the capital stock of a corporation, and 
  (ii) all other rights with respect to, and interests in, the particular corporation as a mutual company; and 
  (b) in a mutual insurance corporation, the following rights and interests held by a person in respect of the mutual insurance corporation because of an interest or former interest of any person in an insurance policy to which that corporation has been a party: 
  (i) rights that are similar to rights attached to shares of the capital stock of a corporation, 
  (ii) all other rights with respect to, and interests in, the mutual insurance corporation as a mutual company, and 
  (iii) any contingent or absolute right to receive a benefit in connection with the demutualization of the mutual insurance corporation. ( droits de propriété)   
  *person* includes a partnership. (personne)   
  *share* of the capital stock of a corporation includes a right granted by the corporation to acquire a share of its capital stock. (action)   
  *specified insurance benefit* means a taxable conversion benefit that is  
  (a) an enhancement of benefits under an insurance policy; 
  (b) an issuance of an insurance policy; 
  (c) an undertaking by an insurance corporation of an obligation to pay a policy dividend; or 
  (d) a reduction in the amount of premiums that would otherwise be payable under an insurance policy. ( avantage déterminé)   
  *stakeholder* means a person who is entitled to receive or who has received a conversion benefit but, in respect of the demutualization of an insurance corporation, does not include a holding corporation in connection with the demutualization or a mutual holding corporation in respect of the insurance corporation. (intéressé)   
  *taxable conversion benefit* means a conversion benefit received by a stakeholder in connection with the demutualization of an insurance corporation, other than a conversion benefit that is  
  (a) a share of a class of the capital stock of the corporation; 
  (b) a share of a class of the capital stock of a corporation that is or becomes a holding corporation in connection with the demutualization; or 
  (c) an ownership right in a mutual holding corporation in respect of the insurance corporation. ( avantage de transformation imposable)  
  
  ### Rules of general application
  
  (2) For the purpose of this section, 
  (a) subject to paragraphs (b) to (g), if in providing a benefit in respect of a demutualization, a corporation becomes obligated, either absolutely or contingently, to make or arrange a payment, the person to whom the undertaking to make or arrange the payment was given is considered to have received a benefit 
  (i) as a consequence of the undertaking of the obligation, and 
  (ii) not as a consequence of the making of the payment; 
  (b) where, in providing a benefit in respect of a demutualization, a corporation makes a payment (other than a payment, made pursuant to the terms of an insurance policy, that is not a policy dividend) at any time on or before the deadline for the payment, 
  (i) subject to paragraphs (f) and (g), the recipient of the payment is considered to have received a benefit as a consequence of the making of the payment, and 
  (ii) no benefit is considered to have been received as a consequence of the undertaking of an obligation, that is either contingent or absolute, to make or arrange the payment; 
  (c) no benefit is considered to have been received as a consequence of the undertaking of an absolute or contingent obligation of a corporation to make or arrange a payment (other than a payment, made pursuant to the terms of an insurance policy, that is not a policy dividend) unless it is reasonable to conclude that there is sufficient information with regard to the location of a person to make or arrange the payment; 
  (d) where a corporation’s obligation to make or arrange a payment in connection with a demutualization ceases on or before the initial deadline for the payment and without the payment being made in whole or in part, no benefit is considered to have been received as a consequence of the undertaking of the obligation unless the payment was to be a payment (other than a policy dividend) pursuant to the terms of an insurance policy; 
  (e) no benefit is considered to have been received as a consequence of the undertaking of an absolute or contingent obligation of a corporation to make or arrange a payment where 
  (i) paragraph (a) would, but for this paragraph, apply with respect to the obligation, 
  (ii) paragraph (d) would, if that paragraph were read without reference to the words “on or before the initial deadline for the payment”, apply in respect of the obligation, 
  (iii) it is reasonable to conclude that there was not, before the initial deadline for the payment, sufficient information with regard to the location of a person to make or arrange the payment, and 
  (iv) such information becomes available on a particular day after the initial deadline and the obligation ceases not more than six months after the particular day; 
  (f) no benefit is considered to have been received as a consequence of 
  (i) an undertaking of an absolute or contingent obligation of a corporation to make or arrange an annuity payment through the issuance of an annuity contract, or 
  (ii) a receipt of an annuity payment under the contract so issued where it is reasonable to conclude that the purpose of the undertaking or the making of the annuity payment is to supplement benefits provided under either an annuity contract to which subsection 147.4(1) or paragraph 254(a) applied or a group annuity contract that had been issued under, or pursuant to, a registered pension plan that has wound up; 
  (g) no benefit is considered to have been received as a consequence of 
  (i) an amendment to which subsection 147.4(2) would, but for subparagraph 147.4(2)(a)(ii), apply, or 
  (ii) a substitution to which paragraph 147.4(3)(a) applies; 
  (h) the time at which a stakeholder is considered to receive a benefit in connection with the demutualization of an insurance corporation is 
  (i) where the benefit is a payment made at or before the time of the demutualization or is a payment to which paragraph (b) applies, the time at which the payment is made, and 
  (ii) in any other case, the latest of 
  (A) the time of the demutualization, 
  (B) where the extent of the benefit or the stakeholder’s entitlement to it depends on the outcome of an initial public offering of shares of the corporation or a holding corporation in respect of the insurance corporation and the offering is completed before the day that is 13 months after the time of the demutualization, the time at which the offering is completed, 
  (C) where the entire amount of the benefit depends on the outcome of an initial public offering of shares of the corporation or a holding corporation in respect of the insurance corporation, the time at which the offering is completed, 
  (D) where it is reasonable to conclude that the person conferring the benefit does not have sufficient information with regard to the location of the stakeholder before the later of the times determined under clauses (A) to (C), to advise the stakeholder of the benefit, the time at which sufficient information with regard to the location of the stakeholder to so advise the stakeholder was received by that person, and 
  (E) the end of any other day that is acceptable to the Minister; 
  (i) the time at which an insurance corporation is considered to demutualize is the time at which it first issues a share of its capital stock (other than shares of its capital stock issued by it when it was a mutual company if the corporation did not cease to be a mutual company because of the issuance of those shares); and 
  (j) subject to paragraph (3)(b), the value of a benefit received by a stakeholder is the fair market value of the benefit at the time the stakeholder receives the benefit. 
  
  ### Special cases
  
  (3) For the purpose of this section, 
  (a) where benefits under an insurance policy are enhanced (otherwise than by way of an amendment to which subsection 147.4(2) would, but for subparagraph 147.4(2)(a)(ii), apply) in connection with a demutualization, the value of the enhancement is deemed to be a benefit received by the policyholder and not by any other person; 
  (b) where premiums payable under an insurance policy to an insurance corporation are reduced in connection with a demutualization, the policyholder is deemed, as a consequence of the undertaking to reduce the premiums, to have received a benefit equal to the present value at the time of the demutualization of the additional premiums that would have been payable if the premiums had not been reduced in connection with the demutualization; 
  (c) the payment of a policy dividend by an insurance corporation or an undertaking of an obligation by the corporation to pay a policy dividend is considered to be in connection with the demutualization of the corporation only to the extent that 
  (i) the policy dividend is referred to in the demutualization proposal sent by the corporation to stakeholders, 
  (ii) the obligation to make the payment is contingent on stakeholder approval for the demutualization, and 
  (iii) the payment or undertaking cannot reasonably be considered to have been made or given, as the case may be, to ensure that policy dividends are not adversely affected by the demutualization; 
  (d) except for the purposes of paragraphs (c), (e) and (f), where part of a policy dividend is a conversion benefit in respect of the demutualization of an insurance corporation and part of it is not, each part of the dividend is deemed to be a policy dividend that is separate from the other part; 
  (e) a policy dividend includes an amount that is in lieu of payment of, or in satisfaction of, a policy dividend; 
  (f) the payment of a policy dividend includes the application of the policy dividend to pay a premium under an insurance policy or to repay a policy loan; 
  (g) where the demutualization of an insurance corporation is effected by the merger of the corporation with one or more other corporations to form one corporate entity, that entity is deemed to be the same corporation as, and a continuation of, the insurance corporation; 
  (h) an insurance corporation shall be considered to have become a party to an insurance policy at the time that the insurance corporation becomes liable in respect of obligations of an insurer under the policy; and 
  (i) notwithstanding paragraph 248(7)(a), where a cheque or other means of payment sent to an address is returned to the sender without being received by the addressee, it is deemed not to have been sent. 
  
  ### Consequences of demutualization
  
  (4) Where a particular insurance corporation demutualizes, 
  (a) each of the income, loss, capital gain and capital loss of a taxpayer, from the disposition, alteration or dilution of the taxpayer’s ownership rights in the particular corporation as a result of the demutualization, is deemed to be nil; 
  (b) no amount paid or payable to a stakeholder in connection with the disposition, alteration or dilution of the stakeholder’s ownership rights in the particular corporation may be included in Class 14.1 of Schedule II to the Income Tax Regulations ;  
  (c) no election may be made under subsection 85(1) or (2) in respect of ownership rights in the particular corporation; 
  (d) where the consideration given by a person for a share of the capital stock of the particular corporation or a holding corporation in connection with the demutualization (or for particular ownership rights in a mutual holding corporation in respect of the particular corporation) includes the transfer, surrender, alteration or dilution of ownership rights in the particular corporation, the cost of the share (or the particular ownership rights) to the person is deemed to be nil; 
  (e) where a holding corporation in connection with the demutualization acquires, in connection with the demutualization, a share of the capital stock of the particular corporation from the particular corporation and issues a share of its own capital stock to a stakeholder as consideration for the share of the capital stock of the particular corporation, the cost to the holding corporation of the share of the capital stock of the particular corporation is deemed to be nil; 
  (f) where at any time a stakeholder receives a taxable conversion benefit and subsection (14) does not apply to the benefit, 
  (i) the corporation that conferred the benefit is deemed to have paid a dividend at that time on shares of its capital stock equal to the value of the benefit, and 
  (ii) subject to subsection (16), the benefit received by the stakeholder is deemed to be a dividend received by the stakeholder at that time; 
  (g) for the purposes of this Part, where a dividend is deemed by paragraph (f) or by paragraph (16)(i) to have been paid by a non-resident corporation, that corporation is deemed in respect of the payment of the dividend to be a corporation resident in Canada that is a taxable Canadian corporation unless any amount is claimed under section 126 in respect of tax on the dividend; 
  (h) for the purposes of section 70, subsection 104(4) and section 128.1, the fair market value of rights to benefits that are to be received in connection with the demutualization is, before the time of the receipt, deemed to be nil; and 
  (i) where a person acquires an annuity contract in respect of which, because of the application of paragraph (2)(f), no benefit is considered to have been received for the purpose of this section, 
  (i) the cost of the annuity contract to the person is deemed to be nil, and 
  (ii) section 12.2 does not apply to the annuity contract. 
  
  ### Fair market value of ownership rights
  
  (5) For the purposes of section 70, subsection 104(4) and section 128.1, where an insurance corporation makes, at any time, a public announcement that it intends to seek approval for its demutualization, the fair market value of ownership rights in the corporation is deemed to be nil throughout the period that 
  (a) begins at that time; and 
  (b) ends either at the time of the demutualization or, in the event that the corporation makes at any subsequent time a public announcement that it no longer intends to demutualize, at the subsequent time. 
  
  ### Paid-up capital — insurance corporation
  
  (6) Where an insurance corporation resident in Canada has demutualized, in computing the paid-up capital at any particular time in respect of a class of shares of the capital stock of the corporation, 
  (a) there shall be deducted the total of all amounts each of which would, but for this subsection, have been deemed by subsection 84(1) to have been paid at or before the particular time by the corporation as a dividend on a share of that class because of an increase in paid-up capital (determined without reference to this subsection) in connection with the demutualization; and 
  (b) there shall be added the amount, if any, by which 
  (i) the total of all amounts each of which is deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the corporation before the particular time exceeds 
  (ii) the total of all amounts each of which would be deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the corporation before the particular time, if this Act were read without reference to this subsection. 
  
  ### Paid-up capital — holding corporation
  
  (7) Where a particular corporation resident in Canada was at any time a holding corporation in connection with the demutualization of an insurance corporation, in computing the paid-up capital at any particular time in respect of a class of shares of the capital stock of the particular corporation, 
  (a) there shall be deducted the total of all amounts each of which is an amount by which the paid-up capital would, but for this subsection, have increased at or before the particular time as a result of the acquisition of shares of a class of the capital stock of the insurance corporation from the corporation on its demutualization; and 
  (b) there shall be added the amount, if any, by which 
  (i) the total of all amounts each of which is deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the particular corporation before the particular time exceeds 
  (ii) the total of all amounts each of which would be deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of that class paid by the particular corporation before the particular time, if this Act were read without reference to this subsection. 
  
  ### Policy dividends
  
  (8) Where the payment of a policy dividend by an insurance corporation is a taxable conversion benefit, 
  (a) for the purposes of this Act other than this section, the policy dividend is deemed not to be a policy dividend; and 
  (b) no amount in respect of the policy dividend may be included, either explicitly or implicitly, in the calculation of an amount deductible by the insurer for any taxation year under paragraph 20(7)(c) or subsection 138(3). 
  
  ### Payment and receipt of premium
  
  (9) Where, in connection with the demutualization of an insurance corporation, a person would, if subsection (2) were read without reference to paragraphs (f) and (g) and paragraph (3)(a) were read without reference to the application of subsection 147.4(2), receive a particular benefit that is a specified insurance benefit, 
  (a) the insurance corporation that is obligated to pay benefits under the policy to which the particular benefit relates is deemed to have received a premium at the time of the demutualization in respect of that policy equal to the value of the particular benefit; 
  (b) for the purpose of paragraph (a), to the extent that the obligations of a particular insurance corporation under the policy were assumed by another insurance corporation before the time of the demutualization, the particular corporation is deemed not to be obligated to pay benefits under the policy; and 
  (c) subject to paragraph (15)(e), where the person receives the particular benefit, the person is deemed to have paid, at the time of demutualization, a premium in respect of the policy to which the benefit relates equal to the value of the particular benefit. 
  
  ### Cost of taxable conversion benefit
  
  (10) Where, in connection with the demutualization of an insurance corporation, a stakeholder receives a taxable conversion benefit (other than a specified insurance benefit), the stakeholder is deemed to have acquired the benefit at a cost equal to the value of the benefit. 
  
  ### No shareholder benefit
  
  (11) Subsection 15(1) does not apply to a conversion benefit. 
  
  ### Exclusion of benefit from RRSP and other rules
  
  (12) Subject to subsection (14), for the purposes of the provisions of this Act (other than paragraph (9)(c)) that relate to registered retirement savings plans, registered retirement income funds, retirement compensation arrangements, deferred profit sharing plans and superannuation or pension funds or plans, the receipt of a conversion benefit shall be considered to be neither a contribution to, nor a distribution from, such a plan, fund or arrangement. 
  
  ### RRSP registration rules, etc.
  
  (13) For the purposes of this Act, paragraphs 146(2)(c.4) and 146.3(2)(g) and subsection 198(6) shall be applied without reference to any conversion benefit. 
  
  ### Retirement benefit
  
  (14) A conversion benefit received because of an interest in a life insurance policy held by a trust governed by a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan or superannuation or pension fund or plan is deemed to be received under the plan or fund, as the case may be, if it is received by any person (other than the trust). 
  
  ### Employee-paid insurance
  
  (15) Where 
  (a) a stakeholder receives a conversion benefit because of the stakeholder’s interest in a group insurance policy under which individuals have been insured in the course of or because of their employment, 
  (b) at all times before the payment of a premium described in paragraph (c), the full cost of a particular insurance coverage under the policy was borne by the individuals who were insured under the particular coverage, 
  (c) the stakeholder pays a premium under the policy in respect of the particular coverage or under another group insurance policy in respect of coverage that has replaced the particular coverage, and 
  (d) either 
  (i) the premium is deemed by paragraph (9)(c) to have been paid, or 
  (ii) it is reasonable to conclude that the purpose of the premium is to apply, for the benefit of the individuals who are insured under the particular coverage or the replacement coverage, all or part of the value of the portion of the conversion benefit that can reasonably be considered to be in respect of the particular coverage, the following rules apply: 
  (e) for the purposes of paragraph 6(1)(f) and regulations made for the purposes of subsection 6(4), the premium is deemed to be an amount paid by the individuals who are insured under the particular coverage or the replacement coverage, as the case may be, and not to be an amount paid by the stakeholder, and 
  (f) no amount may be deducted in respect of the premium in computing the stakeholder’s income. 
  
  ### Flow-through of conversion benefits to employees and others
  
  (16) Where 
  (a) a stakeholder receives a conversion benefit (in this subsection referred to as the “relevant conversion benefit”) because of the interest of any person in an insurance policy, 
  (b) the stakeholder makes a payment of an amount (otherwise than by way of a transfer of a share that was received by the stakeholder as all or part of the relevant conversion benefit and that was not so received as a taxable conversion benefit) to a particular individual 
  (i) who has received benefits under the policy, 
  (ii) who has, or had at any time, an absolute or contingent right to receive benefits under the policy, 
  (iii) for whose benefit insurance coverage was provided under the policy, or 
  (iv) who received the amount because an individual satisfied the condition in subparagraph (i), (ii) or (iii), 
  (c) it is reasonable to conclude that the purpose of the payment is to distribute an amount in respect of the relevant conversion benefit to the particular individual, 
  (d) either 
  (i) the main purpose of the policy was to provide retirement benefits or insurance coverage to individuals in respect of their employment with an employer, or 
  (ii) all or part of the cost of insurance coverage under the policy had been borne by individuals (other than the stakeholder), 
  (e) subsection (14) does not apply to the relevant conversion benefit, and 
  (f) one of the following applies, namely, 
  (i) the particular individual is resident in Canada at the time of the payment, the stakeholder is a person the taxable income of which is exempt from tax under this Part and the payment would, if this section were read without reference to this subsection, be included in computing the income of the particular individual, 
  (ii) the payment is received before Decenber 7, 1999 and the stakeholder elects in writing filed with the Minister, on a day that is not more than six months after the end of the taxation year in which the stakeholder receives the relevant conversion benefit (or a later day acceptable to the Minister), that this subsection applies in respect of the payment, 
  (iii) the payment is received after December 6, 1999, the payment would, if this section were read without reference to this subsection, be included in computing the income of the particular individual and the stakeholder elects in writing filed with the Minister, on a day that is not more than six months after the end of the taxation year in which the stakeholder receives the relevant conversion benefit (or a later day acceptable to the Minister), that this subsection applies in respect of the payment, or 
  (iv) the payment is received after December 6, 1999 and the payment would, if this section were read without reference to this subsection, not be included in computing the income of the particular individual, the following rules apply: 
  (g) subject to paragraph (l), no amount is, because of the making of the payment, deductible in computing the stakeholder’s income, 
  (h) except for the purpose of this subsection and without affecting the consequences to the particular individual of any transaction or event that occurs after the time that the payment was made, the payment is deemed not to have been received by, or made payable to, the particular individual, 
  (i) the corporation that conferred the relevant conversion benefit is deemed to have paid to the particular individual at the time the payment was made, and the particular individual is deemed to have received at that time, a dividend on shares of the capital stock of the corporation equal to the amount of the payment, 
  (j) all obligations that would, but for this subsection, be imposed by this Act or the regulations on the corporation because of the payment of the dividend apply to the stakeholder as if the stakeholder were the corporation, and do not apply to the corporation, 
  (k) where the relevant conversion benefit is a taxable conversion benefit, except for the purpose of this subsection and the purposes of determining the obligations imposed by this Act or the regulations on the corporation because of the conferral of the relevant conversion benefit, the stakeholder is deemed, to the extent of the fair market value of the payment, not to have received the relevant conversion benefit, and 
  (l) where the relevant conversion benefit was a share received by the stakeholder (otherwise than as a taxable conversion benefit), 
  (i) where the share is, at the time of the payment, capital property held by the stakeholder, the amount of the payment shall, after that time, be added in computing the adjusted cost base to the stakeholder of the share, 
  (ii) where subparagraph (i) does not apply and the share was capital property disposed of by the stakeholder before that time, the amount of the payment is deemed to be a capital loss of the stakeholder from the disposition of a property for the taxation year of the stakeholder in which the payment is made, and 
  (iii) in any other case, paragraph (g) shall not apply to the payment. 
  
  ### Flow-through of share benefits to employees and others
  
  (17) Where 
  (a) because of the interest of any person in an insurance policy, a stakeholder receives a conversion benefit (other than a taxable conversion benefit) that consists of shares of the capital stock of a corporation, 
  (b) the stakeholder transfers some or all of the shares at any time to a particular individual 
  (i) who has received benefits under the policy, 
  (ii) who has, or had at any time, an absolute or contingent right to receive benefits under the policy, 
  (iii) for whose benefit insurance coverage was provided under the policy, or 
  (iv) who received the shares because an individual satisfied the condition in subparagraph (i), (ii) or (iii), 
  (c) it is reasonable to conclude that the purpose of the transfer is to distribute all or any portion of the conversion benefit to the particular individual, 
  (d) either 
  (i) the main purpose of the policy was to provide retirement benefits or insurance coverage to individuals in respect of their employment with an employer, or 
  (ii) all or part of the cost of insurance coverage under the policy had been borne by individuals (other than the stakeholder), 
  (e) subsection (14) does not apply to the conversion benefit, and 
  (f) one of the following applies, namely, 
  (i) the particular individual is resident in Canada at the time of the transfer, the stakeholder is a person the taxable income of which is exempt from tax under this Part and the amount of the transfer would, if this section were read without reference to this subsection, be included in computing the income of the particular individual, 
  (ii) the transfer is made before December 7, 1999 and the stakeholder elects in writing filed with the Minister, on a day that is not more than six months after the end of the taxation year in which the stakeholder receives the conversion benefit (or a later day acceptable to the Minister), that this subsection applies in respect of the transfer, 
  (iii) the transfer is made after December 6, 1999, the amount of the transfer would, if this section were read without reference to this subsection, be included in computing the income of the particular individual and the stakeholder elects in writing filed with the Minister, on a day that is not more than six months after the end of the taxation year in which the stakeholder receives the conversion benefit (or a later day acceptable to the Minister), that this subsection applies in respect of the transfer, or 
  (iv) the transfer is made after December 6, 1999 and the amount of the transfer would, if this section were read without reference to this subsection, not be included in computing the income of the particular individual, the following rules apply: 
  (g) no amount is, because of the transfer, deductible in computing the stakeholder’s income, 
  (h) except for the purpose of this subsection and without affecting the consequences to the particular individual of any transaction or event that occurs after the time that the transfer was made, the transfer is deemed not to have been made to the particular individual nor to represent an amount payable to the particular individual, and 
  (i) the cost of the shares to the particular individual is deemed to be nil. 
  
  ### Acquisition of control
  
  (18) For the purposes of subsections 10(10), 13(21.2) and (24) and 18(15), sections 18.1 and 37, subsection 40(3.4), the definition 
  *superficial loss* in section 54, section 55, subsections 66(11), (11.4) and (11.5), 66.5(3) and 66.7(10) and (11), section 80, paragraph 80.04(4)(h), subsections 85(1.2) and 88(1.1) and (1.2), sections 111 and 127 and subsections 249(4) and 256(7), control of an insurance corporation (and each corporation controlled by it) is deemed not to be acquired solely because of the acquisition of shares of the capital stock of the insurance corporation, in connection with the demutualization of the insurance corporation, by a particular corporation that at a particular time becomes a holding corporation in connection with the demutualization where, immediately after the particular time,  
  (a) the particular corporation is not controlled by any person or group of persons; and 
  (b) 95% of the fair market value of all the assets of the particular corporation is less than the total of all amounts each of which is 
  (i) the amount of the particular corporation’s money, 
  (ii) the amount of a deposit, with a financial institution, of such money standing to the credit of the particular corporation, 
  (iii) the fair market value of a bond, debenture, note or similar obligation that is owned by the particular corporation that had, at the time of its acquisition, a maturity date of not more than 24 months after that time, or 
  (iv) the fair market value of a share of the capital stock of the insurance corporation held by the particular corporation. 
  
  ### Mutual holding corporations
  
  139.2 Where at any time a mutual holding corporation (as defined in subsection 139.1(1)) in respect of an insurance corporation distributes property to a policyholder of the insurance corporation, the mutual holding corporation is deemed to have paid, and the policyholder is deemed to have received from the mutual holding corporation, at that time a dividend on shares of the capital stock of the mutual holding corporation, equal to the fair market value of the property. 
  
  ### Deductions in computing income
  
  140 (1) In computing the income for a taxation year of an insurance corporation, whether a mutual corporation or a joint stock company, from carrying on an insurance business other than a life insurance business, there may be deducted every amount credited in respect of that business for the year or a preceding taxation year to a policyholder of the corporation by way of a policy dividend, refund of premiums or refund of premium deposits if the amount was, during the year or within 12 months thereafter, 
  (a) paid or unconditionally credited to the policyholder; or 
  (b) applied in discharge, in whole or in part, of a liability of the policyholder to pay premiums to the corporation. 
  
  ### Inclusion in computing income
  
  (2) There shall be included in computing the income of an insurance corporation, whether a mutual corporation or a joint stock company, from carrying on an insurance business for its first taxation year that commences after June 17, 1987 and ends after 1987 (in this subsection referred to as its “1988 taxation year”) the amount, if any, by which 
  (a) the total of all amounts each of which is an amount deducted by the corporation in computing its income for a taxation year ending before its 1988 taxation year pursuant to paragraph 140(c) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, or pursuant to that paragraph by reason of subparagraph 138(3)(a)(v) of that Act as it read in respect of those taxation years in respect of amounts credited to the account of the policyholder on terms that the policyholder is entitled to payment thereof on or before the expiration or termination of the policy  exceeds 
  (b) the total of all amounts each of which is an amount paid or unconditionally credited to a policyholder or applied in discharge, in whole or in part, of a liability of the policyholder to pay premiums to the corporation before the corporation’s 1988 taxation year in respect of the amounts credited to the account of the policyholder referred to in paragraph 140(2)(a). 
  
  ### Definitions
  
  141 (1) In this section, 
  *demutualization* and 
  *holding corporation* have the same meaning as in subsection 139.1(1).  
  
  ### Life insurance corporation deemed to be public corporation
  
  (2) Notwithstanding any other provision of this Act, a life insurance corporation that is resident in Canada is deemed to be a public corporation. 
  
  ### Holding corporation deemed to be public corporation
  
  (3) A corporation resident in Canada that is a holding corporation because of its acquisition of shares in connection with the demutualization of a life insurance corporation resident in Canada is deemed to be a public corporation at each time in the specified period of the holding corporation at which the holding corporation would have satisfied conditions prescribed under subparagraph (b)(i) of the definition 
  *public corporation* in subsection 89(1) if the words “shareholders, the dispersal of ownership of its shares and the public trading of its shares” in that subparagraph were read as “shareholders and the dispersal of ownership of its shares”.  
  
  ### Specified period
  
  (4) For the purpose of subsection (3), the specified period of a corporation 
  (a) begins at the time the corporation becomes a holding corporation; and 
  (b) ends at the first time the corporation is a public corporation because of any provision of this Act other than subsection (3). 
  
  ### Exclusion from taxable Canadian property
  
  (5) For the purpose of paragraph (d) of the definition 
  *taxable Canadian property* in subsection 248(1), a share of the capital stock of a corporation is deemed to be listed at any time on a designated stock exchange if  
  (a) the corporation is 
  (i) a life insurance corporation resident in Canada that has demutualized and that, at that time, would have satisfied conditions prescribed under subparagraph (b)(i) of the definition 
  *public corporation* in subsection 89(1) if the words “shareholders, the dispersal of ownership of its shares and the public trading of its shares” in that subparagraph were read as “shareholders and the dispersal of ownership of its shares”, or  
  (ii) a holding corporation that is deemed by subsection (3) to be a public corporation at that time; 
  (b) no share of the capital stock of the corporation is listed on any stock exchange at that time; and 
  (c) that time is not later than six months after the time of the demutualization of 
  (i) the corporation, where the corporation is a life insurance corporation, and 
  (ii) in any other case, the life insurance corporation in respect of which the corporation is a holding corporation. 
  
  ### Deemed not to be a private corporation
  
  141.1 Notwithstanding any other provision of this Act, an insurance corporation (other than a life insurance corporation) that would, but for this section, be a private corporation is deemed not to be a private corporation for the purposes of subsection 55(5), the definition 
  *capital dividend account* in subsection 89(1) and sections 123.3 and 129.  
  142  [Repealed, 1997, c. 25, s. 40(1)]  
  142.1  [Repealed, 1997, c. 25, s. 40(1)]  
  
  ## Financial Institutions 
  
  ## Interpretation 
  
  ### Definitions
  
  142.2 (1) In this section and sections 142.3 to 142.7,  
  *excluded property* of a taxpayer for a taxation year means property, held at any time in the taxation year by the taxpayer, that is  
  (a) a share of the capital stock of a corporation if, at any time in the taxation year, the taxpayer has a significant interest in the corporation, 
  (b) a property that is, at all times in the taxation year at which the taxpayer held the property, a prescribed payment card corporation share of the taxpayer, 
  (c) if the taxpayer is an investment dealer, a property that is, at all times in the taxation year at which the taxpayer held the property, a prescribed securities exchange investment of the taxpayer, 
  (d) a share of the capital stock of a corporation if 
  (i) control of the corporation is, at any time (referred to in this paragraph as the “acquisition of control time”) that is in the 24-month period that begins immediately after the end of the year, acquired by 
  (A) the taxpayer, 
  (B) one or more persons related to the taxpayer (otherwise than by reason of a right referred to in paragraph 251(5)(b)), or 
  (C) the taxpayer and one or more persons described in clause (B), and 
  (ii) the taxpayer elects in writing to have subparagraph (i) apply and files the election with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes the acquisition of control time, or 
  (e) a prescribed property; ( bien exclu)   
  *fair value property* of a taxpayer for a taxation year means property, held at any time in the taxation year by the taxpayer, that is — or it is reasonable to expect would, if the taxpayer held the property at the end of the taxation year, be — valued (otherwise than solely because its fair value was less than its cost to the taxpayer or, if the property is a specified debt obligation, because of a default of the debtor) in accordance with generally accepted accounting principles, at its fair value (determined in accordance with those principles) in the taxpayer’s balance sheet as at the end of the taxation year; (bien évalué à sa juste valeur)   
  *financial institution* at any time means  
  (a) a corporation that is, at that time, 
  (i) a corporation referred to in any of paragraphs (a) to (e.1) of the definition 
  *restricted financial institution* in subsection 248(1),  
  (ii) an investment dealer, or 
  (iii) a corporation controlled by one or more persons or partnerships each of which is a financial institution at that time, other than a corporation the control of which was acquired by reason of the default of a debtor where it is reasonable to consider that control is being retained solely for the purpose of minimizing any losses in respect of the debtor’s default, and 
  (b) a trust or partnership more than 50% of the fair market value of all interests in which are held at that time by one or more financial institutions, but does not include 
  (c) a corporation that is, at that time, 
  (i) an investment corporation, 
  (ii) a mortgage investment corporation, 
  (iii) a mutual fund corporation, or 
  (iv) a deposit insurance corporation (as defined in subsection 137.1(5)), 
  (d) a trust that is a mutual fund trust at that time, nor 
  (e) a prescribed person or partnership; ( institution financière)   
  *investment dealer* at any time means a corporation that is, at that time, a registered securities dealer; (courtier en valeurs mobilières)   
  *mark-to-market property* of a taxpayer for a taxation year means property (other than an excluded property) held at any time in the taxation year by the taxpayer that is  
  (a) a share, 
  (b) if the taxpayer is not an investment dealer, a specified debt obligation that is a fair value property of the taxpayer for the taxation year, 
  (c) if the taxpayer is an investment dealer, a specified debt obligation, or 
  (d) a tracking property of the taxpayer that is a fair value property of the taxpayer for the taxation year; ( bien évalué à la valeur du marché)   
  *specified debt obligation* of a taxpayer means the interest held by the taxpayer in  
  (a) a loan, bond, debenture, mortgage, hypothecary claim, note, agreement of sale or any other similar indebtedness, or 
  (b) a debt obligation, where the taxpayer purchased the interest, other than an interest in 
  (c) an income bond, an income debenture or a prescribed property, or 
  (d) an instrument issued by or made with a person to whom the taxpayer is related or with whom the taxpayer does not otherwise deal at arm’s length, or in which the taxpayer has a significant interest. ( titre de créance déterminé)   
  *tracking property* of a taxpayer means property of the taxpayer the fair market value of which is determined primarily by reference to one or more criteria in respect of property (referred to in this definition as “tracked property”) that, if owned by the taxpayer, would be mark-to-market property of the taxpayer, which criteria are  
  (a) the fair market value of the tracked property, 
  (b) the profits or gains from the disposition of the tracked property, 
  (c) the revenue, income or cash flow from the tracked property, or 
  (d) any other similar criteria in respect of the tracked property; ( bien à évaluer)  
  
  ### Significant interest
  
  (2) For the purposes of the definitions 
  *excluded property* and 
  *specified debt obligation* in subsection (1) and subsection 142.6(1.6), a taxpayer has a significant interest in a corporation at any time if  
  (a) the taxpayer is related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the corporation at that time; or 
  (b) the taxpayer holds, at that time, 
  (i) shares of the corporation that give the taxpayer 10% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and 
  (ii) shares of the corporation having a fair market value of 10% or more of the fair market value of all the issued shares of the corporation. 
  
  ### Rules re significant interest
  
  (3) For the purpose of determining under subsection 142.2(2) whether a taxpayer has a significant interest in a corporation at any time, 
  (a) the taxpayer shall be deemed to hold each share that is held at that time by a person or partnership to whom the taxpayer is related (otherwise than because of a right referred to in paragraph 251(5)(b)); 
  (b) a share of the corporation acquired by the taxpayer by reason of the default of a debtor shall be disregarded where it is reasonable to consider that the share is being retained for the purpose of minimizing any losses in respect of the debtor’s default; and 
  (c) a share of the corporation that is prescribed in respect of the taxpayer shall be disregarded. 
  
  ### Extension of meaning of 
  *related* 
  
  (4) For the purposes of this subsection and subsections (2) and (3), in determining if, at a particular time, a person or partnership is related to another person or partnership, the rules in section 251 are to be applied as if, 
  (a) a partnership (other than a partnership in respect of which any amount of the income or capital of the partnership that any entity may receive directly from the partnership at any time as a member of the partnership depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each member of the partnership owned, at the particular time, that proportion of the issued shares of that class that 
  (i) the fair market value of the member’s interest in the partnership at the particular time is of 
  (ii) the fair market value of all interests in the partnership at the particular time; and 
  (b) a trust (other than a trust in respect of which any amount of the income or capital of the trust that any entity may receive directly from the trust at any time as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each beneficiary under the trust owned, at the particular time, that proportion of the issued shares of that class that 
  (i) the fair market value of the beneficiary’s beneficial interest in the trust at the particular time is of 
  (ii) the fair market value at that time of all beneficial interests in the trust. 
  (5)  [Repealed, 2009, c. 2, s. 46]  
  
  ## Income from Specified Debt Obligations 
  
  ### Amounts to be included and deducted
  
  142.3 (1) Subject to subsections 142.3(3) and (4), where a taxpayer that is, in a taxation year, a financial institution holds a specified debt obligation at any time in the year, 
  (a) there shall be included in computing the income of the taxpayer for the year the amount, if any, prescribed in respect of the obligation; 
  (b) there shall be deducted in computing the income of the taxpayer for the year the amount, if any, prescribed in respect of the obligation; and 
  (c) except as provided by this section, paragraphs 12(1)(d) and (i) and 20(1)(l) and (p) and section 142.4, no amount shall be included or deducted in respect of payments under the obligation (other than fees and similar amounts) in computing the income of the taxpayer for the year. 
  
  ### Failure to report accrued amounts
  
  (2) Subject to subsection 142.3(3), where 
  (a) a taxpayer holds a specified debt obligation at any time in a particular taxation year in which the taxpayer is a financial institution, and 
  (b) all or part of an amount required by paragraph 142.3(1)(a) or subsection 12(3) to be included in respect of the obligation in computing the taxpayer’s income for a preceding taxation year was not so included, that part of the amount shall be included in computing the taxpayer’s income for the particular year, to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year. 
  
  ### Exception for certain obligations
  
  (3) Subsections 142.3(1) and (2) do not apply for a taxation year in respect of a taxpayer’s specified debt obligation that is 
  (a) a mark-to-market property for the year; or 
  (b) an indexed debt obligation, other than a prescribed obligation. 
  
  ### Impaired specified debt obligations
  
  (4) Subsection 142.3(1) does not apply to a taxpayer in respect of a specified debt obligation for the part of a taxation year throughout which the obligation is impaired where an amount in respect of the obligation is deductible because of subparagraph 20(1)(l)(ii) in computing the taxpayer’s income for the year. 
  
  ## Disposition of Specified Debt Obligations 
  
  ### Definitions
  
  142.4 (1) In this section,  
  *tax basis* of a specified debt obligation at any time to a taxpayer means the amount, if any, by which the total of all amounts each of which is  
  (a) the cost of the obligation to the taxpayer, 
  (b) an amount included under subsection 12(3) or 16(2) or 16(3), paragraph 142.3(1)(a) or subsection 142.3(2) in respect of the obligation in computing the taxpayer’s income for a taxation year that began before that time, 
  (c) subject to subsection 138(13), where the taxpayer acquired the obligation in a taxation year ending before February 23, 1994, the part of the amount, if any, by which 
  (i) the principal amount of the obligation at the time it was acquired exceeds 
  (ii) the cost to the taxpayer of the obligation that was included in computing the taxpayer’s income for a taxation year ending before February 23, 1994, 
  (d) subject to subsection 138(13), where the taxpayer is a life insurer, an amount in respect of the obligation that was deemed by paragraph 142(3)(a) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a gain for a taxation year ending before 1978,  
  (e) where the obligation is an indexed debt obligation, an amount determined under subparagraph 16(6)(a)(i) in respect of the obligation and included in computing the income of the taxpayer for a taxation year beginning before that time, 
  (f) an amount in respect of the obligation that was included in computing the taxpayer’s income for a taxation year ending at or before that time in respect of changes in the value of the obligation attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, other than an amount included under paragraph 142.3(1)(a), 
  (g) an amount in respect of the obligation that was included under paragraph 12(1)(i) in computing the taxpayer’s income for a taxation year beginning before that time, or 
  (h) where the obligation was a capital property of the taxpayer on February 22, 1994, an amount required by paragraph 53(1)(f) or 53(1)(f.1) to be added in computing the adjusted cost base of the obligation to the taxpayer on that day exceeds the total of all amounts each of which is 
  (i) an amount deducted under paragraph 142.3(1)(b) in respect of the obligation in computing the taxpayer’s income for a taxation year beginning before that time, 
  (j) the amount of a payment received by the taxpayer under the obligation at or before that time, other than 
  (i) a fee or similar payment, and 
  (ii) proceeds of disposition of the obligation, 
  (k) subject to subsection 138(13), where the taxpayer acquired the obligation in a taxation year ending before February 23, 1994, the part of the amount, if any, by which 
  (i) the cost to the taxpayer of the obligation exceeds 
  (ii) the principal amount of the obligation at the time it was acquired that was deducted in computing the taxpayer’s income for a taxation year ending before February 23, 1994, 
  (l) subject to subsection 138(13), where the taxpayer is a life insurer, an amount in respect of the obligation that was deemed by paragraph 142(3)(b) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a loss for a taxation year ending before 1978,  
  (m) an amount that was deducted under subsection 20(14) in respect of the obligation in computing the taxpayer’s income for a taxation year beginning before that time, 
  (n) where the obligation is an indexed debt obligation, an amount determined under subparagraph 16(6)(a)(ii) in respect of the obligation and deducted in computing the income of the taxpayer for a taxation year beginning before that time, 
  (o) an amount in respect of the obligation that was deducted in computing the taxpayer’s income for a taxation year ending at or before that time in respect of changes in the value of the obligation attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, other than an amount deducted under paragraph 142.3(1)(b), 
  (p) an amount in respect of the obligation that was deducted under paragraph 20(1)(p) in computing the taxpayer’s income for a taxation year ending at or before that time, or 
  (q) where the obligation was a capital property of the taxpayer on February 22, 1994, an amount required by paragraph 53(2)(b.2) or 53(2)(g) to be deducted in computing the adjusted cost base of the obligation to the taxpayer on that day; ( montant de base)   
  *transition amount* of a taxpayer in respect of the disposition of a specified debt obligation has the meaning assigned by regulation. (montant de transition)  
  
  ### Scope of section
  
  (2) This section applies to the disposition of a specified debt obligation by a taxpayer that is a financial institution, except that this section does not apply to the disposition of a specified debt obligation that is a mark-to-market property for the taxation year in which the disposition occurs. 
  
  ### Rules applicable to disposition
  
  (3) Where a taxpayer has disposed of a specified debt obligation after February 22, 1994, 
  (a) except as provided by paragraph 79.1(7)(d) or this section, no amount shall be included or deducted in respect of the disposition in computing the taxpayer’s income; and 
  (b) except where the obligation is an indexed debt obligation (other than a prescribed obligation), paragraph 20(14)(a) shall not apply in respect of the disposition. 
  
  ### Inclusions and deductions re disposition
  
  (4) Subject to subsection 142.4(5), where after 1994 a taxpayer disposes of a specified debt obligation in a taxation year, 
  (a) where the transition amount in respect of the disposition of the obligation is positive, it shall be included in computing the income of the taxpayer for the year; 
  (b) where the transition amount in respect of the disposition of the obligation is negative, the absolute value of the transition amount shall be deducted in computing the income of the taxpayer for the year; 
  (c) where the taxpayer has a gain from the disposition of the obligation, 
  (i) the current amount of the gain shall be included in computing the income of the taxpayer for the year, and 
  (ii) there shall be included in computing the taxpayer’s income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the gain; and 
  (d) where the taxpayer has a loss from the disposition of the obligation, 
  (i) the current amount of the loss shall be deducted in computing the taxpayer’s income for the year, and 
  (ii) there shall be deducted in computing the taxpayer’s income for taxation years that end on or after the day of disposition the amount allocated, in accordance with prescribed rules, to the year in respect of the residual portion of the loss. 
  
  ### Gain or loss not amortized
  
  (5) Where after February 22, 1994 a taxpayer disposes of a specified debt obligation in a taxation year, and 
  (a) the obligation is 
  (i) an indexed debt obligation (other than a prescribed obligation), or 
  (ii) a debt obligation prescribed in respect of the taxpayer, 
  (b) the disposition occurred 
  (i) before 1995, 
  (ii) after 1994 in connection with the transfer of all or part of a business of the taxpayer to a person or partnership, or 
  (iii) because of paragraph 142.6(1)(c), or 
  (c) in the case of a taxpayer other than a life insurance corporation, 
  (i) the disposition occurred before 1996, and 
  (ii) the taxpayer elects in writing, filed with the Minister before July 1997, to have this paragraph apply, the following rules apply: 
  (d) subsection 142.4(4) does not apply to the disposition, 
  (e) there shall be included in computing the taxpayer’s income for the year the amount, if any, by which the taxpayer’s proceeds of disposition exceed the tax basis of the obligation to the taxpayer immediately before the disposition, and 
  (f) there shall be deducted in computing the taxpayer’s income for the year the amount, if any, by which the tax basis of the obligation to the taxpayer immediately before the disposition exceeds the taxpayer’s proceeds of disposition. 
  
  ### Gain or loss from disposition of obligation
  
  (6) For the purposes of this section, 
  (a) where the amount determined under paragraph 142.4(6)(c) in respect of the disposition of a specified debt obligation by a taxpayer is positive, that amount is the taxpayer’s gain from the disposition of the obligation; 
  (b) where the amount determined under paragraph 142.4(6)(c) in respect of the disposition of a specified debt obligation by a taxpayer is negative, the absolute value of that amount is the taxpayer’s loss from the disposition of the obligation; and 
  (c) the amount determined under this paragraph in respect of the disposition of a specified debt obligation by a taxpayer is the positive or negative amount determined by the formula is the taxpayer’s proceeds of disposition, is the tax basis of the obligation to the taxpayer immediately before the time of disposition, and is the taxpayer’s transition amount in respect of the disposition. 
  
  ### Current amount
  
  (7) For the purposes of subsections 142.4(4) and 142.4(8), the current amount of a taxpayer’s gain or loss from the disposition of a specified debt obligation is 
  (a) where the taxpayer has a gain from the disposition of the obligation, the part, if any, of the gain that is reasonably attributable to a material increase in the probability, or perceived probability, that the debtor will make all payments as required by the obligation; and 
  (b) where the taxpayer has a loss from the disposition of the obligation, the amount that the taxpayer claims not exceeding the part, if any, of the loss that is reasonably attributable to a default by the debtor or a material decrease in the probability, or perceived probability, that the debtor will make all payments as required by the obligation. 
  
  ### Residual portion of gain or loss
  
  (8) For the purpose of subsection 142.4(4), the residual portion of a taxpayer’s gain or loss from the disposition of a specified debt obligation is the amount, if any, by which the gain or loss exceeds the current amount of the gain or loss. 
  
  ### Disposition of part of obligation
  
  (9) Where a taxpayer disposes of part of a specified debt obligation, section 142.3 and this section apply as if the part disposed of and the part retained were separate specified debt obligations. 
  
  ### Penalties and bonuses
  
  (10) Notwithstanding subsection 18(9.1), where a taxpayer that holds a specified debt obligation receives a penalty or bonus because of the repayment before maturity of all or part of the principal amount of the debt obligation, the payment is deemed to be received by the taxpayer as proceeds of disposition of the specified debt obligation. 
  
  ### Payments received on or after disposition
  
  (11) For the purposes of this section, where at any time a taxpayer receives a payment (other than proceeds of disposition) under a specified debt obligation on or after the disposition of the obligation, the payment is deemed not to have been so received at that time but to have been so received immediately before the disposition. 
  
  ## Mark-to-Market Properties 
  
  ### Income treatment for profits and losses
  
  142.5 (1) Where, in a taxation year that begins after October 1994, a taxpayer that is a financial institution in the year disposes of a property that is a mark-to-market property for the year, 
  (a) there shall be included in computing the taxpayer’s income for the year the profit, if any, from the disposition; and 
  (b) there shall be deducted in computing the taxpayer’s income for the year the loss, if any, from the disposition. 
  
  ### Mark-to-market requirement
  
  (2) Where a taxpayer that is a financial institution in a taxation year holds, at the end of the year, a mark-to-market property for the year, the taxpayer shall be deemed 
  (a) to have disposed of the property immediately before the end of the year for proceeds equal to its fair market value at the time of disposition, and 
  (b) to have reacquired the property at the end of the year at a cost equal to those proceeds. 
  
  ### Mark-to-market debt obligation
  
  (3) Where a taxpayer is a financial institution in a particular taxation year that begins after October 1994, the following rules apply with respect to a specified debt obligation that is a mark-to-market property of the taxpayer for the particular year: 
  (a) paragraph 12(1)(c) and subsections 12(3) and 20(14) and (21) do not apply to the obligation in computing the taxpayer’s income for the particular year; 
  (b) there shall be included in computing the taxpayer’s income for the particular year an amount received by the taxpayer in the particular year as, on account of, in lieu of payment of, or in satisfaction of, interest on the obligation, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year; and 
  (c) for the purpose of paragraph 142.5(3)(b), where the taxpayer was deemed by subsection 142.5(2) or paragraph 142.6(1)(b) to have disposed of the obligation in a preceding taxation year, no part of an amount included in computing the income of the taxpayer for that preceding year because of the disposition shall be considered to be in respect of interest on the obligation. 
  
  ### Proceeds — mark-to-market property
  
  (4) For greater certainty, if a taxpayer is a financial institution in a taxation year and disposes of a share that is mark-to-market property of the taxpayer for the year, the taxpayer’s proceeds from the disposition do not include any amount that would otherwise be proceeds from the disposition to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed by subparagraph 88(2)(b)(ii) not to be a dividend. 
  (5) to (7)  [Repealed, 2013, c. 34, s. 288]  
  
  ### First deemed disposition of debt obligation
  
  (8) Where 
  (a) in a particular taxation year that ends after October 30, 1994, a taxpayer disposed of a specified debt obligation that is a mark-to-market property of the taxpayer for the following taxation year, and 
  (b) either 
  (i) the disposition occurred because of subsection 142.5(2) and the particular year includes October 31, 1994, or 
  (ii) the disposition occurred because of paragraph 142.6(1)(b), the following rules apply: 
  (c) subsection 20(21) does not apply to the disposition, and 
  (d) where 
  (i) an amount has been deducted under paragraph 20(1)(p) in respect of the obligation in computing the taxpayer’s income for the particular year or a preceding taxation year, and 
  (ii) section 12.4 does not apply to the disposition, there shall be included in computing the taxpayer’s income for the particular year the amount, if any, by which 
  (iii) the total of all amounts referred to in subparagraph 142.5(8)(d)(i) exceeds 
  (iv) the total of all amounts included under paragraph 12(1)(i) in respect of the obligation in computing the taxpayer’s income for the particular year or a preceding taxation year. 
  
  ### Application of subsection (8.2)
  
  (8.1) Subsection (8.2) applies to a taxpayer for its transition year if 
  (a) subsection (2) deems the taxpayer to have disposed of a particular specified debt obligation immediately before the end of its transition year (in subsection (8.2) referred to as “the particular disposition”); and 
  (b) the particular specified debt obligation was owned by the taxpayer at the end of its base year and was not a mark-to-market property of the taxpayer for its base year. 
  
  ### Rules applicable to first deemed disposition of debt obligation
  
  (8.2) If this subsection applies to a taxpayer for its transition year, the following rules apply to the taxpayer in respect of the particular disposition: 
  (a) subsection 20(21) does not apply to the taxpayer in respect of the particular disposition; and 
  (b) if section 12.4 does not apply to the taxpayer in respect of the particular disposition, there shall be included in computing the taxpayer’s income for its transition year the amount, if any, by which 
  (i) the total of all amounts each of which is 
  (A) an amount deducted under paragraph 20(1)(l) in respect of the particular specified debt obligation of the taxpayer in computing the taxpayer’s income for its base year, or 
  (B) an amount deducted under paragraph 20(1)(p) in respect of the particular specified debt obligation of the taxpayer in computing the taxpayer’s income for a taxation year that preceded its transition year, exceeds 
  (ii) the total of all amounts each of which is 
  (A) an amount included under paragraph 12(1)(d) in respect of the particular specified debt obligation of the taxpayer in computing the taxpayer’s income for its transition year, or 
  (B) an amount included under paragraph 12(1)(i) in respect of the particular specified debt obligation of the taxpayer in computing the taxpayer’s income for its transition year or a preceding taxation year. 
  
  ### Transition — property acquired on rollover
  
  (9) Where 
  (a) a taxpayer acquired a property before October 31, 1994 at a cost less than the fair market value of the property at the time of acquisition, 
  (b) the property was transferred, directly or indirectly, to the taxpayer by a person that would never have been a financial institution before the transfer if the definition 
  *financial institution* in subsection 142.2(1) had always applied,  
  (c) the cost is less than the fair market value because subsection 85(1) applied in respect of the disposition of the property by the person, and 
  (d) subsection 142.5(2) deemed the taxpayer to have disposed of the property in its particular taxation year that includes October 31, 1994, the following rules apply: 
  (e) where the taxpayer would, but for this paragraph, have a taxable capital gain for the particular year from the disposition of the property, the part of the taxable capital gain that can reasonably be considered to have arisen while the property was held by a person described in paragraph 142.5(9)(b) shall be deemed to be a taxable capital gain of the taxpayer from the disposition of the property for the taxation year in which the taxpayer disposes of the property otherwise than because of subsection 142.5(2), and not to be a taxable capital gain for the particular year, and 
  (f) where the taxpayer has a profit (other than a capital gain) from the disposition of the property, the part of the profit that can reasonably be considered to have arisen while the property was held by a person described in paragraph 142.5(9)(b) shall be included in computing the taxpayer’s income for the taxation year in which the taxpayer disposes of the property otherwise than because of subsection 142.5(2), and shall not be included in computing the taxpayer’s income for the particular year. 
  
  ### Definitions
  
  142.51 (1) The following definitions apply for the purposes of this section and subsections 142.5(8.1) and (8.2).  
  *base year* of a taxpayer means the taxpayer’s taxation year that immediately precedes its transition year. (année de base)   
  *transition amount* of a taxpayer for the taxpayer’s transition year is the positive or negative amount determined by the formula  is the total of all amounts each of which is the fair market value, at the end of the taxpayer’s base year, of a transition property of the taxpayer; and is the total of all amounts each of which is the cost amount to the taxpayer, at the end of the taxpayer’s base year, of a transition property of the taxpayer. ( montant transitoire)   
  *transition property* of a taxpayer means a property that  
  (a) was a specified debt obligation held by the taxpayer at the end of the taxpayer’s base year; 
  (b) was not a mark-to-market property of the taxpayer for the taxpayer’s base year, but would have been a mark-to-market property of the taxpayer for the taxpayer’s base year if the property had been carried at the property’s fair market value in the taxpayer’s balance sheet as at the end of each taxation year of the taxpayer that ends after the taxpayer last acquired the property (otherwise than by reason of a reacquisition under subsection 142.5(2)) and before the commencement of the taxpayer’s transition year; and 
  (c) was a mark-to-market property of the taxpayer for the transition year of the taxpayer. ( bien transitoire)   
  *transition year* of a taxpayer means the taxpayer’s first taxation year that begins after 2022. (année transitoire)  
  
  ### Transition year income inclusion
  
  (2) If a taxpayer is an insurer in its transition year, there shall be included in computing the taxpayer’s income for its transition year the absolute value of the negative amount, if any, of the taxpayer’s transition amount. 
  
  ### Transition year income deduction
  
  (3) If a taxpayer is an insurer in its transition year, there shall be deducted in computing the taxpayer’s income for its transition year the positive amount, if any, of the taxpayer’s transition amount. 
  
  ### Transition year income inclusion reversal
  
  (4) If an amount has been included under subsection (2) in computing a taxpayer’s income for its transition year, there shall be deducted in computing the taxpayer’s income for each particular taxation year of the taxpayer that ends after the beginning of the transition year, and in which particular taxation year the taxpayer is an insurer, the amount determined by the formula is the amount included under subsection (2) in computing the taxpayer’s income for the transition year; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Transition year income deduction reversal
  
  (5) If an amount has been deducted under subsection (3) in computing a taxpayer’s income for its transition year, there shall be included in computing the taxpayer’s income, for each particular taxation year of the taxpayer ending after the beginning of the transition year, and in which particular taxation year the taxpayer is an insurer, the amount determined by the formula is the amount deducted under subsection (3) in computing the taxpayer’s income for the transition year; and is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year. 
  
  ### Winding-up
  
  (6) If a taxpayer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the “parent”), and immediately after the winding-up the parent is an insurer, in applying subsections (4) and (5) in computing the income of the taxpayer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the “start day”) on which assets of the taxpayer were distributed to the parent on the winding-up, 
  (a) the parent is, on and after the start day, deemed to be the same corporation as and a continuation of the taxpayer in respect of 
  (i) any amount included under subsection (2) or deducted under subsection (3) by the taxpayer in computing the taxpayer’s income for its transition year, 
  (ii) any amount deducted under subsection (4) or included under subsection (5) in computing the taxpayer’s income for a taxation year of the taxpayer that begins before the start day, and 
  (iii) any amount that would — in the absence of this subsection and if the taxpayer existed and was an insurer on each day that is the start day or a subsequent day and on which the parent is an insurer — be required to be deducted or included, in respect of any of those days, under subsection (4) or (5) in computing the taxpayer’s income for its transition year; and 
  (b) the taxpayer is, in respect of each of its particular taxation years, to determine the value for B in the formulas in subsections (4) and (5) without reference to the start day and days after the start day. 
  
  ### Amalgamations
  
  (7) If there is an amalgamation (within the meaning assigned by subsection 87(1)) of a taxpayer with one or more other corporations to form one corporation (referred to in this subsection as the “new corporation”), and immediately after the amalgamation the new corporation is an insurer, in applying subsections (4) and (5) in computing the income of the new corporation for particular taxation years of the new corporation that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the taxpayer in respect of 
  (a) any amount included under subsection (2) or deducted under subsection (3) in computing the taxpayer’s income for its transition year of the taxpayer; 
  (b) any amount deducted under subsection (4) or included under subsection (5) in computing the taxpayer’s income for a taxation year of the taxpayer that begins before the day on which the amalgamation occurred; and 
  (c) any amount that would — in the absence of this subsection and if the taxpayer existed and was an insurer on each day that is the day on which the amalgamation occurred or a subsequent day and on which the new corporation is an insurer — be required to be deducted or included, in respect of any of those days, under subsection (4) or (5) in computing the taxpayer’s income. 
  
  ### Application of subsection (9)
  
  (8) Subsection (9) applies if, at any time, a taxpayer (referred to in this subsection and subsection (9) as the “transferor”) transfers, to a corporation (referred to in this subsection and subsection (9) as the “transferee”) that is related to the transferor, property in respect of a business carried on by the transferor in Canada (referred to in this subsection and subsection (9) as the “transferred business”) and 
  (a) subsection 138(11.5) or (11.94) applies to the transfer; or 
  (b) subsection 85(1) applies to the transfer, the transfer includes all or substantially all of the property and liabilities of the transferred business and, immediately after the transfer, the transferee is an insurer. 
  
  ### Transfer of a business
  
  (9) If this subsection applies in respect of the transfer, at any time, of property 
  (a) the transferee is, at and after that time, deemed to be the same corporation as and a continuation of the transferor in respect of 
  (i) any amount included under subsection (2) or deducted under subsection (3) in computing the transferor’s income for its transition year that can reasonably be attributed to the transferred business, 
  (ii) any amount deducted under subsection (4) or included under subsection (5) in computing the transferor’s income for a taxation year of the transferor that begins before that time that can reasonably be attributed to the transferred business, and 
  (iii) any amount that would — in the absence of this subsection and if the transferor existed and was an insurer on each day that includes that time or is a subsequent day and on which the transferee is an insurer — be required to be deducted or included, in respect of any of those days, under subsection (4) or (5) in computing the transferor’s income that can reasonably be attributed to the transferred business; and 
  (b) in determining, in respect of the day that includes that time or any subsequent day, any amount that is required under subsection (4) or (5) to be deducted or included in computing the transferor’s income for each particular taxation year from the transferred business, the description of A in the formulas in those subsections is deemed to be nil. 
  (10)  [Repealed, 2022, c. 19, s. 28]  
  
  ### Ceasing to carry on a business
  
  (11) If at any time, a taxpayer ceases to be an insurer 
  (a) there shall be deducted, in computing the income of the taxpayer for the taxation year of the taxpayer that includes the time that is immediately before that time, the amount determined by the formula is the amount included under subsection (2) in computing the taxpayer’s income for its transition year, and is the total of all amounts each of which is an amount deducted under subsection (4) in computing the income of the taxpayer for a taxation year that began before that time; and 
  (b) there shall be included, in computing the income of the taxpayer for the taxation year of the taxpayer that includes the time that is immediately before that time, the amount determined by the formula is the amount deducted under subsection (3) in computing the taxpayer’s income for its transition year, and is the total of all amounts each of which is an amount included under subsection (5) in computing the taxpayer’s income for a taxation year that began before that time. 
  
  ### Ceasing to exist
  
  (12) If at any time a taxpayer ceases to exist (otherwise than as a result of a merger to which subsection 87(2) applies or a winding-up to which subsection 88(1) applies), for the purposes of subsection (11), the taxpayer is deemed to have ceased to be an insurer at the earlier of 
  (a) the time (determined without reference to this subsection) at which the taxpayer ceased to be an insurer, and 
  (b) the time that is immediately before the end of the last taxation year of the taxpayer that ended at or before the time at which the taxpayer ceased to exist. 
  
  ### Application of subsection (13.1)
  
  (13) Subsection (13.1) applies to a taxpayer for a particular taxation year of the taxpayer if 
  (a) the taxpayer holds a transition property in the particular taxation year; 
  (b) the property was a mark-to-market property of the taxpayer for the taxation year preceding the particular taxation year; and 
  (c) the property is not a mark-to-market property of the taxpayer for the particular taxation year. 
  
  ### Ceasing to be mark-to-market property
  
  (13.1) If this subsection applies to a taxpayer for a particular taxation year of the taxpayer, for purposes of this section 
  (a) the taxpayer is deemed to have ceased to be an insurer at the particular time that is the beginning of the particular taxation year; and 
  (b) the time immediately before the particular time shall be deemed to be the end of the taxation year that ends immediately before the particular taxation year. 
  
  ## Additional Rules 
  
  ### Becoming or ceasing to be a financial institution
  
  142.6 (1) Where, at a particular time after February 22, 1994, a taxpayer becomes or ceases to be a financial institution, 
  (a) where a taxation year of the taxpayer would not, but for this paragraph, end immediately before the particular time, 
  (i) except for the purpose of subsection 132(6.1), the taxpayer’s taxation year that would otherwise have included the particular time is deemed to have ended immediately before that time and a new taxation year of the taxpayer is deemed to have begun at that time, and 
  (ii) for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before that time; 
  (b) if the taxpayer becomes a financial institution, the taxpayer is deemed to have disposed, immediately before the end of its particular taxation year that ends immediately before the particular time, of each of the following properties held by the taxpayer for proceeds equal to the property’s fair market value at the time of that disposition: 
  (i) a specified debt obligation, or 
  (ii) a mark-to-market property of the taxpayer for the particular taxation year or for the taxpayer’s taxation year that includes the particular time; 
  (c) where the taxpayer ceases to be a financial institution, the taxpayer shall be deemed to have disposed, immediately before the end of its taxation year that ends immediately before the particular time, of each property held by the taxpayer that is a specified debt obligation (other than a mark-to-market property of the taxpayer for the year), for proceeds equal to its fair market value at the time of disposition; and 
  (d) the taxpayer is deemed to have reacquired, at the end of its taxation year that ends immediately before the particular time, each property deemed by paragraph (b) or (c) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property. 
  
  ### Ceasing to use property in Canadian business
  
  (1.1) If at a particular time in a taxation year a taxpayer that is a non-resident financial institution (other than a life insurance corporation) ceases to use, in connection with a business or part of a business carried on by the taxpayer in Canada immediately before the particular time, a property that is a mark-to-market property of the taxpayer for the year or a specified debt obligation, but that is not a property that was disposed of by the taxpayer at the particular time, 
  (a) the taxpayer is deemed 
  (i) to have disposed of the property immediately before the time that was immediately before the particular time for proceeds equal to its fair market value at the time of disposition and to have received those proceeds at the time of disposition in the course of carrying on the business or the part of the business, as the case may be, and 
  (ii) to have reacquired the property at the particular time at a cost equal to those proceeds; and 
  (b) in determining the consequences of the disposition in subparagraph (a)(i), subsection 142.4(11) does not apply to any payment received by the taxpayer after the particular time. 
  
  ### Beginning to use property in a Canadian business
  
  (1.2) If at a particular time a taxpayer that is a non-resident financial institution (other than a life insurance corporation) begins to use, in connection with a business or part of a business carried on by the taxpayer in Canada, a property that is a mark-to-market property of the taxpayer for the year that includes the particular time or a specified debt obligation, but that is not a property that was acquired by the taxpayer at the particular time, the taxpayer is deemed 
  (a) to have disposed of the property immediately before the time that was immediately before the particular time for proceeds equal to its fair market value at the time of disposition; and 
  (b) to have reacquired the property at the particular time at a cost equal to those proceeds. 
  
  ### Specified debt obligation marked to market
  
  (1.3) In applying subsection (1.1) to a taxpayer in respect of a property in a taxation year, 
  (a) the definition 
  *mark-to-market property* in subsection 142.2(1) shall be applied as if the year ended immediately before the particular time referred to in subsection (1.1); and  
  (b) if the taxpayer does not have financial statements for the period ending immediately before the particular time referred to in subsection (1.1), references in the definition to financial statements for the year shall be read as references to the financial statements that it is reasonable to expect would have been prepared if the year had ended immediately before the particular time. 
  
  ### Change in status — prescribed payment card corporation share
  
  (1.4) If, at any particular time in a taxation year of a taxpayer that is a financial institution for the taxation year, a property becomes a mark-to-market property of the taxpayer for the taxation year because it ceased, at the particular time, to be a prescribed payment card corporation share of the taxpayer, 
  (a) the taxpayer is deemed 
  (i) to have disposed of the property immediately before the particular time for proceeds of disposition equal to its fair market value immediately before the particular time, and 
  (ii) to have acquired the property, at the particular time, at a cost equal to those proceeds; and 
  (b) subsection 142.5(1) does not apply to the disposition under subparagraph (a)(i). 
  
  ### Change in status — prescribed securities exchange investment
  
  (1.5) If, at any particular time in a taxation year of a taxpayer that is a financial institution for the taxation year, a property becomes a mark-to-market property of the taxpayer for the taxation year because it ceased, at the particular time, to be a prescribed securities exchange investment of the taxpayer, 
  (a) the taxpayer is deemed 
  (i) to have disposed of the property immediately before the particular time for proceeds of disposition equal to its fair market value immediately before the particular time, and 
  (ii) to have acquired the property, at the particular time, at a cost equal to those proceeds; and 
  (b) subsection 142.5(1) does not apply to the disposition under subparagraph (a)(i). 
  
  ### Change in status — significant interest
  
  (1.6) If, at the end of a particular taxation year of a taxpayer that is a financial institution for the taxation year, the taxpayer holds a share of the capital stock of a corporation, the taxpayer has a significant interest in that corporation at any time in the particular taxation year and the share is mark-to-market property of the taxpayer for the immediately following taxation year, the taxpayer is deemed to have, 
  (a) disposed of the share immediately before the end of the particular taxation year for proceeds of disposition equal to the fair market value, at that time, of the share; and 
  (b) acquired the share at the end of the particular taxation year at a cost equal to those proceeds. 
  
  ### Deemed disposition not applicable
  
  (2) For the purposes of this Act, the determination of when a taxpayer acquired a share shall be made without regard to a disposition or acquisition that occurred because of subsection 142.5(2) or subsection (1), (1.1), (1.2), (1.4), (1.5) or (1.6). 
  
  ### Property not inventory
  
  (3) Where a taxpayer is a financial institution in a taxation year, inventory of the taxpayer in the year does not include property that is 
  (a) a specified debt obligation (other than a mark-to-market property for the year); or 
  (b) where the year begins after October 1994, a mark-to-market property for the year. 
  
  ### Property that ceases to be inventory
  
  (4) Where a taxpayer that was a financial institution in its particular taxation year that includes February 23, 1994 held, on that day, a specified debt obligation (other than a mark-to-market property for the year) that was inventory of the taxpayer at the end of its preceding taxation year, 
  (a) the taxpayer shall be deemed to have disposed of the property at the beginning of the particular year for proceeds equal to 
  (i) where subparagraph 142.6(4)(a)(ii) does not apply, the amount at which the property was valued at the end of the preceding taxation year for the purpose of computing the taxpayer’s income for the year, and 
  (ii) where the taxpayer is a bank and the property is prescribed property for the particular year, the cost of the property to the taxpayer (determined without reference to paragraph 142.6(4)(b)); 
  (b) for the purpose of determining the taxpayer’s profit or loss from the disposition, the cost of the property to the taxpayer shall be deemed to be the amount referred to in subparagraph 142.6(4)(a)(i); and 
  (c) the taxpayer shall be deemed to have reacquired the property, immediately after the beginning of the particular year, at a cost equal to the proceeds of disposition of the property. 
  
  ### Debt obligations acquired in rollover transactions
  
  (5) Where, 
  (a) on February 23, 1994, a financial institution that is a corporation held a specified debt obligation (other than a mark-to-market property for the taxation year that includes that day) that was at any particular time before that day held by another corporation, and 
  (b) between the particular time and February 23, 1994, the only transactions affecting the ownership of the property were rollover transactions, the financial institution shall be deemed, in respect of that obligation, to be the same corporation as, and a continuation of, the other corporation. 
  
  ### Definition of 
  *rollover transaction* 
  
  (6) For the purpose of subsection 142.6(5), 
  *rollover transaction* means a transaction to which subsection 87(2), 88(1) or 138(11.5) or 138(11.94) applies, other than a transaction to which paragraph 138(11.5)(e) requires the provisions of subsection 85(1) to be applied.  
  
  ### Superficial loss rule not applicable
  
  (7) Subsection 18(13) does not apply to the disposition of a property by a taxpayer after October 30, 1994 where 
  (a) the taxpayer is a financial institution when the disposition occurs and the property is a specified debt obligation or a mark-to-market property for the taxation year in which the disposition occurs; or 
  (b) the disposition occurs because of paragraph 142.6(1)(b). 
  
  ### Accrued capital gains and losses election
  
  (8) Where a taxpayer that is a financial institution in its first taxation year that ends after February 22, 1994 so elects by notifying the Minister in writing before July 1998 or within 90 days after the day on which a notice of assessment of tax payable under this Part for the year, notification that no tax is payable under this Part for the year or notification that an election made by the taxpayer under this subsection is deemed by subsection 142.6(9) or 142.6(10) not to have been made is mailed to the taxpayer, 
  (a) each property of the taxpayer 
  (i) that was a capital property (other than a depreciable property) of the taxpayer at the end of the taxpayer’s last taxation year that ended before February 23, 1994, 
  (ii) that was a mark-to-market property for, or a specified debt obligation in, the taxpayer’s first taxation year that begins after that time, 
  (iii) that had a fair market value at that time greater than its adjusted cost base to the taxpayer at that time, and 
  (iv) that is designated by the taxpayer in the election is deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after that time at a cost equal to, the lesser of 
  (v) the fair market value of the property at that time, and 
  (vi) the greater of the adjusted cost base to the taxpayer of the property immediately before that time and the amount designated by the taxpayer in the election in respect of the property; 
  (b) each property of the taxpayer 
  (i) that was a capital property (other than a depreciable property) of the taxpayer at the end of the taxpayer’s last taxation year that ended before February 23, 1994, 
  (ii) that was not a mark-to-market property for, or a specified debt obligation in, the taxpayer’s first taxation year that begins after that time, 
  (iii) that had an adjusted cost base to the taxpayer at that time greater than its fair market value at that time, and 
  (iv) that is designated by the taxpayer in the election is deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after that time at a cost equal to, the greater of 
  (v) the fair market value of the property at that time, and 
  (vi) the lesser of the adjusted cost base to the taxpayer of the property immediately before that time and the amount designated by the taxpayer in the election in respect of the property; and 
  (c) notwithstanding subsections 152(4) to 152(5), such assessment of the taxpayer’s tax payable under this Act for the taxpayer’s last taxation year that ended before February 23, 1994 shall be made as is necessary to take the election into account. 
  
  ### Accrued capital gains election limit
  
  (9) Where a taxpayer has made an election under subsection 142.6(8) in which a property was designated under subparagraph 142.6(8)(a)(iv), the election is deemed not to have been made where 
  (a) the amount that would be the taxpayer’s taxable capital gains from dispositions of property for the taxpayer’s last taxation year that ended before February 23, 1994 if this subsection and subsection 142.6(10) did not apply exceeds the total of 
  (b) the amount that would be the taxpayer’s allowable capital losses for the year from dispositions of property if this subsection and subsection 142.6(10) did not apply, 
  (c) the maximum amount that would have been deductible in computing the taxpayer’s taxable income for the year in respect of the taxpayer’s net capital losses for preceding taxation years if there were sufficient taxable capital gains for the year from dispositions of property, and 
  (d) the amount, if any, by which 
  (i) the amount that would be the taxpayer’s taxable capital gains for the taxpayer’s last taxation year that ended before February 23, 1994 from dispositions of property if no election were made under subsection 142.6(8) exceeds the total of 
  (ii) the amount that would be the taxpayer’s allowable capital losses for the year from dispositions of property if no election were made under subsection 142.6(8), and 
  (iii) the maximum amount that would have been deductible in computing the taxpayer’s taxable income for the year in respect of the taxpayer’s net capital losses for preceding taxation years if no election were made under subsection 142.6(8). 
  
  ### Accrued capital losses election limit
  
  (10) Where a taxpayer has made an election under subsection 142.6(8) in which a property was designated under subparagraph 142.6(8)(b)(iv), the election is deemed not to have been made where 
  (a) the total of the amounts determined under paragraphs 142.6(9)(b) and 142.6(9)(c) in respect of the taxpayer exceeds the amount determined under paragraph 142.6(9)(a) in respect of the taxpayer; or 
  (b) the total of all amounts each of which would, if this subsection did not apply, be the taxpayer’s allowable capital loss for the taxpayer’s last taxation year that ended before February 23, 1994 from the disposition of a property deemed to have been disposed of under paragraph 142.6(8)(b) exceeds the total of all amounts each of which is the taxpayer’s taxable capital gain for the year from the disposition of a property deemed to have been disposed of under paragraph 142.6(8)(a). 
  
  ## Conversion of Foreign Bank Affiliate to Branch 
  
  ### Definitions
  
  142.7 (1) The definitions in this subsection apply in this section.  
  *Canadian affiliate* of an entrant bank at any particular time means a Canadian corporation that was, immediately before the particular time, affiliated with the entrant bank and that was, at all times during the period that began on February 11, 1999 and ended immediately before the particular time,  
  (a) affiliated with either 
  (i) the entrant bank, or 
  (ii) a foreign bank (within the meaning assigned by section 2 of the Bank Act) that is affiliated with the entrant bank at the particular time; and  
  (b) either 
  (i) a bank, 
  (ii) a corporation authorized under the Trust and Loan Companies Act to carry on the business of offering to the public its services as trustee, or  
  (iii) a corporation of which the principal activity in Canada consists of any of the activities referred to in subparagraphs 518(3)(a)(i) to (v) of the Bank Act and in which the entrant bank or a non-resident person affiliated with the entrant bank holds shares under the authority, directly or indirectly, of an order issued by the Minister of Finance or the Governor in Council under subsection 521(1) of that Act. (filiale canadienne)   
  *eligible property* of a Canadian affiliate at any time means a property described in any of paragraphs 85(1.1)(a) to (g.1) that is, immediately before that time, used or held by it in carrying on its business in Canada. (bien admissible)   
  *entrant bank* means a non-resident corporation that is, or has applied to the Superintendent of Financial Institutions to become, an authorized foreign bank. (banque entrante)   
  *qualifying foreign merger* means a merger or combination of two or more corporations that would be a 
  *foreign merger* within the meaning assigned by subsection 87(8.1) if that subsection were read without reference to the words “and otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation. (fusion étrangère déterminée)  
  
  ### Qualifying foreign merger
  
  (2) Where an entrant bank was formed as the result of a qualifying foreign merger, after February 11, 1999, of two or more corporations (referred to in this subsection as “predecessors”), and at the time immediately before the merger, there were one or more Canadian corporations (referred to in this subsection as “predecessor affiliates”), each of which at that time would have been a Canadian affiliate of a predecessor if the predecessor were an entrant bank at that time, 
  (a) for the purpose of the definition 
  *Canadian affiliate* in subsection (1),  
  (i) each predecessor affiliate is deemed to have been affiliated with the entrant bank throughout the period that began on February 11, 1999 and ended at the time of the merger, 
  (ii) the expression “entrant bank” in subparagraph (b)(iii) of the definition is deemed to include a predecessor, and 
  (iii) if two or more of the predecessor affiliates are amalgamated or merged at any time after February 11, 1999 to form a new corporation, the new corporation is deemed to have been affiliated with the entrant bank throughout the period that began on February 11, 1999 and ended at the time of the amalgamation or merger of the predecessor affiliates; and 
  (b) if at least one of the predecessors complied with the terms of subsection (11)(a), the entrant bank is deemed to have complied with those terms. 
  
  ### Branch-establishment rollover
  
  (3) If a Canadian affiliate of an entrant bank transfers an eligible property to the entrant bank, the entrant bank begins immediately after the transfer to use or hold the transferred property in its Canadian banking business and the Canadian affiliate and the entrant bank jointly elect, in accordance with subsection (11), to have this subsection apply in respect of the transfer, subsections 85(1) (other than paragraph (e.2)), (1.1), (1.4) and (5) apply, with any modifications that the circumstances require, in respect of the transfer, except that the portion of subsection 85(1) before paragraph (a) shall be read as follows: 
  “85 (1) Where a taxpayer that is a Canadian affiliate of an entrant bank (within the meanings assigned by subsection 142.7(1)) has, in a taxation year, disposed of any of the taxpayer’s property to the entrant bank (referred to in this subsection as the “corporation”), if the taxpayer and the corporation have jointly elected under subsection 142.7(3), the following rules apply:”. 
  
  ### Deemed fair market value
  
  (4) If a Canadian affiliate of an entrant bank and the entrant bank make an election under subsection (3) in respect of a transfer of property by the Canadian affiliate to the entrant bank, for the purposes of subsections 15(1), 52(2), 69(1), (4) and (5), 246(1) and 247(2) in respect of the transfer, the fair market value of the property is deemed to be the amount agreed by the Canadian affiliate and the entrant bank in their election. 
  
  ### Specified debt obligations
  
  (5) If a Canadian affiliate of an entrant bank transfers a specified debt obligation to the entrant bank in a transaction in respect of which an election is made under subsection (3), the Canadian affiliate is a financial institution in its taxation year in which the transfer is made, and the amount that the Canadian affiliate and the entrant bank agree on in their election in respect of the obligation is equal to the tax basis of the obligation within the meaning assigned by subsection 142.4(1), the entrant bank is deemed, in respect of the obligation, for the purposes of sections 142.2 to 142.4 and 142.6, to be the same corporation as, and a continuation of, the Canadian affiliate. 
  
  ### Mark-to-market property
  
  (6) If a Canadian affiliate of an entrant bank described in paragraph (11)(a) transfers at any time within the period described in paragraph (11)(c) to the entrant bank a property that is, for the Canadian affiliate’s taxation year in which the property is transferred, a mark-to-market property of the Canadian affiliate, 
  (a) for the purposes of subsections 112(5) to (5.21) and (5.4), the definition 
  *mark-to-market property* in subsection 142.2(1) and subsection 142.5(9), the entrant bank is deemed, in respect of the property, to be the same corporation as and a continuation of, the Canadian affiliate; and  
  (b) for the purpose of applying subsection 142.5(2) in respect of the property, the Canadian affiliate’s taxation year in which the property is transferred is deemed to have ended immediately before the time the property was transferred. 
  
  ### Reserves
  
  (7) If 
  (a) at a particular time, 
  (i) a Canadian affiliate of an entrant bank transfers to the entrant bank property that is a loan or lending asset, or a right to receive an unpaid amount in respect of a disposition before the particular time of property by the affiliate, or 
  (ii) the entrant bank assumes an obligation of the Canadian affiliate that is an instrument or commitment described in paragraph 20(1)(l.1) or an obligation in respect of goods, services, land, or chattels or movable property, described in subparagraph 20(1)(m)(i), (ii) or (iii), 
  (b) the property is transferred or the obligation is assumed for an amount equal to its fair market value at the particular time, 
  (c) the entrant bank begins immediately after the particular time to use or hold the property or owe the obligation in its Canadian banking business, and 
  (d) the Canadian affiliate and the entrant bank jointly elect in accordance with subsection (11) to have this subsection apply in respect of the transfer or assumption, then 
  (e) in applying paragraphs 20(1)(l), (l.1), (m), (n) and (p) in respect of the obligation or property, the taxation year of the affiliate that would, but for this paragraph, include the particular time is deemed to end immediately before the particular time, and 
  (f) in computing the income of the Canadian affiliate and the entrant bank for taxation years that end on or after the particular time, 
  (i) any amount deducted under paragraph 20(1)(l), (l.1), (m) or (n) by the Canadian affiliate in respect of the property or obligation in computing its income for its taxation year that ended immediately before the particular time, or under paragraph 20(1)(p) in computing its income for that year or for a preceding taxation year (to the extent that the amount has not been included in the affiliate’s income under paragraph 12(1)(i)), is deemed to have been so deducted by the entrant bank in computing its income for its last taxation year that ended before the particular time and not to have been deducted by the Canadian affiliate, 
  (ii) in applying paragraph 20(1)(m), an amount in respect of the goods, services, land, chattels or movable property, that was included under paragraph 12(1)(a) in computing the Canadian affiliate’s income from a business is deemed to have been so included in computing the entrant bank’s income from its Canadian banking business for a preceding taxation year, 
  (iii) in applying paragraph 20(1)(n) in respect of a property described in subparagraph (a)(i) and paragraphs (b), (c) and (d) sold by the Canadian affiliate in the course of a business, the property is deemed to have been disposed of by the entrant bank (and not by the Canadian affiliate) at the time it was disposed of by the Canadian affiliate, and the amount in respect of the sale that was included in computing the Canadian affiliate’s income from a business is deemed to have been included in computing the entrant bank’s income from its Canadian banking business for its taxation year that includes the time at which the property was so disposed of, and 
  (iv) in applying paragraph 40(1)(a) or 44(1)(e) in respect of a property described in subparagraph (a)(i) and paragraphs (b), (c) and (d) disposed of by the Canadian affiliate, the property is deemed to have been disposed of by the entrant bank (and not by the Canadian affiliate) at the time it was disposed of by the Canadian affiliate, the amount determined under subparagraph 40(1)(a)(i) or 44(1)(e)(i) in respect of the Canadian affiliate is deemed to be the amount determined under that subparagraph in respect of the entrant bank, and any amount claimed by the Canadian affiliate under subparagraph 40(1)(a)(iii) or 44(1)(e)(iii) in computing its gain from the disposition of the property for its last taxation year that ended before the particular time is deemed to have been so claimed by the entrant bank for its last taxation year that ended before the particular time. 
  
  ### Assumption of debt obligation
  
  (8) If a Canadian affiliate of an entrant bank described in paragraph (11)(a) transfers at any time within the period described in paragraph (11)(c) property to the entrant bank, and any part of the consideration for the transfer is the assumption by the entrant bank in respect of its Canadian banking business of a debt obligation of the Canadian affiliate, 
  (a) where the Canadian affiliate and the entrant bank jointly elect in accordance with subsection (11) to have this paragraph apply, 
  (i) both 
  (A) the value of that part of the consideration for the transfer of the property, and 
  (B) for the purpose of determining the consequences of the assumption of the obligation and any subsequent settlement or extinguishment of it, the value of the consideration given to the entrant bank for the assumption of the obligation, are deemed to be an amount (in this paragraph referred to as the “assumption amount”) equal to the amount outstanding on account of the principal amount of the obligation at that time, and 
  (ii) the assumption amount shall not be considered a term of the transaction that differs from that which would have been made between persons dealing at arm’s length solely because it is not equal to the fair market value of the obligation at that time; 
  (a.1)  [Repealed, 2013, c. 34, s. 290]  
  (b) where the obligation is denominated in a foreign currency, and the Canadian affiliate and the entrant bank jointly elect in accordance with subsection (11) to have this paragraph apply, 
  (i) the amount of any income, loss, capital gain or capital loss in respect of the obligation due to the fluctuation in the value of the foreign currency relative to Canadian currency realized by 
  (A) the Canadian affiliate on the assumption of the obligation is deemed to be nil, and 
  (B) the entrant bank on the settlement or extinguishment of the obligation shall be determined based on the amount of the obligation in Canadian currency at the time it became an obligation of the Canadian affiliate, and 
  (ii) for the purpose of an election made in respect of the obligation under paragraph (a), the amount outstanding on account of the principal amount of the obligation at that time is the total of all amounts each of which is an amount that was advanced to the Canadian affiliate on account of principal, that remains outstanding at that time, and that is determined using the exchange rate that applied between the foreign currency and Canadian currency at the time of the advance; and 
  (c) for the purpose of applying paragraphs 20(1)(e) and (f) in respect of the debt obligation, the obligation is deemed not to have been settled or extinguished by virtue of its assumption by the entrant bank and the entrant bank is deemed to be the same corporation as, and a continuation of, the Canadian affiliate. 
  
  ### Branch-establishment dividend
  
  (9) Notwithstanding any other provision of this Act, the rules in subsection (10) apply if 
  (a) a dividend is paid by a Canadian affiliate of an entrant bank to the entrant bank or to a person that is affiliated with the Canadian affiliate and that is resident in the country in which the entrant bank is resident, or 
  (b) a dividend is deemed to be paid for the purposes of this Part or Part XIII (other than by paragraph 214(3)(a)) as a result of a transfer of property from the Canadian affiliate to such a person, and the Canadian affiliate and the entrant bank jointly elect in accordance with subsection (11) to have subsection (10) apply in respect of the dividend. 
  
  ### Treatment of dividend
  
  (10) If the conditions in subsection (9) are met, 
  (a) the dividend is deemed (except for the purposes of subsections 112(3) to (7)) not to be a taxable dividend; and 
  (b) there is added to the amount otherwise determined under paragraph 219(1)(g) in respect of the entrant bank for its first taxation year that ends after the time at which the dividend is paid, the amount of the dividend less, where the dividend is paid by means of, or arises as a result of, a transfer of eligible property in respect of which the Canadian affiliate and the entrant bank have jointly elected under subsection (3), the amount by which the fair market value of the property transferred exceeds the amount the Canadian affiliate and the entrant bank have agreed on in their election. 
  
  ### Elections
  
  (11) An election under subsection (3) or (7), paragraph (8)(a) or (b) or subsection (10), (12) or (14) is valid only if 
  (a) the entrant bank by which the election is made has, on or before the day that is 6 months after the day on which the Income Tax Amendments Act, 2000 receives royal assent, complied with paragraphs 1.1(b) and (c) of the “Guide to Foreign Bank Branching” in respect of the establishment and commencement of business of a foreign bank branch in Canada issued by the Office of the Superintendent of Financial Institutions, as it read on December 31, 2000;  
  (b) the election is made in prescribed form on or before the earlier of the filing-due date of the Canadian affiliate and the filing-due date of the entrant bank, for the taxation year that includes the time at which 
  (i) in the case of an election under subsection (3) or (7), paragraph (8)(a) or (b) or subsection (10), the dividend, transfer or assumption to which the election relates is paid, made or effected, or 
  (ii) in the case of an election under subsection (12), the dissolution order was granted or the winding up commenced; and 
  (c) in the case of an election under subsection (3) or (7), paragraph (8)(a) or (b) or subsection (10), the dividend, transfer or assumption to which the election relates is paid, made or effected within the period that 
  (i) begins on the day on which the Superintendent makes an order in respect of the entrant bank under subsection 534(1) of the Bank Act, and  
  (ii) ends on the later of 
  (A) the earlier of 
  (I) the day that is one year after the day referred to subparagraph (i), and 
  (II) the day that is three years after the day on which the Income Tax Amendments Act, 2000 receives royal assent, and  
  (B) the day that is one year after the day on which the Income Tax Amendments Act, 2000 receives royal assent.  
  
  ### Winding-up of Canadian affiliate: losses
  
  (12) If 
  (a) within the period described in paragraph (11)(c) in respect of the entrant bank, 
  (i) the Minister of Finance has issued letters patent under section 342 of the Bank Act or section 347 of the Trust and Loan Companies Act dissolving the Canadian affiliate or an order under section 345 of the Bank Act or section 350 of the Trust and Loan Companies Act approving the Canadian affiliate’s application for dissolution (such letters patent or order being referred to in this subsection as the “dissolution order”), or  
  (ii) the affiliate has been wound up under the terms of the corporate law that governs it, 
  (b) the entrant bank carries on all or part of the business in Canada that was formerly carried on by the Canadian affiliate, and 
  (c) the Canadian affiliate and the entrant bank jointly elect in accordance with subsection (11) to have this section apply then in applying section 111 for the purpose of computing the taxable income earned in Canada of the entrant bank for any taxation year that begins after the date of the dissolution order or the commencement of the winding up, as the case may be, 
  (d) subject to paragraphs (e) and (h), the portion of a non-capital loss of the Canadian affiliate for a taxation year (in this paragraph referred to as the “Canadian affiliate’s loss year”) that can reasonably be regarded as being its loss from carrying on a business in Canada (in this paragraph referred to as the “loss business”) or being in respect of a claim made under section 110.5, to the extent that it 
  (i) was not deducted in computing the taxable income of the Canadian affiliate or any other entrant bank for any taxation year, and 
  (ii) would have been deductible in computing the taxable income of the Canadian affiliate for any taxation year that begins after the date of the dissolution order or the commencement of the winding up, as the case may be, on the assumption that it had such a taxation year and that it had sufficient income for that year, is deemed, for the taxation year of the entrant bank in which the Canadian affiliate’s loss year ended, to be a non-capital loss of the entrant bank from carrying on the loss business (or, in respect of a claim made under section 110.5, to be a non-capital loss of the entrant bank in respect of a claim under subparagraph 115(1)(a)(vii)) that was not deductible by the entrant bank in computing its taxable income earned in Canada for any taxation year that began before the date of the dissolution order or the commencement of the winding up, as the case may be, 
  (e) if at any time control of the Canadian affiliate or entrant bank has been acquired by a person or group of persons, no amount in respect of the Canadian affiliate’s non-capital loss for a taxation year that ends before that time is deductible in computing the taxable income earned in Canada of the entrant bank for a particular taxation year that ends after that time, except that the portion of the loss that can reasonably be regarded as the Canadian affiliate’s loss from carrying on a business in Canada and, where a business was carried on by the Canadian affiliate in Canada in the earlier year, the portion of the loss that can reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing its taxable income for the year are deductible only 
  (i) if that business is carried on by the Canadian affiliate or the entrant bank for profit or with a reasonable expectation of profit throughout the particular year, and 
  (ii) to the extent of the total of the entrant bank’s income for the particular year from that business, and where properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, from any other business substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services, and for the purpose of this paragraph, where subsection 88(1.1) applied to the dissolution of another corporation in respect of which the Canadian affiliate was the parent and paragraph 88(1.1)(e) applied in respect of losses of that other corporation, the Canadian affiliate is deemed to be the same corporation as, and a continuation of, that other corporation with respect to those losses, 
  (f) subject to paragraphs (g) and (h), a net capital loss of the Canadian affiliate for a taxation year (in this paragraph referred to as the “Canadian affiliate’s loss year”) is deemed to be a net capital loss of the entrant bank for its taxation year in which the Canadian affiliate’s loss year ended to the extent that the loss 
  (i) was not deducted in computing the taxable income of the Canadian affiliate or any other entrant bank for any taxation year, and 
  (ii) would have been deductible in computing the taxable income of the Canadian affiliate for any taxation year beginning after the date of the dissolution order or the commencement of the winding-up, as the case may be, on the assumption that the Canadian affiliate had such a taxation year and that it had sufficient income and taxable capital gains for that year, 
  (g) if at any time control of the Canadian affiliate or the entrant bank has been acquired by a person or group of persons, no amount in respect of the Canadian affiliate’s net capital loss for a taxation year that ends before that time is deductible in computing the entrant bank’s taxable income earned in Canada for a taxation year that ends after that time, and 
  (h) any loss of the Canadian affiliate that would otherwise be deemed by paragraph (d) or (f) to be a loss of the entrant bank for a particular taxation year that begins after the date of the dissolution order or the commencement of the winding-up, as the case may be, is deemed, for the purpose of computing the entrant bank’s taxable income earned in Canada for taxation years that begin after that date, to be such a loss of the entrant bank for its immediately preceding taxation year and not for the particular year, if the entrant bank so elects in its return of income for the particular year. 
  
  ### Winding-up of Canadian affiliate: stop loss
  
  (13) If a Canadian affiliate and its entrant bank have at any time made a joint election under either of subsection (3) or (12), 
  (a) in respect of any transfer of property, directly or indirectly, by the Canadian affiliate to the entrant bank or a person with whom the entrant bank does not deal at arm’s length, 
  (i) subparagraph 13(21.2)(e)(iii) shall be read without reference to clause (E) of that subparagraph, 
  (ii)  [Repealed, 2016, c. 12, s. 51]  
  (iii) paragraph 18(15)(b) shall be read without reference to subparagraph (iv) of that paragraph, and 
  (iv) paragraph 40(3.4)(b) shall be read without reference to subparagraph (v) of that paragraph; 
  (b) in respect of any property of the Canadian affiliate appropriated to or for the benefit of the entrant bank or any person with whom the entrant bank does not deal at arm’s length, section 69(5) shall be read without reference to paragraph (d); and 
  (c) for the purposes of applying subsection 13(21.2), 18(15) and 40(3.4) to any property that was disposed of by the affiliate, after the dissolution or winding-up of the affiliate, the entrant bank is deemed to be the same corporation as, and a continuation of, the affiliate. 
  
  ### Winding-up of Canadian affiliate: SDOs
  
  (14) If a Canadian affiliate of an entrant bank and the entrant bank meet the conditions set out in paragraphs (12)(a) and (b) and jointly elect in accordance with subsection (11) to have this subsection apply, and the Canadian affiliate has not made an election under this subsection with any other entrant bank, the entrant bank is deemed to be the same corporation as, and a continuation of, the Canadian affiliate for the purposes of paragraphs 142.4(4)(c) and (d) in respect of any specified debt obligation disposed of by the Canadian affiliate. 
  
  ## Communal Organizations 
  
  ### Communal organizations
  
  143 (1) Where a congregation, or one or more business agencies of the congregation, carries on one or more businesses for purposes that include supporting or sustaining the congregation’s members or the members of any other congregation, the following rules apply: 
  (a) a trust is deemed to be created on the day that is the later of 
  (i) December 31, 1976, and 
  (ii) the day the congregation came into existence; 
  (b) the trust is deemed to have been continuously in existence from the day determined under paragraph (a); 
  (c) the property of the congregation is deemed to be the property of the trust; 
  (d) the property of each business agency of the congregation in a calendar year is deemed to be property of the trust throughout the portion of the year throughout which the trust exists; 
  (e) where the congregation is a corporation, the corporation is deemed to be the trustee having control of the trust property; 
  (f) where the congregation is not a corporation, its council, committee of leaders, executive committee, administrative committee, officers or other group charged with its management are deemed to be the trustees having control of the trust property; 
  (g) the congregation is deemed to act and to have always acted as agent for the trust in all matters relating to its businesses and other activities; 
  (h) each business agency of the congregation in a calendar year is deemed to have acted as agent for the trust in all matters in the year relating to its businesses and other activities; 
  (i) the members of the congregation are deemed to be the beneficiaries under the trust; 
  (j) tax under this Part is payable by the trust on its taxable income for each taxation year; 
  (k) in computing the income of the trust for any taxation year, 
  (i) subject to paragraph (l), no deduction may be made in respect of salaries, wages or benefits of any kind provided to the members of the congregation, and 
  (ii) no deduction may be made under subsection 104(6), except to the extent that any portion of the trust’s income (determined without reference to that subsection) is allocated to the members of the congregation in accordance with subsection (2); and 
  (l) for the purpose of applying section 20.01 to the trust, 
  (i) each member of the congregation is deemed to be a member of the trust’s household, and 
  (ii) section 20.01 shall be read without reference to paragraphs 20.01(2)(b) and (c) and subsection 20.01(3). 
  (m)  [Repealed, 2023, c. 26, s. 35]  
  
  ### Election in respect of income
  
  (2) If the trust referred to in subsection (1) in respect of a congregation so elects in respect of a taxation year in writing filed with the Minister on or before the trust’s filing-due date for the year and all the congregation’s participating members are specified in the election in accordance with subsection (5), the following rules apply: 
  (a) for the purposes of subsections 104(6) and (13), the amount payable in the year to a particular participating member of the congregation out of the income of the trust (determined without reference to subsection 104(6)) is the amount determined by the formula is the taxable income of the trust for the year (determined without reference to subsection 104(6) and specified future tax consequences for the year), is 
  (i) where the particular member is identified in the election as a person to whom this subparagraph applies (in this subsection referred to as a “designated member”), 1, and 
  (ii) in any other case, 0.5, is the total of 
  (i) the number of designated members of the congregation, and 
  (ii) 1/2 of the number of other participating members of the congregation in respect of the year, is the amount, if any, that is specified in the election as an additional allocation under this subsection to the particular member, is the total of all amounts each of which is an amount specified in the election as an additional allocation under this subsection to a participating member of the congregation in respect of the year, and is the number of participating members of the congregation in respect of the year; 
  (b) the designated member of each family at the end of the year is deemed to have supported the other members of the family during the year and the other members of the family are deemed to have been wholly dependent on the designated member for support during the year; 
  (c) the taxable income for the year of each member of the congregation shall be computed without reference to subsection 110(2); and 
  (d) if the trust earns income from a business in the year, then the portion of the amount payable in the year to a particular participating member of the congregation out of the income of the trust under paragraph (a) that can reasonably be considered to relate to that income from a business is deemed to be income from a business carried on by the particular member. 
  
  ### Refusal to accept election
  
  (3) An election under subsection (2) in respect of a congregation for a particular taxation year is not binding on the Minister unless all taxes, interest and penalties payable under this Part, as a consequence of the application of subsection (2) to the congregation for preceding taxation years, are paid at or before the end of the particular year. 
  
  ### Election in respect of gifts
  
  (3.1) For the purposes of section 118.1, if the eligible amount of a gift made in a taxation year by a trust referred to in subsection (1) in respect of a congregation would, but for this subsection, be included in the total charitable gifts, total cultural gifts or total ecological gifts of the trust for the year and the trust so elects in its return of income under this Part for the year, 
  (a) the trust is deemed not to have made the gift; and 
  (b) each participating member of the congregation is deemed to have made, in the year, such a gift the eligible amount of which is the amount determined by the formula is the eligible amount of the gift made by the trust, is the amount determined for the year in respect of the member under paragraph(2)(a) as a consequence of an election under subsection (2) by the trust, and is the total of all amounts each of which is an amount determined for the year in respect of a participating member of the congregation under paragraph (2)(a) as a consequence of an election under subsection (2) by the trust. 
  
  ### Definitions
  
  (4) For the purposes of this section,  
  *adult* means an individual who, before the time at which the term is applied, has attained the age of eighteen years or is married or in a common-law partnership; (adulte)   
  *business agency*, of a congregation at any time in a particular calendar year, means a corporation, trust or other person, where the congregation owned all the shares of the capital stock of the corporation (except directors’ qualifying shares) or every interest in the trust or other person, as the case may be, throughout the portion of the particular calendar year throughout which both the congregation and the corporation, trust or other person, as the case may be, were in existence; (agence commerciale)   
  *congregation* means a community, society or body of individuals, whether or not incorporated,  
  (a) the members of which live and work together, 
  (b) that adheres to the practices and beliefs of, and operates according to the principles of, the religious organization of which it is a constituent part, 
  (c) that does not permit any of its members to own any property in their own right, and 
  (d) that requires its members to devote their working lives to the activities of the congregation; ( congrégation)   
  *family* means,  
  (a) in the case of an adult who is unmarried and who is not in a common-law partnership, that person and the person’s children who are not adults, not married and not in a common-law partnership, and 
  (b) in the case of an adult who is married or in a common-law partnership, that person and the person’s spouse or common-law partner and the children of either or both of them who are not adults, not married and not in a common-law partnership but does not include an individual who is included in any other family or who is not a member of the congregation in which the family is included; ( famille)   
  *member of a congregation* means  
  (a) an adult, living with the members of the congregation, who conforms to the practices of the religious organization of which the congregation is a constituent part whether or not that person has been formally accepted into the organization, and 
  (b) a child who is unmarried and not in a common-law partnership, other than an adult, of an adult referred to in paragraph (a), if the child lives with the members of the congregation; ( membre d’une congrégation)   
  *participating member*, of a congregation in respect of a taxation year, means an individual who, at the end of the year, is an adult who is a member of the congregation; (membre participant)   
  *religious organization* means an organization, other than a registered charity, of which a congregation is a constituent part, that adheres to beliefs, evidenced by the religious and philosophical tenets of the organization, that include a belief in the existence of a supreme being. (organisme religieux)   
  *total charitable gifts* has the meaning assigned by subsection 118.1(1); (total des dons de bienfaisance)   
  *total Crown gifts* [Repealed, 2014, c. 39, s. 48]   
  *total cultural gifts* has the meaning assigned by subsection 118.1(1); (total des dons de biens culturels)   
  *total ecological gifts* has the same meaning as in subsection 118.1(1). (total des dons de biens écosensibles)  
  
  ### Specification of family members
  
  (5) For the purpose of applying subsection (2) to a particular election by the trust referred to in subsection (1) in respect of a congregation for a particular taxation year, 
  (a) subject to paragraph (b), a participating member of the congregation is considered to have been specified in the particular election in accordance with this subsection only if the member is identified in the particular election and 
  (i) where the member’s family includes only one adult at the end of the particular year, the member is identified in the particular election as a person to whom subparagraph (i) of the description of B in subsection (2) (in this subsection referred to as the “relevant subparagraph”) applies, and 
  (ii) in any other case, only one of the adults in the member’s family is identified in the particular election as a person to whom the relevant subparagraph applies; and 
  (b) an individual is considered not to have been specified in the particular election in accordance with this subsection if 
  (i) the individual is one of two individuals who were married to each other, or in a common-law partnership, at the end of a preceding taxation year of the trust and at the end of the particular year, 
  (ii) one of those individuals was 
  (A) where the preceding year ended before 1998, specified in an election under subsection (2) by the trust for the preceding year, and 
  (B) in any other case, identified in an election under subsection (2) by the trust for the preceding year as a person to whom the relevant subparagraph applied, and 
  (iii) the other individual is identified in the particular election as a person to whom the relevant subparagraph applies. 
  
  ### Definitions
  
  143.1 (1) The definitions in this subsection apply in this section.  
  *amateur athlete* at any time means an individual (other than a trust) who is, at that time,  
  (a) a member of a registered Canadian amateur athletic association; 
  (b) eligible to compete, in an international sporting event sanctioned by an international sports federation, as a Canadian national team member; and 
  (c) not a professional athlete. ( athlète amateur)   
  *professional athlete* means an individual who receives income that is compensation for, or is otherwise attributable to, the individual’s activities as a player or athlete in a professional sport. (athlète professionnel)   
  *qualifying performance income* of an individual means income that  
  (a) is received by the individual in a taxation year in which 
  (i) the individual was, at any time, an amateur athlete, and 
  (ii) the individual was not, at any time, a professional athlete; 
  (b) may reasonably be considered to be in connection with the individual’s participation as an amateur athlete in one or more international sporting events referred to in the definition 
  *amateur athlete* ; and  
  (c) is endorsement income, prize money, or income from public appearances or speeches. ( revenu de performance admissible)   
  *third party* in respect of an arrangement described in paragraph (1.1)(b) means a person who deals at arm’s length with the amateur athlete in respect of the arrangement. (tiers)  
  
  ### Where subsection (1.2) applies
  
  (1.1) Subsection (1.2) applies where, at any time, 
  (a) a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation; or 
  (b) an individual enters into an arrangement that 
  (i) is an account with an issuer described in paragraph (b) of the definition 
  *qualifying arrangement* in subsection 146.2(1), or that would be so described if that definition applied at that time,  
  (ii) provides that no amount may be deposited, credited or added to the account, other than an amount that is qualifying performance income of the individual or that is interest or other income in respect of the property deposited, credited or added to the account, 
  (iii) provides that a third party is a mandatory signatory on any payment from the account, and 
  (iv) is not a registered retirement savings plan or a TFSA. 
  
  ### Amateur athletes’ reserve funds
  
  (1.2) If this subsection applies in respect of an arrangement referred to in subsection (1.1), 
  (a) a trust (in this section referred to as the “amateur athlete trust”) is deemed 
  (i) to be created on the day on which the first amount referred to in paragraph (1.1)(a) or (b) is received by the sport organization or by the issuer, as the case may be, in respect of the arrangement, and 
  (ii) to exist until subsection (3) or (4) applies in respect of the trust; 
  (b) all property held under the arrangement is deemed to be the property of the amateur athlete trust and not property of any other person; 
  (c) if, at any time, the sport organization or the issuer, as the case may be, receives an amount under the arrangement and the amount would, in the absence of this subsection, be included in computing the income of the individual in respect of the arrangement for the taxation year that includes that time, the amount is deemed to be income of the amateur athlete trust for that taxation year and not to be income of the individual; 
  (d) if, at any time, the sport organization or the issuer, as the case may be, pays or transfers an amount under the arrangement to or for the benefit of the individual, the amount is deemed to be an amount distributed at that time to the individual by the amateur athlete trust; 
  (e) the individual is deemed to be the beneficiary under the amateur athlete trust; 
  (f) the sport organization or the third party, as the case may be, in respect of the arrangement is deemed to be the trustee of the amateur athlete trust; and 
  (g) no tax is payable under this Part by the amateur athlete trust on its taxable income for any taxation year. 
  
  ### Amounts included in beneficiary’s income
  
  (2) In computing the income for a taxation year of the beneficiary under an amateur athlete trust, there shall be included the total of all amounts distributed in the year to the beneficiary by the trust. 
  
  ### Termination of amateur athlete trust
  
  (3) Where an amateur athlete trust holds property on behalf of a beneficiary who has not competed in an international sporting event as a Canadian national team member for a period of 8 years that ends in a particular taxation year and that begins in the year that is the later of 
  (a) where the beneficiary has competed in such an event, the year in which the beneficiary last so competed, and 
  (b) the year in which the trust was created, the trust shall be deemed to have distributed, at the end of the particular taxation year to the beneficiary, an amount equal to 
  (c) if the trust is liable to pay tax under Part XII.2 in respect of the particular year, 60% of the fair market value of all property held by it at that time, and 
  (d) in any other case, the fair market value of all property held by it at that time. 
  
  ### Death of beneficiary
  
  (4) Where an amateur athlete trust holds property on behalf of a beneficiary who dies in a year, the trust shall be deemed to have distributed, immediately before the death, to the beneficiary, an amount equal to 
  (a) if the trust is liable to pay tax under Part XII.2 in respect of the year, 60% of the fair market value of all property held by it at that time; and 
  (b) in any other case, the fair market value of all property held by it at that time. 
  
  ## Cost of Tax Shelter Investments and Limited-recourse Debt in Respect of Gifting Arrangements 
  
  ### Definitions
  
  143.2 (1) The definitions in this subsection apply in this section.  
  *expenditure* means an outlay or expense or the cost or capital cost of a property. (dépense)   
  *limited partner* has the meaning that would be assigned by subsection 96(2.4) if that subsection were read without reference to “if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection 96(2.5)) at that time and”. (commanditaire)   
  *limited-recourse amount* means the unpaid principal amount of any indebtedness for which recourse is limited, either immediately or in the future and either absolutely or contingently. (montant à recours limité)   
  *taxpayer* includes a partnership. (contribuable)   
  *tax shelter investment* means  
  (a) a property that is a tax shelter for the purpose of subsection 237.1(1); or 
  (b) a taxpayer’s interest in a partnership where 
  (i) an interest in the taxpayer 
  (A) is a tax shelter investment, and 
  (B) the taxpayer’s partnership interest would be a tax shelter investment if 
  (I) this Act were read without reference to this paragraph and to the words “having regard to statements or representations made or proposed to be made in connection with the property” in the definition 
  *tax shelter* in subsection 237.1(1),  
  (II) the references in that definition to 
  *represented* were read as references to “that can reasonably be expected”, and  
  (III) the reference in that definition to 
  *is represented* were read as a reference to “can reasonably be expected”,  
  (ii) another interest in the partnership is a tax shelter investment, or 
  (iii) the taxpayer’s interest in the partnership entitles the taxpayer, directly or indirectly, to a share of the income or loss of a particular partnership where 
  (A) another taxpayer holding a partnership interest is entitled, directly or indirectly, to a share of the income or loss of the particular partnership, and 
  (B) that other taxpayer’s partnership interest is a tax shelter investment. ( abri fiscal déterminé)  
  
  ### At-risk adjustment
  
  (2) For the purpose of this section, an at-risk adjustment in respect of an expenditure of a particular taxpayer, other than the cost of a partnership interest to which subsection 96(2.2) applies, means any amount or benefit that the particular taxpayer, or another taxpayer not dealing at arm’s length with the particular taxpayer, is entitled, either immediately or in the future and either absolutely or contingently, to receive or to obtain, whether by way of reimbursement, compensation, revenue guarantee, proceeds of disposition, loan or any other form of indebtedness, or in any other form or manner whatever, granted or to be granted for the purpose of reducing the impact, in whole or in part, of any loss that the particular taxpayer may sustain in respect of the expenditure or, where the expenditure is the cost or capital cost of a property, any loss from the holding or disposition of the property. 
  
  ### Amount or benefit not included
  
  (3) For the purpose of subsection 143.2(2), an at-risk adjustment in respect of a taxpayer’s expenditure does not include an amount or benefit 
  (a) to the extent that it is included in determining the value of J in the definition 
  *cumulative Canadian exploration expense* in subsection 66.1(6), of M in the definition 
  *cumulative Canadian development expense* in subsection 66.2(5) or of I in the definition 
  *cumulative Canadian oil and gas property expense* in subsection 66.4(5) in respect of the taxpayer; or  
  (b) the entitlement to which arises 
  (i) because of a contract of insurance with an insurance corporation dealing at arm’s length with the taxpayer (and, where the expenditure is the cost of an interest in a partnership, with each member of the partnership) under which the taxpayer is insured against any claim arising as a result of a liability incurred in the ordinary course of carrying on the business of the taxpayer or the partnership, 
  (ii) as a consequence of the death of the taxpayer, 
  (iii) in respect of an amount not included in the expenditure, determined without reference to subparagraph 143.2(6)(b)(ii), or 
  (iv) because of an excluded obligation (as defined in subsection 6202.1(5) of the Income Tax Regulations) in relation to a share issued to the taxpayer or, where the expenditure is the cost of an interest in a partnership, to the partnership.  
  
  ### Amount or benefit
  
  (4) For the purposes of subsections 143.2(2) and (3), where the amount or benefit to which a taxpayer is entitled at any time is provided by way of an agreement or other arrangement under which the taxpayer has a right, either immediately or in the future and either absolutely or contingently (otherwise than as a consequence of the death of the taxpayer), to acquire property, for greater certainty the amount or benefit to which the taxpayer is entitled under the agreement or arrangement is considered to be not less than the fair market value of the property at that time. 
  
  ### Amount or benefit
  
  (5) For the purposes of subsections 143.2(2) and (3), where the amount or benefit to which a taxpayer is entitled at any time is provided by way of a guarantee, security or similar indemnity or covenant in respect of any loan or other obligation of the taxpayer, for greater certainty the amount or benefit to which the taxpayer is entitled under the guarantee or indemnity at any particular time is considered to be not less than the total of the unpaid amount of the loan or obligation at that time and all other amounts outstanding in respect of the loan or obligation at that time. 
  
  ### Amount of expenditure
  
  (6) Notwithstanding any other provision of this Act, the amount of any expenditure that is, or is the cost or capital cost of, a taxpayer’s tax shelter investment, and the amount of any expenditure of a taxpayer an interest in which is a tax shelter investment, shall be reduced to the amount, if any, by which 
  (a) the amount of the taxpayer’s expenditure otherwise determined exceeds 
  (b) the total of 
  (i) the limited-recourse amounts of 
  (A) the taxpayer, and 
  (B) all other taxpayers not dealing at arm’s length with the taxpayer that can reasonably be considered to relate to the expenditure, 
  (ii) the taxpayer’s at-risk adjustment in respect of the expenditure, and 
  (iii) each limited-recourse amount and at-risk adjustment, determined under this section when this section is applied to each other taxpayer who deals at arm’s length with and holds, directly or indirectly, an interest in the taxpayer, that can reasonably be considered to relate to the expenditure. 
  
  ### Limited-re­course debt in respect of a gift or monetary contribution
  
  (6.1) The limited-recourse debt in respect of a gift or monetary contribution of a taxpayer, at the time the gift or monetary contribution is made, is the total of 
  (a) each limited-recourse amount at that time, of the taxpayer and of all other taxpayers not dealing at arm’s length with the taxpayer, that can reasonably be considered to relate to the gift or monetary contribution, 
  (b) each limited-recourse amount at that time, determined under this section when this section is applied to each other taxpayer who deals at arm’s length with and holds, directly or indirectly, an interest in the taxpayer, that can reasonably be considered to relate to the gift or monetary contribution, and 
  (c) each amount that is the unpaid amount at that time of any other indebtedness, of any taxpayer referred to in paragraph (a) or (b), that can reasonably be considered to relate to the gift or monetary contribution if there is a guarantee, security or similar indemnity or covenant in respect of that or any other indebtedness. 
  
  ### Repayment of indebtedness
  
  (7) For the purpose of this section, the unpaid principal of an indebtedness is deemed to be a limited-recourse amount unless 
  (a)  bona fide arrangements, evidenced in writing, were made, at the time the indebtedness arose, for repayment by the debtor of the indebtedness and all interest on the indebtedness within a reasonable period not exceeding 10 years; and  
  (b) interest is payable at least annually, at a rate equal to or greater than the lesser of 
  (i) the prescribed rate of interest in effect at the time the indebtedness arose, and 
  (ii) the prescribed rate of interest applicable from time to time during the term of the indebtedness, and is paid in respect of the indebtedness by the debtor no later than 60 days after the end of each taxation year of the debtor that ends in the period. 
  
  ### Limited-recourse amount
  
  (8) For the purpose of this section, the unpaid principal of an indebtedness is deemed to be a limited-recourse amount of a taxpayer where the taxpayer is a partnership and recourse against any member of the partnership in respect of the indebtedness is limited, either immediately or in the future and either absolutely or contingently. 
  
  ### Timing
  
  (9) Where at any time a taxpayer has paid an amount (in this subsection referred to as the “repaid amount”) on account of the principal amount of an indebtedness that was, before that time, the unpaid principal amount of a loan or any other form of indebtedness to which subsection 143.2(2) applies (in this subsection referred to as the “former amount or benefit”) relating to an expenditure of the taxpayer, 
  (a) the former amount or benefit is considered to have been an amount or benefit under subsection 143.2(2) in respect of the taxpayer at all times before that time; and 
  (b) the expenditure is, subject to subsection 143.2(6), deemed to have been made or incurred at that time to the extent of, and by the payment of, the repaid amount. 
  
  ### Timing
  
  (10) Where at any time a taxpayer has paid an amount (in this subsection referred to as the “repaid amount”) on account of the principal amount of an indebtedness which was, before that time, an unpaid principal amount that was a limited-recourse amount (in this subsection referred to as the “former limited-recourse indebtedness”) relating to an expenditure of the taxpayer, 
  (a) the former limited-recourse indebtedness is considered to have been a limited-recourse amount at all times before that time; and 
  (b) the expenditure is, subject to subsection 143.2(6), deemed to have been made or incurred at that time to the extent of, and by the amount of, the repaid amount. 
  
  ### Short-term debt
  
  (11) Where a taxpayer pays all of the principal of an indebtedness no later than 60 days after that indebtedness arose and the indebtedness would otherwise be considered to be a limited-recourse amount solely because of the application of subsection 143.2(7) or (8), that subsection does not apply to the indebtedness unless 
  (a) any portion of the repayment is made with a limited-recourse amount; or 
  (b) the repayment can reasonably be considered to be part of a series of loans or other indebtedness and repayments that ends more than 60 days after the indebtedness arose. 
  
  ### Series of loans or repayments
  
  (12) For the purpose of paragraph 143.2(7)(a), a debtor is considered not to have made arrangements to repay an indebtedness within 10 years where the debtor’s arrangement to repay can reasonably be considered to be part of a series of loans or other indebtedness and repayments that ends more than 10 years after it begins. 
  
  ### Information located outside Canada
  
  (13) For the purpose of this section, if it can reasonably be considered that information relating to indebtedness that relates to a taxpayer’s expenditure, gift or monetary contribution is available outside Canada and the Minister is not satisfied that the unpaid principal of the indebtedness is not a limited-recourse amount, the unpaid principal of the indebtedness relating to the taxpayer’s expenditure, gift or monetary contribution is deemed to be a limited-recourse amount relating to the expenditure, gift or monetary contribution unless 
  (a) the information is provided to the Minister; or 
  (b) the information is located in a country with which the Government of Canada has entered into a tax convention or agreement that has the force of law in Canada and includes a provision under which the Minister can obtain the information. 
  
  ### Information located outside Canada
  
  (14) For the purpose of this section, where it can reasonably be considered that information relating to whether a taxpayer is not dealing at arm’s length with another taxpayer is available outside Canada and the Minister is not satisfied that the taxpayer is dealing at arm’s length with the other taxpayer, the taxpayer and the other taxpayer are deemed not to be dealing with each other at arm’s length unless 
  (a) the information is provided to the Minister; or 
  (b) the information is located in a country with which the Government of Canada has entered into a tax convention or agreement that has the force of law in Canada and includes a provision under which the Minister can obtain the information. 
  
  ### Assessments
  
  (15) Notwithstanding subsections 152(4) to (5), such assessments, determinations and redeterminations may be made as are necessary to give effect to this section. 
  
  ## Expenditure — Limitations 
  
  ### Definitions
  
  143.3 (1) The following definitions apply in this section.  
  *expenditure* of a taxpayer means an expense, expenditure or outlay made or incurred by the taxpayer, or a cost or capital cost of property acquired by the taxpayer. (dépense)   
  *option* means  
  (a) a security that is issued or sold by a taxpayer under an agreement referred to in subsection 7(1); or 
  (b) an option, warrant or similar right, issued or granted by a taxpayer, giving the holder the right to acquire an interest in the taxpayer or in another taxpayer with whom the taxpayer does not, at the time the option, warrant or similar right is issued or granted, deal at arm’s length. ( option)   
  *taxpayer* includes a partnership. (contribuable)  
  
  ### Options — limitation
  
  (2) In computing a taxpayer’s income, taxable income or tax payable or an amount considered to have been paid on account of the taxpayer’s tax payable, an expenditure of the taxpayer is deemed not to include any portion of the expenditure that would — if this Act were read without reference to this subsection — be included in determining the expenditure because of the taxpayer having granted or issued an option on or after November 17, 2005. 
  
  ### Corporate shares — limitation
  
  (3) In computing a corporation’s income, taxable income or tax payable or an amount considered to have been paid on account of the corporation’s tax payable, an expenditure of the corporation that would — if this Act were read without reference to this subsection — include an amount because of the corporation having issued a share of its capital stock at any particular time on or after November 17, 2005 is reduced by 
  (a) if the issuance of the share is not a consequence of the exercise of an option, the amount, if any, by which the fair market value of the share at the particular time exceeds 
  (i) if the transaction under which the share is issued is a transaction to which section 85, 85.1 or 138 applies, the amount determined under that section to be the cost to the issuing corporation of the property acquired in consideration for issuing the share, or 
  (ii) in any other case, the amount of the consideration that is the fair market value of the property transferred or issued to, or the services provided to, the issuing corporation for issuing the share; and 
  (b) if the issuance of the share is a consequence of the exercise of an option, the amount, if any, by which the fair market value of the share at the particular time exceeds the amount paid, pursuant to the terms of the option, by the holder to the issuing taxpayer for issuing the share. 
  
  ### Non-corporate interests — limitation
  
  (4) In computing a taxpayer’s (other than a corporation’s) income, taxable income or tax payable or an amount considered to have been paid on account of the taxpayer’s tax payable, an expenditure of the taxpayer that would — if this Act were read without reference to this subsection — include an amount because of the taxpayer having issued an interest, or because of an interest being created, in itself at any particular time on or after November 17, 2005 is reduced by 
  (a) if the issuance or creation of the interest is not a consequence of the exercise of an option, the amount, if any, by which the fair market value of the interest at the particular time exceeds 
  (i) if the transaction under which the interest is issued is a transaction to which paragraph 70(6)(b) or 73(1.01)(c), subsection 97(2) or section 107.4 or 132.2 applies, the amount determined under that provision to be the cost to the taxpayer of the property acquired for the interest, or 
  (ii) in any other case, the amount of the consideration that is the fair market value of the property transferred or issued to, or the services provided to, the taxpayer for the interest; and 
  (b) if the issuance or creation of the interest is a consequence of the exercise of an option, the amount, if any, by which the fair market value of the interest at the particular time exceeds the amount paid, pursuant to the terms of the option, by the holder to the taxpayer for the interest. 
  
  ### Clarification
  
  (5) For greater certainty, 
  (a) subsection (2) does not apply to reduce an expenditure that is a commission, fee or other amount for services rendered by a person as a salesperson, agent or dealer in securities in the course of the issuance of an option; 
  (b) subsections (3) and (4) do not apply to reduce an expenditure of a taxpayer to the extent that the expenditure does not include an amount determined to be an excess under those subsections; 
  (c) this section does not apply to determine the cost or capital cost of property determined under subsection 70(6), section 73, 85 or 85.1, subsection 97(2) or section 107.4, 132.2 or 138; 
  (d) this section does not apply to determine the amount of a taxpayer’s expenditure if the amount of the expenditure as determined under section 69 is less than the amount that would, if this subsection were read without reference to this paragraph, be the amount of the expenditure as determined under this section; and 
  (e) this section does not apply to prohibit the deduction of an amount under paragraph 110(1)(e). 
  
  ## Expenditure — Limit for Contingent Amount 
  
  ### Definitions
  
  143.4 (1) The following definitions apply in this section.  
  *contingent amount*, of a taxpayer at any time (other than a time at which the taxpayer is a bankrupt), includes an amount to the extent that the taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce the amount at that time. (montant éventuel)   
  *expenditure*, of a taxpayer, means an expense, expenditure or outlay made or incurred by the taxpayer, or a cost or capital cost of property acquired by the taxpayer. (dépense)   
  *right to reduce* means a right to reduce or eliminate an amount in respect of an expenditure at any time, including, for greater certainty, a right to reduce that is contingent upon the occurrence of an event, or in any other way contingent, if it is reasonable to conclude, having regard to all the circumstances, that the right will become exercisable. (droit de réduire)   
  *taxpayer* includes a partnership. (contribuable)  
  
  ### Limitation of amount of expenditure
  
  (2) For the purposes of this Act, if in a taxation year of a taxpayer an expenditure of the taxpayer occurs, the amount of the expenditure at any time is the lesser of 
  (a) the amount of the expenditure at the time calculated under this Act without reference to this section, and 
  (b) the least amount of the expenditure calculated by reducing the amount of the expenditure determined under paragraph (a) by the amount that is the amount, if any, by which 
  (i) the total of all amounts each of which is a contingent amount of the taxpayer in the year in respect of the expenditure exceeds 
  (ii) the total of all amounts each of which is 
  (A) an amount paid by the taxpayer to obtain a right to reduce an amount in respect of the expenditure, or 
  (B) a limited-recourse amount for the purposes of paragraph 143.2(6)(b) that reduces the expenditure under subsection 143.2(6) to the extent that the amount is also a contingent amount described in subparagraph (i) in respect of the expenditure. 
  
  ### Payment of contingent amount
  
  (3) For the purposes of this Act, if in a particular taxation year, a taxpayer pays all or a portion of a contingent amount referred to in paragraph (2)(b) that reduces the amount of the taxpayer’s expenditure referred to in paragraph (2)(a), the portion of the contingent amount paid by the taxpayer in the particular year for the purpose of earning income, and to that extent only, is deemed 
  (a) to have been incurred by the taxpayer in the particular year; 
  (b) to have been incurred for the same purpose and to have the same character as the expenditure so reduced; and 
  (c) to have become payable by the taxpayer in respect of the particular year. 
  
  ### Subsequent years
  
  (4) Subject to subsection (6), if at any time in a taxation year that is after a taxation year in which an expenditure of the taxpayer occurred, the taxpayer, or another taxpayer not dealing at arm’s length with the taxpayer, has a right to reduce an amount in respect of the expenditure (in this subsection and subsection (5) referred to as the “prior expenditure”) that would, if the taxpayer or the other taxpayer had had the right to reduce in a particular taxation year that ended before the time, have resulted in subsection (2) applying in the particular taxation year to reduce or eliminate the amount of the prior expenditure, the taxpayer’s subsequent contingent amount in respect of the prior expenditure, as determined under subsection (5), is deemed, to the extent subsection (2) and this subsection have not previously applied in respect of the expenditure, 
  (a) to be an amount received by the taxpayer at the time in the course of earning income from a business or property from a person described in subparagraph 12(1)(x)(i); and 
  (b) to be an amount referred to in subparagraph 12(1)(x)(iv). 
  
  ### Subsequent contingent amount
  
  (5) For the purposes of subsection (4), a taxpayer’s subsequent contingent amount in respect of a prior expenditure of the taxpayer is the amount, if any, by which 
  (a) the maximum amount by which the amount (in this subsection referred to as the “particular amount”) in respect of the prior expenditure may be reduced pursuant to a right to reduce the particular amount exceeds 
  (b) the amount, if any, paid to obtain the right to reduce the particular amount. 
  
  ### Anti-avoidance
  
  (6) If a taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce an amount in respect of an expenditure of the taxpayer in a taxation year that is after the taxation year in which the expenditure otherwise occurred, determined without reference to subsection (3), the taxpayer is deemed to have the right to reduce in the taxation year in which that expenditure otherwise occurred if it is reasonable to conclude having regard to all the circumstances that one of the purposes for having the right to reduce after the end of the year in which the expenditure otherwise occurred was to avoid the application of subsection (2) to the amount of the expenditure. 
  
  ### Assessments
  
  (7) Notwithstanding subsections 152(4) to (5), such assessments, determinations and redeterminations may be made as are necessary to give effect to this section. 
  
  # DIVISION G 
  
  ## Deferred and Other Special Income Arrangements 
  
  ## Employees Profit Sharing Plans 
  
  ### Definitions
  
  144 (1) The definitions in this subsection apply in this section.  
  *employees profit sharing plan* at a particular time means an arrangement  
  (a) under which payments computed by reference to 
  (i) an employer’s profits from the employer’s business, 
  (ii) the profits from the business of a corporation with which the employer does not deal at arm’s length, or 
  (iii) any combination of the amounts described in subparagraphs 144(1) employees profit sharing plan (a)(i) and 144(1) employees profit sharing plan (a)(ii) are required to be made by the employer to a trustee under the arrangement for the benefit of employees of the employer or of a corporation with which the employer does not deal at arm’s length; and 
  (b) in respect of which the trustee has, since the later of the beginning of the arrangement and the end of 1949, allocated, either contingently or absolutely, to those employees 
  (i) in each year that ended at or before the particular time, all amounts received in the year by the trustee from the employer or from a corporation with which the employer does not deal at arm’s length, 
  (ii) in each year that ended at or before the particular time, all profits for the year from the property of the trust (determined without regard to any capital gain made by the trust or capital loss sustained by it at any time after 1955), 
  (iii) in each year that ended after 1971 and at or before the particular time, all capital gains and capital losses of the trust for the year, 
  (iv) in each year that ended after 1971, before 1993 and at or before the particular time, 100/15 of the total of all amounts each of which is deemed by subsection 144(9) to be paid on account of tax under this Part in respect of an employee because the employee ceased to be a beneficiary under the plan in the year, and 
  (v) in each year that ended after 1991 and at or before the particular time, the total of all amounts each of which is an amount that may be deducted under subsection 144(9) in computing the employee’s income because the employee ceased to be a beneficiary under the plan in the year. ( régime de participation des employés aux bénéfices)   
  *unused portion of a beneficiary’s exempt capital gains balance* in respect of a trust governed by an employees profit sharing plan, at any particular time in a taxation year of the beneficiary, means  
  (a) where the year ends before 2005, the amount, if any, by which the beneficiary’s exempt capital gains balance (in this paragraph having the same meaning as in subsection 39.1(1)) in respect of the trust for the year exceeds the total of all amounts each of which is an amount by which a capital gain is reduced under section 39.1 in the year because of the beneficiary’s exempt capital gains balance in respect of the trust; or 
  (b) where the year ends after 2004, the amount, if any, by which 
  (i) the amount, if any, that would, if the definition 
  *exempt capital gains balance* in subsection 39.1(1) were read without reference to “that ends before 2005”, be the beneficiary’s exempt capital gains balance in respect of the trust for the year  exceeds 
  (ii) where there has been a disposition of an interest or a part of an interest of the beneficiary in the trust after the beneficiary’s 2004 taxation year (other than a disposition that is a part of a transaction described in paragraph 144(7.1)(c) in which property is received in satisfaction of all or a portion of the beneficiary’s interests in the trust), the total of all amounts each of which is an amount by which the adjusted cost base of an interest or a part of an interest disposed of by the beneficiary (other than an interest or a part of an interest that is all or a portion of the beneficiary’s interests referred to in paragraph 144(7.1)(c)) was increased because of paragraph 53(1)(p), and 
  (iii) in any other case, nil. ( fraction inutilisée du solde des gains en capital exonérés)  
  
  ### No tax while trust governed by plan
  
  (2) No tax is payable under this Part by a trust on the taxable income of the trust for a taxation year throughout which the trust is governed by an employees profit sharing plan. 
  
  ### Allocation contingent or absolute taxable
  
  (3) There shall be included in computing the income for a taxation year of an employee who is a beneficiary under an employees profit sharing plan each amount that is allocated to the employee contingently or absolutely by the trustee under the plan at any time in the year otherwise than in respect of 
  (a) a payment made by the employee to the trustee; 
  (b) a capital gain made by the trust before 1972; 
  (c) a capital gain of the trust for a taxation year ending after 1971; 
  (d) a gain made by the trust after 1971 from the disposition of a capital property except to the extent that the gain is a capital gain described in paragraph 144(3)(c); or 
  (e) a dividend received by the trust from a taxable Canadian corporation. 
  (f)  [Repealed, 1994, c. 21, s. 68(2)]  
  
  ### Allocated capital gains and losses
  
  (4) Each capital gain and capital loss of a trust governed by an employees profit sharing plan from the disposition of any property shall, to the extent that it is allocated by the trust to an employee who is a beneficiary under the plan, be deemed to be a capital gain or capital loss, as the case may be, of the employee from the disposition of that property for the taxation year of the employee in which the allocation was made and, for the purposes of section 110.6, the property shall be deemed to have been disposed of by the employee on the day on which it was disposed of by the trust. 
  
  ### Idem
  
  (4.1) Notwithstanding subsection 26(6) of the Income Tax Application Rules, where at any time before 1976 the trustee of a trust governed by an employees profit sharing plan so elects in prescribed manner, the trust shall be deemed  
  (a) to have, on December 31, 1971, disposed of each property owned by the trust on that day for proceeds of disposition equal to the fair market value of the property on that day, and 
  (b) to have, on January 1, 1972, reacquired each property described in paragraph 144(4.1)(a) for the amount referred to in that paragraph, if the trustee under the plan has, before 1976, allocated the total of all capital gains and capital losses resulting from the deemed dispositions among the employees or other beneficiaries under the plan to the extent that the trustee under the plan has not previously so allocated them. 
  
  ### Idem
  
  (4.2) Where a trust governed by an employees profit sharing plan 
  (a) was governed by an employees profit sharing plan on December 31, 1971, and the trustee of the trust has made an election under subsection 144(4.1), or 
  (b) was not governed by an employees profit sharing plan on December 31, 1971, the trustee of the trust may, in any taxation year after 1973, elect in prescribed manner and prescribed form to treat any capital property of the trust as having been disposed of, in which event the property shall be deemed to have been disposed of on any day designated by the trustee for proceeds of disposition equal to 
  (c) the fair market value of the property on that day, 
  (d) the adjusted cost base to the trust of the property on that day, or 
  (e) an amount that is neither greater than the greater of the amounts determined under paragraphs 144(4.2)(c) and 144(4.2)(d) nor less than the lesser of the amounts determined under those paragraphs whichever is designated by the trustee and to have been reacquired by the trust immediately thereafter at a cost equal to those proceeds. 
  
  ### Employer’s contribution to trust deductible
  
  (5) An amount paid by an employer to a trustee under an employees profit sharing plan during a taxation year or within 120 days thereafter may be deducted in computing the employer’s income for the taxation year to the extent that it was not deductible in computing income for a previous taxation year. 
  
  ### Beneficiary’s receipts deductible
  
  (6) An amount received in a taxation year by a beneficiary from a trustee under an employees profit sharing plan shall not be included in computing the beneficiary’s income for the year. 
  
  ### Beneficiary’s receipts that are not deductible
  
  (7) Notwithstanding subsection 144(6), such portion of an amount received in a taxation year by a beneficiary from the trustee under an employees profit sharing plan as cannot be established to be attributable to 
  (a) payments made by the employee to the trustee, 
  (b) amounts required to be included in computing the income of the employee for that or a previous taxation year, 
  (c) a capital gain made by the trust before 1972, 
  (d) a capital gain made by the trust for a taxation year ending after 1971, to the extent allocated by the trust to the beneficiary, 
  (e) a gain made by the trust after 1971 from the disposition of a capital property, except to the extent that the gain is a capital gain made by the trust for a taxation year ending after 1971, 
  (f) the portion, if any, of the increase in the value of property transferred to the beneficiary by the trustee that would have been considered to be a capital gain made by the trust in 1971 if the trustee had sold the property on December 31, 1971 for its fair market value at that time, or 
  (g) a dividend received by the trust from a taxable Canadian corporation other than a dividend described in subsection 83(1), to the extent allocated by the trust to the beneficiary, shall be included in computing the beneficiary’s income for the year in which the amount was received, except that in determining the amount of any payments or other things described in any paragraph of this subsection, the amount thereof otherwise determined shall be reduced by such portion of the total of all capital losses of the trust for taxation years ending after 1971 as has been allocated by the trust to the beneficiary and has not been applied to reduce the amount of any payments or other things described in any other paragraph of this subsection. 
  
  ### Where property other than money received by beneficiary
  
  (7.1) Where, at any particular time in a taxation year of a trust governed by an employees profit sharing plan, an amount was received by a beneficiary from the trustee under the plan and the amount so received was property other than money, the following rules apply in respect of each such property so received by the beneficiary at the particular time: 
  (a) the amount that was the cost amount to the trust of the property immediately before the particular time shall be deemed to be the trust’s proceeds of disposition of the property; 
  (b) that proportion of 
  (i) such portion of the amount received by the beneficiary as can be established to be attributable to the payments or other things described in paragraphs 144(7)(a) to 144(7)(g) (on the assumption that the amount of any payments or other things described in any such paragraph is the amount thereof determined as provided in subsection 144(7)) that 
  (ii) the cost amount to the trust of the property immediately before the particular time is of 
  (iii) the cost amounts to the trust of all properties, other than money, so received by the beneficiary at the particular time, is subject to paragraph 144(7.1)(c), deemed to be 
  (iv) the cost to the beneficiary of the property, and 
  (v) for the purposes of subsection 144(7) but not for the purposes of this subsection, the amount so received by the beneficiary by virtue of the receipt by the beneficiary of the property; and 
  (c) where a particular property received is all or a portion of property received in satisfaction of all or a portion of the beneficiary’s interests in the trust and the beneficiary files with the Minister on or before the beneficiary’s filing-due date for the taxation year that includes the particular time an election in respect of the particular property in prescribed form, there shall be included in the cost to the beneficiary of the particular property determined under paragraph 144(7.1)(b) the least of 
  (i) the amount, if any, by which the unused portion of the beneficiary’s exempt capital gains balance in respect of the trust at the particular time exceeds the total of all amounts each of which is an amount included because of this paragraph in the cost to the beneficiary of another property received by the beneficiary at or before the particular time in the year, 
  (ii) the amount, if any, by which the fair market value of the particular property at the particular time exceeds the amount deemed by subparagraph 144(7.1)(b)(iv) to be the cost to the beneficiary of the particular property, and 
  (iii) the amount designated in the election in respect of the particular property. 
  
  ### Allocation of credit for dividends
  
  (8) Where there has been included in computing the income of a trust for a taxation year during which the trust was governed by an employees profit sharing plan taxable dividends from taxable Canadian corporations and there has been allocated by the trustee under the plan for the purposes of this subsection an amount for the year to one or more of the employees who are beneficiaries under the plan, which amount or the total of which amounts does not exceed the amount of the taxable dividends so included, each of the employees who are beneficiaries under the plan shall be deemed to have received a taxable dividend from a taxable Canadian corporation equal to the lesser of 
  (a) the amount, if any, that would be included in computing the employee’s income for the year by virtue of this section, if this section were read without reference to paragraph 144(3)(e), and 
  (b) the amount, if any, so allocated for the purposes of this subsection to the employee. 
  
  ### Foreign tax deduction
  
  (8.1) For the purpose of subsection 126(1), the following rules apply: 
  (a) such portion of the income for a taxation year of a trust governed by an employees profit sharing plan from sources (other than businesses carried on by it) in a foreign country as 
  (i) may reasonably be considered (having regard to all the circumstances including the terms and conditions of the plan) to be part of 
  (A) the income that, by virtue of subsection 144(3), was included in computing the income for a taxation year of a particular employee who was a beneficiary under the plan, or 
  (B) the amount, if any, by which 
  (I) the total of amounts each of which is a capital gain of the trust that, by virtue of subsection 144(4), was deemed to be a capital gain of the particular employee for a taxation year exceeds 
  (II) the total of amounts each of which is a capital loss of the trust that, by virtue of subsection 144(4), was deemed to be a capital loss of the particular employee for the taxation year, and 
  (ii) was not designated by the trust in respect of any other employee who was a beneficiary under the plan, shall if so designated by the trust in respect of the particular employee in its return of income for the year under this Part, be deemed to be income of the particular employee for the taxation year from sources in that country; and 
  (b) an employee who is a beneficiary under an employees profit sharing plan shall be deemed to have paid as non-business-income tax for a taxation year, on the income that the employee is deemed by paragraph 144(8.1)(a) to have for the year from sources in a foreign country, to the government of that country an amount equal to that proportion of the non-business-income tax paid by the trust governed by the plan for the year to the government of that country, or to the government of a state, province or other political subdivision of that country (except such portion of that tax as was deductible under subsection 20(11) in computing its income for the year) that 
  (i) the income that the employee is deemed by paragraph 144(8.1)(a) to have for the year from sources in that country is of 
  (ii) the income of the trust for the year from sources (other than businesses carried on by it) in that country. 
  (8.2)  [Repealed, 1994, c. 21, s. 68(3)]  
  
  ### Deduction for forfeited amounts
  
  (9) Where a person ceases at any time in a taxation year to be a beneficiary under an employees profit sharing plan and does not become a beneficiary under the plan after that time and in the year, there may be deducted in computing the person’s income for the year the amount determined by the formula is the total of all amounts each of which is an amount included in computing the person’s income for the year or a preceding taxation year (other than an amount received before that time under the plan or an amount under the plan that the person is entitled at that time to receive) because of an allocation (other than an allocation to which subsection 144(4) applies) to the person made contingently under the plan before that time; is the portion, if any, of the value of A that is included in the value of A because of paragraph 82(1)(b); is the total of all taxable dividends deemed to be received by the person because of allocations under subsection 144(8) in respect of the plan; and is the total of all amounts deductible under this subsection in computing the person’s income for a preceding taxation year because the person ceased to be a beneficiary under the plan in a preceding taxation year. 
  
  ### Payments out of profits
  
  (10) Where the terms of an arrangement under which an employer makes payments to a trustee specifically provide that the payments shall be made “out of profits”, the arrangement shall, if the employer so elects in prescribed manner, be deemed, for the purpose of subsection 144(1), to be an arrangement under which payments computed by reference to the employer’s profits are required. 
  
  ### Taxation year of trust
  
  (11) Where an employees profit sharing plan is accepted for registration by the Minister as a deferred profit sharing plan, the taxation year of the trust governed by the employees profit sharing plan shall be deemed to have ended immediately before the plan is deemed to have become registered as a deferred profit sharing plan pursuant to subsection 147(5). 
  
  ## Employee Life and Health Trust 
  
  ### Definitions
  
  144.1 (1) The following definitions apply in this section.  
  *actuary* means a Fellow of the Canadian Institute of Actuaries. (actuaire)   
  *class of beneficiaries* of a trust means a group of beneficiaries who have identical rights or interests under the trust.  (catégorie de bénéficiaires)   
  *designated employee benefit* means a benefit that is  
  (a) from a group sickness or accident insurance plan; 
  (b) from a group term life insurance policy; 
  (c) from a private health services plan; 
  (d) in respect of a counselling service described in subparagraph 6(1)(a)(iv); or 
  (e) not a death benefit, but that would be a death benefit if the amounts determined for paragraphs (a) and (b) of the definition death benefit in subsection 248(1) were nil. (prestation désignée)   
  *employee* means a current or former employee of an employer and includes an individual in respect of whom the employer has assumed responsibility for the provision of designated employee benefits as a result of the acquisition by the employer of a business in which the individual was employed. (employé)   
  *key employee*, of an employer in respect of a taxation year, means an employee who  
  (a) was at any time in the taxation year or in a preceding taxation year, a specified employee of the employer; or 
  (b) was an employee whose employment income from the employer in any two of the five taxation years preceding the year exceeded five times the Year’s Maximum Pensionable Earnings (as determined under section 18 of the Canada Pension Plan) for the calendar year in which the employment income was earned. (employé clé)  
  
  ### Employee life and health trust
  
  (2) A trust that is established for employees of one or more employers (each referred to in this subsection as a “participating employer”) is an employee life and health trust for a taxation year if, throughout the taxation year, under the terms that govern the trust, 
  (a) the only purpose of the trust is to provide benefits to, or for the benefit of, persons described in subparagraph (d)(i) or (ii) and all or substantially all of the total cost of the benefits is applicable to designated employee benefits; 
  (b) on wind-up or reorganization, the property of the trust may only be distributed to 
  (i) each remaining beneficiary of the trust who is described in subparagraph (d)(i) or (ii) (other than a key employee or an individual who is related to a key employee) on a pro rata basis,  
  (ii) another employee life and health trust, or 
  (iii) after the death of the last beneficiary described in subparagraph (d)(i) or (ii), Her Majesty in right of Canada or a province; 
  (c) the trust meets one of the following conditions: 
  (i) the trust is required to be resident in Canada, determined without reference to section 94, or 
  (ii) if the condition in subparagraph (i) is not met, it is the case that 
  (A) employee benefits are provided to employees who are resident in Canada and to employees who are not resident in Canada, 
  (B) one or more participating employers are employers that are resident in a country other than Canada, and 
  (C) the trust is required to be resident in a country in which a participating employer resides; 
  (d) the trust may not have any beneficiaries other than persons each of whom is 
  (i) an employee of a participating employer or former participating employer, 
  (ii) an individual who, in respect of an employee of a participating employer or former participating employer, is (or, if the employee is deceased, was, at the time of the employee’s death) 
  (A) the spouse or common-law partner of the employee, or 
  (B) related to the employee and either a member of the employee’s household or dependent on the employee for support, 
  (iii) another employee life and health trust, or 
  (iv) Her Majesty in right of Canada or a province; 
  (e) the trust meets one of the following conditions: 
  (i) it contains at least one class of beneficiaries where 
  (A) the members of the class represent at least 25% of all of the beneficiaries of the trust who are employees of the participating employers under the trust, and 
  (B) either of the following conditions is met: 
  (I) at least 75% of the members of the class are not key employees of any of the participating employers under the trust, or 
  (II) the contributions to the trust in respect of key employees who deal at arm’s length with their employer are determined in connection with a collective bargaining agreement, or 
  (ii) in respect of the private health services plan under the trust, the total cost of benefits provided to each key employee (and to persons described in subparagraph (2)(d)(ii) in respect of the key employee) in relation to the year does not exceed the amount determined by the formula is the total number of persons each of whom 
  (A) is a person to whom designated employee benefits are provided under the plan, and 
  (B) is the key employee or a person described in subparagraph (2)(d)(ii) in respect of the key employee, is the number of days in the year that the key employee was employed on a full-time basis by an employer that participates in the plan, and is the number of days in the year; 
  (f) unless the condition in subparagraph (e)(ii) is satisfied, the rights under the trust of each key employee of a participating employer are not more advantageous than the rights of a class of beneficiaries described in subparagraph (e)(i); 
  (g) no participating employer, nor any person who does not deal at arm’s length with a participating employer, has any rights under the trust as a beneficiary or otherwise, except rights to 
  (i) designated employee benefits, 
  (ii) to enforce covenants, warranties or similar provisions regarding 
  (A) the maintenance of the trust as an employee life and health trust, or 
  (B) the operation of the trust in a manner that prevents subsection (3) from applying to prohibit the deduction of an amount by the trust under subsection 104(6), or 
  (iii) prescribed payments; and 
  (h)  [Repealed, 2021, c. 23, s. 30]  
  (i) trustees who do not deal at arm’s length with one or more participating employers must not constitute the majority of the trustees of the trust. 
  
  ### Breach of terms, etc.
  
  (3) No amount may be deducted in a taxation year by an employee life and health trust pursuant to subsection 104(6) if in the taxation year the trust 
  (a) is not operated in accordance with the terms required by subsection (2) to govern the trust, unless it is reasonable to conclude that its trustees neither knew nor ought to have known that designated employee benefits have been provided to, or contributions have been made in respect of, beneficiaries other than those described in subparagraph (2)(d)(i) or (ii); or 
  (b) provides any benefit for which, if the benefit had been paid directly to the employee and not out of the trust, the contributions or premiums would not be deductible in computing the income of an employer in respect of any taxation year. 
  
  ### Deductibility of employer contributions
  
  (4) In computing the income of an employer, 
  (a) the employer may deduct for a taxation year the portion of its contributions to an employee life and health trust made in the year that may reasonably be regarded as having been contributed to enable the trust to 
  (i) pay premiums to an insurance corporation that is licensed to provide insurance under the laws of Canada or a province for insurance coverage for the year or a prior year in respect of designated employee benefits for beneficiaries described in subparagraph (2)(d)(i) or (ii), or 
  (ii) otherwise provide 
  (A) group term life insurance as described in clause 18(9)(a)(iii)(B), or 
  (B) any designated employee benefits payable in the year or a prior year to, or for the benefit of, beneficiaries described in subparagraph (2)(d)(i) or (ii); and 
  (b) the portion of any contribution made to an employee life and health trust that exceeds the amount deductible under paragraph (a) and that may reasonably be regarded as enabling the trust to provide or pay benefits described in subparagraphs (a)(i) or (ii) in a subsequent taxation year is deductible for that year. 
  
  ### Actuarial determination
  
  (5) For the purposes of subsection (4), if, in respect of an employer’s obligations to fund an employee life and health trust, a report has been prepared by an independent actuary, using accepted actuarial principles and practices, before the time of a contribution by the employer, the portion of the contribution that the report specifies to be the amount that the employee life and health trust is reasonably expected to pay or incur in a taxation year in order to provide designated employee benefits to beneficiaries described in subparagraph (2)(d)(i) or (ii) for a taxation year is, in the absence of evidence to the contrary, presumed to have been contributed to enable the trust to provide those benefits for the year. 
  
  ### Deductibility — collectively bargained or similar agreement
  
  (6) Despite subsection (4) and paragraph 18(9)(a), an employer may deduct in computing its income for a taxation year the amount that it is required to contribute for the year to an employee life and health trust if the following conditions are met at the time that the contribution is made: 
  (a) the employer contributes to the trust in accordance with a contribution formula that does not provide for any variation in contributions determined by reference to the financial experience of the trust and either of the following conditions is met: 
  (i) if there is a collective bargaining agreement, the trust provides benefits 
  (A) negotiated under the collective bargaining agreement, or 
  (B) under a participation agreement that are substantially the same as under the collective bargaining agreement, or 
  (ii) in any other case, the trust provides benefits in accordance with an arrangement that meets the following conditions: 
  (A) there is a legal requirement for each employer to participate in accordance with the terms and conditions that govern the trust, 
  (B) there are a minimum of 50 beneficiaries under the trust who are employees of the participating employers in respect of the trust, and 
  (C) each employee who is a beneficiary under the trust deals at arm’s length with each participating employer in respect of the trust; and 
  (b) contributions that are to be made by each employer are determined, in whole or in part, by reference to the number of hours worked by individual employees of the employer or some other measure that is specific to each employee with respect to whom contributions are made to the trust. 
  
  ### Maximum deductible
  
  (7) The amount deducted in a taxation year by an employer in computing its income in respect of contributions made to an employee life and health trust shall not exceed the amount determined by the formula is the total of all amounts contributed by the employer to the trust in the year or in a preceding taxation year; and is the total of all amounts deducted by the employer in a preceding taxation year in respect of amounts contributed by the employer to the trust. 
  
  ### Employer promissory note
  
  (8) If an employer issues a promissory note or provides other evidence of its indebtedness to an employee life and health trust in respect of its obligation to the trust, 
  (a) the issuance of the note or the provision of the evidence of indebtedness to the trust is not a contribution to the trust; and 
  (b) a payment by the employer to the trust in full or partial satisfaction of its liability under the note or the evidence of indebtedness, whether stated to be of principal or interest or any other amount, is deemed to be an employer contribution to the trust that is subject to this section and not a payment of principal or interest on the note or indebtedness. 
  
  ### Trust status — subsequent times
  
  (9) For the purposes of determining whether an amount is deductible by an employer under subsection (4), if a trust was an employee life and health trust at the time that a promissory note or other evidence of indebtedness referred to in subsection (8) was issued or provided, the trust is deemed to be an employee life and health trust at each time that an employer contribution is deemed to have been made under paragraph (8)(b) in respect of the note or other indebtedness. 
  
  ### Employee contributions
  
  (10) For the purposes of paragraph 6(1)(f), subsection 6(4) and paragraph 118.2(2)(q), employee contributions to an employee life and health trust, to the extent that they are, and are identified by the trust at the time of contribution as, contributions in respect of a particular designated employee benefit, are deemed to be payments by the employee in respect of the particular designated employee benefit. 
  
  ### Income inclusion
  
  (11) If a trust that is, or was, at any time, an employee life and health trust pays an amount as a distribution from the trust to any person in a taxation year, the amount of the distribution shall be included in computing the person’s income for the year, except to the extent that the amount is 
  (a) a payment of a designated employee benefit that is not included in the person’s income because of section 6; or 
  (b) a distribution to another employee life and health trust that is a beneficiary of the employee life and health trust. 
  
  ### Deemed separate trusts
  
  (12) Where contributions have been received by an employee life and health trust from more than one employer, the trust is deemed to be a separate trust established in respect of the property held for the benefit of beneficiaries described in subparagraph (2)(d)(i) or (ii) in respect of a particular employer, if 
  (a) the trustee designates the property to be held in a separate trust for the benefit of those beneficiaries in an election made on or before the filing-due date of the first taxation year of the separate trust described in this subsection; and 
  (b) under the terms of the trust, contributions from the employer and the income derived from those contributions accrues solely for the benefit of those beneficiaries. 
  
  ### Non-capital losses
  
  (13) No non-capital loss is deductible by an employee life and health trust in computing its taxable income for a taxation year, except as provided by subsections 111(7.3) to (7.5). 
  
  ### Conditions — deemed employee life and health trust
  
  (14) Subsection (15) applies in respect of a trust if 
  (a) the trust was established before February 28, 2018; 
  (b) the contributions to the trust are determined in connection with a collective bargaining agreement; 
  (c) all or substantially all of the employee benefits provided by the trust are designated employee benefits; and 
  (d) the trust elects in prescribed form and manner that subsection (15) applies as of a particular date after 2018. 
  
  ### Deemed employee life and health trust
  
  (15) If this subsection applies in respect of a trust, 
  (a) the trust is deemed for the purposes of the Act to be an employee life and health trust from the particular date referred to in paragraph (14)(d) until the earliest of 
  (i) the end of 2022, 
  (ii) the day that the trust satisfies the conditions in subsection (2), and 
  (iii) any day on which the condition in paragraph (14)(c) is not satisfied; and 
  (b) at any time that the trust is an employee life and health trust because of paragraph (a), 
  (i) subsection 111(7.5) applies to the trust as if the reference in paragraph (b) of that subsection to “subsection 144.1(3)” were read as a reference to “paragraph 144.1(3)(b)”, and 
  (ii) subsection (3) applies to the trust without reference to its paragraph (a). 
  
  ### Trust-to-trust transfer
  
  (16) If a property is transferred from a trust that provides employee benefits substantially all of which are designated employee benefits (referred to in this subsection as the “transferor trust”) to an employee life and health trust (referred to in this subsection as the “receiving trust”), and if the Minister has been so notified in prescribed form, then 
  (a) the transferred property is deemed to have been disposed of by the transferor trust, and to have been acquired by the receiving trust, for an amount equal to the cost amount of the property to the transferor trust immediately before the disposition; and 
  (b) section 107.1 does not apply to the transfer. 
  
  ### Deductibility of transferred property
  
  (17) If subsection (16) applies to a transfer of property to an employee life and health trust, the transfer shall not be considered to be a contribution to the employee life and health trust for the purposes of subsections (4) and (6). 
  
  ### Requirement to file
  
  (18) A trust shall, on or before its first filing-due date after 2021, notify the Minister in prescribed form that it is an employee life and health trust if 
  (a) prior to February 27, 2018, it provided employee benefits substantially all of which are designated employee benefits; 
  (b) after February 26, 2018, it becomes an employee life and health trust because it satisfies the conditions in subsection (2); and 
  (c) subsections (15) and (16) do not apply to the trust. 
  
  ## Registered Supplementary Unemployment Benefit Plans 
  
  ### Definitions
  
  145 (1) In this section,  
  *registered supplementary unemployment benefit plan* means a supplementary unemployment benefit plan accepted by the Minister for registration for the purposes of this Act in respect of its constitution and operations for the taxation year under consideration; (régime enregistré de prestations supplémentaires de chômage)   
  *supplementary unemployment benefit plan* means an arrangement, other than an arrangement in the nature of a superannuation or pension fund or plan or an employees profit sharing plan, under which payments are made by an employer to a trustee in trust exclusively for the payment of periodic amounts to employees or former employees of the employer who are or may be laid off for any temporary or indefinite period. (régime de prestations supplémentaires de chômage)  
  
  ### No tax while trust governed by plan
  
  (2) No tax is payable under this Part by a trust on the taxable income of the trust for a period during which the trust was governed by a registered supplementary unemployment benefit plan. 
  
  ### Amounts received taxable
  
  (3) There shall be included in computing the income of a taxpayer for a taxation year each amount received by the taxpayer under a supplementary unemployment benefit plan from the trustee under the plan at any time in the year. 
  
  ### Amounts received on amendment or winding-up of plan
  
  (4) There shall be included in computing the income for a taxation year of a taxpayer who, as an employer, has made any payment to a trustee under a supplementary unemployment benefit plan, any amount received by the taxpayer in the year as a result of an amendment to or modification of the plan or as a result of the termination or winding-up of the plan. 
  
  ### Payments by employer deductible
  
  (5) An amount paid by an employer to a trustee under a registered supplementary unemployment benefit plan during a taxation year or within 30 days thereafter may be deducted in computing the employer’s income for the taxation year to the extent that it was not deductible in computing income for a previous taxation year. 
  
  ## Registered Retirement Savings Plans 
  
  ### Definitions
  
  146 (1) In this section,  
  *annuitant* means  
  (a) until such time after maturity of the plan as an individual’s spouse or common-law partner becomes entitled, as a consequence of the individual’s death, to receive benefits to be paid out of or under the plan, the individual referred to in paragraph (a) or (b) of the definition 
  *retirement savings plan* in this subsection for whom, under a retirement savings plan, a retirement income is to be provided, and  
  (b) thereafter, the spouse or common-law partner referred to in paragraph (a); ( rentier)   
  *benefit* includes any amount received out of or under a retirement savings plan other than  
  (a) the portion thereof received by a person other than the annuitant that can reasonably be regarded as part of the amount included in computing the income of an annuitant by virtue of subsections 146(8.8) and 146(8.9), 
  (b) an amount received by the person with whom the annuitant has the contract or arrangement described in the definition 
  *retirement savings plan* in this subsection as a premium under the plan,  
  (b.1) an amount in respect of which the annuitant pays a tax under Part XI.01, unless the tax is waived, cancelled or refunded, 
  (c) an amount, or part thereof, received in respect of the income of the trust under the plan for a taxation year for which the trust was not exempt from tax by virtue of paragraph 146(4)(c), and 
  (c.1) a tax-paid amount described in paragraph (b) of the definition 
  *tax-paid amount* in this subsection that relates to interest or another amount included in computing income otherwise than because of this section  and without restricting the generality of the foregoing includes any amount paid to an annuitant under the plan 
  (d) in accordance with the terms of the plan, 
  (e) resulting from an amendment to or modification of the plan, or 
  (f) resulting from the termination of the plan; ( prestation)   
  *earned income* of a taxpayer for a taxation year means the amount, if any, by which the total of all amounts each of which is  
  (a) the taxpayer’s income (other than an amount described in paragraph 12(1)(z)) for a period in the year throughout which the taxpayer was resident in Canada from 
  (i) an office or employment, determined without reference to paragraphs 8(1)(c), 8(1)(m) and 8(1)(m.2), 
  (ii) a business carried on by the taxpayer either alone or as a partner actively engaged in the business, or 
  (iii) property, where the income is derived from the rental of real or immovable property or from royalties in respect of a work or invention of which the taxpayer was the author or inventor, 
  (b) an amount included under paragraph 56(1)(b), (c.2), (g) or (o) or subparagraph 56(1)(r)(v) in computing the taxpayer’s income for a period in the year throughout which the taxpayer was resident in Canada, 
  (b.01) an amount included under paragraph 56(1)(n) in computing the taxpayer’s income for a period in the year throughout which the taxpayer was resident in Canada in connection with a program that consists primarily of research and does not lead to a diploma from a college or a collège d’enseignement général et professionnel, or a bachelor, masters, doctoral or equivalent degree, 
  (b.1) an amount received by the taxpayer in the year and at a time when the taxpayer is resident in Canada as, on account of, in lieu of payment of or in satisfaction of, a disability pension under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act,  
  (b.2) the taxpayer’s qualifying performance income (as defined in subsection 143.1(1)) that is deemed by paragraph 143.1(1.2)(c) to be income of an amateur athlete trust for the year, 
  (c) the taxpayer’s income (other than an amount described in paragraph 12(1)(z)) for a period in the year throughout which the taxpayer was not resident in Canada from 
  (i) the duties of an office or employment performed by the taxpayer in Canada, determined without reference to paragraphs 8(1)(c), 8(1)(m) and 8(1)(m.2), or 
  (ii) a business carried on by the taxpayer in Canada, either alone or as a partner actively engaged in the business except to the extent that the income is exempt from income tax in Canada by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada, or 
  (d) in the case of a taxpayer described in subsection 115(2), the total that would be determined under paragraph 115(2)(e) in respect of the taxpayer for the year if 
  (i) that paragraph were read without reference to subparagraph 115(2)(e)(iv), and 
  (ii) subparagraph 115(2)(e)(ii) were read without any reference therein to paragraph 56(1)(n), except any part thereof included in the total determined under this definition by reason of paragraph (c) or exempt from income tax in Canada by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada, exceeds the total of all amounts each of which is 
  (e) the taxpayer’s loss for a period in the year throughout which the taxpayer was resident in Canada from 
  (i) a business carried on by the taxpayer, either alone or as a partner actively engaged in the business, or 
  (ii) property, where the loss is sustained from the rental of real or immovable property, 
  (f) an amount deductible under paragraph 60(b), or deducted under paragraph 60(c.2), in computing the taxpayer’s income for the year, or 
  (g) the taxpayer’s loss for a period in the year throughout which the taxpayer was not resident in Canada from a business carried on by the taxpayer in Canada, either alone or as a partner actively engaged in the business, 
  (h)  [Repealed, 2016, c. 12, s. 52]  and, for the purposes of this definition, the income or loss of a taxpayer for any period in a taxation year is the taxpayer’s income or loss computed as though that period were the whole taxation year; ( revenu gagné)   
  *issuer* means the person referred to in the definition 
  *retirement savings plan* in this subsection with whom an annuitant has a contract or arrangement that is a retirement savings plan; (émetteur)   
  *maturity* means the date fixed under a retirement savings plan for the commencement of any retirement income the payment of which is provided for by the plan; (échéance)   
  *net past service pension adjustment* of a taxpayer for a taxation year means the positive or negative amount determined by the formula  is the total of all amounts each of which is the taxpayer’s past service pension adjustment for the year in respect of an employer, is the total of all amounts each of which is the amount of a contribution made under subsection 147.1(20), or deemed by prescribed rules to have been made, in respect of the taxpayer for the immediately preceding year, and is the amount of the taxpayer’s PSPA withdrawals for the year, determined as of the end of the year in accordance with prescribed rules; ( facteur d’équivalence pour services passés net)   
  *non-qualified investment* has the same meaning as in subsection 207.01(1); (placement non admissible)   
  *premium* means any periodic or other amount paid or payable under a retirement savings plan  
  (a) as consideration for any contract referred to in paragraph (a) of the definition 
  *retirement savings plan* to pay a retirement income, or  
  (b) as a contribution or deposit referred to in paragraph (b) of that definition for the purpose stated in that paragraph but except for the purposes of paragraph (b) of the definition benefit in this subsection, paragraph (2)(b.3), subsection (22) and the definition excluded premium in subsection 146.02(1), does not include a repayment to which paragraph (b) or (d) of the definition excluded withdrawal in subsection 146.01(1), or paragraph (b) of the definition excluded withdrawal in subsection 146.02(1), applies or an amount that is designated under subsection 146.01(3) or 146.02(3); (prime)   
  *qualified investment* for a trust governed by a registered retirement savings plan means  
  (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition 
  *qualified investment* in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered retirement savings plan” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,  
  (b)  [Repealed, 2007, c. 29, s. 17]  
  (c) an annuity described in the definition 
  *retirement income* in respect of the annuitant under the plan, if purchased from a licensed annuities provider,  
  (c.1) a contract for an annuity issued by a licensed annuities provider where 
  (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and 
  (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract, 
  (c.2) a contract for an annuity issued by a licensed annuities provider where 
  (i) annual or more frequent periodic payments are or may be made under the contract to the holder of the contract, 
  (ii) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, 
  (iii) neither the time nor the amount of any payment under the contract may vary because of the length of any life, other than the life of the annuitant under the plan (in this definition referred to as the “RRSP annuitant”), 
  (iv) the day on which the periodic payments began or are to begin (in this paragraph referred to as the “start date”) is not later than the end of the year in which the RRSP annuitant attains 72 years of age, 
  (v) either 
  (A) the periodic payments are payable for the life of the RRSP annuitant and either there is no guaranteed period under the contract or there is a guaranteed period that begins at the start date and does not exceed a term equal to 90 years minus the lesser of 
  (I) the age in whole years at the start date of the RRSP annuitant (determined on the assumption that the RRSP annuitant is alive at the start date), and 
  (II) the age in whole years at the start date of a spouse or common-law partner of the RRSP annuitant (determined on the assumption that a spouse or common-law partner of the RRSP annuitant at the time the contract was acquired is a spouse or common-law partner of the RRSP annuitant at the start date), or 
  (B) the periodic payments are payable for a term equal to 
  (I) 90 years minus the age described in subclause (I), or 
  (II) 90 years minus the age described in subclause (II), and 
  (vi) the periodic payments 
  (A) are equal, or 
  (B) are not equal solely because of one or more adjustments that would, if the contract were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v) or that arise because of a uniform reduction in the entitlement to the periodic payments as a consequence of a partial surrender of rights to the periodic payments, and 
  (d) such other investments as may be prescribed by regulations of the Governor in Council made on the recommendation of the Minister of Finance; ( placement admissible)   
  *RRSP deduction limit* of a taxpayer for a taxation year means the amount determined by the formula  is the taxpayer’s unused RRSP deduction room at the end of the preceding taxation year, is the amount, if any, by which 
  (a) the lesser of the RRSP dollar limit for the year and 18% of the taxpayer’s earned income for the preceding taxation year exceeds the total of all amounts each of which is 
  (b) the taxpayer’s pension adjustment for the preceding taxation year in respect of an employer, or 
  (c) a prescribed amount in respect of the taxpayer for the year, is the taxpayer’s net past service pension adjustment for the year, and is the taxpayer’s total pension adjustment reversal for the year; ( maximum déductible au titre des REER)   
  *RRSP dollar limit* for a calendar year means  
  (a) for years other than 1996 and 2003, the money purchase limit for the preceding year, 
  (b) for 1996, $13,500, and 
  (c) for 2003, $14,500; ( plafond REER)   
  *refund of premiums* means any amount paid out of or under a registered retirement savings plan (other than a tax-paid amount in respect of the plan) as a consequence of the death of the annuitant under the plan,  
  (a) to an individual who was, immediately before the death, a spouse or common-law partner of the annuitant, where the annuitant died before the maturity of the plan, or 
  (b) to a child or grandchild of the annuitant who was, immediately before the death, financially dependent on the annuitant for support; ( remboursement de primes)   
  *registered retirement savings plan* means a retirement savings plan accepted by the Minister for registration for the purposes of this Act as complying with the requirements of this section; (régime enregistré d’épargne-retraite)   
  *retirement income* means  
  (a) an annuity commencing at maturity, and with or without a guaranteed term commencing at maturity, not exceeding the term referred to in paragraph (b), or, in the case of a plan entered into before March 14, 1957, not exceeding 20 years, payable to 
  (i) the annuitant for the annuitant’s life, or 
  (ii) the annuitant for the lives, jointly, of the annuitant and the annuitant’s spouse and to the survivor of them for the survivor’s life, or 
  (b) an annuity commencing at maturity, payable to the annuitant, or to the annuitant for the annuitant’s life and to the spouse after the annuitant’s death, for a term of years equal to 90 minus either 
  (i) the age in whole years of the annuitant at the maturity of the plan, or 
  (ii) where the annuitant’s spouse is younger than the annuitant and the annuitant so elects, the age in whole years of the spouse at the maturity of the plan, issued by a person described in the definition 
  *retirement savings plan* in this subsection with whom an individual may have a contract or arrangement that is a retirement savings plan,  or any combination thereof; ( revenu de retraite)   
  *retirement savings plan* means  
  (a) a contract between an individual and a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, under which, in consideration of payment by the individual or the individual’s spouse or common-law partner of any periodic or other amount as consideration under the contract, a retirement income commencing at maturity is to be provided for the individual, or 
  (b) an arrangement under which payment is made by an individual or the individual’s spouse or common-law partner 
  (i) in trust to a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, of any periodic or other amount as a contribution under the trust, 
  (ii) to a corporation approved by the Governor in Council for the purposes of this section that is licensed or otherwise authorized under the laws of Canada or a province to issue investment contracts providing for the payment to or to the credit of the holder thereof of a fixed or determinable amount at maturity, of any periodic or other amount as a contribution under such a contract between the individual and that corporation, or 
  (iii) as a deposit with a branch or office, in Canada, of 
  (A) a person who is, or is eligible to become, a member of the Canadian Payments Association, or 
  (B) a credit union that is a shareholder or member of a body corporate referred to as a “central” for the purposes of the Canadian Payments Act,  (in this section referred to as a “depositary”) to be used, invested or otherwise applied by that corporation or that depositary, as the case may be, for the purpose of providing for the individual, commencing at maturity, a retirement income; ( régime d’épargne-retraite)   
  *spousal or common-law partner plan*, in relation to a taxpayer, means  
  (a) a registered retirement savings plan 
  (i) to which the taxpayer has, at a time when the taxpayer’s spouse or common-law partner was the annuitant under the plan, paid a premium, or 
  (ii) that has received a payment out of or a transfer from a registered retirement savings plan or a registered retirement income fund that was a spousal or common-law partner plan in relation to the taxpayer, or 
  (b) a registered retirement income fund that has received a payment out of or a transfer from a spousal or common-law partner plan in relation to the taxpayer; ( régime au profit de l’époux ou du conjoint de fait)   
  *spousal plan* [Repealed, 2001, c. 17, s. 246]   
  *tax-paid amount* paid to a person in respect of a registered retirement saving plan means  
  (a) an amount paid to the person in respect of the amount that would, if this Act were read without reference to subsection 104(6), be income of a trust governed by the plan for a taxation year for which the trust was subject to tax because of paragraph 146(4)(c), or 
  (b) where 
  (i) the plan is a deposit with a depositary referred to in clause (b)(iii)(B) of the definition 
  *retirement savings plan* in this subsection, and  
  (ii) an amount is received at any time out of or under the plan by the person, the portion of the amount that can reasonably be considered to relate to interest or another amount in respect of the deposit that was required to be included in computing the income of any person (other than the annuitant) otherwise than because of this section; ( montant libéré d’impôt)   
  *unused RRSP deduction room* of a taxpayer at the end of a taxation year means,  
  (a) for taxation years ending before 1991, nil, and 
  (b) for taxation years that end after 1990, the amount, which can be positive or negative, determined by the formula is the taxpayer’s unused RRSP deduction room at the end of the preceding taxation year, is the amount, if any, by which 
  (i) the lesser of the RRSP dollar limit for the year and 18% of the taxpayer’s earned income for the preceding taxation year exceeds the total of all amounts each of which is 
  (ii) the taxpayer’s pension adjustment for the preceding taxation year in respect of an employer, or 
  (iii) a prescribed amount in respect of the taxpayer for the year, is the taxpayer’s net past service pension adjustment for the year, is the total of all amounts each of which is 
  (i) an amount deducted by the taxpayer under any of subsections (5) to (5.2), in computing the taxpayer’s income for the year, 
  (ii) an amount deducted by the taxpayer under paragraph 10 of Article XVIII of the Canada-United States Tax Convention signed at Washington on September 26, 1980 or a similar provision in another tax treaty, in computing the taxpayer’s taxable income for the year,  
  (iii) a contribution made by an employer in the year to a pooled registered pension plan in respect of the taxpayer, or 
  (iv) the amount, if any, by which the taxpayer’s exempt-income contribution amount (as defined in subsection 147.5(1)) for the year exceeds the taxpayer’s unused non-deductible PRPP room (as defined in subsection 147.5(1)) at the end of the preceding taxation year, and is the taxpayer’s total pension adjustment reversal for the year. ( déductions inutilisées au titre des REER)  
  
  ### Restriction — financially dependent
  
  (1.1) For the purposes of paragraph (b) of the definition 
  *refund of premiums* in subsection (1), clause 60(l)(v)(B.01), the definition 
  *eligible individual* in subsection 60.02(1), subparagraph 104(27)(e)(i) and section 147.5, it is assumed, unless the contrary is established, that an individual’s child or grandchild was not financially dependent on the individual for support immediately before the individual’s death if the income of the child or grandchild for the taxation year preceding the taxation year in which the individual died exceeded the amount determined by the formula  is the amount determined for F in subsection 118(1.1) for that preceding taxation year; and is nil, unless the financial dependency was because of mental or physical infirmity, in which case it is $6,180 adjusted for each such preceding taxation year that is after 2002 in the manner set out in section 117.1. 
  
  ### Acceptance of plan for registration
  
  (2) The Minister shall not accept for registration for the purposes of this Act any retirement savings plan unless, in the Minister’s opinion, it complies with the following conditions: 
  (a) the plan does not provide for the payment of any benefit before maturity except 
  (i) a refund of premiums, and 
  (ii) a payment to the annuitant; 
  (b) the plan does not provide for the payment of any benefit after maturity except 
  (i) by way of retirement income to the annuitant, 
  (ii) to the annuitant in full or partial commutation of retirement income under the plan, and 
  (iii) in respect of a commutation referred to in paragraph 146(2)(c.2); 
  (b.1) the plan does not provide for a payment to the annuitant of a retirement income except by way of equal annual or more frequent periodic payments until such time as there is a payment in full or partial commutation of the retirement income and, where that commutation is partial, equal annual or more frequent periodic payments thereafter; 
  (b.2) the plan does not provide for periodic payments in a year under an annuity after the death of the first annuitant, the total of which exceeds the total of the payments under the annuity in a year before that death; 
  (b.3) the plan does not provide for the payment of any premium after maturity; 
  (b.4) the plan does not provide for maturity after the end of the year in which the annuitant attains 71 years of age; 
  (c) the plan provides that retirement income under the plan may not be assigned in whole or in part; 
  (c.1) notwithstanding paragraph 146(2)(a), the plan permits the payment of an amount to a taxpayer where the amount is paid to reduce the amount of tax otherwise payable under Part X.1 by the taxpayer; 
  (c.2) the plan requires the commutation of each annuity payable thereunder that would otherwise become payable to a person other than an annuitant under the plan; 
  (c.3) the plan, where it involves a depositary, includes provisions stipulating that 
  (i) the depositary has no right of offset as regards the property held under the plan in connection with any debt or obligation owing to the depositary, and 
  (ii) the property held under the plan cannot be pledged, assigned or in any way alienated as security for a loan or for any purpose other than that of providing for the annuitant, commencing at maturity, a retirement income; and 
  (c.4)  [Repealed, 2011, c. 24, s. 45]  
  (d) the plan in all other respects complies with regulations of the Governor in Council made on the recommendation of the Minister of Finance. 
  
  ### Idem
  
  (3) The Minister may accept for registration for the purposes of this Act any retirement savings plan notwithstanding that the plan 
  (a) provides for the payment of a benefit after maturity by way of dividend; 
  (b) provides for any annual or more frequent periodic amount payable 
  (i) to the annuitant referred to in subparagraph (a)(ii) of the definition 
  *retirement income* in subsection 146(1) by way of an annuity described in paragraph (a) of that definition to be reduced, in the event of the death of the annuitant’s spouse or common-law partner during the lifetime of the annuitant, in such manner as to provide for the payment of equal annual or more frequent periodic amounts throughout the lifetime of the annuitant thereafter,  
  (ii) to any person by way of an annuity, to be reduced if a pension becomes payable to that person under the Old Age Security Act, by an annual or other periodic amount not exceeding the amount payable to that person in that period under that Act,  
  (iii) to any person by way of an annuity, to be increased or reduced depending on the increase or reduction in the value of a specified group of assets constituting the assets of a separate and distinct account or fund maintained in respect of a variable annuities business by a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada that business, 
  (iii.1) to any person by way of an annuity under a contract that provides for the increase or reduction of the annuity in accordance only with a change in the interest rate on which the annuity is based, if the interest rate, as increased or reduced, equals or approximates a generally available Canadian market interest rate, 
  (iv) that may be adjusted annually to reflect 
  (A) in whole or in part increases in the Consumer Price Index, as published by Statistics Canada under the authority of the Statistics Act, or  
  (B) increases at a rate specified in the annuity contract, not exceeding 4% per annum, or 
  (v) to the annuitant by way of an annuity to be increased annually to the extent the amount or rate of return that would have been earned on a pool of investment assets (available for purchase by the public and specified in the annuity contract) exceeds an amount or rate specified in the plan and provides that no other increase may be made in the amount payable; 
  (d) provides for the payment of any amount after the death of an annuitant thereunder; 
  (e) is adjoined to a contract or other arrangement that is not a retirement savings plan; or 
  (f) contains such other terms and provisions, not inconsistent with this section, as are authorized or permitted by regulations of the Governor in Council made on the recommendation of the Minister of Finance. 
  
  ### No tax while trust governed by plan
  
  (4) Except as provided in subsection 146(10.1), no tax is payable under this Part by a trust on the taxable income of the trust for a taxation year if, throughout the period in the year during which the trust was in existence, the trust was governed by a registered retirement savings plan, except that 
  (a) if the trust has borrowed money (other than money used in carrying on a business) in the year or has, after June 18, 1971, borrowed money (other than money used in carrying on a business) that it has not repaid before the commencement of the year, tax is payable under this Part by the trust on its taxable income for the year; 
  (b) in any case not described in paragraph 146(4)(a), if the trust has carried on any business or businesses in the year, tax is payable under this Part by the trust on the amount, if any, by which 
  (i) the amount that its taxable income for the year would be if it had no incomes or losses from sources other than from that business or those businesses, as the case may be, exceeds 
  (ii) such portion of the amount determined under subparagraph 146(4)(b)(i) in respect of the trust for the year as can reasonably be considered to be income from, or from the disposition of, qualified investments for the trust; and 
  (c) if the last annuitant under the plan has died, tax is payable under this Part by the trust on its taxable income for each year after the year following the year in which the last annuitant died. 
  
  ### Amount of RRSP premiums deductible
  
  (5) There may be deducted in computing a taxpayer’s income for a taxation year such amount as the taxpayer claims not exceeding the lesser of 
  (a) the amount, if any, by which the total of all amounts each of which is a premium paid by the taxpayer after 1990 and on or before the day that is 60 days after the end of the year under a registered retirement savings plan under which the taxpayer was the annuitant at the time the premium was paid, other than the portion, if any, of the premium 
  (i) that was deducted in computing the taxpayer’s income for a preceding taxation year, 
  (ii) that was designated for any taxation year for the purposes of paragraph 60(j), 60(j.1) or 60(l), 
  (iii) in respect of which the taxpayer received a payment that was deducted under subsection 146(8.2) in computing the taxpayer’s income for a preceding taxation year, 
  (iii.1) that was an exempt-income contribution amount (as defined in subsection 147.5(1)) for any taxation year, 
  (iv) that was deductible under subsection 146(6.1) in computing the taxpayer’s income for any taxation year or 
  (iv.1) that would be considered to be withdrawn by the taxpayer as an eligible amount (as defined in subsection 146.01(1) or 146.02(1)) less than 90 days after it was paid, if earnings in respect of a registered retirement savings plan were considered to be withdrawn before premiums paid under that plan and premiums were considered to be withdrawn in the order in which they were paid exceeds 
  (v) the amount, if any, by which 
  (A) the total of all amounts deducted under subsection 147.3(13.1) in computing the taxpayer’s income for the year or a preceding taxation year exceeds 
  (B) the total of all amounts, in respect of transfers occurring before 1991 from registered pension plans, deemed by paragraph 147.3(10)(b) or 147.3(10)(c) to be a premium paid by the taxpayer to a registered retirement savings plan, and 
  (b) the amount, if any, by which the taxpayer’s RRSP deduction limit for the year exceeds the total of all contributions made by an employer in the year to a pooled registered pension plan in respect of the taxpayer. 
  
  ### Amount of spousal RRSP premiums deductible
  
  (5.1) There may be deducted in computing a taxpayer’s income for a taxation year such amount as the taxpayer claims not exceeding the lesser of 
  (a) the total of all amounts each of which is a premium paid by the taxpayer after 1990 and on or before the day that is 60 days after the end of the year under a registered retirement savings plan under which the taxpayer’s spouse or common-law partner (or, where the taxpayer died in the year or within 60 days after the end of the year, an individual who was the taxpayer’s spouse or common-law partner immediately before the death) was the annuitant at the time the premium was paid, other than the portion, if any, of the premium 
  (i) that was deducted in computing the taxpayer’s income for a preceding taxation year, 
  (ii) that was designated for any taxation year for the purposes of paragraph 60(j.2), 
  (iii) in respect of which the taxpayer or the taxpayer’s spouse or common-law partner has received a payment that has been deducted under subsection 146(8.2) in computing the taxpayer’s income for a preceding taxation year, or 
  (iv) that would be considered to be withdrawn by the taxpayer’s spouse or common-law partner as an eligible amount (as defined in subsection 146.01(1) or 146.02(1)) less than 90 days after it was paid, if earnings in respect of a registered retirement savings plan were considered to be withdrawn before premiums paid under that plan and premiums were considered to be withdrawn in the order in which they were paid, and 
  (b) the amount, if any, by which the taxpayer’s RRSP deduction limit for the year exceeds the total of all amounts each of which is 
  (i) the amount deducted under subsection (5) in computing the taxpayer’s income for the year, or 
  (ii) a contribution made by an employer in the year to a pooled registered pension plan in respect of the taxpayer. 
  
  ### RRSP premium
  
  (5.2) If a taxpayer’s entitlement to benefits under a defined benefit provision of a registered pension plan is transferred in accordance with subsection 147.3(4) after February 2009 and before 2011, there may be deducted in computing the taxpayer’s income for a taxation year that ends on or after the day on which the transfer was made, the amount claimed by the taxpayer in respect of premiums paid by the taxpayer in the year to a registered retirement savings plan under which the taxpayer is the annuitant, not exceeding the amount, if any, determined by the formula is the amount, if any, that is the lesser of 
  (a) the prescribed amount that would have been determined for the purpose of paragraph 147.3(4)(c) if subsection 8517(3.01) of the Regulations had applied in respect of the transfer, and 
  (b) the amount of the taxpayer’s entitlement to benefits under the provision commuted in connection with the transfer; is the prescribed amount for the purpose of paragraph 147.3(4)(c) that applied in respect of the transfer; and is the total of all amounts deducted by the taxpayer under this subsection for a preceding taxation year. 
  
  ### Transitional rule
  
  (5.201) For the purpose of subsection (5.2), a premium paid by a taxpayer before 2013 is deemed to have been paid in the taxation year in which the transfer referred to in that subsection was made and not in the year in which it was actually paid, if the taxpayer so elects in prescribed form. 
  
  ### Anti-avoidance
  
  (5.21) Notwithstanding any other provision of this section, where 
  (a) a registered pension plan is amended or administered in such a manner as to terminate, suspend or delay 
  (i) the membership of an individual in the plan for the individual’s 1990 taxation year, 
  (ii) contributions under the plan by or for the benefit of the individual in respect of the year, or 
  (iii) the accrual of retirement benefits under the plan for the individual in respect of the year, or 
  (b) a deferred profit sharing plan is amended or administered in such a manner as to terminate, suspend or delay contributions under the plan for the year in respect of an individual, and one of the main reasons for the termination, suspension or delay may reasonably be considered to be to reduce the pension adjustment of the individual for the year in respect of an employer, the only amount that may be deducted in computing the income for the year of the individual, in respect of premiums paid to registered retirement savings plans, is the amount that would have been deductible had that termination, suspension or delay not occurred. 
  (6)  [Repealed, 2011, c. 24, s. 45]  
  
  ### Recontribution of certain withdrawals
  
  (6.1) There may be deducted in computing a taxpayer’s income for a particular taxation year the total of all amounts each of which is such portion of a prescribed premium for the particular year as was not designated for any taxation year for the purposes of paragraph 60(j), 60(j.1) or 60(l). 
  
  ### Recovery of property used as security
  
  (7) Where in a taxation year a loan, for which a trust governed by a registered retirement savings plan has used or permitted to be used trust property as security, ceases to be extant, and the fair market value of the property so used was included by virtue of subsection 146(10) in computing the income of the taxpayer who is the annuitant under the plan, there may be deducted, in computing the income of the taxpayer for the taxation year, an amount equal to the amount, if any, remaining when 
  (a) the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using the property, or permitting it to be used, as security for the loan and not as a result of a change in the fair market value of the property is deducted from 
  (b) the amount so included in computing the income of the taxpayer in consequence of the trust’s using the property, or permitting it to be used, as security for the loan. 
  
  ### Benefits taxable
  
  (8) There shall be included in computing a taxpayer’s income for a taxation year the total of all amounts received by the taxpayer in the year as benefits out of or under registered retirement savings plans, other than excluded withdrawals (as defined in subsection 146.01(1) or 146.02(1)) of the taxpayer and amounts that are included under paragraph (12)(b) in computing the taxpayer’s income. 
  
  ### Subsequent re-calculation
  
  (8.01) If a designated withdrawal (as defined in subsection 146.01(1)) or an amount referred to in paragraph (a) of the definition 
  *eligible amount* in subsection 146.02(1) is received by a taxpayer in a taxation year and, at any time after that year, it is determined that the amount is not an excluded withdrawal (as defined in subsection 146.01(1) or 146.02(1)), notwithstanding subsections 152(4) to (5), such assessments of tax, interest and penalties shall be made as are necessary to give effect to the determination.  
  
  ### Deemed receipt of refund of premiums
  
  (8.1) If a payment out of or under a registered retirement savings plan of a deceased annuitant to the annuitant’s legal representative would have been a refund of premiums if it had been paid under the plan to an individual who is a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, the payment is, to the extent it is so designated jointly by the legal representative and the individual in prescribed form filed with the Minister, deemed to be received by the individual (and not by the legal representative) at the time it was so paid as a benefit that is a refund of premiums. 
  
  ### Amount deductible
  
  (8.2) Where 
  (a) all or any portion of the premiums paid in a taxation year by a taxpayer to one or more registered retirement savings plans under which the taxpayer or the taxpayer’s spouse or common-law partner was the annuitant was not deducted in computing the taxpayer’s income for any taxation year, 
  (b) the taxpayer or the taxpayer’s spouse or common-law partner can reasonably be regarded as having received a payment from a registered retirement savings plan or a registered retirement income fund in respect of such portion of the undeducted premiums as 
  (i) was not paid by way of a transfer of an amount from a registered pension plan to a registered retirement savings plan, 
  (ii) was not paid by way of a transfer of an amount from a deferred profit sharing plan to a registered retirement savings plan in accordance with subsection 147(19), and 
  (iii) was not paid by way of a transfer of an amount to a registered retirement savings plan from 
  (A) a pooled registered pension plan in circumstances to which subsection 147.5(21) applied, or 
  (B) a specified pension plan in circumstances to which subsection (21) applied, 
  (c) the payment is received by the taxpayer or the taxpayer’s spouse or common-law partner in a particular taxation year that is 
  (i) the year in which the premiums were paid by the taxpayer, 
  (ii) the year in which a notice of assessment for the taxation year referred to in subparagraph 146(8.2)(c)(i) was sent to the taxpayer, or 
  (iii) the year immediately following the year referred to in subparagraph 146(8.2)(c)(i) or 146(8.2)(c)(ii), and 
  (d) the payment is included in computing the taxpayer’s income for the particular year, the payment (except to the extent that it is a prescribed withdrawal) may be deducted in computing the taxpayer’s income for the particular year unless it is reasonable to consider that 
  (e) the taxpayer did not reasonably expect that the full amount of the premiums would be deductible in the taxation year in which the premiums were paid or in the immediately preceding taxation year, and 
  (f) the taxpayer paid all or any portion of the premiums with the intent of receiving a payment that, but for this paragraph and paragraph 146(8.2)(e), would be deductible under this subsection. 
  
  ### Premium deemed not paid
  
  (8.21) Where a taxpayer or the taxpayer’s spouse or common-law partner has, at any time in a taxation year, received a payment from a registered retirement savings plan or a registered retirement income fund in respect of all or any portion of a premium paid by the taxpayer to a registered retirement savings plan and the payment has been deducted under subsection 146(8.2) in computing the taxpayer’s income for the year, the premium or portion thereof, as the case may be, shall, 
  (a) for the purposes of determining, after that time, the amount that may be deducted under subsection 146(5) or 146(5.1) in computing the taxpayer’s income for the year or a preceding taxation year, and 
  (b) for the purposes of subsections 146(8.3) and 146.3(5.1) after that time, in the case of a payment received by the taxpayer, be deemed not to have been a premium paid by the taxpayer to a registered retirement savings plan. 
  
  ### Spousal or common-law partner payments
  
  (8.3) Where at any time in a taxation year a particular amount in respect of a registered retirement savings plan that is a spousal or common-law partner plan in relation to a taxpayer is required by reason of subsection (8) or paragraph (12)(b) to be included in computing the income of the taxpayer’s spouse or common-law partner before the plan matures or as a payment in full or partial commutation of a retirement income under the plan and the taxpayer is not living separate and apart from the taxpayer’s spouse or common-law partner at that time by reason of the breakdown of their marriage or common-law partnership, there shall be included at that time in computing the taxpayer’s income for the year an amount equal to the lesser of 
  (a) the total of all amounts each of which is a premium paid by the taxpayer in the year or in one of the two immediately preceding taxation years to a registered retirement savings plan under which the taxpayer’s spouse or common-law partner was the annuitant at the time the premium was paid, and 
  (b) the particular amount. 
  
  ### Ordering
  
  (8.5) Where a taxpayer has paid more than one premium described in subsection 146(8.3), such a premium or part thereof paid by the taxpayer at any time shall be deemed to have been included in computing the taxpayer’s income by virtue of that subsection before premiums or parts thereof paid by the taxpayer after that time. 
  
  ### Spouse’s income
  
  (8.6) Where, in respect of an amount required at any time in a taxation year to be included in computing the income of a taxpayer’s spouse or common-law partner, all or part of a premium has by reason of subsection 146(8.3) been included in computing the taxpayer’s income for the year, the following rules apply: 
  (a) the premium or part thereof, as the case may be, shall, for the purposes of subsections 146(8.3) and 146.3(5.1) after that time, be deemed not to have been a premium paid to a registered retirement savings plan under which the taxpayer’s spouse or common-law partner was the annuitant; and 
  (b) an amount equal to the premium or part thereof, as the case may be, may be deducted in computing the income of the spouse or common-law partner for the year. 
  
  ### Where s. (8.3) does not apply
  
  (8.7) Subsection 146(8.3) does not apply 
  (a) in respect of a taxpayer at any time during the year in which the taxpayer died; 
  (b) in respect of a taxpayer where either the taxpayer or the taxpayer’s spouse or common-law partner is a non-resident at the particular time referred to in that subsection; 
  (c) in respect of amounts paid out of or under a plan referred to in subsection 146(12) as an “amended plan” to which paragraph 146(12)(a) applied before May 26, 1976; 
  (d) to any payment that is received in full or partial commutation of a registered retirement income fund or a registered retirement savings plan and in respect of which a deduction was made under paragraph 60(l) if, where the deduction was in respect of the acquisition of an annuity, the terms of the annuity provide that it cannot be commuted, and it is not commuted, in whole or in part within 3 years after the acquisition; or 
  (e) in respect of an amount that is deemed by subsection 146(8.8) to have been received by an annuitant under a registered retirement savings plan immediately before the annuitant’s death. 
  
  ### Effect of death where person other than spouse becomes entitled
  
  (8.8) Where the annuitant under a registered retirement savings plan (other than a plan that had matured before June 30, 1978) dies after June 29, 1978, the annuitant shall be deemed to have received, immediately before the annuitant’s death, an amount as a benefit out of or under a registered retirement savings plan equal to the amount, if any, by which 
  (a) the fair market value of all the property of the plan at the time of death exceeds 
  (b) where the annuitant died after the maturity of the plan, the fair market value at the time of the death of the portion of the property described in paragraph 146(8.8)(a) that, as a consequence of the death, becomes receivable by a person who was the annuitant’s spouse or common-law partner immediately before the death, or would become so receivable should that person survive throughout all guaranteed terms contained in the plan. 
  
  ### Idem
  
  (8.9) There may be deducted from the amount deemed by subsection 146(8.8) to have been received by an annuitant as a benefit out of or under a registered retirement savings plan an amount not exceeding the amount determined by the formula is the total of 
  (a) all refunds of premiums in respect of the plan, 
  (b) all tax-paid amounts in respect of the plan paid to individuals who, otherwise than because of subsection 146(8.1), received refunds of premiums in respect of the plan, and 
  (c) all amounts each of which is a tax-paid amount in respect of the plan paid to the legal representative of the annuitant under the plan, to the extent that the legal representative would have been entitled to designate that tax-paid amount under subsection 146(8.1) if tax-paid amounts were not excluded in determining refunds of premiums; is the fair market value of the property of the plan at the particular time that is the later of 
  (a) the end of the first calendar year that begins after the death of the annuitant, and 
  (b) the time immediately after the last time that any refund of premiums in respect of the plan is paid out of or under the plan; is the total of all amounts paid out of or under the plan after the death of the annuitant and before the particular time; and is the lesser of 
  (a) the fair market value of the property of the plan at the time of the annuitant’s death, and 
  (b) the sum of the values of B and C in respect of the plan. 
  
  ### Amounts deemed receivable by spouse or common-law partner
  
  (8.91) Where, as a consequence of the death of an annuitant after the maturity of the annuitant’s registered retirement savings plan, the annuitant’s legal representative has become entitled to receive amounts out of or under the plan for the benefit of the spouse or common-law partner of the deceased and the legal representative and the spouse or common-law partner file with the Minister a joint election in prescribed form, 
  (a) the spouse or common-law partner shall be deemed to have become the annuitant under the plan as a consequence of the annuitant’s death; and 
  (b) those amounts shall be deemed to be receivable by the spouse or common-law partner and, when paid, to be received by the spouse or common-law partner as a benefit under the plan, and not to be received by any other person. 
  
  ### Deduction for post-death reduction in value
  
  (8.92) If the annuitant under a registered retirement savings plan dies before the maturity of the plan, there may be deducted in computing the annuitant’s income for the taxation year in which the annuitant dies an amount not exceeding the amount determined, after all amounts payable out of or under the plan have been paid, by the formula is the total of all amounts each of which is 
  (a) the amount deemed by subsection (8.8) to have been received by the annuitant as a benefit out of or under the plan, 
  (b) an amount (other than an amount described in paragraph (c)) received, after the death of the annuitant, by a taxpayer as a benefit out of or under the plan and included, because of subsection (8), in computing the taxpayer’s income, or 
  (c) a tax-paid amount in respect of the plan; and is the total of all amounts paid out of or under the plan after the death of the annuitant. 
  
  ### Subsection (8.92) not applicable
  
  (8.93) Except where the Minister has waived in writing the application of this subsection with respect to all or any portion of the amount determined in subsection (8.92) in respect of a registered retirement savings plan, that subsection does not apply if 
  (a) at any time after the death of the annuitant, a trust governed by the plan held a non-qualified investment; or 
  (b) the last payment out of or under the plan was made after the end of the year following the year in which the annuitant died. 
  
  ### Where disposition of property by trust
  
  (9) Where in a taxation year a trust governed by a registered retirement savings plan 
  (a) disposes of property for a consideration less than the fair market value of the property at the time of the disposition, or for no consideration, or 
  (b) acquires property for a consideration greater than the fair market value of the property at the time of the acquisition, the difference between the fair market value and the consideration, if any, shall be included in computing the income for the taxation year of the annuitant under the plan. 
  
  ### Property used as security for loan
  
  (10) If at any time in a taxation year a trust governed by a registered retirement savings plan uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the taxpayer who is the annuitant under the plan at that time. 
  
  ### Where tax payable
  
  (10.1) Where in a taxation year a trust governed by a registered retirement savings plan holds a property that is a non-qualified investment, 
  (a) tax is payable under this Part by the trust on the amount that its taxable income for the year would be if it had no incomes or losses from sources other than non-qualified investments and no capital gains or losses other than from dispositions of non-qualified investments; and 
  (b) for the purposes of paragraph 146(10.1)(a), 
  (i)  
  *income* includes dividends described in section 83, and  
  (ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”. 
  (11) and (11.1)  [Repealed, 2011, c. 24, s. 45]  
  
  ### Change in plan after registration
  
  (12) Where, on any day after a retirement savings plan has been accepted by the Minister for registration for the purposes of this Act, the plan is revised or amended or a new plan is substituted for it, and the plan as revised or amended or the new plan, as the case may be (in this subsection referred to as the “amended plan”), does not comply with the requirements of this section for its acceptance by the Minister for registration for the purposes of this Act, subject to subsection 146(13.1), the following rules apply: 
  (a) the amended plan shall be deemed, for the purposes of this Act, not to be a registered retirement savings plan; and 
  (b) the taxpayer who was the annuitant under the plan before it became an amended plan shall, in computing the taxpayer’s income for the taxation year that includes that day, include as income received at that time an amount equal to the fair market value of all the property of the plan immediately before that time. 
  
  ### Idem
  
  (13) For the purposes of subsection 146(12), an arrangement under which a right or obligation under a retirement savings plan is released or extinguished either wholly or in part and either in exchange or substitution for any right or obligation, or otherwise (other than an arrangement the sole object and legal effect of which is to revise or amend the plan) or under which payment of any amount by way of loan or otherwise is made on the security of a right under a retirement savings plan, shall be deemed to be a new plan substituted for that retirement savings plan. 
  (13.1)  [Repealed, 2011, c. 24, s. 45]  
  (13.2) and (13.3)  [Repealed, 2007, c. 29, s. 17]  
  
  ### Premiums paid in taxation year
  
  (14) Where any amount has been paid in a taxation year as a premium under a retirement savings plan that was, at the end of that taxation year, a registered retirement savings plan, the amount so paid shall be deemed, for the purposes of this Act, to have been paid in that year as a premium under a registered retirement savings plan. 
  
  ### Plan not registered at end of year entered into
  
  (15) Notwithstanding anything in this section, where an amount is received in a taxation year as a benefit under a registered retirement savings plan that was not, at the end of the year in which the plan was entered into, a registered retirement savings plan, such part, if any, of the amount so received as may be prescribed shall be deemed, for the purposes of this Act, to have been received in the taxation year otherwise than as a benefit or other payment under a registered retirement savings plan. 
  
  ### Transfer of funds
  
  (16) Notwithstanding any other provision in this section, a registered retirement savings plan may at any time be revised or amended to provide for the payment or transfer before the maturity of the plan, on behalf of the annuitant under the plan (in this subsection referred to as the “transferor”), of any property thereunder by the issuer thereof 
  (a) to a registered pension plan for the benefit of the transferor or to a registered retirement savings plan or registered retirement income fund under which the transferor is the annuitant, 
  (a.1) to a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the transferor, 
  (a.2) to a FHSA for the benefit of the transferor, if subsection (8.3) would not apply to an amount in respect of the property in the case that the property was instead received by the transferor as a benefit out of or under the registered retirement savings plan, or 
  (b) to a registered retirement savings plan or registered retirement income fund under which the spouse or common-law partner or former spouse or common-law partner of the transferor is the annuitant, where the transferor and the transferor’s spouse or common-law partner or former spouse or common-law partner are living separate and apart and the payment or transfer is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the transferor and the transferor’s spouse or common-law partner or former spouse or common-law partner in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership, and, where there has been such a payment or transfer of such property on behalf of the transferor before the maturity of the plan, 
  (c) the amount of the payment or transfer shall not, solely because of the payment or transfer, be included in computing the income of the transferor or the transferor’s spouse or common-law partner or former spouse or common-law partner, 
  (d) no deduction may be made under subsection (5), (5.1) or (8.2) or section 8, 60 or 146.6 in respect of the payment or transfer in computing the income of any taxpayer, and 
  (e) where the payment or transfer was made to a registered retirement savings plan, for the purposes of subsection 146(8.2), the amount of the payment or transfer shall be deemed not to be a premium paid to that plan by the taxpayer. 
  
  ### Credited or added amount deemed not received
  
  (20) Where 
  (a) an amount is credited or added to a deposit with a depositary referred to in subparagraph (b)(iii) of the definition 
  *retirement savings plan* in subsection 146(1) as interest or income in respect of the deposit,  
  (b) the deposit is a registered retirement savings plan at the time the amount is credited or added to the deposit, and 
  (c) during the calendar year in which the amount is credited or added or during the preceding calendar year, the annuitant under the plan was alive, the amount shall be deemed not to be received by the annuitant or any other person solely because of the crediting or adding. 
  
  ### Specified pension plan
  
  (21) Where 
  (a) an amount (other than an amount that is part of a series of periodic payments) is transferred directly from an individual’s account under a specified pension plan 
  (i) to a registered retirement savings plan or registered retirement income fund under which the individual, or a spouse or common-law partner or former spouse or common-law partner of the individual, is the annuitant, 
  (ii) to acquire from a licensed annuities provider an annuity that would be described in subparagraph 60(l)(ii) if the individual, or a spouse or common-law partner or former spouse or common-law partner of the individual, were the taxpayer referred to in that subparagraph and if that subparagraph were read without reference to clause 60(l)(ii)(B), or 
  (iii) to an account under the plan of a spouse or common-law partner or former spouse or common-law partner of the individual, and 
  (b) if the transfer is in respect of a spouse or common-law partner or former spouse or common-law partner of the individual, 
  (i) the individual and the spouse or common-law partner or former spouse or common-law partner are living separate and apart and the transfer is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership, or 
  (ii) the amount is transferred as a consequence of the individual’s death, the following rules apply: 
  (c) the amount shall not, solely because of the transfer, be included because of subparagraph 56(1)(a)(i) in computing the income of a taxpayer, and 
  (d) no deduction may be made under any provision of this Act in respect of the transfer in computing the income of a taxpayer. 
  
  ### Specified pension plan — contribution
  
  (21.1) For the purposes of this section, paragraphs 18(11)(b), 60(j), (j.1) and (l), 74.5(12)(a), 146.01(3)(a) and 146.02(3)(a) and Parts X.1 and X.5, and for the purposes of section 214.1 of the Income Tax Regulations, a contribution made by an individual to an account of the individual, or of the individual’s spouse or common-law partner, under a specified pension plan is deemed to be a premium paid by the individual to a registered retirement savings plan under which the individual, or the individual’s spouse or common-law partner, as the case may be, is the annuitant.  
  
  ### Specified pension plan — account
  
  (21.2) For the purposes of paragraph (8.2)(b), subsection (8.21), paragraphs (16)(a) and (b) and 18(1)(u), subparagraph (a)(i) of the definition excluded right or interest in subsection 128.1(10), paragraph (b) of the definition excluded premium in subsection 146.01(1), paragraph (c) of the definition excluded premium in subsection 146.02(1), subsections 146.3(14) and 147(19), section 147.3 and paragraphs 147.5(21)(c) and 212(1)(j.1) and (m) and for the purposes of any regulations made under subsection 147.1(18), an individual’s account under a specified pension plan is deemed to be a registered retirement savings plan under which the individual is the annuitant.  
  
  ### Specified pension plan — payment
  
  (21.3) For the purposes of subsections (8.3) to (8.7), a payment received by an individual from a specified pension plan is deemed to be a payment received by the individual from a registered retirement savings plan. 
  
  ### Deemed payment of RRSP premiums
  
  (22) If the Minister so directs, 
  (a) except for the purposes of subparagraphs (5)(a)(iv.1) and (5.1)(a)(iv), an amount paid by an individual in a taxation year (other than an amount paid in the first 60 days of the year) as a premium is deemed to have been paid at the beginning of the year and not at the time it was actually paid; 
  (b) all or part of the amount may be designated in writing by the individual for the purpose of paragraph 60(j), (j.1) or (l) or subsection 146.01(3) or 146.02(3); and 
  (c) the designation is deemed to have been made in the individual’s return of income for the preceding taxation year or in a prescribed form filed with that return, as the case may be. 
  
  ## Home Buyers’ Plan 
  
  ### Definitions
  
  146.01 (1) In this section,  
  *annuitant* has the meaning assigned by subsection 146(1); (rentier)   
  *benefit* has the meaning assigned by subsection 146(1); (prestation)   
  *completion date*, in respect of an amount received by an individual, is  
  (a) where the amount was received before March 2, 1993, October 1, 1993, 
  (b) where the amount was received after March 1, 1993 and before March 2, 1994, October 1, 1994, and 
  (c) in any other case, October 1 of the calendar year following the calendar year in which the amount was received; ( date de clôture)   
  *designated withdrawal* of an individual is an amount received by the individual, as a benefit out of or under a registered retirement savings plan, pursuant to the individual’s written request in the prescribed form referred to in paragraph (a) of the definition 
  *eligible amount* (as that definition read in its application to amounts received before 1999), paragraph (a) of the definition 
  *regular eligible amount* or paragraph (a) of the definition 
  *supplemental eligible amount* ; (retrait déterminé)   
  *eligible amount* of an individual is a regular eligible amount or supplemental eligible amount of the individual; (montant admissible)   
  *excluded premium* in respect of an individual means a premium under a registered retirement savings plan where the premium  
  (a) was designated by the individual for the purposes of paragraph 60(j), 60(j.1), 60(j.2) or 60(l), 
  (b) was an amount transferred directly from a registered retirement savings plan, registered pension plan, registered retirement income fund or deferred profit sharing plan, 
  (c) was deductible under subsection 146(6.1) in computing the individual’s income for any taxation year, or 
  (d) was deducted in computing the individual’s income for the 1991 taxation year; ( prime exclue)   
  *excluded withdrawal* of an individual means  
  (a) an eligible amount received by the individual, 
  (b) a particular amount (other than an eligible amount) received while the individual was resident in Canada and in a calendar year if 
  (i) the particular amount would be an eligible amount of the individual if the definition 
  *regular eligible amount* were read without reference to paragraphs (c) and (g) of that definition and the definition 
  *supplemental eligible amount* were read without reference to paragraphs (d) and (f) of that definition,  
  (ii) a payment (other than an excluded premium) equal to the particular amount is made by the individual under a retirement saving plan that is, at the end of the taxation year of the payment, a registered retirement savings plan under which the individual is the annuitant, 
  (iii) the payment is made before the particular time that is 
  (A) if the individual was not resident in Canada at the time the individual filed a return of income for the taxation year in which the particular amount was received, the earlier of 
  (I) the end of the following calendar year, and 
  (II) the time at which the individual filed the return, 
  (B) where clause (A) does not apply and the particular amount would, but for subclause (2)(c)(ii)(A)(II), be an eligible amount, the end of the second following calendar year, and 
  (C) in any other case, the end of the following calendar year, and 
  (iv) either 
  (A) if the particular time is before 2000, the payment is made, as a repayment of the particular amount, to the issuer of the registered retirement savings plan from which the particular amount was received, no other payment is made as a repayment of the particular amount and that issuer is notified of the payment in prescribed form submitted to the issuer at the time the payment is made, or 
  (B) the payment is made after 1999 and before the particular time and the payment (and no other payment) is designated under this clause as a repayment of the particular amount in prescribed form filed with the Minister on or before the particular time (or before such later time as is acceptable to the Minister), 
  (c) an amount (other than an eligible amount) that is received in a calendar year before 1999 and that would be an eligible amount of the individual if the definition 
  *eligible amount*, as it applied to amounts received before 1999, were read without reference to paragraphs (c) and (e) of that definition, where the individual  
  (i) died before the end of the following calendar year, and 
  (ii) was resident in Canada throughout the period that began immediately after the amount was received and ended at the time of the death, or 
  (d) a particular amount (other than an eligible amount) received while the individual was resident in Canada and in a calendar year if 
  (i) the particular amount would be a regular eligible amount if subsection (2.1) were read without reference to its subparagraph (a)(iii), 
  (ii) a payment (other than an excluded premium) equal to the particular amount is made by the individual under a retirement saving plan that is, at the end of the taxation year of the payment, a registered retirement savings plan under which the individual is the annuitant, and 
  (iii) the payment is made before the end of the second calendar year after the calendar year that includes the particular time referred to in subsection (2.1); ( retrait exclu)   
  *HBP balance* of an individual at any time means the amount, if any, by which the total of all eligible amounts received by the individual at or before that time exceeds the total of  
  (a) all amounts designated under subsection (3) by the individual for taxation years that ended before that time, and 
  (b) all amounts each of which is included under subsection (4) or (5) in computing the individual’s income for a taxation year that ended before that time; ( solde RAP)   
  *issuer* has the meaning assigned by subsection 146(1); (émetteur)   
  *participation period* of an individual means each period  
  (a) that begins at the beginning of a calendar year in which the individual receives an eligible amount, and 
  (b) that ends immediately before the beginning of the first subsequent calendar year at the beginning of which the individual’s HBP balance is nil; ( période de participation)   
  *premium* has the meaning assigned by subsection 146(1); (prime)   
  *qualifying home* means  
  (a) a housing unit located in Canada, or 
  (b) a share of the capital stock of a cooperative housing corporation, the holder of which is entitled to possession of a housing unit located in Canada, except that, where the context so requires, a reference to a qualifying home that is a share described in paragraph (b) means the housing unit to which the share described in that paragraph relates; ( habitation admissible)   
  *quarter* [Repealed, 2013, c. 34, s. 297]   
  *regular eligible amount* of an individual means an amount received at a particular time by the individual as a benefit out of or under a registered retirement savings plan if  
  (a) the amount is received pursuant to the individual’s written request in a prescribed form in which the individual sets out the location of a qualifying home that the individual has begun, or intends not later than one year after its acquisition by the individual to begin, using as a principal place of residence, 
  (b) the individual entered into an agreement in writing before the particular time for the acquisition of it or with respect to its construction, 
  (c) the individual 
  (i) acquires the qualifying home (or a replacement property for the qualifying home) before the completion date in respect of the amount, or 
  (ii) dies before the end of the calendar year that includes the completion date in respect of the amount, 
  (d) neither the individual nor the individual’s spouse or common-law partner acquired the qualifying home more than 30 days before the particular time, 
  (e) the individual did not have an owner-occupied home in the period 
  (i) that began at the beginning of the fourth preceding calendar year that ended before the particular time, and 
  (ii) that ended on the 31st day before the particular time, 
  (f) the individual’s spouse or common-law partner did not, in the period referred to in paragraph (e), have an owner-occupied home 
  (i) that was inhabited by the individual during the spouse’s or common-law partner’s marriage or common-law partnership to the individual, or 
  (ii) that was a share of the capital stock of a cooperative housing corporation that relates to a housing unit inhabited by the individual during the spouse’s or common-law partner’s marriage or common-law partnership to the individual, 
  (g) the individual 
  (i) acquired the qualifying home before the particular time and is resident in Canada at the particular time, or 
  (ii) is resident in Canada throughout the period that begins at the particular time and ends at the earlier of the time of the individual’s death and the earliest time at which the individual acquires the qualifying home or a replacement property for it, 
  (h) the total of the amount and all other eligible amounts received by the individual in the calendar year that includes the particular time does not exceed $35,000, and 
  (i) the individual’s HBP balance at the beginning of the calendar year that includes the particular time is nil; ( montant admissible principal)   
  *replacement property* for a particular qualifying home in respect of an individual, or of a specified disabled person in respect of the individual, means another qualifying home that  
  (a) the individual or the specified disabled person agrees to acquire, or begins the construction of, at a particular time that is after the latest time that the individual made a request described in the definition 
  *designated withdrawal* in respect of the particular qualifying home,  
  (b) at the particular time, the individual intends to be used by the individual or the specified disabled person as a principal place of residence not later than one year after its acquisition, and 
  (c) none of the individual, the individual’s spouse or common-law partner, the specified disabled person or that person’s spouse or common-law partner had acquired before the particular time; ( bien de remplacement)   
  *specified disabled person*, in respect of an individual at any time, means a person who  
  (a) is the individual or is related at that time to the individual, and 
  (b) would be entitled to a deduction under subsection 118.3(1) in computing tax payable under this Part for the person’s taxation year that includes that time if that subsection were read without reference to paragraph (c) of that subsection; ( personne handicapée déterminée)   
  *supplemental eligible amount* of an individual means an amount received at a particular time by the individual as a benefit out of or under a registered retirement savings plan if  
  (a) the amount is received pursuant to the individual’s written request in a prescribed form identifying a specified disabled person in respect of the individual and setting out the location of a qualifying home 
  (i) that has begun to be used by that person as a principal place of residence, or 
  (ii) that the individual intends to be used by that person as a principal place of residence not later than one year after its first acquisition after the particular time, 
  (b) the purpose of receiving the amount is to enable the specified disabled person to live 
  (i) in a dwelling that is more accessible by that person or in which that person is more mobile or functional, or 
  (ii) in an environment better suited to the personal needs and care of that person, 
  (c) the individual or the specified disabled person entered into an agreement in writing before the particular time for the acquisition of the qualifying home or with respect to its construction, 
  (d) either 
  (i) the individual or the specified disabled person acquires the qualifying home (or a replacement property for it) after 1998 and before the completion date in respect of the amount, or 
  (ii) the individual dies before the end of the calendar year that includes the completion date in respect of the amount, 
  (e) none of the individual, the spouse or common-law partner of the individual, the specified disabled person or the spouse or common-law partner of that person acquired the qualifying home more than 30 days before the particular time, 
  (f) either 
  (i) the individual or the specified disabled person acquired the qualifying home before the particular time and the individual is resident in Canada at the particular time, or 
  (ii) the individual is resident in Canada throughout the period that begins at the particular time and ends at the earlier of the time of the individual’s death and the earliest time at which 
  (A) the individual acquires the qualifying home or a replacement property for it, or 
  (B) the specified disabled person acquires the qualifying home or a replacement property for it, 
  (g) the total of the amount and all other eligible amounts received by the individual in the calendar year that includes the particular time does not exceed $35,000, and 
  (h) the individual’s HBP balance at the beginning of the calendar year that includes the particular time is nil. ( montant admissible supplémentaire)  
  
  ### Special Rules
  
  (2) For the purposes of this section, 
  (a) an individual shall be considered to have acquired a qualifying home if the individual acquired it jointly with one or more other persons; 
  (a.1) an individual shall be considered to have an owner-occupied home at any time where, at that time, the individual owns, whether jointly with another person or otherwise, a housing unit or a share of the capital stock of a cooperative housing corporation and 
  (i) the housing unit is inhabited by the individual as the individual’s principal place of residence at that time, or 
  (ii) the share was acquired for the purpose of acquiring a right to possess a housing unit owned by the corporation and that unit is inhabited by the individual as the individual’s principal place of residence at that time; 
  (b) except for the purposes of paragraphs (d) and (g) of the definition regular eligible amount and paragraphs (e) and (f) of the definition supplemental eligible amount in subsection (1), where an individual agrees to acquire a condominium unit, the individual shall be deemed to have acquired it on the day the individual is entitled to immediate vacant possession of it;  
  (c) except for the purposes of subparagraph (g)(ii) of the definition 
  *regular eligible amount* and subparagraph (f)(ii) of the definition 
  *supplemental eligible amount*, an individual or a specified disabled person in respect of the individual is deemed to have acquired, before the completion date in respect of a designated withdrawal received by the individual, the qualifying home in respect of which the designated withdrawal was received if  
  (i) neither the qualifying home nor a replacement property for it was acquired by the individual or the specified disabled person before that completion date, and 
  (ii) either 
  (A) the individual or the specified disabled person 
  (I) is obliged under the terms of a written agreement in effect on that completion date to acquire the qualifying home (or a replacement property for it) on or after that date, and 
  (II) acquires the qualifying home or a replacement property for it before the day that is one year after that completion date, or 
  (B) the individual or the specified disabled person made payments, the total of which equalled or exceeded the total of all designated withdrawals that were received by the individual in respect of the qualifying home, 
  (I) to persons with whom the individual was dealing at arm’s length, 
  (II) in respect of the construction of the qualifying home or a replacement property for it, and 
  (III) in the period that begins at the time the individual first received a designated withdrawal in respect of the qualifying home and that ends before that completion date; and 
  (d) an amount received by an individual in a particular calendar year is deemed to have been received by the individual at the end of the preceding calendar year and not at any other time if 
  (i) the amount is received in January of the particular year (or at such later time as is acceptable to the Minister), 
  (ii) the amount would not be an eligible amount if this section were read without reference to this paragraph, and 
  (iii) the amount would be an eligible amount if the definition 
  *regular eligible amount* in subsection (1) were read without reference to paragraph (i) of that definition and the definition 
  *supplemental eligible amount* were read without reference to paragraph (h) of that definition.  
  (e) and (f)  [Repealed, 1999, c. 22, s. 60(5)]  
  
  ### Marriage or common-law partnership
  
  (2.1) Notwithstanding paragraph (2)(a.1), for the purposes of the definition regular eligible amount,  
  (a) an individual, and a spouse or common-law partner of the individual, are deemed not to have an owner-occupied home in a period ending before a particular time referred to in that definition if 
  (i) at the particular time, the individual 
  (A) is living separate and apart from the individual’s spouse or common-law partner because of a breakdown of their marriage or common-law partnership, 
  (B) has been living separate and apart from the individual’s spouse or common-law partner for a period of at least 90 days, and 
  (C) began living separate and apart from the individual’s spouse or common-law partner in the calendar year that includes the particular time or any time in the four preceding calendar years, 
  (ii) in the absence of this subsection, the individual would not be precluded from having a regular eligible amount because of the application of paragraph (f) of that definition in respect of a spouse or common-law partner (other than the spouse or common-law partner referred to in clauses (i)(A) to (C)), and 
  (iii) where the individual has an owner-occupied home at the particular time, 
  (A) the home is not the qualifying home referred to in that definition and the individual disposes of the home no later than the end of the second calendar year after the calendar year that includes the particular time, or 
  (B) the individual acquires the interest, or for civil law the right, of the spouse or common-law partner in the home; and 
  (b) if an individual to whom paragraph (a) applies has an owner-occupied home at the particular time referred to in that paragraph and the individual acquires the interest, or for civil law the right, of a spouse or common-law partner in the home, the individual is deemed for the purposes of paragraphs (c) and (d) of that definition to have acquired a qualifying home on the date that the individual acquired the interest or the right. 
  
  ### Repayment of eligible amount
  
  (3) An individual may designate a single amount for a taxation year in a prescribed form filed with the individual’s return of income for the year if the amount does not exceed the lesser of 
  (a) the total of all amounts (other than excluded premiums, repayments to which paragraph (b) or (d) of the definition excluded withdrawal in subsection (1) applies and amounts paid by the individual in the first 60 days of the year that can reasonably be considered to have been deducted in computing the individual’s income, or designated under this subsection, for the preceding taxation year) paid by the individual in the year or within 60 days after the end of the year under a retirement savings plan that is at the end of the year or the following taxation year a registered retirement savings plan under which the individual is the annuitant, and  
  (b) the amount, if any, by which 
  (i) the total of all eligible amounts received by the individual before the end of the year exceeds the total of 
  (ii) all amounts designated by the individual under this subsection for preceding taxation years, and 
  (iii) all amounts each of which is an amount included in computing the income of the individual under subsection 146.01(4) or 146.01(5) for a preceding taxation year. 
  
  ### Portion of eligible amount not repaid
  
  (4) There shall be included in computing an individual’s income for a particular taxation year included in a particular participation period of the individual the amount determined by the formula is 
  (a) where 
  (i) the individual died or ceased to be resident in Canada in the particular year, or 
  (ii) the completion date in respect of an eligible amount received by the individual was in the particular year nil and 
  (b) in any other case, the total of all eligible amounts received by the individual in preceding taxation years included in the particular period, is 
  (a) nil, if the completion date in respect of an eligible amount received by the individual was in the preceding taxation year, and 
  (b) in any other case, the total of all amounts each of which is designated under subsection (3) by the individual for a preceding taxation year included in the particular period; is the total of all amounts each of which is included under this subsection or subsection (5) in computing the individual’s income for a preceding taxation year included in the particular period; is the lesser of 14 and the number of taxation years of the individual ending in the period beginning 
  (a) where the completion date in respect of an eligible amount received by the individual was before 1995, January 1, 1995, and 
  (b) in any other case, January 1 of the first calendar year beginning after the completion date in respect of an eligible amount received by the individual and ending at the beginning of the particular year, and is 
  (a) if the completion date in respect of an eligible amount received by the individual was in the preceding taxation year, the total of all amounts each of which is designated under subsection (3) by the individual for the particular year or any preceding taxation year included in the particular period, and 
  (b) in any other case, the amount designated under subsection (3) by the individual for the particular year. 
  
  ### Where individual becomes a non-resident
  
  (5) Where at any time in a taxation year an individual ceases to be resident in Canada, there shall be included in computing the income of the individual for the period in the year during which the individual was resident in Canada the amount, if any, by which 
  (a) the total of all amounts each of which is an eligible amount received by the individual in the year or a preceding taxation year exceeds the total of 
  (b) all amounts designated under subsection 146.01(3) by the individual in respect of amounts paid not later than 60 days after that time and before the individual files a return of income for the year, and 
  (c) all amounts included under subsection (4) or this subsection in computing the individual’s income for preceding taxation years. 
  
  ### Death of individual
  
  (6) If an individual dies at any time in a taxation year, there shall be included in computing the individual’s income for the year the amount, if any, by which 
  (a) the individual’s HBP balance immediately before that time exceeds 
  (b) the amount designated under subsection (3) by the individual for the year. 
  
  ### Exception
  
  (7) If a spouse or common-law partner of an individual was resident in Canada immediately before the individual’s death at a particular time in a taxation year and the spouse or common-law partner and the individual’s legal representatives jointly so elect in writing in the individual’s return of income for the year, 
  (a) subsection (6) does not apply to the individual; 
  (b) the spouse or common-law partner is deemed to have received a particular eligible amount at the particular time equal to the amount that, but for this subsection, would be determined under subsection (6) in respect of the individual; 
  (c) for the purposes of subsection (4) and paragraph (d), the completion date in respect of the particular amount is deemed to be 
  (i) if the spouse or common-law partner received an eligible amount before the death (other than an eligible amount received in a participation period of the spouse or common-law partner that ended before the beginning of the year), the completion date in respect of that amount, and 
  (ii) in any other case, the completion date in respect of the last eligible amount received by the individual; and 
  (d) for the purpose of subsection (4), the completion date in respect of each eligible amount received by the spouse or common-law partner, after the death and before the end of the spouse’s or common-law partner’s participation period that includes the time of the death, is deemed to be the completion date in respect of the particular amount. 
  (8)  [Repealed, 2013, c. 34, s. 297]  
  (9) to (13)  [Repealed, 1995, c. 3, s. 44(13)]  
  
  ## Lifelong Learning Plan 
  
  ### Definitions
  
  146.02 (1) The definitions in this subsection apply in this section.  
  *annuitant* has the meaning assigned by subsection 146(1). (rentier)   
  *benefit* has the meaning assigned by subsection 146(1). (prestation)   
  *eligible amount* of an individual means a particular amount received at a particular time in a calendar year by the individual as a benefit out of or under a registered retirement savings plan if  
  (a) the particular amount is received after 1998 pursuant to the individual’s written request in a prescribed form; 
  (b) in respect of the particular amount, the individual designates in the form a person (in this definition referred to as the “designated person”) who is the individual or the individual’s spouse or common-law partner; 
  (c) the total of the particular amount and all other eligible amounts received by the individual at or before the particular time and in the year does not exceed $10,000; 
  (d) the total of the particular amount and all other eligible amounts received by the individual at or before the particular time (other than amounts received in participation periods of the individual that ended before the year) does not exceed $20,000; 
  (e) the individual did not receive an eligible amount at or before the particular time in respect of which someone other than the designated person was designated (other than an amount received in a participation period of the individual that ended before the year); 
  (f) the designated person 
  (i) is enrolled at the particular time as a full-time student in a qualifying educational program, or 
  (ii) has received written notification before the particular time that the designated person is absolutely or contingently entitled to enrol before March of the following year as a full-time student in a qualifying educational program; 
  (g) the individual is resident in Canada throughout the period that begins at the particular time and ends immediately before the earlier of 
  (i) the beginning of the following year, and 
  (ii) the time of the individual’s death; 
  (h) except where the individual dies after the particular time and before April of the following year, the designated person is enrolled as a full-time student in a qualifying educational program after the particular time and before March of the following year and 
  (i) the designated person completes the program before April of the following year, 
  (ii) the designated person does not withdraw from the program before April of the following year, or 
  (iii) less than 75% of the tuition paid, after the beginning of the year and before April of the following year, in respect of the designated person and the program is refundable; and 
  (i) if an eligible amount was received by the individual before the year, the particular time is neither 
  (i) in the individual’s repayment period for the individual’s participation period that includes the particular time, nor 
  (ii) after January (or a later month where the Minister so permits) of the fifth calendar year of that participation period. ( montant admissible)   
  *excluded premium* of an individual means a premium that  
  (a) was designated by the individual for the purpose of paragraph 60(j), (j.1) or (l) or subsection 146.01(3); 
  (b) was a repayment to which paragraph (b) or (d) of the definition excluded withdrawal in subsection 146.01(1) applies;  
  (c) was an amount transferred directly from a registered retirement savings plan, registered pension plan, registered retirement income fund or deferred profit sharing plan; or 
  (d) was deductible under subsection 146(6.1) in computing the individual’s income for any taxation year. ( prime exclue)   
  *excluded withdrawal* of an individual means  
  (a) an eligible amount received by the individual; or 
  (b) a particular amount (other than an eligible amount) received while the individual was resident in Canada and in a calendar year if 
  (i) the particular amount would be an eligible amount of the individual if the definition 
  *eligible amount* were read without reference to paragraphs (g) and (h) of that definition,  
  (ii) a payment (other than an excluded premium) equal to the particular amount is paid by the individual under a retirement savings plan that is, at the end of the taxation year of payment, a registered retirement savings plan under which the individual is the annuitant, 
  (iii) the payment is made before the particular time that is, 
  (A) if the individual was not resident in Canada at the time the individual filed a return of income for the taxation year in which the particular amount was received, the earlier of 
  (I) the end of the following calendar year, and 
  (II) the time at which the individual filed the return, and 
  (B) in any other case, the end of the following calendar year, and 
  (iv) the payment (and no other payment) is designated under this subparagraph as a repayment of the particular amount in prescribed form filed with the Minister on or before the particular time (or before such later time as is acceptable to the Minister). ( retrait exclu)   
  *full-time student* in a taxation year includes an individual to whom subsection 118.6(3) applies for the purpose of computing tax payable under this Part for the year or the following taxation year. (étudiant à temps plein)   
  *LLP balance* of an individual at any time means the amount, if any, by which the total of all eligible amounts received by the individual at or before that time exceeds the total of  
  (a) all amounts designated under subsection (3) by the individual for taxation years that ended before that time, and 
  (b) all amounts each of which is included under subsection (4) or (5) in computing the individual’s income for a taxation year that ended before that time. ( solde REP)   
  *participation period* of an individual means each period  
  (a) that begins at the beginning of a calendar year 
  (i) in which the individual receives an eligible amount, and 
  (ii) at the beginning of which the individual’s LLP balance is nil; and 
  (b) that ends immediately before the beginning of the first subsequent calendar year at the beginning of which the individual’s LLP balance is nil. ( période de participation)   
  *premium* has the meaning assigned by subsection 146(1). (prime)   
  *qualifying educational program* means a program at a designated educational institution, as defined in subsection 118.6(1), of not less than three consecutive months duration that requires that each student taking the program spend not less than ten hours per week on courses or work in the program and that is  
  (a) of a technical or vocational nature designed to furnish a person with skills for, or improve a person’s skills in, an occupation, if the program is at an institution described in subparagraph (a)(ii) of that definition; and 
  (b) at a post-secondary school level, in any other case. ( programme de formation admissible)   
  *repayment period* of an individual for a participation period of the individual in respect of a person designated under paragraph (b) of the definition 
  *eligible amount* means the period, if any, within the participation period  
  (a) that begins 
  (i) at the beginning of the third calendar year within the participation period if, in each of the second and third calendar years within the participation period, 
  (A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and 
  (B) for calendar years after 2016, the person would not be a 
  *qualifying student* (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii),  
  (ii) at the beginning of the fourth calendar year within the participation period if, in each of the third and fourth calendar years within the participation period, 
  (A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and 
  (B) for calendar years after 2016, the person would not be a 
  *qualifying student* (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii),  
  (iii) at the beginning of the fifth calendar year within the participation period if, in each of the fourth and fifth calendar years within the participation period, 
  (A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and 
  (B) for calendar years after 2016, the person would not be a 
  *qualifying student* (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii), and  
  (iv) in any other case, at the beginning of the sixth calendar year within the participation period; and 
  (b) that ends at the end of the participation period. ( période de remboursement)  
  
  ### Rule of application
  
  (2) For the purpose of the definition 
  *eligible amount* in subsection (1), a particular person is deemed to be the only person in respect of whom a particular amount was designated under paragraph (b) of that definition if  
  (a) an individual received the particular amount; 
  (b) the individual files a prescribed form with the Minister in which the particular person is specified in connection with the receipt of the particular amount; 
  (c) the particular amount would be an eligible amount of the individual if 
  (i) that definition were read without reference to paragraphs (b) and (e) of that definition, and 
  (ii) each reference in the portion of that definition after paragraph (d) to “designated person” were read as “individual” or “individual’s spouse or common-law partner”; and 
  (d) the Minister so permits. 
  
  ### Repayment of eligible amount
  
  (3) An individual may designate a single amount for a taxation year in prescribed form filed with the individual’s return of income for the year if the amount does not exceed the lesser of 
  (a) the total of all amounts (other than excluded premiums, repayments to which paragraph (b) of the definition 
  *excluded withdrawal* in subsection (1) applies and amounts paid by the individual in the first 60 days of the year that can reasonably be considered to have been deducted in computing the individual’s income, or designated under this subsection, for the preceding taxation year) paid by the individual in the year or within 60 days after the end of the year under a retirement savings plan that is at the end of the year or the following taxation year a registered retirement savings plan under which the individual is the annuitant, and  
  (b) the individual’s LLP balance at the end of the year. 
  
  ### If portion of eligible amount not repaid
  
  (4) There shall be included in computing an individual’s income for a particular taxation year that begins after 2000 the amount determined by the formula is 
  (a) nil, if 
  (i) the individual died or ceased to be resident in Canada in the particular year, or 
  (ii) the beginning of the particular year is not included in a repayment period of the individual, and 
  (b) in any other case, the total of all eligible amounts received by the individual in preceding taxation years (other than taxation years in participation periods of the individual that ended before the particular year); is 
  (a) nil, if the particular year is the first taxation year in a repayment period of the individual, and 
  (b) in any other case, the total of all amounts designated under subsection (3) by the individual for preceding taxation years (other than taxation years in participation periods of the individual that ended before the particular year); is the total of all amounts each of which is included under this subsection or subsection (5) in computing the individual’s income for a preceding taxation year (other than a taxation year included in a participation period of the individual that ended before the particular year); is the lesser of nine and the number of taxation years of the individual that end in the period that 
  (a) begins at the beginning of the individual’s last repayment period that began at or before the beginning of the particular year, and 
  (b) ends at the beginning of the particular year; and is 
  (a) if the particular year is the first taxation year within a repayment period of the individual, the total of the amount designated under subsection (3) by the individual for the particular year and all amounts so designated for preceding taxation years (other than taxation years in participation periods of the individual that ended before the particular year), and 
  (b) in any other case, the amount designated under subsection (3) by the individual for the particular year. 
  
  ### Ceasing residence in Canada
  
  (5) If at any time in a taxation year an individual ceases to be resident in Canada, there shall be included in computing the individual’s income for the period in the year during which the individual was resident in Canada the amount, if any, by which 
  (a) the total of all amounts each of which is an eligible amount received by the individual in the year or a preceding taxation year exceeds the total of 
  (b) all amounts designated under subsection (3) by the individual in respect of amounts paid not later than 60 days after that time and before the individual files a return of income for the year, and 
  (c) all amounts included under subsection (4) or this subsection in computing the individual’s income for preceding taxation years. 
  
  ### Death of individual
  
  (6) If an individual dies at any time in a taxation year, there shall be included in computing the individual’s income for the year the amount, if any, by which 
  (a) the individual’s LLP balance immediately before that time exceeds 
  (b) the amount designated under subsection (3) by the individual for the year. 
  
  ### Exception
  
  (7) If a spouse or common-law partner of an individual was resident in Canada immediately before the individual’s death at a particular time in a taxation year and the spouse or common-law partner and the individual’s legal representatives jointly so elect in writing in the individual’s return of income for the year, 
  (a) subsection (6) does not apply to the individual; 
  (b) the spouse or common-law partner is deemed to have received a particular eligible amount at the particular time equal to the amount that, but for this subsection, would be determined under subsection (6) in respect of the individual; 
  (c) subject to paragraph (d), for the purpose of applying this section after the particular time, the spouse or common-law partner is deemed to be the person designated under paragraph (b) of the definition 
  *eligible amount* in subsection (1) in respect of the particular amount; and  
  (d) where the spouse or common-law partner received an eligible amount before the particular time in the spouse’s or common-law partner’s participation period that included the particular time and the particular individual designated under paragraph (b) of the definition 
  *eligible amount* in subsection (1) in respect of that eligible amount was not the spouse or common-law partner, for the purpose of applying this section after the particular time the particular individual is deemed to be the person designated under that paragraph in respect of the particular amount.  
  
  ## Registered Education Savings Plans 
  
  ### Definitions
  
  146.1 (1) In this section,  
  *accumulated income payment* under an education savings plan means any amount paid out of the plan, other than a payment described in any of paragraphs (a) and (c) to (e) of the definition 
  *trust*, to the extent that the amount so paid exceeds the fair market value of any consideration given to the plan for the payment of the amount; (paiement de revenu accumulé)   
  *beneficiary*, in respect of an education savings plan, means a person, designated by a subscriber, to whom or on whose behalf an educational assistance payment under the plan is agreed to be paid if the person qualifies under the plan; (bénéficiaire)   
  *contribution* to an education savings plan does not include an amount paid into the plan under or because of  
  (a) the Canada Education Savings Act or a designated provincial program, or  
  (b) any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by a public primary caregiver in its capacity as subscriber under the plan); ( cotisation)   
  *designated provincial program* means  
  (a) a program administered pursuant to an agreement entered into under section 12 of the Canada Education Savings Act, or  
  (b) a program established under the laws of a province to encourage the financing of children’s post-secondary education through savings in registered education savings plans; ( programme provincial désigné)   
  *educational assistance payment* means any amount, other than a refund of payments, paid out of an education savings plan to or for an individual to assist the individual to further the individual’s education at a post-secondary school level; (paiement d’aide aux études)   
  *education savings plan* means an arrangement entered into between  
  (a) any of the following, namely, 
  (i) an individual (other than a trust), 
  (ii) an individual (other than a trust) and the spouse or common-law partner of the individual, 
  (iii) a public primary caregiver of a beneficiary, and 
  (iv) an individual (other than a trust), who is a legal parent of a beneficiary, and the individual’s former spouse or common-law partner, who is also the legal parent of a beneficiary, and 
  (b) a person (in this definition referred to as the “promoter”) under which the promoter agrees to pay or to cause to be paid educational assistance payments to or for one or more beneficiaries; ( régime d’épargne-études)   
  *post-secondary educational institution* means  
  (a) an educational institution in Canada that is described in paragraph (a) of the definition 
  *designated educational institution* in subsection 118.6(1), or  
  (b) an educational institution outside Canada that provides courses at a post-secondary school level and that is 
  (i) a university, college or other educational institution at which a beneficiary was enrolled in a course of not less than 13 consecutive weeks, or 
  (ii) a university at which a beneficiary was enrolled on a full-time basis in a course of not less than three consecutive weeks; ( établissement d’enseignement postsecondaire)   
  *post-secondary school level* includes a program of courses, at an institution described in subparagraph (a)(ii) of the definition 
  *designated educational institution* in subsection 118.6(1), of a technical or vocational nature designed to furnish a person with skills for, or improve a person’s skills in, an occupation; (niveau postsecondaire)   
  *pre-1972 income* [Repealed, 1998, c. 19, s. 38(1)]   
  *promoter*, of an arrangement, means the person described as the promoter in the definition education savings plan ; (promoteur)   
  *public primary caregiver*, of a beneficiary under an education savings plan in respect of whom a special allowance is payable under the Children’s Special Allowances Act, means the department, agency or institution that maintains the beneficiary or the public trustee or public curator of the province in which the beneficiary resides; (responsable public)   
  *qualified investment* for a trust governed by a registered education savings plan means  
  (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition 
  *qualified investment* in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered education savings plan” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,  
  (b)  [Repealed, 2007, c. 29, s. 18]  
  (c) a contract for an annuity issued by a licensed annuities provider where 
  (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and 
  (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract, 
  (d) an investment that was acquired by the trust before October 28, 1998, and 
  (e) a prescribed investment; ( placement admissible)   
  *qualifying educational program* means a program at a post-secondary school level of not less than three consecutive weeks duration that requires that each student taking the program spend not less than ten hours per week on courses or work in the program; (programme de formation admissible)   
  *refund of payments* at any time under a particular registered education savings plan means  
  (a) a refund at that time of a contribution that had been made at a previous time, if the contribution was made 
  (i) otherwise than by way of a transfer from another registered education savings plan, and 
  (ii) into the particular plan by or on behalf of a subscriber under the particular plan, or 
  (b) a refund at that time of an amount that was paid at a previous time into the particular plan by way of a transfer from another registered education savings plan, where the amount would have been a refund of payments under the other plan if it had been paid at the previous time directly to a subscriber under the other plan; ( remboursement de paiements)   
  *registered education savings plan* or 
  *RESP* means  
  (a) an education savings plan registered for the purposes of this Act, or 
  (b) a registered education savings plan as it is amended from time to time but, except for the purposes of subsections 146.1(7) and 146.1(7.1) and Part X.4, a plan ceases to be a registered education savings plan immediately after the day as of which its registration is revoked under subsection 146.1(13); ( régime enregistré d’épargne-études)   
  *RESP annual limit* [Repealed, 2007, c. 29, s. 18]   
  *specified educational program* means a program at a post-secondary school level of not less than three consecutive weeks duration that requires each student taking the program to spend not less than 12 hours per month on courses in the program; (programme de formation déterminé)   
  *specified plan* means an education savings plan  
  (a) that does not allow more than one beneficiary under the plan at any one time, 
  (b) under which the beneficiary is an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the beneficiary’s taxation year that ends in the 31st year following the year in which the plan was entered into, and 
  (c) that provides that, at all times after the end of the 35th year following the year in which the plan was entered into, no other individual may be designated as a beneficiary under the plan; ( régime déterminé)   
  *subscriber* under an education savings plan at any time means  
  (a) each individual or the public primary caregiver with whom the promoter of the plan enters into the plan, 
  (a.1) another individual or another public primary caregiver who has before that time, under a written agreement, acquired a public primary caregiver’s rights as a subscriber under the plan, 
  (b) an individual who has before that time acquired a subscriber’s rights under the plan pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the individual and a subscriber under the plan in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership, or 
  (c) after the death of an individual described in any of paragraphs (a) to (b), any other person (including the estate of the deceased individual) who acquires the individual’s rights as a subscriber under the plan or who makes contributions into the plan in respect of a beneficiary but does not include an individual or a public primary caregiver whose rights as a subscriber under the plan had, before that time, been acquired by an individual or public primary caregiver in the circumstances described in paragraph (a.1) or (b); ( souscripteur)   
  *tax-paid income* [Repealed, 1998, c. 19, s. 38(1)]   
  *trust*, except in this definition and the definition 
  *education savings plan*, means any person who irrevocably holds property under an education savings plan for any of, or any combination of, the following purposes:  
  (a) the payment of educational assistance payments, 
  (b) the payment after 1997 of accumulated income payments, 
  (c) the refund of payments, 
  (c.1) the repayment of amounts (and the payment of amounts related to that repayment) under the Canada Education Savings Act or under a designated provincial program,  
  (d) the payment to, or to a trust in favour of, designated educational institutions in Canada referred to in subparagraph (a)(i) of the definition of that expression in subsection 118.6(1), or 
  (e) the payment to a trust that irrevocably holds property pursuant to a registered education savings plan for any of the purposes set out in paragraphs (a) to (d). ( fiducie)  
  
  ### Election
  
  (1.1) A subscriber under an RESP that allows accumulated income payments and a holder of an RDSP may jointly elect in prescribed form to have subsection (1.2) apply in respect of a beneficiary under the RESP if, at the time the election is made, the beneficiary is also the beneficiary under the RDSP and 
  (a) the beneficiary has a severe and prolonged mental impairment that prevents, or can reasonably be expected to prevent, the beneficiary from enrolling in a qualifying educational program at a post-secondary educational institution; or 
  (b) the RESP meets the conditions described in clause (2)(d.1)(iii)(A) or (B) to make an accumulated income payment. 
  
  ### Effect of election
  
  (1.2) If an election is made under subsection (1.1) and is filed by the promoter of the RESP with the Minister without delay, then notwithstanding paragraph (2)(d.1) and any terms of the RESP required by that paragraph, an accumulated income payment under the RESP may be made to the RDSP. 
  
  ### Conditions for registration
  
  (2) The Minister shall not accept for registration for the purposes of this Act any education savings plan of a promoter unless, in the Minister’s opinion, the following conditions are complied with: 
  (a) the plan provides that the property of any trust governed by the plan (after the payment of trustee and administration charges) is irrevocably held for any of the purposes described in the definition 
  *trust* in subsection 146.1(1) by a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee;  
  (b) at the time of the application by the promoter for registration of the plan, there are not fewer than 150 plans entered into with the promoter each of which complied, at the time it was entered into, with all the other conditions set out in this subsection, as it read at that time; 
  (b.1) application for registration of the plan is made by the promoter in prescribed form containing prescribed information; 
  (c) the promoter and all trusts governed by the plan are resident in Canada; 
  (d) the plan does not allow for any payment before 1998 to a subscriber, other than a refund of payments, unless the subscriber is also the beneficiary under the plan; 
  (d.1) subject to subsection (2.2), if the plan allows accumulated income payments, the plan provides that an accumulated income payment is permitted to be made only if 
  (i) the payment is made to, or on behalf of, a subscriber under the plan who is resident in Canada when the payment is made, 
  (ii) the payment is not made jointly to, or on behalf of, more than one subscriber, and 
  (iii) any of 
  (A) the payment is made after the 9th year that follows the year in which the plan was entered into and each individ­ual (other than a deceased individual) who is or was a beneficiary under the plan has attained 21 years of age before the payment is made and is not, when the payment is made, eligible under the plan to receive an educational assistance payment, 
  (B) the payment is made in the year in which the plan is required to be terminated in accordance with paragraph (i), or 
  (C) each individual who was a beneficiary under the plan is deceased when the payment is made; 
  (e) the plan is substantially similar to the type of plan described in or annexed to a prospectus filed by the promoter with a securities commission in Canada or a body performing a similar function in a province; 
  (f) in the event that a trust governed by the plan is terminated, the property held by the trust is required to be used for any of the purposes described in the definition 
  *trust* in subsection 146.1(1);  
  (g) the plan does not allow for the payment of educational assistance payments before 1997 to an individual unless the individual is, at the time the payment is made, a student in full-time attendance at a post-secondary educational institution and enrolled in a qualifying educational program at the institution; 
  (g.1) the plan does not allow for the payment of an educational assistance payment to or for an individual at any time after 1996 unless 
  (i) either 
  (A) the individual is, at that time, enrolled as a student in a qualifying educational program at a post-secondary educational institution, or 
  (B) the individual has, before that time, attained the age of 16 years and is, at that time, enrolled as a student in a specified educational program at a post-secondary educational institution, and 
  (ii) either 
  (A) the individual satisfies, at that time, the condition set out in clause (i)(A), and 
  (I) has satisfied that condition throughout at least 13 consecutive weeks in the 12-month period that ends at that time, or 
  (II) the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 12-month period that ends at that time does not exceed $8,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual, or  
  (B) the individual satisfies, at that time, the condition set out in clause (i)(B) and the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 13-week period that ends at that time does not exceed $4,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual;  
  (g.2) the plan does not allow for any contribution into the plan, other than a contribution made by or on behalf of a subscriber under the plan in respect of a beneficiary under the plan or a contribution made by way of transfer from another registered education savings plan; 
  (g.3) the plan provides that an individual is permitted to be designated as a beneficiary under the plan, and that a contribution to the plan in respect of an individual who is a beneficiary under the plan is permitted to be made, only if 
  (i) in the case of a designation, the individual’s Social Insurance Number is provided to the promoter before the designation is made and either 
  (A) the individual is resident in Canada when the designation is made, or 
  (B) the designation is made in conjunction with a transfer of property into the plan from another registered education savings plan under which the individual was a beneficiary immediately before the transfer, and 
  (ii) in the case of a contribution, either 
  (A) the individual’s Social Insurance Number is provided to the promoter before the contribution is made and the individual is resident in Canada when the contribution is made, or 
  (B) the contribution is made by way of transfer from another registered education savings plan under which the individual was a beneficiary immediately before the transfer; 
  (h) the plan provides that no contribution (other than a contribution made by way of a transfer from another registered education savings plan) may be made into the plan after 
  (i) in the case of a specified plan, the 35th year following the year in which the plan was entered into, and 
  (ii) in any other case, the 31st year following the year in which the plan was entered into; 
  (i) the plan provides that it must be terminated on or before the last day of 
  (i) in the case of a specified plan, the 40th year following the year in which the plan was entered into, and 
  (ii) in any other case, the 35th year following the year in which the plan was entered into; 
  (i.1) if the plan allows accumulated income payments, the plan provides that it must be terminated before March of the year following the year in which the first such payment is made out of the plan; 
  (i.2) the plan does not allow for the receipt of property by way of direct transfer from another registered education savings plan after the other plan has made any accumulated income payment; 
  (j) if the plan allows more than one beneficiary under the plan at any one time, the plan provides 
  (i) that each of the beneficiaries under the plan is required to be connected to each living subscriber under the plan, or to have been connected to a deceased original subscriber under the plan, by blood relationship or adoption, 
  (ii) that a contribution into the plan in respect of a beneficiary is permitted to be made only if 
  (A) the beneficiary had not attained 31 years of age before the time of the contribution, or 
  (B) the contribution is made by way of transfer from another registered education savings plan that allows more than one beneficiary at any one time, and 
  (iii) that an individual is permitted to become a beneficiary under the plan at any particular time only if 
  (A) the individual had not attained 21 years of age before the particular time, or 
  (B) the individual was, immediately before the particular time, a beneficiary under another registered education savings plan that allows more than one beneficiary at any one time; 
  (k)  [Repealed, 2007, c. 29, s. 18]  
  (l) the plan provides that the promoter shall, within 90 days after an individual becomes a beneficiary under the plan, notify the individ­ual (or, where the individual is under 19 years of age at that time and either ordinarily resides with a parent of the individual or is maintained by a public primary caregiver of the individual, that parent or public primary caregiver) in writing of the existence of the plan and the name and address of the subscriber in respect of the plan; 
  (m) the Minister has no reasonable basis to believe that the promoter will not take all reasonable measures to ensure that the plan will continue to comply with the conditions set out in paragraphs 146.1(2)(a), 146.1(2)(c) to 146.1(2)(d.1) and 146.1(2)(f) to 146.1(2)(l) for its registration for the purposes of this Act; and 
  (n) the Minister has no reasonable basis to believe that the plan will become revocable. 
  
  ### RESP is revocable
  
  (2.1) For the purposes of paragraphs (2)(n) and (12.1)(d), a registered education savings plan is revocable at any time after October 27, 1998 at which 
  (a) and (b)  [Repealed, 2017, c. 33, s. 57]  
  (c) a trust governed by the plan begins carrying on a business; or 
  (d) a trustee that holds property in connection with the plan borrows money for the purposes of the plan, except where 
  (i) the money is borrowed for a term not exceeding 90 days, 
  (ii) the money is not borrowed as part of a series of loans or other transactions and repayments, and 
  (iii) none of the property of the trust is used as security for the borrowed money. 
  
  ### Waiver of conditions for accumulated income payments
  
  (2.2) The Minister may, on written application of the promoter of a registered education savings plan, waive the application of the conditions in clause (2)(d.1)(iii)(A) in respect of the plan where a beneficiary under the plan suffers from a severe and prolonged mental impairment that prevents, or can reasonably be expected to prevent, the beneficiary from enrolling in a qualifying educational program at a post-secondary educational institution. 
  
  ### Extension for making educational assistance payments
  
  (2.21) Notwithstanding paragraph (2)(g.1), an education savings plan may allow for the payment of an educational assistance payment to or for an individual at any time in the six-month period immediately following the particular time at which the individual ceases to be enrolled as a student in a qualifying educational program or a specified educational program, as the case may be, if the payment would have complied with the requirements of paragraph (2)(g.1) had the payment been made immediately before the particular time. 
  
  ### Timing of payment
  
  (2.22) An educational assistance payment that is made at any time in accordance with subsection (2.21) but not in accordance with paragraph (2)(g.1) is deemed, for the purposes of applying that paragraph at and after that time, to have been made immediately before the particular time referred to in subsection (2.21). 
  
  ### Social Insurance Number not required
  
  (2.3) Notwithstanding paragraph (2)(g.3), an education savings plan may provide that an individual’s Social Insurance Number need not be provided in respect of 
  (a) a contribution to the plan, if the plan was entered into before 1999; and 
  (b) a designation of a non-resident individual as a beneficiary under the plan, if the individual was not assigned a Social Insurance Number before the designation is made. 
  
  ### Deemed registration
  
  (3) Where in any year an education savings plan cannot be accepted for registration solely because the condition set out in paragraph 146.1(2)(b) has not been complied with, if the plan is subsequently registered, it shall be deemed to have been registered on the first day of January of 
  (a) the year in which all of the conditions set out in subsection 146.1(2) (except in paragraph 146.1(2)(b)) were complied with, or 
  (b) the year preceding the year in which the plan was subsequently registered, whichever is the later. 
  
  ### Registration of plans without prospectus
  
  (4) Notwithstanding paragraph 146.1(2)(e), where a promoter has not filed a prospectus in respect of an education savings plan referred to in that paragraph, the Minister may register the plan if the promoter is not otherwise required by the laws of Canada or a province to file such a prospectus with a securities commission in Canada or a body performing a similar function in a province and the plan complies with the other conditions set out in subsection 146.1(2). 
  
  ### Obligation to file amendment
  
  (4.1) When a registered education savings plan is amended, the promoter shall file the text of the amendment with the Minister not later than 60 days after the day on which the plan is amended. 
  
  ### Trust not taxable
  
  (5) No tax is payable under this Part by a trust that is governed by a RESP on its taxable income for a taxation year, except that, if at any time in the taxation year, it holds one or more properties that are not qualified investments for the trust, tax is payable under this Part by the trust on the amount that would be its taxable income for the taxation year if it had no income or losses from sources other than those properties, and no capital gains or capital losses other than from dispositions of those properties, and for that purpose, 
  (a) income includes dividends described in section 83; 
  (b) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition; and 
  (c) the trust’s income shall be computed without reference to subsection 104(6). 
  
  ### Subscriber not taxable
  
  (6) No tax is payable by a subscriber on the income of a trust for a taxation year after 1971 throughout which the trust was governed by a registered education savings plan. 
  
  ### Transfers between plans
  
  (6.1) Where property irrevocably held by a trust governed by a registered education savings plan (in this subsection referred to as the “transferor plan”) is transferred to a trust governed by another registered education savings plan (in this subsection referred to as the “transferee plan”), 
  (a)  [Repealed, 1998, c. 19, s. 38(13)]  
  (b) for the purposes of this paragraph, the definition 
  *specified plan* in subsection (1) and paragraphs (2)(d.1), (h) and (i), the transferee plan is deemed to have been entered into on the day that is the earlier of  
  (i) the day on which the transferee plan was entered into, and 
  (ii) the day on which the transferor plan was entered into; and 
  (c) notwithstanding subsections 146.1(7) and 146.1(7.1), no amount shall be included in computing the income of any person because of the transfer. 
  
  ### Educational assistance payments
  
  (7) There shall be included in computing an individual’s income for a taxation year the total of all educational assistance payments paid out of registered education savings plans to or for the individual in the year that exceeds the total of all excluded amounts in respect of those plans and the individual for the year. 
  
  ### Other income inclusions
  
  (7.1) There shall be included in computing a taxpayer’s income for a taxation year 
  (a) each accumulated income payment (other than an accumulated income payment made under subsection (1.2)) received in the year by the taxpayer under a registered education savings plan that exceeds the total of all excluded amounts in respect of those plans and the individual for the year; and 
  (b) each amount received in the year by the taxpayer in full or partial satisfaction of a subscriber’s interest under a registered education savings plan (other than any excluded amount in respect of the plan). 
  
  ### Excluded amount
  
  (7.2) An excluded amount in respect of a registered education savings plan is, 
  (a) for the purposes of subsection (7) and paragraph (7.1)(a), an amount in respect of which a subscriber pays a tax under section 207.05 in respect of the plan, or another plan for which the plan was substituted by the subscriber, that 
  (i) has not been waived, cancelled or refunded, and 
  (ii) has not reduced any other amount that would otherwise be included under subsections (7) or (7.1) in computing an individual’s income for the year or a preceding year; and 
  (b) for the purposes of paragraph (7.1)(b), 
  (i) any amount received under the plan, 
  (ii) any amount received in satisfaction of a right to a refund of payments under the plan, or 
  (iii) any amount received by a taxpayer under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the taxpayer and the taxpayer’s spouse or common-law partner or former spouse or common-law partner in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership. 
  (8) to (10)  [Repealed, 1998, c. 19, s. 38(15)]  
  (11)  [Repealed, 2014, c. 39, s. 51]  
  
  ### Deemed date of registration
  
  (12) Subject to subsection 146.1(3), an education savings plan that is registered 
  (a) before 1976 shall be deemed to have been registered since the later of 
  (i) January 1, 1972, and 
  (ii) the first day of January of the year in which the plan was created; and 
  (b) after 1975 shall be deemed to have been registered on the first day of January in the year of registration. 
  
  ### Notice of intent to revoke registration
  
  (12.1) When a particular day is 
  (a) a day on which a registered education savings plan ceases to comply with the conditions of subsection 146.1(2) for the plan’s registration, 
  (b) a day on which a registered education savings plan ceases to comply with any provision of the plan, 
  (c) the last day of a month in respect of which tax is payable under Part X.4 by an individual because of contributions made, or deemed for the purpose of Part X.4 to have been made, by or on behalf of the individual into a registered education savings plan, 
  (d) a day on which a registered education savings plan is revocable, or 
  (e) a day on which a person fails to comply with a condition or an obligation, imposed under the Canada Education Savings Act or under a program administered pursuant to an agreement entered into under section 12 of that Act, that applies with respect to a registered education savings plan,  the Minister may send written notice (referred to in this subsection and subsection 146.1(12.2) as a “notice of intent”) to the promoter of the plan that the Minister proposes to revoke the registration of the plan as of the day specified in the notice of intent, which day shall not be earlier than the particular day. 
  
  ### Notice of revocation
  
  (12.2) When the Minister sends a notice of intent to revoke the registration of a registered education savings plan to the promoter of the plan, the Minister may, after 30 days after the receipt by the promoter of the notice, send written notice (referred to in this subsection and subsection 146.1(13) as a “notice of revocation”) to the promoter that the registration of the plan is revoked as of the day specified in the notice of revocation, which day shall not be earlier than the day specified in the notice of intent. 
  
  ### Revocation of registration
  
  (13) When the Minister sends a notice of revocation of the registration of a registered education savings plan under subsection 146.1(12.2) to the promoter of the plan, the registration of the plan is revoked as of the day specified in the notice of revocation, unless the Federal Court of Appeal or a judge thereof, on application made at any time before the determination of an appeal under subsection 172(3), orders otherwise. 
  
  ### RESP information
  
  (13.1) Every trustee under a registered education savings plan shall, in prescribed form and manner, file with the Minister information returns in respect of the plan. 
  
  ### Former Act
  
  (14) A reference 
  (a) in this section, in paragraph 60(x) or in subparagraph 241(4)(d)(vii.1) to the Canada Education Savings Act, to an amount paid, to the payment of an amount or to the repayment of an amount, or to a condition or an obligation imposed, under that Act includes a reference to Part III.1 of the Department of Human Resources Development Act, or to an amount paid, to the payment of an amount or to the repayment of an amount, or to a condition or an obligation imposed, as the case may be, under that Part as it read at the time the reference is relevant; and  
  (b) in clause (2)(g.1)(ii)(B) to an amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to an individual includes a reference to an amount that the Minister of Human Resources Development or the Minister of State to be styled Minister of Human Resources and Skills Development has approved in writing, before the day on which a Minister is designated for the purposes of that Act, with respect to the individual.  
  
  ### Regulations
  
  (15) The Governor in Council may make regulations requiring promoters of education savings plans to file information returns in respect of the plans. 
  
  ## Tax-free Savings Accounts 
  
  ### Definitions
  
  146.2 (1) The following definitions apply in this section and in Part XI.01.  
  *distribution* under an arrangement of which an individual is the holder means a payment out of or under the arrangement in satisfaction of all or part of the holder’s interest in the arrangement. (distribution)   
  *holder* of an arrangement means  
  (a) until the death of the individual who entered into the arrangement with the issuer, the individual; 
  (b) at and after the death of the individual, the individual’s survivor, if the survivor acquires 
  (i) all of the individual’s rights as the holder of the arrangement, and 
  (ii) to the extent it is not included in the rights described in subparagraph (i), the unconditional right to revoke any beneficiary designation made, or similar direction imposed, by the individual under the arrangement or relating to property held in connection with the arrangement; and 
  (c) at and after the death of a holder described in paragraph (b) or in this paragraph, the holder’s survivor, if the survivor acquires 
  (i) all of the holder’s rights as the holder of the arrangement, and 
  (ii) to the extent it is not included in the rights described in subparagraph (i), the unconditional right to revoke any beneficiary designation made, or similar direction imposed, by the holder under the arrangement or relating to property held in connection with the arrangement. ( titulaire)   
  *issuer* of an arrangement means the person described as the issuer in the definition 
  *qualifying arrangement*. (émetteur)   
  *qualifying arrangement*, at a particular time, means an arrangement  
  (a) that is entered into after 2008 between a person (in this definition referred to as the “issuer”) and an individual (other than a trust) who is at least 18 years of age; 
  (b) that is 
  (i) an arrangement in trust with an issuer that is a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (ii) an annuity contract with an issuer that is a licensed annuities provider, or 
  (iii) a deposit with an issuer that is 
  (A) a person who is, or is eligible to become, a member of the Canadian Payments Association, or 
  (B) a credit union that is a shareholder or member of a body corporate referred to as a “central” for the purposes of the Canadian Payments Act ;  
  (c) that provides for contributions to be made under the arrangement to the issuer in consideration of, or to be used, invested or otherwise applied for the purpose of, the issuer making distributions under the arrangement to the holder; 
  (d) under which the issuer and the individual agree, at the time the arrangement is entered into, that the issuer will file with the Minister an election to register the arrangement as a TFSA; and 
  (e) that, at all times throughout the period that begins at the time the arrangement is entered into and that ends at the particular time, complies with the conditions in subsection (2). ( arrangement admissible)   
  *survivor* of an individual means another individual who is, immediately before the individual’s death, a spouse or common-law partner of the individual. (survivant)  
  
  ### Qualifying arrangement conditions
  
  (2) The conditions referred to in paragraph (e) of the definition 
  *qualifying arrangement* in subsection (1) are as follows:  
  (a) the arrangement requires that it be maintained for the exclusive benefit of the holder (determined without regard to any right of a person to receive a payment out of or under the arrangement only on or after the death of the holder); 
  (b) the arrangement prohibits, while there is a holder of the arrangement, anyone that is neither the holder nor the issuer of the arrangement from having rights under the arrangement relating to the amount and timing of distributions and the investing of funds; 
  (c) the arrangement prohibits anyone other than the holder from making contributions under the arrangement; 
  (d) the arrangement permits distributions to be made to reduce the amount of tax otherwise payable by the holder under section 207.02 or 207.03; 
  (e) the arrangement provides that, at the direction of the holder, the issuer shall transfer all or any part of the property held in connection with the arrangement (or an amount equal to its value) to another TFSA of the holder; 
  (f) if the arrangement is an arrangement in trust, it prohibits the trust from borrowing money or other property for the purposes of the arrangement; and 
  (g) the arrangement complies with prescribed conditions. 
  
  ### Paragraphs (2)(a), (b) and (e) not applicable
  
  (3) The conditions in paragraphs (2)(a), (b) and (e) do not apply to the extent that they are inconsistent with subsection (4). 
  
  ### Using TFSA interest as security for a loan
  
  (4) A holder of a TFSA may use the holder’s interest or, for civil law, right in the TFSA as security for a loan or other indebtedness if 
  (a) the terms and conditions of the indebtedness are terms and conditions that persons dealing at arm’s length with each other would have entered into; and 
  (b) it can reasonably be concluded that none of the main purposes for that use is to enable a person (other than the holder) or a partnership to benefit from the exemption from tax under this Part of any amount in respect of the TFSA. 
  
  ### Right of set-off
  
  (4.1) A qualifying arrangement that is a deposit may provide that the issuer has the right to set off any indebtedness owed by the holder to the issuer, or a person related to the issuer, against the holder’s interest in the arrangement if 
  (a) the terms and conditions of the indebtedness and the right of set-off are terms and conditions that persons dealing at arm’s length with each other would have entered into; and 
  (b) it is reasonable to conclude that none of the main purposes for the right of set-off is to enable a person (other than the holder) or a partnership to benefit from the exemption from tax under this Part of any amount in respect of the TFSA. 
  
  ### TFSA
  
  (5) If the issuer of an arrangement that is, at the time it is entered into, a qualifying arrangement files with the Minister, before March of the calendar year following the calendar year in which the arrangement was entered into (or such later date as is acceptable to the Minister), an election in prescribed form and manner to register the arrangement as a TFSA under the Social Insurance Number of the individual with whom the arrangement was entered into, the arrangement becomes a TFSA at the time the arrangement was entered into and ceases to be a TFSA at the earliest of the following times: 
  (a) the time at which the last holder of the arrangement dies; 
  (b) the time at which the arrangement ceases to be a qualifying arrangement; or 
  (c) the earliest time at which the arrangement is not administered in accordance with the conditions in subsection (2). 
  
  ### Trust not taxable
  
  (6) No tax is payable under this Part by a trust that is governed by a TFSA on its taxable income for a taxation year, except that, if at any time in the taxation year, it carries on one or more businesses or holds one or more properties that are non-qualified investments (as defined in subsection 207.01(1)) for the trust, tax is payable under this Part by the trust on the amount that would be its taxable income for the taxation year if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or capital losses other than from dispositions of those properties, and for that purpose, 
  (a) “income” includes dividends described in section 83; 
  (b) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition; and 
  (c) the trust’s income shall be computed without reference to subsection 104(6). 
  
  ### Carrying on a business
  
  (6.1) If tax is payable under this Part for a taxation year because of subsection (6) by a trust that is governed by a TFSA that carries on one or more businesses at any time in the taxation year, 
  (a) the holder of the TFSA is jointly and severally, or solidarily, liable with the trust to pay each amount payable under this Act by the trust that is attributable to that business or those businesses; and 
  (b) the issuer’s liability at any time for amounts payable under this Act in respect of that business or those businesses shall not exceed the total of 
  (i) the amount of property of the trust that the issuer is in possession or control of at that time in its capacity as legal representative of the trust, and 
  (ii) the total amount of all distributions of property from the trust on or after the date that the notice of assessment was sent in respect of the taxation year and before that time. 
  
  ### Amount credited to a deposit
  
  (7) An amount that is credited or added to a deposit that is a TFSA as interest or other income in respect of the TFSA is deemed not to be received by the holder of the TFSA solely because of that crediting or adding. 
  
  ### Trust ceasing to be a TFSA
  
  (8) If an arrangement that governs a trust ceases, at a particular time, to be a TFSA, 
  (a) the trust is deemed 
  (i) to have disposed, immediately before the particular time, of each property held by the trust for proceeds equal to the property’s fair market value immediately before the particular time, and 
  (ii) to have acquired, at the particular time, each such property at a cost equal to that fair market value; 
  (b) the trust’s last taxation year that began before the particular time is deemed to have ended immediately before the particular time; and 
  (c) a taxation year of the trust is deemed to begin at the particular time. 
  
  ### Trust ceasing to be a TFSA on death of holder
  
  (9) If an arrangement that governs a trust ceases to be a TFSA because of the death of the holder of the TFSA, 
  (a) the arrangement is deemed, for the purposes of subsections (6) and (8), any regulations made under subsection (13), the definition 
  *trust* in subsection 108(1), paragraph 149(1)(u.2) and the definitions 
  *qualified investment* and 
  *non-qualified investment* in subsection 207.01(1), to continue to be a TFSA until, and to cease to be a TFSA immediately after, the exemption-end time, being in this subsection the earlier of  
  (i) the time at which the trust ceases to exist, and 
  (ii) the end of the first calendar year that begins after the holder dies; 
  (b) there shall be included in computing a taxpayer’s income for a taxation year the total of all amounts each of which is an amount determined by the formula is the amount of a payment made out of or under the trust, in satisfaction of all or part of the taxpayer’s beneficial interest in the trust, in the taxation year, after the holder’s death and at or before the exemption-end time, and is an amount designated by the trust not exceeding the lesser of 
  (i) the amount of the payment, and 
  (ii) the amount by which the fair market value of all of the property held by the trust immediately before the holder’s death exceeds the total of all amounts each of which is the value of B in respect of any other payment made out of or under the trust; and 
  (c) there shall be included in computing the trust’s income for its first taxation year, if any, that begins after the exemption-end time the amount determined by the formula is the fair market value of all of the property held by the trust at the exemption-end time, and is the amount by which the fair market value of all of the property held by the trust immediately before the holder’s death exceeds the total of all amounts each of which is the value of B in paragraph (b) in respect of a payment made out of or under the trust. 
  
  ### Annuity contract ceasing to be a TFSA
  
  (10) If an annuity contract ceases, at a particular time, to be a TFSA, 
  (a) the holder of the TFSA is deemed to have disposed of the contract immediately before the particular time for proceeds equal to its fair market value immediately before the particular time; 
  (b) the contract is deemed to be a separate annuity contract issued and effected at the particular time otherwise than pursuant to or as a TFSA; and 
  (c) each person who has an interest or, for civil law, a right in the separate annuity contract at the particular time is deemed to acquire the interest at the particular time at a cost equal to its fair market value at the particular time. 
  
  ### Deposit ceasing to be a TFSA
  
  (11) If a deposit ceases, at a particular time, to be a TFSA, 
  (a) the holder of the TFSA is deemed to have disposed of the deposit immediately before the particular time for proceeds equal to its fair market value immediately before the particular time; and 
  (b) each person who has an interest or, for civil law, a right in the deposit at the particular time is deemed to acquire the interest at the particular time at a cost equal to its fair market value at the particular time. 
  
  ### Arrangement is TFSA only
  
  (12) An arrangement that is a qualifying arrangement at the time it is entered into is deemed not to be a retirement savings plan, an education savings plan, a retirement income fund or a disability savings plan. 
  
  ### Regulations
  
  (13) The Governor in Council may make regulations requiring issuers of TFSAs to file information returns in respect of TFSAs. 
  
  ## Registered Retirement Income Funds 
  
  ### Definitions
  
  146.3 (1) In this section,  
  *annuitant* under a retirement income fund at any time means  
  (a) the first individual to whom the carrier has undertaken to make payments described in the definition 
  *retirement income fund* out of or under the fund, where the first individual is alive at that time,  
  (b) after the death of the first individual, a spouse or common-law partner (in this definition referred to as the “survivor”) of the first individual to whom the carrier has undertaken to make payments described in the definition 
  *retirement income fund* out of or under the fund after the death of the first individual, if the survivor is alive at that time and the undertaking was made  
  (i) pursuant to an election that is described in that definition and that was made by the first individual, or 
  (ii) with the consent of the legal representative of the first individual, and 
  (c) after the death of the survivor, another spouse or common-law partner of the survivor to whom the carrier has undertaken, with the consent of the legal representative of the survivor, to make payments described in the definition 
  *retirement income fund* out of or under the fund after the death of the survivor, where that other spouse or common-law partner is alive at that time; (rentier)   
  *carrier* of a retirement income fund means  
  (a) a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, 
  (b) a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (c) a corporation approved by the Governor in Council for the purposes of section 146 that is licensed or otherwise authorized under the laws of Canada or a province to issue investment contracts, or 
  (d) a person referred to as a depositary in section 146, that has agreed to make payments under a retirement incomefund to the individual who is the annuitant under the fund; ( émetteur)   
  *designated benefit* of an individual in respect of a registered retirement income fund means the total of  
  (a) such amounts paid out of or under the fund after the death of the last annuitant thereunder to the legal representative of that annuitant 
  (i) as would, had they been paid under the fund to the individual, have been refunds of premiums (in this paragraph having the meaning assigned by subsection 146(1)) if the fund were a registered retirement savings plan that had not matured before the death, and 
  (ii) as are designated jointly by the legal representative and the individual in prescribed form filed with the Minister, and 
  (b) amounts paid out of or under the fund after the death of the last annuitant thereunder to the individual that would be refunds of premiums had the fund been a registered retirement savings plan that had not matured before the death; ( prestation désignée)   
  *minimum amount* under a retirement income fund for a year means, for the year in which the fund was entered into, a nil amount, and, for any other year, the amount determined by the formula  is the total fair market value of all properties held in connection with the fund at the beginning of the year (other than annuity contracts held by a trust governed by the fund that, at the beginning of the year, are not described in paragraph (b.1) of the definition 
  *qualified investment*);  is 
  (a) where the first annuitant under the fund elected in respect of the fund under paragraph (b) of the definition 
  *minimum amount* in this subsection, as it read before 1992, or under subparagraph 146.3(1)(f)(i) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, to use the age of another individual, the prescribed factor for the year in respect of the other individual,  
  (b) where paragraph (a) does not apply and the first annuitant under the fund so elects before any payment has been made under the fund by the carrier, the prescribed factor for the year in respect of an individual who was the spouse or common-law partner of the first annuitant at the time of the election, and 
  (c) in any other case, the prescribed factor for the year in respect of the first annuitant under the fund, and is, where the fund governs a trust, the total of all amounts each of which is 
  (a) a periodic payment under an annuity contract held by the trust at the beginning of the year (other than an annuity contract described at the beginning of the year in paragraph (b.1) of the definition 
  *qualified investment*) that is paid to the trust in the year, or  
  (b) if the periodic payment under such an annuity contract is not made to the trust because the trust disposed of the right to that payment in the year, a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the year and no rights under the contract were disposed of in the year; ( minimum)   
  *property held* in connection with a retirement income fund means property held by the carrier of the fund, whether held by the carrier as trustee or beneficial owner thereof, the value of which, or the income or loss from which, is relevant in determining the amount for a year payable to the annuitant under the fund; (biens détenus)   
  *qualified investment* for a trust governed by a registered retirement income fund means  
  (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition 
  *qualified investment* in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered retirement income fund” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,  
  (b)  [Repealed, 2007, c. 29, s. 19]  
  (b.1) a contract for an annuity issued by a licensed annuities provider where 
  (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and 
  (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract, 
  (b.2) a contract for an annuity issued by a licensed annuities provider where 
  (i) annual or more frequent periodic payments are or may be made under the contract to the holder of the contract, 
  (ii) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, 
  (iii) neither the time nor the amount of any payment under the contract may vary because of the length of any life, other than 
  (A) if the annuitant under the fund (in this paragraph referred to as the “RRIF annuitant”) has made the election referred to in the definition 
  *retirement income fund* in respect of the fund and a spouse or common-law partner, the life of the RRIF annuitant or the life of the spouse or common-law partner, and  
  (B) in any other case, the life of the RRIF annuitant, 
  (iv) the day on which the periodic payments began or are to begin (in this paragraph referred to as the “start date”) is not later than the end of the year following the year in which the contract was acquired by the trust, 
  (v) either 
  (A) the periodic payments are payable for the life of the RRIF annuitant or the joint lives of the RRIF annuitant and the RRIF annuitant’s spouse or common-law partner and either there is no guaranteed period under the contract or there is a guaranteed period that begins at the start date and does not exceed a term equal to 90 years minus the lesser of 
  (I) the age in whole years at the start date of the RRIF annuitant (determined on the assumption that the RRIF annuitant is alive at the start date), and 
  (II) the age in whole years at the start date of a spouse or common-law partner of the RRIF annuitant (determined on the assumption that a spouse or common-law partner of the RRIF annuitant at the time the contract was acquired is a spouse or common-law partner of the RRIF annuitant at the start date), or 
  (B) the periodic payments are payable for a term equal to 
  (I) 90 years minus the age described in subclause (I), or 
  (II) 90 years minus the age described in subclause (II), and 
  (vi) the periodic payments 
  (A) are equal, or 
  (B) are not equal solely because of one or more adjustments that would, if the contract were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to 146(3)(b)(v) or that arise because of a uniform reduction in the entitlement to the periodic payments as a consequence of a partial surrender of rights to the periodic payments, and 
  (c) such other investments as may be prescribed by regulations of the Governor in Council made on the recommendation of the Minister of Finance; ( placement admissible)   
  *registered retirement income fund* means a retirement income fund accepted by the Minister for registration for the purposes of this Act and registered under the Social Insurance Number of the first annuitant under the fund; (fonds enregistré de revenu de retraite)   
  *retirement income fund* means an arrangement between a carrier and an annuitant under which, in consideration for the transfer to the carrier of property, the carrier undertakes to pay amounts to the annuitant (and, where the annuitant so elects, to the annuitant’s spouse or common-law partner after the annuitant’s death), the total of which is, in each year in which the minimum amount under the arrangement for the year is greater than nil, not less than the minimum amount under the arrangement for that year, but the amount of any such payment does not exceed the value of the property held in connection with the arrangement immediately before the time of the payment. (fonds de revenu de retraite)  
  
  ### Adjusted minimum amount for 2008
  
  (1.1) The minimum amount under a retirement income fund for 2008 is 75 per cent of the amount that would, in the absence of this subsection, be the minimum amount under the fund for the year. 
  
  ### Exceptions
  
  (1.2) Subsection (1.1) does not apply to a retirement income fund 
  (a) for the purposes of subsections (5.1) and 153(1) and the definition 
  *periodic pension payment* in section 5 of the Income Tax Conventions Interpretation Act ; nor  
  (b) if the individual who was the annuitant under the fund on January 1, 2008 attained 70 years of age in 2007. 
  
  ### Exceptions
  
  (1.3) For the purposes of subsections (5.1) and 153(1) and the definition 
  *periodic pension payment* in section 5 of the Income Tax Conventions Interpretation Act, the minimum amount under a retirement income fund for 2015 is the amount that would be the minimum amount under the fund for the year if it were determined using the prescribed factors under subsection 7308(3) or (4), as the case may be, of the Income Tax Regulations as they read on December 31, 2014.  
  
  ### Adjusted minimum amount for 2020
  
  (1.4) The minimum amount under a retirement income fund for 2020 is 75% of the amount that would, in the absence of this subsection, be the minimum amount under the fund for the year. 
  
  ### Exceptions
  
  (1.5) Subsection (1.4) does not apply to a retirement income fund for the purposes of subsections (5.1) and 153(1) and the definition periodic pension payment in section 5 of the Income Tax Conventions Interpretation Act.  
  
  ### Acceptance of fund for registration
  
  (2) The Minister shall not accept for registration for the purposes of this Act any retirement income fund of an individual unless, in the Minister’s opinion, the following conditions are complied with: 
  (a) the fund provides that the carrier shall make only those payments described in any of paragraphs (d) and (e), the definition 
  *retirement income fund* in subsection (1), and subsections (14) and (14.1);  
  (b) the fund provides that payments thereunder may not be assigned in whole or in part; 
  (c) if the carrier is a person referred to as a depositary in section 146, the fund provides that 
  (i) the carrier has no right of offset as regards the property held in connection with the fund in respect of any debt or obligation owing to the carrier, and 
  (ii) the property held in connection with the fund cannot be pledged, assigned or in any way alienated as security for a loan or for any purpose other than that of the making by the carrier to the annuitant those payments described in paragraph 146.3(2)(a); 
  (d) the fund provides that, except where the annuitant’s spouse or common-law partner becomes the annuitant under the fund, the carrier shall, as a consequence of the death of the annuitant, distribute the property held in connection with the fund at the time of the annuitant’s death or an amount equal to the value of such property at that time; 
  (e) the fund provides that, at the direction of the annuitant, the carrier shall transfer all or part of the property held in connection with the fund, or an amount equal to its value at the time of the direction (other than property required to be retained in accordance with the provision described in paragraph 146.3(2)(e.1) or 146.3(2)(e.2)), together with all information necessary for the continuance of the fund, to a person who has agreed to be a carrier of another registered retirement income fund of the annuitant; 
  (e.1) where the fund does not govern a trust or the fund governs a trust created before 1998 that does not hold an annuity contract as a qualified investment for the trust, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain an amount equal to the lesser of 
  (i) the fair market value of such portion of the property as would, if the fair market value thereof does not decline after the transfer, be sufficient to ensure that the minimum amount under the fund for the year in which the transfer is made may be paid to the annuitant in the year, and 
  (ii) the fair market value of all the property; 
  (e.2) where paragraph (e.1) does not apply, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain property in the fund sufficient to ensure that the total of 
  (i) all amounts each of which is the fair market value, immediately after the transfer, of a property held in connection with the fund that is 
  (A) property other than an annuity contract, or 
  (B) an annuity contract described, immediately after the transfer, in paragraph (b.1) of the definition 
  *qualified investment* in subsection 146.3(1), and  
  (ii) all amounts each of which is a reasonable estimate, as of the time of the transfer, of the amount of an annual or more frequent periodic payment under an annuity contract (other than an annuity contract described in clause 146.3(2)(e.2)(i)(B)) that the trust may receive after the transfer and in the year of the transfer is not less than the amount, if any, by which the minimum amount under the fund for that year exceeds the total of all amounts received out of or under the fund before the transfer that are included in computing the income of the annuitant under the fund for that year; 
  (f) the fund provides that the carrier shall not accept property as consideration thereunder other than property transferred from 
  (i) a registered retirement savings plan under which the individual is the annuitant, 
  (ii) another registered retirement income fund under which the individual is the annuitant, 
  (iii) the individual to the extent only that the amount of the consideration was an amount described in subparagraph 60(l)(v), 
  (iv) a registered retirement income fund or registered retirement savings plan of the individual’s spouse or common-law partner or former spouse or common-law partner under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the individual and the individual’s spouse or common-law partner or former spouse or common-law partner in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership, 
  (iv.1) a deferred profit sharing plan in accordance with subsection 147(19); 
  (v) a registered pension plan of which the individual is a member (within the meaning assigned by subsection 147.1(1)), 
  (vi) a registered pension plan in accordance with subsection 147.3(5) or (7), 
  (vii) a specified pension plan in circumstances to which subsection 146(21) applies, 
  (viii) a pooled registered pension plan in accordance with subsection 147.5(21), 
  (ix) an advanced life deferred annuity under which the individual is the annuitant, if the transfer is a refund described under paragraph (g) of the definition advanced life deferred annuity in subsection 146.5(1), or  
  (x) a FHSA in accordance with subsection 146.6(7); 
  (g)  [Repealed, 2011, c. 24, s. 49]  
  (h) the fund in all other respects complies with regulations of the Governor in Council made on the recommendation of the Minister of Finance. 
  
  ### No tax while trust governed by fund
  
  (3) Except as provided in subsection 146.3(9), no tax is payable under this Part by a trust on the taxable income of the trust for a taxation year if, throughout the period in the year during which the trust was in existence, the trust was governed by a registered retirement income fund of an individual, except that if the trust has 
  (a) borrowed money in the year or has borrowed money that it has not repaid before the commencement of the year, 
  (b) received a gift of property (other than a transfer from a registered retirement savings plan under which the individual is the annuitant (within the meaning of subsection 146(1)) or a transfer from a registered retirement income fund under which the individual is the annuitant) 
  (i) in the year, or 
  (ii) in a preceding year and has not divested itself of the property or any property substituted therefor before the commencement of the year, or 
  (c) carried on any business or businesses in the year, tax is payable under this Part by the trust, 
  (d) where paragraph 146.3(3)(a) or 146.3(3)(b) applies, on its taxable income for the year, and 
  (e) where neither paragraph 146.3(3)(a) nor (b) applies and where paragraph 146.3(3)(c) applies, on the amount, if any, by which 
  (i) the amount that its taxable income for the year would be if it had no incomes or losses from sources other than from the business or businesses, as the case may be, exceeds 
  (ii) such portion of the amount determined under subparagraph 146.3(3)(e)(i) in respect of the trust for the year as can reasonably be considered to be income from, or from the disposition of, qualified investments for the trust. 
  
  ### Exception
  
  (3.1) Notwithstanding subsection 146.3(3), if the last annuitant under a registered retirement income fund has died, tax is payable under this Part by the trust governed by the fund on its taxable income for each year after the year following the year in which the last annuitant under the fund died. 
  
  ### Disposition or acquisition of property by trust
  
  (4) Where at any time in a taxation year a trust governed by a registered retirement income fund 
  (a) disposes of property for a consideration less than the fair market value of the property at the time of the disposition, or for no consideration, or 
  (b) acquires property for a consideration greater than the fair market value of the property at the time of the acquisition, 2 times the difference between that fair market value and the consideration, if any, shall be included in computing the income for the taxation year of the taxpayer who is the annuitant under the fund at that time. 
  
  ### Benefits taxable
  
  (5) There shall be included in computing the income of a taxpayer for a taxation year all amounts received by the taxpayer in the year out of or under a registered retirement income fund other than the portion thereof that can reasonably be regarded as 
  (a) part of the amount included in computing the income of another taxpayer by virtue of subsections 146.3(6) and 146.3(6.2); 
  (b) an amount received in respect of the income of the trust under the fund for a taxation year for which the trust was not exempt from tax by virtue of subsection 146.3(3.1); 
  (c) an amount that relates to interest, or to another amount included in computing income otherwise than because of this section, and that would, if the fund were a registered retirement savings plan, be a tax-paid amount (within the meaning assigned by paragraph (b) of the definition 
  *tax-paid amount* in subsection 146(1)); or  
  (d) an amount in respect of which the annuitant pays a tax under Part XI.01, unless the tax is waived, cancelled or refunded. 
  
  ### Amount included in income
  
  (5.1) If at any time in a taxation year a particular amount in respect of a registered retirement income fund that is a spousal or common-law partner plan (within the meaning assigned by subsection 146(1)) in relation to a taxpayer is required to be included in the income of the taxpayer’s spouse or common-law partner and the taxpayer is not living separate and apart from the taxpayer’s spouse or common-law partner at that time by reason of the breakdown of their marriage or common-law partnership, there shall be included at that time in computing the taxpayer’s income for the year an amount equal to the least of 
  (a) the total of all amounts each of which is a premium (within the meaning assigned by subsection 146(1)) paid by the taxpayer in the year or in one of the two immediately preceding taxation years to a registered retirement savings plan under which the taxpayer’s spouse or common-law partner was the annuitant (within the meaning assigned by subsection 146(1)) at the time the premium was paid, 
  (b) the particular amount, and 
  (c) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount in respect of the fund that is required, in the year and at or before that time, to be included in the income of the taxpayer’s spouse or common-law partner exceeds 
  (ii) the minimum amount under the fund for the year. 
  
  ### Ordering
  
  (5.3) Where a taxpayer has paid more than one premium described in subsection 146.3(5.1), such a premium or part thereof paid by the taxpayer at any time shall be deemed to have been included in computing the taxpayer’s income by virtue of that subsection before premiums or parts thereof paid by the taxpayer after that time. 
  
  ### Spouse’s income
  
  (5.4) Where, in respect of an amount required at any time in a taxation year to be included in computing the income of a taxpayer’s spouse, all or part of a premium has, by reason of subsection 146.3(5.1), been included in computing the taxpayer’s income for the year, the following rules apply: 
  (a) the premium or part thereof, as the case may be, shall, for the purposes of subsections 146.3(5.1) and 146(8.3) after that time, be deemed not to have been a premium paid to a registered retirement savings plan under which the taxpayer’s spouse was the annuitant (within the meaning assigned by subsection 146(1)); and 
  (b) an amount equal to the premium or part thereof, as the case may be, may be deducted in computing the income of the spouse for the year. 
  
  ### Where s. (5.1) does not apply
  
  (5.5) Subsection 146.3(5.1) does not apply 
  (a) in respect of a taxpayer at any time during the year in which the taxpayer dies; 
  (b) in respect of a taxpayer where either the taxpayer or the annuitant is a non-resident at the particular time referred to in that subsection; 
  (c) to any payment that is received in full or partial commutation of a registered retirement savings plan or a registered retirement income fund and in respect of which a deduction was made under paragraph 60(l) if, where the deduction was in respect of the acquisition of an annuity, the terms of the annuity provide that it cannot be commuted, and it is not commuted, in whole or in part within 3 years after the acquisition; or 
  (d) in respect of an amount that is deemed by subsection 146.3(6) to have been received by an annuitant under a registered retirement income fund immediately before the annuitant’s death. 
  
  ### Where last annuitant dies
  
  (6) Where the last annuitant under a registered retirement income fund dies, that annuitant shall be deemed to have received, immediately before death, an amount out of or under a registered retirement income fund equal to the fair market value of the property of the fund at the time of the death. 
  
  ### Designated benefit deemed received
  
  (6.1) A designated benefit of an individual in respect of a registered retirement income fund that is received by the legal representative of the last annuitant under the fund shall be deemed 
  (a) to be received by the individual out of or under the fund at the time it is received by the legal representative; and 
  (b) except for the purpose of the definition 
  *designated benefit* in subsection 146.3(1), not to be received out of or under the fund by any other person.  
  
  ### Transfer of designated benefit
  
  (6.11) For the purpose of subparagraph 60(l)(v), the eligible amount of a particular individual for a taxation year in respect of a registered retirement income fund is nil unless the particular individual was 
  (a) a spouse or common-law partner of the last annuitant under the fund, or 
  (b) a child or grandchild of that annuitant who was dependent because of physical or mental infirmity on that annuitant, in which case the eligible amount shall be determined by the formula is the portion of the designated benefit of the particular individual in respect of the fund that is included because of subsection 146.3(5) in computing the particular individual’s income for the year, is the minimum amount under the fund for the year, is the lesser of 
  (a) the total amounts included because of subsection 146.3(5) in computing the income of an annuitant under the fund for the year in respect of amounts received by the annuitant out of or under the fund, and 
  (b) the minimum amount under the fund for the year, and is the total of all amounts each of which is the portion of a designated benefit of an individual in respect of the fund that is included because of subsection 146.3(5) in computing the individual’s income for the year. 
  
  ### Amount deductible
  
  (6.2) There may be deducted from the amount deemed by subsection 146.3(6) to be received by an annuitant out of or under a registered retirement income fund an amount not exceeding the amount determined by the formula is the total of 
  (a) all designated benefits of individuals in respect of the fund, 
  (b) all amounts that would, if the fund were a registered retirement savings plan, be tax-paid amounts (in this subsection having the meaning assigned by subsection 146(1)) in respect of the fund received by individuals who received, otherwise than because of subsection 146.3(6.1), designated benefits in respect of the fund, and 
  (c) all amounts each of which is an amount that would, if the fund were a registered retirement savings plan, be a tax-paid amount in respect of the fund received by the legal representative of the last annuitant under the fund, to the extent that the legal representative would have been entitled to designate that tax-paid amount under paragraph (a) of the definition 
  *designated benefit* in subsection 146.3(1) if tax-paid amounts were not excluded in determining refunds of premiums (as defined in subsection 146(1));  is the fair market value of the property of the fund at the particular time that is the later of 
  (a) the end of the first calendar year that begins after the death of the annuitant, and 
  (b) the time immediately after the last time that any designated benefit in respect of the fund is received by an individual; is the total of all amounts paid out of or under the fund after the death of the last annuitant thereunder and before the particular time; and is the lesser of 
  (a) the fair market value of the property of the fund at the time of the death of the last annuitant thereunder, and 
  (b) the sum of the values of B and C in respect of the fund. 
  
  ### Deduction for post-death reduction in value
  
  (6.3) If the last annuitant under a registered retirement income fund dies, there may be deducted in computing the annuitant’s income for the taxation year in which the annuitant dies an amount not exceeding the amount determined, after all amounts payable out of or under the fund have been paid, by the formula is the total of all amounts each of which is 
  (a) the amount deemed by subsection (6) to have been received by the annuitant out of or under the fund, 
  (b) an amount (other than an amount described in paragraph (c)) received, after the death of the annuitant, by a taxpayer out of or under the fund and included, because of subsection (5), in computing the taxpayer’s income, or 
  (c) an amount that would, if the fund were a registered retirement savings plan, be a tax-paid amount (within the meaning assigned by subsection 146(1)) in respect of the fund; and is the total of all amounts paid out of or under the fund after the death of the annuitant. 
  
  ### Subsection (6.3) not applicable
  
  (6.4) Except where the Minister has waived in writing the application of this subsection with respect to all or any portion of the amount determined in subsection (6.3) in respect of a registered retirement income fund, that subsection does not apply if 
  (a) at any time after the death of the annuitant, a trust governed by the fund held an investment that is not a qualified investment; or 
  (b) the last payment out of or under the fund was made after the end of the year following the year in which the annuitant died. 
  
  ### Property used as security for loan
  
  (7) If at any time in a taxation year a trust governed by a registered retirement income fund uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the taxpayer who is the annuitant under the fund at that time. 
  (8)  [Repealed, 2011, c. 24, s. 49]  
  
  ### Tax payable on income from non-qualified investment
  
  (9) If a trust that is governed by a registered retirement income fund holds, at any time in a taxation year, a property that is not a qualified investment, 
  (a) tax is payable under this Part by the trust on the amount that its taxable income for the year would be if it had no incomes or losses from sources other than the property that is not a qualified investment or no capital gains or capital losses other than from the disposition of that property, as the case may be; and 
  (b) for the purposes of paragraph 146.3(9)(a), 
  (i)  
  *income* includes dividends described in section 83, and  
  (ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”. 
  
  ### Recovery of property used as security
  
  (10) Where at any time in a taxation year a loan for which a trust governed by a registered retirement income fund has used or permitted to be used trust property as security ceases to be extant, and the fair market value of the property so used was included by virtue of subsection 146.3(7) in computing the income of a taxpayer who was the annuitant under the fund, there may be deducted in computing the income for a taxation year of the taxpayer who is at that time the annuitant, an amount equal to the amount, if any, remaining when 
  (a) the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using or permitting to be used the property as security for the loan and not as a result of a change in the fair market value of the property is deducted from 
  (b) the amount so included in computing the income of a taxpayer in consequence of the trust’s using or permitting to be used the property as security for the loan. 
  
  ### Change in fund after registration
  
  (11) Where, on any day after a retirement income fund has been accepted by the Minister for registration for the purposes of this Act, the fund is revised or amended or a new fund is substituted therefor, and the fund as revised or amended or the new fund substituted therefor, as the case may be, (in this subsection referred to as the “amended fund”) does not comply with the requirements of this section for its acceptance by the Minister for registration for the purposes of this Act, the following rules apply: 
  (a) the amended fund shall be deemed, for the purposes of this Act, not to be a registered retirement income fund; and 
  (b) the taxpayer who was the annuitant under the fund before it became an amended fund shall, in computing the taxpayer’s income for the taxation year that includes that day, include as income received out of the fund at that time an amount equal to the fair market value of all the property held in connection with the fund immediately before that time. 
  
  ### Idem
  
  (12) For the purposes of subsection 146.3(11), an arrangement under which a right or obligation under a retirement income fund is released or extinguished either wholly or in part and either in exchange or substitution for any right or obligation, or otherwise (other than an arrangement the sole object and legal effect of which is to revise or amend the fund) or under which payment of any amount by way of loan or otherwise is made on the security of a right under a retirement income fund, shall be deemed to be a new fund substituted for the retirement income fund. 
  (13)  [Repealed, 2011, c. 24, s. 49]  
  
  ### Transfer on breakdown of marriage or common-law partnership
  
  (14) An amount is transferred from a registered retirement income fund of an annuitant in accordance with this subsection if the amount 
  (a) is transferred on behalf of an individual who is a spouse or common-law partner or former spouse or common-law partner of the annuitant and who is entitled to the amount under a decree, an order or a judgment of a competent tribunal, or under a written agreement, that relates to a division of property between the annuitant and the individual in settlement of rights that arise out of, or on a breakdown of, their marriage or common-law partnership; and 
  (b) is transferred directly to 
  (i) a registered retirement income fund under which the individual is the annuitant, or 
  (ii) a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)). 
  
  ### Transfer to PRPP or RPP
  
  (14.1) An amount is transferred from a registered retirement income fund of an annuitant in accordance with this subsection if the amount 
  (a) is transferred at the direction of the annuitant directly to an account of the annuitant under a pooled registered pension plan; 
  (b) is transferred at the direction of the annuitant directly to a registered pension plan of which, at any time before the transfer, the annuitant was a member (as defined in subsection 147.1(1)) or to a specified pension plan and is allocated to the annuitant under a money purchase provision (as defined in subsection 147.1(1)) of the plan; or  
  (c) is transferred at the direction of the annuitant directly to a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the annuitant. 
  
  ### Taxation of amount transferred
  
  (14.2) An amount transferred on behalf of an individual in accordance with paragraph (2)(e) or subsection (14) or (14.1) 
  (a) is not, solely because of that transfer, to be included in computing the income of any taxpayer; and 
  (b) is not to be deducted in computing the income of any taxpayer. 
  
  ### Credited or added amount deemed not received
  
  (15) Where 
  (a) an amount is credited or added to a deposit with a depositary referred to in paragraph (d) of the definition 
  *carrier* in subsection 146.3(1) as interest or income in respect of the deposit,  
  (b) the deposit is a registered retirement income fund at the time the amount is credited or added to the deposit, and 
  (c) during the calendar year in which the amount is credited or added or during the preceding calendar year, the annuitant under the fund was alive, the amount shall be deemed not to be received by the annuitant or any other person solely because of the crediting or adding. 
  
  ## Registered Disability Savings Plan 
  
  ### Definitions
  
  146.4 (1) The following definitions apply in this section.  
  *assistance holdback amount*, in relation to a disability savings plan, has the meaning assigned under the Canada Disability Savings Act. (montant de retenue)   
  *contribution* to a disability savings plan does not include (other than for the purpose of paragraph (b) of the definition disability savings plan)  
  (a) an amount paid into the plan under or because of the Canada Disability Savings Act or a designated provincial program;  
  (b) an amount paid into the plan under or because of any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by an entity described in subparagraph (a)(iii) of the definition qualifying person in its capacity as holder of the plan);  
  (c) an amount transferred to the plan in accordance with subsection (8); or 
  (d) other than for the purposes of paragraphs (4)(f) to (h) and (n), 
  (i) a specified RDSP payment as defined in subsection 60.02(1), or 
  (ii) an accumulated income payment made to the plan under subsection 146.1(1.2). ( cotisation)   
  *designated provincial program* means a program that is established under the laws of a province and that supports savings in registered disability savings plans. (programme provincial désigné)   
  *disability assistance payment*, in relation to a disability savings plan of a beneficiary, means any payment made from the plan to the beneficiary or to the beneficiary’s estate. (paiement d’aide à l’invalidité)   
  *disability savings plan* of a beneficiary means an arrangement  
  (a) between 
  (i) a corporation (in this definition referred to as the “issuer”) 
  (A) that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, and 
  (B) with which the specified Minister has entered into an agreement that applies to the arrangement for the purposes of the Canada Disability Savings Act, and  
  (ii) one or more of the following: 
  (A) the beneficiary, 
  (B) an entity that, at the time the arrangement is entered into, is a qualifying person described in paragraph (a) or (b) of the definition qualifying person in relation to the beneficiary,  
  (B.1) if the arrangement is entered into before 2027, a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is a qualifying person in relation to the beneficiary, 
  (B.2) a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is not a qualifying person in relation to the beneficiary but is a holder of another arrangement that is a registered disability savings plan of the beneficiary, and 
  (C) a legal parent of the beneficiary who, at the time the arrangement is entered into, is not a qualifying person in relation to the beneficiary but is a holder of another arrangement that is a registered disability savings plan of the beneficiary; 
  (b) under which one or more contributions are to be made in trust to the issuer to be invested, used or otherwise applied by the issuer for the purpose of making payments from the arrangement to the beneficiary; and 
  (c) that is entered into in a taxation year in respect of which 
  (i) the beneficiary is a DTC-eligible individual, or 
  (ii) the beneficiary is not a DTC-eligible individual and an amount is to be transferred from a registered disability savings plan of the beneficiary to the arrangement in accordance with subsection (8). ( régime d’épargne-invalidité)   
  *DTC-eligible individual*, in respect of a taxation year, means an individual in respect of whom an amount is deductible, or would if this Act were read without reference to paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year. (particulier admissible au CIPH)   
  *holder* of a disability savings plan at any time means each of the following:  
  (a) an entity that has, at that time, rights as an entity with whom the issuer entered into the plan; 
  (b) an entity that has, at that time, rights as a successor or assignee of an entity described in paragraph (a) or in this paragraph; and 
  (c) the beneficiary if, at that time, the beneficiary is not an entity described in paragraph (a) or (b) and has rights under the plan to make decisions (either alone or with other holders of the plan) concerning the plan, except where the only such right is a right to direct that disability assistance payments be made as provided for in subparagraph (4)(n)(ii). ( titulaire)   
  *issuer*, of an arrangement, means the person described as the “issuer” in the definition disability savings plan. (émetteur)   
  *lifetime disability assistance payments* under a disability savings plan of a beneficiary means disability assistance payments that are identified under the terms of the plan as lifetime disability assistance payments and that, after they begin to be paid, are payable at least annually until the earlier of the day on which the beneficiary dies and the day on which the plan is terminated. (paiements viagers pour invalidité)   
  *plan trust*, in relation to a disability savings plan, means the trust governed by the plan. (fiducie de régime)   
  *qualified investment*, for a trust governed by a RDSP, means  
  (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition qualified investment in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a RDSP” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;  
  (b) a contract for an annuity issued by a licensed annuities provider where 
  (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and 
  (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract; 
  (c) a contract for an annuity issued by a licensed annuities provider where 
  (i) annual or more frequent periodic payments are or may be made under the contract to the holder of the contract, 
  (ii) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, 
  (iii) neither the time nor the amount of any payment under the contract may vary because of the length of any life, other than the life of the beneficiary under the plan, 
  (iv) the day on which the periodic payments began or are to begin is not later than the end of the later of 
  (A) the year in which the beneficiary under the plan attains the age of 60 years, and 
  (B) the year following the year in which the contract was acquired by the trust, 
  (v) the periodic payments are payable for the life of the beneficiary under the plan and either there is no guaranteed period under the contract or there is a guaranteed period that does not exceed 15 years, 
  (vi) the periodic payments 
  (A) are equal, or 
  (B) are not equal solely because of one or more adjustments that would, if the contract were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to (v) or that arise because of a uniform reduction in the entitlement to the periodic payments as a consequence of a partial surrender of rights to the periodic payments, and 
  (vii) the contract requires that, in the event the plan must be terminated in accordance with paragraph (4)(p), any amounts that would otherwise be payable after the termination be commuted into a single payment; and 
  (d) a prescribed investment. ( placement admissible)   
  *qualifying family member*, in relation to a beneficiary of a disability savings plan, at any time, means an individual who, at that time, is  
  (a) a legal parent of the beneficiary; 
  (b) a spouse or common-law partner of the beneficiary who is not living separate and apart from the beneficiary by reason of a breakdown of their marriage or common-law partnership; or 
  (c) a brother or sister (determined without reference to subsection 252(2)) of the beneficiary. ( membre de la famille admissible)   
  *qualifying person*, in relation to a beneficiary of a disability savings plan, at any time, means  
  (a) if the beneficiary has not, at or before that time, attained the age of majority, an entity that is, at that time, 
  (i) a legal parent of the beneficiary, 
  (ii) a guardian, tutor, curator or other individual who is legally authorized to act on behalf of the beneficiary, or 
  (iii) a public department, agency or institution that is legally authorized to act on behalf of the beneficiary; 
  (b) if the beneficiary has, at or before that time, attained the age of majority and is not, at that time, contractually competent to enter into a disability savings plan, an entity that is, at that time, an entity described in subparagraph (a)(ii) or (iii); and 
  (c) other than for the purposes of subparagraph (4)(b)(iv), an individual who is a qualifying family member in relation to the beneficiary if 
  (i) at or before that time, the beneficiary has attained the age of majority and is not a beneficiary under a disability savings plan, 
  (ii) at that time, no entity described in subparagraph (a)(ii) or (iii) is legally authorized to act on behalf of the beneficiary, and 
  (iii) in the issuer’s opinion after reasonable inquiry, the beneficiary’s contractual competence to enter into a disability savings plan at that time is in doubt. ( responsable)   
  *registered disability savings plan* or 
  *RDSP* means a disability savings plan that satisfies the conditions in subsection (2), but does not include a plan to which subsection (3) or (10) applies. (régime enregistré d’épargne-invalidité ou REEI)   
  *specified maximum amount*, for a calendar year in respect of a disability savings plan, means the amount that is the greater of  
  (a) the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the calendar year, and 
  (b) the amount determined by the formula is 10% of the fair market value of the property held by the plan trust at the beginning of the calendar year (other than annuity contracts held by the plan trust that, at the beginning of the calendar year, are not described in paragraph (b) of the definition qualified investment), and  is the total of all amounts each of which is 
  (i) a periodic payment under an annuity contract held by the plan trust at the beginning of the calendar year (other than an annuity contract described at the beginning of the calendar year in paragraph (b) of the definition qualified investment) that is paid to the plan trust in the calendar year, or  
  (ii) if the periodic payment under such an annuity contract is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year and no rights under the contract were disposed of in the calendar year. ( plafond)   
  *specified Minister* means the minister designated under section 4 of the Canada Disability Savings Act. (ministre responsable)   
  *specified year*, for a disability savings plan of a beneficiary means the particular calendar year in which a medical doctor or a nurse practitioner licensed to practise under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor or the nurse practitioner, the beneficiary is not likely to survive more than five years and  
  (a) if the plan is a specified disability savings plan, each subsequent calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan; or 
  (b) in any other case, each of the five calendar years following the particular calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan. ( année déterminée)  
  
  ### Specified disability savings plan
  
  (1.1) If, in respect of a beneficiary under a registered disability savings plan, a medical doctor or a nurse practitioner licensed to practise under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor or the nurse practitioner, the beneficiary is not likely to survive more than five years, the holder of the plan elects in prescribed form and provides the election and the medical certification in respect of the beneficiary to the issuer of the plan, and the issuer notifies the specified Minister of the election in a manner and format acceptable to the specified Minister, then the plan becomes a specified disability savings plan at the time the notification is received by the specified Minister. 
  
  ### Ceasing to be a specified disability savings plan
  
  (1.2) A plan ceases to be a specified disability savings plan at the earliest of the following times: 
  (a) the time that the specified Minister receives a notification, in a manner and format acceptable to the specified Minister, from the issuer of the plan that the holder elects that the plan is to cease to be a specified disability savings plan; 
  (b) the time that is immediately before the earliest time in a calendar year when the total disability assistance payments, other than non-taxable portions, made from the plan in the year and while it was a specified disability savings plan exceeds $10,000 (or such greater amount as is required to satisfy the condition in subparagraph (d)(i)); 
  (c) the time that is immediately before the time that 
  (i) a contribution is made to the plan, 
  (ii) an amount described in any of paragraphs (a) and (b) and subparagraph (d)(ii) of the definition contribution in subsection (1) is paid into the plan,  
  (iii) the plan is terminated, 
  (iv) the plan ceases to be a registered disability savings plan as a result of the application of paragraph (10)(a), or 
  (v) is the beginning of the first calendar year throughout which the beneficiary under the plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1); and 
  (d) the time immediately following the end of a calendar year if 
  (i) in the year the total amount of disability assistance payments made from the plan to the beneficiary is less than the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the year (or such lesser amount as is supported by the property of the plan), and 
  (ii) the year is not the calendar year in which the plan became a specified disability savings plan. 
  (e) and (f)  [Repealed, 2012, c. 31, s. 35]  
  
  ### Waiting period
  
  (1.3) If at any time, a plan has ceased to be a specified disability savings plan because of subsection (1.2), then the holder of the plan may not make an election under subsection (1.1) until 24 months after that time. 
  
  ### Waiver
  
  (1.4) The Minister may waive the application of subsections (1.2) or (1.3) if it is just and equitable to do so. 
  
  ### Beneficiary replacing holder
  
  (1.5) Any holder of a disability savings plan who was a qualifying person in relation to the beneficiary under the plan at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1) ceases to be a holder of the plan and the beneficiary becomes the holder of the plan if  
  (a) the beneficiary is determined to be contractually competent by a competent tribunal or other authority under the laws of a province or, in the issuer’s opinion after reasonable inquiry, the beneficiary’s contractual competence to enter into a disability savings plan is no longer in doubt; and 
  (b) the beneficiary notifies the issuer that the beneficiary chooses to become the holder of the plan. 
  
  ### Entity replacing holder
  
  (1.6) If an entity described in subparagraph (a)(ii) or (iii) of the definition qualifying person in subsection (1) is appointed in respect of a beneficiary of a disability savings plan and a holder of the plan was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of that definition,  
  (a) the entity shall notify the issuer without delay of the entity’s appointment; 
  (b) the holder of the plan ceases to be a holder of the plan; and 
  (c) the entity becomes the holder of the plan. 
  
  ### Rules applicable in case of dispute
  
  (1.7) If a dispute arises as a result of an issuer’s acceptance of a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1) as a holder of a disability savings plan, from the time the dispute arises until the time that the dispute is resolved or an entity becomes the holder of the plan under subsection (1.5) or (1.6), the holder of the plan shall use their best efforts to avoid any reduction in the fair market value of the property held by the plan trust, having regard to the reasonable needs of the beneficiary under the plan.  
  
  ### Registered status
  
  (2) The conditions that must be satisfied for a disability savings plan of a beneficiary to be a registered disability savings plan are as follows: 
  (a) before the plan is entered into, the issuer of the plan has received written notification from the Minister that, in the Minister’s opinion, a plan whose terms are identical to the plan would, if entered into by entities eligible to enter into a disability savings plan, comply with the conditions in subsection (4); 
  (b) at or before the time the plan is entered into, the issuer of the plan has been provided with the Social Insurance Number of the beneficiary and the Social Insurance Number or business number, as the case may be, of each entity with which the issuer has entered into the plan; and 
  (c) at the time the plan is entered into, the beneficiary is resident in Canada, except that this condition does not apply if, at that time, the beneficiary is the beneficiary under another registered disability savings plan. 
  
  ### Registered status nullified
  
  (3) A disability savings plan is deemed never to have been a registered disability savings plan unless 
  (a) the issuer of the plan provides without delay notification of the plan’s establishment in prescribed form containing prescribed information to the specified Minister; and 
  (b) if the beneficiary is the beneficiary under another registered disability savings plan at the time the plan is established, that other plan is terminated without delay. 
  
  ### Plan conditions
  
  (4) The conditions referred to in paragraph (2)(a) are as follows: 
  (a) the plan stipulates 
  (i) that it is to be operated exclusively for the benefit of the beneficiary under the plan, 
  (ii) that the designation of the beneficiary under the plan is irrevocable, and 
  (iii) that no right of the beneficiary to receive payments from the plan is capable, either in whole or in part, of surrender or assignment; 
  (b) the plan allows an entity to acquire rights as a successor or assignee of a holder of the plan only if the entity is 
  (i) the beneficiary, 
  (ii) the beneficiary’s estate, 
  (iii) a holder of the plan at the time the rights are acquired, 
  (iv) a qualifying person in relation to the beneficiary at the time the rights are acquired, or 
  (v) an individual who is a legal parent of the beneficiary and was previously a holder of the plan; 
  (c) the plan provides that, where an entity (other than a qualifying family member in relation to the beneficiary) that is a holder of the plan ceases to be a qualifying person in relation to the beneficiary at any time, the entity ceases at that time to be a holder of the plan; 
  (d) the plan provides for there to be at least one holder of the plan at all times that the plan is in existence and may provide for the beneficiary (or the beneficiary’s estate, as the case may be) to automatically acquire rights as a successor or assignee of a holder in order to ensure compliance with this requirement; 
  (e) the plan provides that, where an entity becomes a holder of the plan after the plan is entered into, the entity is prohibited (except to the extent otherwise permitted by the Minister or the specified Minister) from exercising their rights as a holder of the plan until the issuer has been advised of the entity having become a holder of the plan and been provided with the entity’s Social Insurance Number or business number, as the case may be; 
  (f) the plan prohibits contributions from being made to the plan at any time if 
  (i) the beneficiary is not a DTC-eligible individual in respect of the taxation year that includes that time, unless the contribution is a specified RDSP payment in respect of the beneficiary, or 
  (ii) the beneficiary died before that time; 
  (g) the plan prohibits a contribution from being made to the plan at any time if 
  (i) the beneficiary attained the age of 59 years before the calendar year that includes that time, 
  (ii) the beneficiary is not resident in Canada at that time, or 
  (iii) the total of the contribution and all other contributions made at or before that time to the plan or to any other registered disability savings plan of the beneficiary would exceed $200,000; 
  (h) the plan prohibits contributions to the plan by any entity that is not a holder of the plan, except with the written consent of a holder of the plan; 
  (i) the plan provides that no payments may be made from the plan other than 
  (i) disability assistance payments, 
  (ii) a transfer in accordance with subsection (8), and 
  (iii) repayments under the Canada Disability Savings Act or a designated provincial program;  
  (j) the plan prohibits a disability assistance payment from being made if it would result in the fair market value of the property held by the plan trust immediately after the payment being less than the assistance holdback amount in relation to the plan; 
  (k) the plan provides for lifetime disability assistance payments to begin to be paid no later than the end of the particular calendar year in which the beneficiary attains the age of 60 years or, if the plan is established in or after the particular year, in the calendar year following the calendar year in which the plan is established; 
  (l) the plan provides that the total amount of lifetime disability assistance payments made in any calendar year (other than a specified year for the plan) shall not exceed the amount determined by the formula is the fair market value of the property held by the plan trust at the beginning of the calendar year (other than annuity contracts held by the plan trust that, at the beginning of the calendar year, are not described in paragraph (b) of the definition qualified investment in subsection (1)),  is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year, is the age in whole years of the beneficiary at the beginning of the calendar year, and is the total of all amounts each of which is 
  (i) a periodic payment under an annuity contract held by the plan trust at the beginning of the calendar year (other than an annuity contract described at the beginning of the calendar year in paragraph (b) of the definition qualified investment in subsection (1)) that is paid to the plan trust in the calendar year, or  
  (ii) if the periodic payment under such an annuity contract is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year and no rights under the contract were disposed of in the calendar year; 
  (m) the plan stipulates whether or not disability assistance payments that are not lifetime disability assistance payments are to be permitted under the plan; 
  (n) the plan provides that when the total of all amounts paid under the Canada Disability Savings Act before the beginning of a calendar year to any registered disability savings plan of the beneficiary exceeds the total of all contributions made before the beginning of the calendar year to any registered disability savings plan of the beneficiary,  
  (i) if the calendar year is not a specified year for the plan and the conditions in clauses (p)(ii)(A) and (B) are not met in the calendar year, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not exceed the specified maximum amount for the calendar year, except that, in calculating that total amount, any payment made following a transfer in the calendar year from another plan in accordance with subsection (8) is to be disregarded if it is made 
  (A) to satisfy an undertaking described in paragraph (8)(d), or 
  (B) in lieu of a payment that would otherwise have been permitted to be made from the other plan in the calendar year had the transfer not occurred, and 
  (ii) if the beneficiary attained the age of 27 years, but not the age of 59 years, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph (i) and paragraph (j), one or more disability assistance payments be made from the plan to the beneficiary in the calendar year; 
  (iii)  [Repealed, 2012, c. 31, s. 35]  
  (n.1) the plan provides that, if the beneficiary attained the age of 59 years before a calendar year, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not be less than the amount determined by the formula set out in paragraph (l) in respect of the plan for the calendar year (or such lesser amount as is supported by the property of the plan trust); 
  (o) the plan provides that, at the direction of the holders of the plan, the issuer shall transfer all of the property held by the plan trust (or an amount equal to its value) to another registered disability savings plan of the beneficiary, together with all information in its possession (other than information provided to the issuer of the other plan by the specified Minister) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act ; and  
  (p) the plan provides for any amounts remaining in the plan (after taking into consideration any repayments under the Canada Disability Savings Act or a designated provincial program) to be paid to the beneficiary or the beneficiary’s estate, as the case may be, and for the plan to be terminated, by the end of the calendar year following the earlier of  
  (i) the calendar year in which the beneficiary dies, and 
  (ii) the first calendar year in which the following conditions are met: 
  (A) the holder of the plan has requested that the issuer terminate the plan, and 
  (B) throughout the year, the beneficiary has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1). 
  
  ### Transitional rule
  
  (4.01) If, after March 18, 2019 and before 2021, a registered disability savings plan would otherwise be required to be terminated because of subparagraph (4)(p)(ii) or any terms of the plan provided because of that subparagraph, then notwithstanding that subparagraph or those terms, the plan is not required to be terminated before 2021 in either of the following circumstances: 
  (a) the beneficiary of the plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1), or 
  (b) an election was made under subsection (4.1), as it read immediately before 2021, and the election ceases to be valid after March 18, 2019 and before 2021 because of paragraph (4.2)(b), as it read immediately before 2021. 
  (4.1)  [Repealed, 2021, c. 23, s. 33]  
  (4.2)  [Repealed, 2021, c. 23, s. 33]  
  (4.3)  [Repealed, 2021, c. 23, s. 33]  
  
  ### Trust not taxable
  
  (5) No tax is payable under this Part by a trust on the taxable income of the trust for a taxation year if, throughout the period in the year during which the trust was in existence, the trust was governed by a registered disability savings plan, except that 
  (a) tax is payable under this Part by the trust on its taxable income for the year if the trust has borrowed money 
  (i) in the year, or 
  (ii) in a preceding taxation year and has not repaid it before the beginning of the year; and 
  (b) if the trust is not otherwise taxable under paragraph (a) on its taxable income for the year and, at any time in the year, it carries on one or more businesses or holds one or more properties that are not qualified investments for the trust, tax is payable under this Part by the trust on the amount that its taxable income for the year would be if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or losses other than from dispositions of those properties, and for this purpose, 
  (i) “income” includes dividends described in section 83, 
  (ii) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition, and 
  (iii) the trust’s income shall be computed without reference to subsection 104(6). 
  
  ### Taxation of disability assistance payments
  
  (6) Where a disability assistance payment is made from a registered disability savings plan of a beneficiary, the amount, if any, by which the amount of the payment exceeds the non-taxable portion of the payment shall be included, 
  (a) if the beneficiary is alive at the time the payment is made, in computing the beneficiary’s income for the beneficiary’s taxation year in which the payment is made; and 
  (b) in any other case, in computing the income of the beneficiary’s estate for the estate’s taxation year in which the payment is made. 
  
  ### Non-taxable portion of disability assistance payment
  
  (7) The non-taxable portion of a disability assistance payment made at a particular time from a registered disability savings plan of a beneficiary is the lesser of the amount of the disability assistance payment and the amount determined by the formula is the amount of the disability assistance payment; is the amount, if any, by which 
  (a) the total of all amounts each of which is the amount of a contribution made before the particular time to any registered disability savings plan of the beneficiary exceeds 
  (b) the total of all amounts each of which is the amount that would be the non-taxable portion of a disability assistance payment made before the particular time from any registered disability savings plan of the beneficiary, if the formula in this subsection were read without reference to the description of D; is the amount by which the fair market value of the property held by the plan trust immediately before the payment exceeds the assistance holdback amount in relation to the plan; and is the amount in respect of which a holder of the plan pays a tax under section 207.05 in respect of the plan, or another plan for which the plan was substituted by the holder, that 
  (a) has not been waived, cancelled or refunded; and 
  (b) has not otherwise been used in the year or a preceding year in computing the non-taxable portion of a disability assistance payment made from the plan or another plan for which the plan was substituted. 
  
  ### Transfer of funds
  
  (8) An amount is transferred from a registered disability savings plan (in this subsection referred to as the “prior plan”) of a beneficiary in accordance with this subsection if 
  (a) the amount is transferred directly to another registered disability savings plan (in this subsection referred to as the “new plan”) of the beneficiary; 
  (b) the prior plan is terminated immediately after the transfer; 
  (c) the issuer of the prior plan provides the issuer of the new plan with all information in its possession concerning the prior plan (other than information provided to the issuer of the new plan by the specified Minister) as may reasonably be considered necessary for compliance, in respect of the new plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act ; and  
  (d) where the beneficiary attained the age of 59 years before the calendar year in which the transfer occurs, the issuer of the new plan undertakes to make (in addition to any other disability assistance payments that would otherwise have been made from the new plan in the year) one or more disability assistance payments from the plan in the year, the total of which is equal to the amount, if any, by which 
  (i) the total amount of disability assistance payments that would have been required to be made from the prior plan in the year if the transfer had not occurred exceeds 
  (ii) the total amount of disability assistance payments made from the prior plan in the year. 
  
  ### No income inclusion on transfer
  
  (9) An amount transferred in accordance with subsection (8) is not, solely because of that transfer, to be included in computing the income of any taxpayer. 
  
  ### Non-compliance — cessation of registered status
  
  (10) Where, at any particular time, a registered disability savings plan is non-compliant as described in subsection (11), 
  (a) the plan ceases, as of the particular time, to be a registered disability savings plan (other than for the purposes of applying, as of the particular time, this subsection and subsection (11)); 
  (b) a disability assistance payment is deemed to have been made from the plan at the time (in this subsection referred to as the “relevant time”) immediately before the particular time to the beneficiary under the plan (or, if the beneficiary is deceased at the relevant time, to the beneficiary’s estate), the amount of which payment is equal to the amount, if any, by which 
  (i) the fair market value of the property held by the plan trust at the relevant time exceeds 
  (ii) the assistance holdback amount in relation to the plan; and 
  (c) if the plan is non-compliant because of a payment that is not in accordance with paragraph (4)(j), a disability assistance payment is deemed to have been made from the plan at the relevant time (in addition to the payment deemed by paragraph (b) to have been made) to the beneficiary under the plan (or, if the beneficiary is deceased at the relevant time, to the beneficiary’s estate) 
  (i) the amount of which payment is equal to the amount by which the lesser of 
  (A) the assistance holdback amount in relation to the plan, and 
  (B) the fair market value of the property held by the plan trust at the relevant time exceeds 
  (C) the fair market value of the property held by the plan trust immediately after the particular time, and 
  (ii) the non-taxable portion of which is deemed to be nil. 
  
  ### Non-compliance
  
  (11) A registered disability savings plan is non-compliant 
  (a) at any time that the plan fails to comply with a condition in subsection (4); 
  (b) at any time that there is a failure to administer the plan in accordance with its terms (other than those terms which the plan is required by subparagraph (4)(a)(i) to stipulate); and 
  (c) at any time that a person fails to comply with a condition or an obligation imposed, with respect to the plan, under the Canada Disability Savings Act, and the specified Minister has notified the Minister that, in the specified Minister’s opinion, it is appropriate that the plan be considered to be non-compliant because of the failure.  
  
  ### Non-application of subsection (11)
  
  (12) Where a registered disability savings plan would otherwise be non-compliant at a particular time because of a failure described in paragraph (11)(a) or (b), 
  (a) the Minister may waive the application of the relevant paragraph with respect to the failure, if it is just and equitable to do so; 
  (b) the Minister may deem the failure to have occurred at a later time; 
  (c) if the failure consists of the making of a contribution that is prohibited under any of paragraphs (4)(f) to (h), an amount equal to the amount of the contribution has been withdrawn from the plan within such period as is specified by the Minister and the Minister has approved the application of this paragraph with respect to the failure, 
  (i) the contribution is deemed never to have been made, and 
  (ii) the withdrawal is deemed not to be a disability assistance payment and not to be in contravention of the condition in paragraph (4)(i); or 
  (d) if the failure consists of the plan not being terminated by the time set out in paragraph (4)(p) and the failure was due to the issuer being unaware of, or there being some uncertainty as to, the existence of circumstances requiring that the plan be terminated, 
  (i) the Minister may specify a later time by which the plan is to be terminated (but no later than is reasonably necessary for the plan to be terminated in an orderly manner), and 
  (ii) paragraph (4)(p) and the plan terms are, for the purposes of paragraphs (11)(a) and (b), to be read as though they required the plan to be terminated by the time so specified. 
  
  ### Obligations of issuer
  
  (13) The issuer of a registered disability savings plan shall, 
  (a) where an entity becomes a holder of the plan after the plan is entered into, so notify the specified Minister in prescribed form containing prescribed information on or before the day that is 60 days after the later of 
  (i) the day on which the issuer is advised of the entity having become a holder of the plan, and 
  (ii) the day on which the issuer is provided with the new holder’s Social Insurance Number or business number, as the case may be; 
  (b) not amend the plan before having received notification from the Minister that, in the Minister’s opinion, a plan whose terms are identical to the amended plan would, if entered into by entities eligible to enter into a disability savings plan, comply with the conditions in subsection (4); 
  (c) where the issuer becomes aware that the plan is, or is likely to become, non-compliant (determined without reference to paragraph (11)(c) and subsection (12)), notify the Minister and the specified Minister of this fact on or before the day that is 30 days after the day on which the issuer becomes so aware; and 
  (d)  [Repealed, 2017, c. 33, s. 58]  
  (e) if the issuer enters into the plan with a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1),  
  (i) so notify the beneficiary under the plan without delay in writing and include in the notification information setting out the circumstances in which the holder of the plan may be replaced under subsection (1.5) or (1.6), and 
  (ii) collect and use any information provided by the holder of the plan that is relevant to the administration and operation of the plan. 
  
  ### Issuer’s liability
  
  (14) If, after reasonable inquiry, an issuer of a disability savings plan is of the opinion that an individual’s contractual competence to enter into a disability savings plan is in doubt, no action lies against the issuer for entering into a plan, under which the individual is the beneficiary, with a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1).  
  
  ## Advanced Life Deferred Annuity 
  
  ### Definitions
  
  146.5 (1) The following definitions apply in this section.  
  *advanced life deferred annuity* means a contract for an annuity that meets the following conditions:  
  (a) it is issued by a licensed annuities provider; 
  (b) it specifies that it is intended to qualify as an advanced life deferred annuity under this Act; 
  (c) periodic annuity payments under the contract 
  (i) commence to be paid no later than the end of the calendar year in which the annuitant attains 85 years of age, and 
  (ii) are payable for the life of the annuitant or for the lives, jointly, of the annuitant and the annuitant’s spouse or common-law partner; 
  (d) periodic annuity payments under the contract are payable 
  (i) in equal amounts, or 
  (ii) in amounts that are not equal only because the payments 
  (A) are adjusted in whole or in part to reflect 
  (I) increases in the Consumer Price Index, as published by Statistics Canada under the authority of the Statistics Act, or  
  (II) increases at a rate specified in the contract, not exceeding 2% per annum, or 
  (B) are reduced on the death of the annuitant or the annuitant’s spouse or common-law partner; 
  (e) if an annuity is payable for the lives, jointly, of the annuitant and the annuitant’s spouse or common-law partner and the annuitant dies before payments commence to be paid, then the payments to the annuitant’s spouse or common-law partner shall 
  (i) commence no later than the date that they would have commenced if the annuitant were alive, and 
  (ii) be adjusted in accordance with generally accepted actuarial principles if the payments commence before the date they would have commenced if the annuitant were alive; 
  (f) the amount to be paid, if any, to one or more beneficiaries under the contract after the death of the annuitant — or, in the case of a joint-lives annuity, after the last death of the annuitant and the annuitant’s spouse or common-law partner — shall 
  (i) be paid as soon as practicable after the death of the annuitant or the last death of the annuitant and the annuitant’s spouse or common-law partner, as the case may be, and 
  (ii) not exceed the amount, if any, by which the total amount transferred to acquire the annuity exceeds the total amount of annuity payments made under the contract; 
  (g) it provides that all or part of the amount transferred to acquire the annuity may be refunded, if 
  (i) the refund is paid to reduce the amount of tax that would otherwise be payable by the annuitant under Part XI, and 
  (ii) the refund is 
  (A) paid to the annuitant, or 
  (B) transferred directly to 
  (I) the issuer of a registered retirement savings plan of the annuitant, 
  (II) the carrier of a registered retirement income fund of the annuitant, 
  (III) the administrator of a pooled registered pension plan under which the annuitant is a member, or 
  (IV) the administrator of a money purchase provision of a registered pension plan under which the annuitant is a member; 
  (h) if it provides that the spouse or common-law partner may request a payment in a single amount in full or partial satisfaction of the spouse’s or common-law partner’s entitlement to payments described in subparagraph (c)(ii) as a consequence of the death of the annuitant, then the single amount cannot exceed the present value (at the time the single amount is paid) of the other payments that, as a consequence of the payment of the single amount, cease to be provided; 
  (i) no right under the contract is capable of being assigned, charged, anticipated, given as security or surrendered; and 
  (j) it does not provide for any payment under the contract except as specified in this definition. ( rente viagère différée à un âge avancé)   
  *annuitant* means an individual who has acquired a contract for an annuity from a licensed annuities provider. (rentier)   
  *beneficiary*, under a contract for an annuity, means an individual who has a right under the contract to receive a payment after the death of the annuitant or the annuitant’s spouse or common-law partner. (bénéficiaire)  
  
  ### Taxable amount — annuity payments
  
  (2) Amounts (excluding amounts described in paragraph (f) or (g) of the definition advanced life deferred annuity in subsection (1) and including amounts deemed to have been received under paragraph (7)(a)) received by a taxpayer in a taxation year under an advanced life deferred annuity shall be included in computing the income of the taxpayer for the taxation year.  
  
  ### Taxable amount — death benefits
  
  (3) Amounts described in paragraph (f) of the definition advanced life deferred annuity in subsection (1) received by a taxpayer in a taxation year under an advanced life deferred annuity as a result of the death of an individual shall be included in computing the income of  
  (a) the taxpayer for the taxation year, if the taxpayer is 
  (i) the spouse or common-law partner of the individual, or 
  (ii) a child or grandchild of the individual who was, immediately before the death of the individual, financially dependent on the individual for support; and 
  (b) the individual for the taxation year in which the individual died, in any other case. 
  
  ### Taxation of refunds
  
  (4) The amount of a refund described in clause (g)(ii)(A) of the definition advanced life deferred annuity in subsection (1) that is paid to an annuitant shall be included in the income of the annuitant.  
  
  ### Treatment of amount transferred
  
  (5) If an amount is paid in circumstances described in clause (g)(ii)(B) of the definition advanced life deferred annuity in subsection (1),  
  (a) the amount shall not, by reason only of that payment, be included by reason of paragraph 56(1)(z.5) in computing the income of any taxpayer; 
  (b) no deduction may be made under any provision of this Act in respect of the amount in computing the income of any taxpayer; 
  (c) in the case of an amount paid to a registered pension plan, the amount is deemed not to be a contribution for the purpose of applying Parts LXXXIII and LXXXV of the Income Tax Regulations ; and  
  (d) in the case of an amount paid to a registered retirement savings plan or a pooled registered pension plan, the amount shall not be included in determining the amount of the individual’s undeducted RRSP premiums under subsection 204.2(1.2). 
  
  ### Deemed payment to beneficiary
  
  (6) An amount is deemed to have been received at a particular time by a beneficiary (as defined in subsection 108(1)) of a deceased annuitant’s estate, and not by the legal representative of the deceased annuitant, if  
  (a) the amount is described in paragraph (f) of the definition advanced life deferred annuity in subsection (1);  
  (b) the amount was paid to the legal representative; 
  (c) the beneficiary is described in paragraph (3)(a); 
  (d) the beneficiary is entitled to the amount in full or partial satisfaction of their rights as a beneficiary under the deceased annuitant’s estate; and 
  (e) the amount is designated jointly by the legal representative and the beneficiary in prescribed form filed with the Minister. 
  
  ### Amended contract
  
  (7) If an amendment made at any time to a contract results in it no longer meeting the conditions in the definition advanced life deferred annuity in subsection (1), the following rules apply:  
  (a) the annuitant under the contract immediately before that time is deemed to have received under the contract at that time an amount equal to the fair market value of their interest in the contract at that time; and 
  (b) the annuitant is deemed to have acquired their interest in the contract at that time at a cost equal to the fair market value of the interest at that time. 
  
  ## Tax-Free First Home Savings Account 
  
  ### Definitions
  
  146.6 (1) The following definitions apply in this section.  
  *annual FHSA limit* of a taxpayer for a taxation year is the least of  
  (a) the amount determined by the formula is the total of all contributions made to a FHSA in the year by the taxpayer (other than any contributions made after the taxpayer’s first qualifying withdrawal from a FHSA), is 
  (i) if the taxpayer’s maximum participation period has not begun in a preceding taxation year, nil, and 
  (ii) in any other case, the amount by which the amount determined under this paragraph for the preceding taxation year exceeds the annual FHSA limit for that taxation year, and is the total of all designated amounts described in paragraph (b) of the definition designated amount in subsection 207.01(1) for the year,  
  (b) the amount determined by the formula is the amount of the FHSA carryforward for the taxation year; is the total of all amounts transferred in the year or a preceding taxation year under paragraph 146(16)(a.2) to a FHSA under which the taxpayer is the holder, and is the total of all amounts, each of which is an amount determined in respect of each preceding taxation year that is 
  (i) if the taxpayer had not started their maximum participation period in the preceding taxation year, nil, or 
  (ii) in any other case, the lesser of 
  (A) the amount determined by the formula is the amount determined for E in the preceding taxation year, and is the amount determined for F in the preceding taxation year, and 
  (B) $8,000 plus the amount of the FHSA carryforward for the preceding taxation year, and is the total of all designated amounts described in paragraph (a) of the definition designated amount in subsection 207.01(1), and  
  (c) nil, if the taxation year is after the year in which 
  (i) the taxpayer’s maximum participation period has ended, or 
  (ii) the taxpayer has died. ( plafond annuel au titre du CELIAPP)   
  *beneficiary* under a FHSA means an individual (including an estate) or a qualified donee that has a right to receive a distribution from the FHSA after the death of the holder of the FHSA. (bénéficiaire)   
  *first home savings account* or 
  *FHSA* means an arrangement registered with the Minister that has not ceased to be a FHSA under subsection 146.6(16). (compte d’épargne libre d’impôt pour l’achat d’une première propriété ou CELIAPP)   
  *FHSA carryforward* of a taxpayer for a taxation year is the least of  
  (a) $8,000, 
  (b) the amount determined by the formula is the amount determined in paragraph (b) of the definition annual FHSA limit for the preceding taxation year, and  is the amount determined in paragraph (a) of the definition annual FHSA limit for the preceding taxation year, and  
  (c) nil, if the taxpayer had not started their maximum participation period prior to the taxation year. ( montant des cotisations reporté)   
  *holder* of an arrangement means  
  (a) until the death of the individual who entered into the arrangement, the individual; and 
  (b) after the death of the individual, the individual’s survivor, if the survivor is designated under the arrangement to become a successor of the holder and is a qualifying individual. ( titulaire)   
  *issuer* of an arrangement means the person described as the issuer in the definition qualifying arrangement. (émetteur)   
  *maximum participation period* of an individual means the period that  
  (a) begins when an individual first enters into a qualifying arrangement; and 
  (b) ends at the end of the year following the year in which the earliest of the following events occur: 
  (i) the 14th anniversary of the date the individual first enters into a qualifying arrangement, 
  (ii) the individual attains 70 years of age, and 
  (iii) the individual first makes a qualifying withdrawal from a FHSA. ( période de participation maximale)   
  *non-qualified investment* has the same meaning as in subsection 207.01(1). (placement non admissible)   
  *qualified investment* has the same meaning as in subsection 207.01(1). (placement admissible)   
  *qualifying arrangement*, at a particular time, means an arrangement  
  (a) that is entered into after March 2023 between a person (in this definition referred to as the “issuer”) and a qualifying individual; 
  (b) that is 
  (i) an arrangement in trust with an issuer that is a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (ii) an annuity contract with an issuer that is a licensed annuities provider, or 
  (iii) a deposit with an issuer that is 
  (A) a person that is, or is eligible to become, a member of the Canadian Payments Association, or 
  (B) a credit union that is a shareholder or member of a body corporate referred to as a “central” for the purposes of the Canadian Payments Act ;  
  (c) that provides for contributions to be made under the arrangement to the issuer in consideration of, or to be used, invested or otherwise applied for the purpose of, the issuer making distributions under the arrangement to the holder; 
  (d) under which the issuer and the qualifying individual agree, at the time the arrangement is entered into, that the issuer will file with the Minister an election to register the arrangement as a FHSA, in the prescribed form and manner under the Social Insurance Number of the qualifying individual with whom the arrangement was entered into; and 
  (e) that, at all times throughout the period that begins at the time the arrangement is entered into and that ends at the particular time, complies with the conditions in subsection (2). ( arrangement admissible)   
  *qualifying home* means  
  (a) a housing unit located in Canada; or 
  (b) a share of the capital stock of a cooperative housing corporation, the holder of which is entitled to possession of a housing unit located in Canada, except that, where the context so requires, a reference to a share with a right to possession of a housing unit described means the housing unit to which the share relates. ( habitation admissible)   
  *qualifying individual*, at a particular time, means an individual who  
  (a) is a resident of Canada; 
  (b) is at least 18 years of age; and 
  (c) did not, at any prior time in the calendar year or in the preceding four calendar years, inhabit as a principal place of residence a qualifying home (or what would be a qualifying home if it were located in Canada) that was owned, whether jointly with another person or otherwise, by 
  (i) the individual, or 
  (ii) a person who is the spouse or common-law partner of the individual at the particular time. ( particulier déterminé)   
  *qualifying withdrawal* of an individual means an amount received at a particular time by the individual as a benefit out of or under a FHSA if  
  (a) the amount is received as a result of the individual’s written request in prescribed form in which the individual sets out the location of a qualifying home that the individual has begun, or intends not later than one year after its acquisition by the individual to begin, using as a principal place of residence; 
  (b) the individual 
  (i) is a resident of Canada throughout the period that begins at the particular time and ends at the earlier of the time of the individual’s death and the time at which the individual acquires the qualifying home, and 
  (ii) does not have an owner-occupied home within the meaning of paragraph 146.01(2)(a.1) in the period 
  (A) that begins at the beginning of the fourth preceding calendar year that ended before the particular time, and 
  (B) that ends on the 31st day before the particular time; 
  (c) the individual entered into an agreement in writing before the particular time for the acquisition or construction of the qualifying home before October 1 of the calendar year following the year in which the amount was received; and 
  (d) the individual did not acquire the qualifying home more than 30 days before the particular time. ( retrait admissible)   
  *survivor* of a qualifying individual means another individual who is, immediately before the qualifying individual’s death, a spouse or common-law partner of the qualifying individual. (survivant)  
  
  ### Qualifying arrangement conditions
  
  (2) For the purposes of paragraph (e) of the definition qualifying arrangement in subsection (1), the conditions are as follows:  
  (a) the arrangement requires that it be maintained for the exclusive benefit of the holder (determined without regard to any right of a person to receive a payment out of or under the arrangement only on or after the death of the holder); 
  (b) the arrangement prohibits, while there is a holder of the arrangement, anyone that is neither the holder nor the issuer of the arrangement from having rights under the arrangement relating to the amount and timing of distributions and the investing of funds; 
  (c) the arrangement prohibits anyone other than the holder from making contributions under the arrangement; 
  (d) the arrangement permits distributions to be made to reduce the amount of tax otherwise payable by the holder under section 207.021; 
  (e) the arrangement provides that, at the direction of the holder, the issuer shall transfer all or any part of the property held in connection with the arrangement (or an amount equal to its value) to another FHSA of the holder or to an RRSP or a RRIF under which the holder is the annuitant; 
  (f) if the arrangement is an arrangement in trust, it prohibits the trust from borrowing money or other property for the purposes of the arrangement; 
  (g) the arrangement provides that it ceases to be a FHSA after the end of the holder’s maximum participation period; 
  (h) the arrangement, if it involves an issuer described in subparagraph (b)(iii) of the definition qualifying arrangement in subsection (1), includes provisions stipulating that the issuer has no right of offset with respect to the property held under the arrangement in connection with any debt or obligation owing to the issuer; and  
  (i) the arrangement meets prescribed conditions. 
  
  ### Trust not taxable
  
  (3) No tax is payable under this Part by a trust that is governed by a FHSA on its taxable income for a taxation year, except that, if at any time in the taxation year, it carries on one or more businesses or holds one or more properties that are non-qualified investments for the trust, tax is payable under this Part by the trust on the amount that would be its taxable income for the taxation year if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or capital losses other than from dispositions of those properties, and for that purpose, 
  (a) income includes dividends described in section 83; 
  (b) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition; and 
  (c) the trust’s income shall be computed without reference to subsection 104(6). 
  
  ### Carrying on a business
  
  (4) If tax is payable under this Part for a taxation year by application of subsection (3) by a trust that is governed by a FHSA that carries on one or more businesses at any time in the taxation year, 
  (a) the holder of the FHSA is jointly and severally, or solidarily, liable with the trust to pay each amount payable under this Act by the trust that is attributable to that business or those businesses; and 
  (b) the issuer’s liability at any time for amounts payable under this Act in respect of that business or those businesses may not exceed the total of 
  (i) the amount of property of the trust that the issuer is in possession or control of at that time in its capacity as legal representative of the trust, and 
  (ii) the total amount of all distributions of property from the trust on or after the date that the notice of assessment was sent in respect of the taxation year and before that time. 
  
  ### FHSA deduction
  
  (5) There may be deducted in computing a taxpayer’s income for a taxation year an amount not exceeding the lesser of 
  (a) the amount determined by the formula is the total of all amounts each of which is the taxpayer’s annual FHSA limit for the year and each preceding taxation year, and is the total of all amounts each of which is an amount deducted under this subsection in computing the individual’s income for preceding taxation years, and 
  (b) the amount by which $40,000 exceeds the total of 
  (i) the amount determined for B in paragraph (a), and 
  (ii) all amounts transferred in the year or a preceding taxation year under paragraph 146(16)(a.2) to a FHSA under which the taxpayer is the holder. 
  
  ### Withdrawals included in income
  
  (6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts received by the taxpayer in the year out of or under a FHSA of which the taxpayer is the holder, other than an amount that is 
  (a) a qualifying withdrawal; 
  (b) a designated amount as defined in subsection 207.01(1); or  
  (c) otherwise included in computing the income of the taxpayer. 
  
  ### Transfer of amounts
  
  (7) Subsection (8) applies to an amount transferred at a particular time from a FHSA (in this subsection referred to as the “transferor FHSA”) if the following conditions are met: 
  (a) the amount is transferred on behalf of an individual who is 
  (i) the holder of the transferor FHSA, 
  (ii) a spouse or common-law partner or former spouse or common-law partner of the holder of the transferor FHSA and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the holder and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or 
  (iii) entitled to the amount as a consequence of the death of the holder of the transferor FHSA and was a spouse or common-law partner of the holder immediately before the death; 
  (b) the amount is transferred directly to 
  (i) another FHSA of the individual, or 
  (ii) an RRSP or a RRIF under which the individual is the annuitant; and 
  (c) if the transfer is not made to another FHSA of the holder of the transferor FHSA, the amount does not exceed the amount determined by the formula is the amount that is the total fair market value, immediately before the particular time, of all property held by a FHSA under which the holder of the transferor FHSA is a holder, and is the excess FHSA amount (as defined in subsection 207.01(1)) of the holder of the transferor FHSA at the particular time.  
  
  ### Tax-free transfer
  
  (8) If this subsection applies to an amount transferred from a FHSA, 
  (a) the amount shall not, by reason only of the transfer, be included in computing the income of any taxpayer; and 
  (b) no deduction may be made under this Part in respect of the amount in computing the income of any taxpayer. 
  
  ### Taxable transfer
  
  (9) If an amount is transferred from a FHSA to a plan or fund (in this subsection referred to as the “transferee plan”) that is a FHSA, RRSP or RRIF and subsection (8) does not apply to the amount transferred, 
  (a) the amount is deemed to have been received from the FHSA by the holder of the FHSA; 
  (b) the holder or annuitant of the transferee plan is deemed to have paid the amount as a contribution or premium to the transferee plan; and 
  (c) in the case that the transferee plan is a RRIF, for the purposes of subsection 146(5) and Part X.1, the annuitant of the transferee plan is deemed to have paid the amount at the time of the transfer as a premium under a RRSP under which the annuitant is the annuitant (as defined in subsection 146(1)).  
  
  ### Apportionment of transferred amount
  
  (10) If an amount is transferred from a FHSA to another FHSA, or to a RRSP or RRIF, and a portion but not all of the amount is transferred in accordance with subsection (7), 
  (a) subsection (8) applies to the portion of the amount transferred in accordance with subsection (7), and 
  (b) subsection (9) applies with respect to the remainder of the amount. 
  
  ### Security for loan
  
  (11) If at any time in a taxation year a trust governed by a FHSA uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the holder of the FHSA at that time. 
  
  ### Recovery of property used as security
  
  (12) If in a taxation year a property described in subsection (11) ceases to be used as security for a loan, there may be deducted, in computing the income of the holder of the relevant FHSA for the taxation year, an amount equal to the amount determined by the formula is the amount included by application of subsection (11) in computing the income of the holder as a consequence of the property being used as security for a loan; and is the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using the property, or permitting it to be used, as security for the loan and not as a result of a change in the fair market value of the property. 
  
  ### Successor holder
  
  (13) If the holder of a FHSA dies and the holder’s survivor is designated as the successor holder of the FHSA, the survivor is, immediately after the time of death, deemed to have entered into a new qualifying arrangement in respect of the FHSA unless 
  (a) the survivor is a qualifying individual and the balance of the FHSA is transferred to a RRSP or a RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death; or 
  (b) the survivor is not a qualifying individual, in which case the balance of the FHSA is to be transferred to a RRSP or a RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death. 
  
  ### Distribution on death
  
  (14) If, as a consequence of the death of the holder of a FHSA, an amount is distributed in a taxation year from the FHSA to, or on behalf of, a beneficiary, the amount shall be included in computing the beneficiary’s income for the year. 
  
  ### Deemed transfer or distribution
  
  (15) If an amount is distributed at any time from the FHSA of a deceased holder to the holder’s legal representative and a survivor of the holder is entitled to all or a portion of the amount in full or partial satisfaction of the survivor’s rights as a person beneficially interested under the deceased’s estate, the following rules apply: 
  (a) if a payment is made from the estate to a FHSA, RRSP or RRIF of the survivor, the payment is deemed to be a transfer from the FHSA to the extent that 
  (i) it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister, and 
  (ii) it meets the conditions to be a transferred amount under subsections (7) to (10); 
  (b) if a payment is made from the estate to the survivor, the payment is deemed for the purposes of subsection (14) to be a distribution to the survivor as a beneficiary to the extent that it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister; and 
  (c) for the purposes of subsection (14), the amount distributed to the legal representative from the FHSA is deemed to be reduced by the amounts designated in paragraphs (a) and (b). 
  
  ### Arrangement ceasing to be a FHSA
  
  (16) An arrangement that was filed with the Minister as a FHSA ceases to be a FHSA at 
  (a) subject to paragraph (b), the earliest of the following times: 
  (i) the end of the maximum participation period of the last holder, 
  (ii) the end of the year following the year of the death of the last holder, 
  (iii) the time at which the arrangement ceases to be a qualifying arrangement, or 
  (iv) the time at which the arrangement is not administered in accordance with the conditions in subsection (2); or 
  (b) a later time specified by the Minister in writing. 
  
  ### Rules applicable on FHSA cessation
  
  (17) If an arrangement ceases at a particular time to be a FHSA, 
  (a) subsection (3) does not apply to exempt the trust governed by the arrangement from tax under this Part on the taxable income of the trust earned after the particular time; 
  (b) if the taxpayer who was the holder under the arrangement is not deceased at the particular time, an amount equal to the fair market value of all property of the arrangement immediately before the particular time is to be included in the taxpayer’s income for the taxation year that includes the particular time; and 
  (c) if the last holder is deceased at the particular time, each beneficiary of the FHSA shall include in their income, for the taxation year that includes the particular time, the proportion of the fair market value of all property of the arrangement immediately before the particular time that the beneficiary is entitled to. 
  
  ### Regulations
  
  (18) The Governor in Council may make regulations requiring issuers of FHSAs to file information returns in respect of FHSAs. 
  
  ## Deferred Profit Sharing Plans 
  
  ### Definitions
  
  147 (1) In this section,  
  *deferred profit sharing plan* means a profit sharing plan accepted by the Minister for registration for the purposes of this Act, on application therefor in prescribed manner by a trustee under the plan and an employer of employees who are beneficiaries under the plan, as complying with the requirements of this section; (régime de participation différée aux bénéfices)   
  *forfeited amount*, under a deferred profit sharing plan or a plan the registration of which has been revoked pursuant to subsection 147(14) or 147(14.1), means an amount to which a beneficiary under the plan has ceased to have any rights, other than the portion thereof, if any, that is payable as a consequence of the death of the beneficiary to a person who is entitled thereto by virtue of the participation of the beneficiary in the plan; (montant perdu)   
  *licensed annuities provider* means a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business; (fournisseur de rentes autorisé)   
  *profit sharing plan* means an arrangement under which payments computed by reference to an employer’s profits from the employer’s business, or by reference to those profits and the profits, if any, from the business of a corporation with which the employer does not deal at arm’s length, are or have been made by the employer to a trustee in trust for the benefit of employees or former employees of that employer. (régime de participation aux bénéfices)  
  
  ### Participating employer
  
  (1.1) An employer is considered to participate in a profit sharing plan where the employer makes or has made payments under the plan to a trustee in trust for the benefit of employees or former employees of the employer. 
  
  ### Acceptance of plan for registration
  
  (2) The Minister shall not accept for registration for the purposes of this Act any profit sharing plan unless, in the Minister’s opinion, it complies with the following conditions: 
  (a) the plan provides that each payment made under the plan to a trustee in trust for the benefit of beneficiaries thereunder is the total of amounts each of which is required to be allocated by the trustee in the year in which it is received by the trustee, to the individual beneficiary in respect of whom the amount was so paid; 
  (a.1) the plan includes a stipulation that no contribution may be made to the plan other than 
  (i) a contribution made in accordance with the terms of the plan by an employer for the benefit of the employer’s employees who are beneficiaries under the plan, or 
  (ii) an amount transferred to the plan in accordance with subsection 147(19); 
  (b) the plan does not provide for the payment of any amount to an employee or other beneficiary thereunder by way of loan; 
  (c) the plan provides that no part of the funds of the trust governed by the plan may be invested in notes, bonds, debentures, bankers’ acceptances or similar obligations of 
  (i) an employer by whom payments are made in trust to a trustee under the plan for the benefit of beneficiaries thereunder, or 
  (ii) a corporation with which that employer does not deal at arm’s length; 
  (d) the plan provides that no part of the funds of the trust governed by the plan may be invested in shares of a corporation at least 50% of the property of which consists of notes, bonds, debentures, bankers’ acceptances or similar obligations of an employer or a corporation described in paragraph 147(2)(c); 
  (e) the plan includes a provision stipulating that no right of a person under the plan is capable of any surrender or assignment other than 
  (i) an assignment under a decree, an order or a judgment of a competent tribunal, or under a written agreement, that relates to a division of property between an individual and the individual’s spouse or common-law partner, or former spouse or common-law partner, in settlement of rights that arise out of, or on a breakdown of, their marriage or common-law partnership, 
  (ii) an assignment by a deceased individual’s legal representative on the distribution of the individual’s estate, and 
  (iii) a surrender of benefits to avoid revocation of the plan’s registration; 
  (f) the plan includes a provision stipulating that each of the trustees under the plan shall be resident in Canada; 
  (g) the plan provides that, if a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee is not a trustee under the plan, there shall be at least 3 trustees under the plan who shall be individuals; 
  (h) the plan provides that all income received, capital gains made and capital losses sustained by the trust governed by the plan must be allocated to beneficiaries under the plan on or before a day 90 days after the end of the year in which they were received, made or sustained, as the case may be, to the extent that they have not been allocated in years preceding that year; 
  (i) the plan provides that each amount allocated or reallocated by a trustee under the plan to a beneficiary under the plan vests irrevocably in that beneficiary, 
  (i) in the case of an amount allocated or reallocated before 1991, at a time that is not later than 5 years after the end of the year in which it was allocated or reallocated, unless the beneficiary becomes, before that time, an individual who is not an employee of any employer who participates in the plan, and 
  (ii) in the case of any other amount, not later than the later of the time of allocation or reallocation and the day on which the beneficiary completes a period of 24 consecutive months as a beneficiary under the plan or under any other deferred profit sharing plan for which the plan can reasonably be considered to have been substituted; 
  (i.1) the plan requires that each forfeited amount under the plan and all earnings of the plan reasonably attributable thereto be paid to employers who participate in the plan, or be reallocated to beneficiaries under the plan, on or before the later of December 31, 1991 and December 31 of the year immediately following the calendar year in which the amount is forfeited, or such later time as is permitted in writing by the Minister under subsection 147(2.2); 
  (j) the plan provides that a trustee under the plan inform, in writing, all new beneficiaries under the plan of their rights under the plan; 
  (k) the plan provides that, in respect of each beneficiary under the plan who has been employed by an employer who participates in the plan, all amounts vested under the plan in the beneficiary become payable 
  (i) to the beneficiary, or 
  (ii) in the event of the beneficiary’s death, to another person designated by the beneficiary or to the beneficiary’s estate, not later than the earlier of 
  (iii) the end of the year in which the beneficiary attains 71 years of age, and 
  (iv) 90 days after the earliest of 
  (A) the death of the beneficiary, 
  (B) the day on which the beneficiary ceases to be employed by an employer who participates in the plan where, at the time of ceasing to be so employed, the beneficiary is not employed by another employer who participates in the plan, and 
  (C) the termination or winding-up of the plan, except that the plan may provide that, on election by the beneficiary, all or any part of the amounts payable to the beneficiary may be paid 
  (v) in equal instalments payable not less frequently than annually over a period not exceeding 10 years from the day on which the amount became payable, or 
  (vi) by a trustee under the plan to a licensed annuities provider to purchase for the beneficiary an annuity (other than an advanced life deferred annuity), if 
  (A) payment of the annuity is to begin not later than the end of the year in which the beneficiary attains 71 years of age, and 
  (B) the guaranteed term, if any, of the annuity does not exceed 15 years; 
  (k.1) the plan requires that no benefit or loan, other than 
  (i) a benefit the amount of which is required to be included in computing the beneficiary’s income, 
  (ii) an amount referred to in paragraph 147(10)(b), 
  (ii.1) an amount paid pursuant to or under the plan by a trustee under the plan to a licensed annuities provider to purchase for a beneficiary under the plan an annuity to which subparagraph (k)(vi) or (19)(d)(v) applies, 
  (iii) a benefit derived from an allocation or reallocation referred to in subsection 147(2), or 
  (iv) the benefit derived from the provision of administrative or investment services in respect of the plan, that is conditional in any way on the existence of the plan may be extended to a beneficiary thereunder or to a person with whom the beneficiary was not dealing at arm’s length; 
  (k.2) the plan provides that no individual who is 
  (i) a person related to the employer, 
  (ii) a person who is, or is related to, a specified shareholder of the employer or of a corporation related to the employer, 
  (iii) where the employer is a partnership, a person related to a member of the partnership, or 
  (iv) where the employer is a trust, a person who is, or is related to, a beneficiary under the trust may become a beneficiary under the plan; and 
  (l) the plan, in all other respects, complies with regulations of the Governor in Council made on the recommendation of the Minister of Finance. 
  
  ### Terms limiting contributions
  
  (2.1) The Minister shall not accept for registration for the purposes of this Act a profit sharing plan unless it includes terms that are adequate to ensure that the requirements of subsection 147(5.1) in respect of the plan will be satisfied for each calendar year. 
  
  ### Reallocation of forfeitures
  
  (2.2) The Minister may, on written application, extend the time for satisfying the requirements of paragraph 147(2)(i.1) where 
  (a) the total of the forfeited amounts arising in a calendar year is greater than normal because of unusual circumstances; and 
  (b) the forfeited amounts are to be reallocated on a reasonable basis to a majority of beneficiaries under the plan. 
  
  ### Acceptance of employees profit sharing plan for registration
  
  (3) The Minister shall not accept for registration for the purposes of this Act any employees profit sharing plan unless all the capital gains of or made by the trust governed by the plan before the date of application for registration of the plan and all the capital losses of or sustained by the trust before that date have been allocated by the trustee under the plan to employees and other beneficiaries thereunder. 
  
  ### Capital gains determined
  
  (4) For the purposes of subsections 147(3) and 147(11), such amount as may be determined by the Minister, on request in prescribed manner by the trustee of a trust governed by an employees profit sharing plan, shall be deemed to be the amount of 
  (a) the capital gains of or made by the trust governed by the plan before the date of application for registration of the plan, or 
  (b) the capital losses of or sustained by the trust before that date, as the case may be. 
  
  ### Registration date
  
  (5) Where a profit sharing plan is accepted by the Minister for registration as a deferred profit sharing plan, the plan shall be deemed to have become registered as a deferred profit sharing plan 
  (a) on the date the application for registration of the plan was made; or 
  (b) where in the application for registration a later date is specified as the date on which the plan is to commence as a deferred profit sharing plan, on that date. 
  
  ### Contribution limits
  
  (5.1) For the purposes of subsections 147(2.1) and 147(9) and paragraph 147(14)(c.4), the requirements of this subsection in respect of a deferred profit sharing plan are satisfied for a calendar year if, in the case of each beneficiary under the plan and each employer in respect of whom the beneficiary’s pension credit (as prescribed by regulation) for the year under the plan is greater than nil, 
  (a) the total of all amounts each of which is the beneficiary’s pension credit (as prescribed by regulation) for the year in respect of the employer under a deferred profit sharing plan does not exceed the lesser of 
  (i) 1/2 of the money purchase limit for the year, and 
  (ii) 18% of the amount that would be the beneficiary’s compensation (within the meaning assigned by subsection 147.1(1)) from the employer for the year if the definition 
  *compensation* in subsection 147.1(1) were read without reference to paragraph (b) of that definition;  
  (b) the total of all amounts each of which is the beneficiary’s pension credit (as prescribed by regulation) for the year under a deferred profit sharing plan in respect of 
  (i) the employer, or 
  (ii) any other employer who, at any time in the year, does not deal at arm’s length with the employer does not exceed 1/2 of the money purchase limit for the year; and 
  (c) the total of 
  (i) the beneficiary’s pension adjustment for the year in respect of the employer, and 
  (ii) the total of all amounts each of which is the beneficiary’s pension adjustment for the year in respect of any other employer who, at any time in the year, does not deal at arm’s length with the employer does not exceed the lesser of 
  (iii) the money purchase limit for the year, and 
  (iv) 18% of the total of all amounts each of which is the beneficiary’s compensation (within the meaning assigned by subsection 147.1(1)) for the year from the employer or any other employer referred to in subparagraph 147(5.1)(c)(ii). 
  (5.11)  [Repealed, 2013, c. 34, s. 301]  
  
  ### Deferred plan not employees profit sharing plan
  
  (6) For a period during which a plan is a deferred profit sharing plan, the plan shall be deemed, for the purposes of this Act, not to be an employees profit sharing plan. 
  
  ### No tax while trust governed by plan
  
  (7) No tax is payable under this Part by a trust on the taxable income of the trust for a period during which the trust was governed by a deferred profit sharing plan. 
  
  ### Amount of employer’s contribution deductible
  
  (8) Subject to subsection 147(9), there may be deducted in computing the income of an employer for a taxation year the total of all amounts each of which is an amount paid by the employer in the year or within 120 days after the end of the year to a trustee under a deferred profit sharing plan for the benefit of the employer’s employees who are beneficiaries under the plan, to the extent that the amount was paid in accordance with the terms of the plan and was not deducted in computing the employer’s income for a preceding taxation year. 
  
  ### Limitation on deduction
  
  (9) Where the requirements of subsection 147(5.1) in respect of a deferred profit sharing plan are not satisfied for a calendar year by reason that the pension credits of a beneficiary under the plan in respect of a particular employer do not comply with paragraph 147(5.1)(a) or the beneficiary’s pension credits or pension adjustments in respect of a particular employer and other employers who do not deal at arm’s length with the particular employer do not comply with paragraph 147(5.1)(b) or 147(5.1)(c), the particular employer is not entitled to a deduction under subsection 147(8) in computing the particular employer’s income for any taxation year in respect of an amount paid to a trustee under the plan in the calendar year except to the extent expressly permitted in writing by the Minister, and, for the purposes of this subsection, an amount paid to a trustee of a deferred profit sharing plan in the first two months of a calendar year shall be deemed to have been paid in the immediately preceding year and not to have been paid in the year to the extent that the amount can reasonably be considered to be in respect of the immediately preceding year. 
  
  ### No deduction
  
  (9.1) Notwithstanding subsection 147(8), no deduction shall be made in computing the income of an employer for a taxation year in respect of an amount paid by the employer for the year to a trustee under a deferred profit sharing plan in respect of a beneficiary who is described in paragraph 147(2)(k.2) in respect of the plan. 
  
  ### Amounts received taxable
  
  (10) There shall be included in computing the income of a beneficiary under a deferred profit sharing plan for a taxation year the amount, if any, by which 
  (a) the total of all amounts received by the beneficiary in the year from a trustee under the plan (other than as a result of acquiring an annuity described in subparagraph 147(2)(k)(vi) under which the beneficiary is the annuitant) exceeds 
  (b) the total of all amounts each of which is an amount determined for the year under subsection 147(10.1), 147(11) or 147(12) in relation to the plan and in respect of the beneficiary. 
  
  ### Single payment on retirement, etc.
  
  (10.1) For the purposes of subsections 147(10) and 147(10.2), where a beneficiary under a deferred profit sharing plan has received, in a taxation year and when the beneficiary was resident in Canada, from a trustee under the plan a single payment that included shares of the capital stock of a corporation that was an employer who contributed to the plan or of a corporation with which the employer did not deal at arm’s length on the beneficiary’s withdrawal from the plan or retirement from employment or on the death of an employee or former employee and has made an election in respect thereof in prescribed manner and prescribed form, the amount determined for the year under this subsection in relation to the plan and in respect of the beneficiary is the amount, if any, by which the fair market value of those shares, immediately before the single payment was made, exceeds the cost amount to the plan of those shares at that time. 
  
  ### Idem
  
  (10.2) Where a trustee under a deferred profit sharing plan has at any time in a taxation year made under the plan a single payment that included shares referred to in subsection 147(10.1) to a beneficiary who was resident in Canada at the time and the beneficiary has made an election under that subsection in respect of that payment, 
  (a) the trustee shall be deemed to have disposed of those shares for proceeds of disposition equal to the cost amount to the trust of those shares immediately before the single payment was made; 
  (b) the cost to the beneficiary of those shares shall be deemed to be their cost amount to the trust immediately before the single payment was made; 
  (c) the cost to the beneficiary of each of those shares shall be deemed to be the amount determined by the formula is the amount determined under paragraph 147(10.2)(a) in respect of all of those shares, is the fair market value of that share at the time the single payment was made, and is the fair market value of all those shares at the time the single payment was made; and 
  (d) for the purposes of paragraph 60(j), the cost to the beneficiary of those shares is an eligible amount in respect of the beneficiary for the year. 
  
  ### Amount contributed to or forfeited under a plan
  
  (10.3) There shall be included in computing the income for a taxation year of a beneficiary described in paragraph 147(2)(k.2) the total of amounts allocated or reallocated to the beneficiary in the year in respect of 
  (a) any amount contributed after December 1, 1982 by an employer to, or 
  (b) any forfeited amount under a deferred profit sharing plan or a plan the registration of which has been revoked pursuant to subsection 147(14) or 147(14.1). 
  
  ### Income on disposal of shares
  
  (10.4) Where a taxpayer has a share in respect of which the taxpayer has made an election under subsection 147(10.1), there shall be included in computing the taxpayer’s income for the taxation year in which the taxpayer disposed of or exchanged the share or ceased to be a resident of Canada, whichever is the earlier, the amount, if any, by which the fair market value of the share at the time the taxpayer acquired it exceeds the cost to the taxpayer, determined under paragraph (10.2)(c), of the share at the time the taxpayer acquired it. 
  
  ### Amended contract
  
  (10.5) Where an amendment is made to an annuity contract to which subparagraph (2)(k)(vi) applies, the sole effect of which is to defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, the annuity contract is deemed not to have been disposed of by the individual. 
  (10.6)  [Repealed, 2007, c. 29, s. 20]  
  
  ### Portion of receipts deductible
  
  (11) For the purposes of subsections 147(10), 147(10.1) and 147(12), where an amount was received in a taxation year from a trustee under a deferred profit sharing plan by an employee or other beneficiary thereunder, and the employee was a beneficiary under the plan at a time when the plan was an employees profit sharing plan, the amount determined for the year under this subsection in relation to the plan and in respect of the beneficiary is such portion of the total of the amounts so received in the year as does not exceed 
  (a) the total of 
  (i) each amount included in respect of the plan in computing the income of the employee for the year or for a previous taxation year by virtue of section 144, 
  (ii) each amount paid by the employee to a trustee under the plan at a time when it was an employees profit sharing plan, and 
  (iii) each amount that was allocated to the employee or other beneficiary by a trustee under the plan, at a time when it was an employees profit sharing plan, in respect of a capital gain made by the trust before 1972, minus 
  (b) the total of 
  (i) each amount received by the employee or other beneficiary in a previous taxation year from a trustee under the plan at a time when it was an employees profit sharing plan, 
  (ii) each amount received by the employee or other beneficiary in a previous taxation year from a trustee under the plan at a time when it was a deferred profit sharing plan, and 
  (iii) each amount allocated to the employee or other beneficiary by a trustee under the plan, at a time when it was an employees profit sharing plan, in respect of a capital loss sustained by the trust before 1972. 
  
  ### Idem
  
  (12) For the purposes of subsections 147(10) and 147(10.1), where an amount was received in a taxation year from a trustee under a deferred profit sharing plan by an employee or other beneficiary thereunder, and the employee has made a payment in the year or a previous year to a trustee under the plan at a time when the plan was a deferred profit sharing plan, the amount determined for the year under this subsection in relation to the plan and in respect of the beneficiary is such portion of the total of the amounts so received in the year (minus any amount determined for the year under subsection 147(11) in relation to the plan and in respect of the beneficiary) as does not exceed 
  (a) the total of all amounts each of which was so paid by the employee in the year or a previous year to the extent that the payment was not deductible in computing the employee’s income, minus 
  (b) the total of all amounts each of which was received by the employee or other beneficiary from a trustee under the plan, at a time when it was a deferred profit sharing plan, to the extent that it was included in the computation of an amount determined for a previous year under this subsection in relation to the plan and in respect of the employee or other beneficiary. 
  
  ### Appropriation of trust property by employer
  
  (13) Where funds or property of a trust governed by a deferred profit sharing plan have been appropriated in any manner whatever to or for the benefit of a taxpayer who is 
  (a) an employer by whom payments are made in trust to a trustee under the plan, or 
  (b) a corporation with which that employer does not deal at arm’s length, otherwise than in payment of or on account of shares of the capital stock of the taxpayer purchased by the trust, the amount or value of the funds or property so appropriated shall be included in computing the income of the taxpayer for the taxation year of the taxpayer in which the funds or property were so appropriated, unless the funds or property or an amount in lieu thereof equal to the amount or value of the funds or property was repaid to the trust within one year from the end of the taxation year, and it is established by subsequent events or otherwise that the repayment was not made as part of a series of appropriations and repayments. 
  
  ### Revocation of registration
  
  (14) Where, at any time after a profit sharing plan has been accepted by the Minister for registration for the purposes of this Act, 
  (a) the plan has been revised or amended or a new plan has been substituted therefor, and the plan as revised or amended or the new plan substituted therefor, as the case may be, ceased to comply with the requirements of this section for its acceptance by the Minister for registration for the purposes of this Act, 
  (b) any provision of the plan has not been complied with, 
  (c) the plan is a plan that did not, as of January 1, 1968, 
  (i) comply with the requirements of paragraphs 147(2)(a), 147(2)(b) to 147(2)(h), 147(2)(j) and 147(2)(k), and paragraph 147(2)(i) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on January 1, 1972, and  
  (ii) provide that the amounts held by the trust for the benefit of beneficiaries thereunder that remained unallocated on December 31, 1967 must be allocated or reallocated, as the case may be, before 1969, 
  (c.1) the plan becomes a revocable plan pursuant to subsection 147(21), 
  (c.2) the plan does not comply with the requirements of paragraphs 147(2)(a) to 147(2)(k) and 147(2)(l), 
  (c.3) in the case of a plan that became registered after March, 1983, the plan does not comply with the requirements of paragraphs 147(2)(k.1) and 147(2)(k.2), 
  (c.4) the requirements of subsection 147(5.1) in respect of the plan are not satisfied for a calendar year, or 
  (c.5) an employer who participates in the plan fails to file an information return reporting a pension adjustment of a beneficiary under the plan as and when required by regulation, the Minister may revoke the registration of the plan, 
  (d) where paragraph 147(14)(a) applies, as of the date that the plan ceased so to comply, or any subsequent date, 
  (e) where paragraph 147(14)(b) applies, as of the date that any provision of the plan was not so complied with, or any subsequent date, 
  (f) where paragraph 147(14)(c) applies, as of any date following January 1, 1968, 
  (g) where paragraph 147(14)(c.1) applies, as of the date on which the plan became a revocable plan, or any subsequent date, 
  (h) where paragraph 147(14)(c.2) or 147(14)(c.3) applies, as of the date on which the plan did not so comply, or any subsequent date, but not before January 1, 1991, 
  (i) where paragraph 147(14)(c.4) applies, as of the end of the year for which the requirements of subsection 147(5.1) in respect of the plan are not satisfied, or any subsequent date, and 
  (j) where paragraph 147(14)(c.5) applies, as of any date after the date by which the information return was required to be filed, and the Minister shall thereafter give notice of the revocation by registered mail to a trustee under the plan and to an employer of employees who are beneficiaries under the plan. 
  
  ### Idem
  
  (14.1) Where on any day after June 30, 1982 a benefit or loan is extended or continues to be extended as a consequence of the existence of a deferred profit sharing plan and that benefit or loan would be prohibited if the plan met the requirement for registration contained in paragraph 147(2)(k.1), the Minister may revoke the registration of the plan as of that or any subsequent day that is specified by the Minister in a notice given by registered mail to a trustee under the plan and to an employer of employees who are beneficiaries under the plan. 
  
  ### Rules applicable to revoked plan
  
  (15) Where the Minister revokes the registration of a deferred profit sharing plan, the plan (in this section referred to as the “revoked plan”) shall be deemed, for the purposes of this Act, not to be a deferred profit sharing plan, and notwithstanding any other provision of this Act, the following rules shall apply: 
  (a) the revoked plan shall not be accepted for registration for the purposes of this Act or be deemed to have become registered as a deferred profit sharing plan at any time within a period of one year commencing on the date the plan became a revoked plan; 
  (b) subsection 147(7) does not apply to exempt the trust governed by the plan from tax under this Part on the taxable income of the trust for a taxation year in which, at any time therein, the trust was governed by the revoked plan; 
  (c) no deduction shall be made by an employer in computing the employer’s income for a taxation year in respect of an amount paid by the employer to a trustee under the plan at a time when it was a revoked plan; 
  (d) there shall be included in computing the income of a taxpayer for a taxation year 
  (i) all amounts received by the taxpayer in the year from a trustee under the revoked plan that, by virtue of subsection 147(10), would have been so included if the revoked plan had been a deferred profit sharing plan at the time the taxpayer received those amounts, and 
  (ii) the amount or value of any funds or property appropriated to or for the benefit of the taxpayer in the year that, by virtue of subsection 147(13), would have been so included if the revoked plan had been a deferred profit sharing plan at the time of the appropriation of the funds or property; and 
  (e) the revoked plan shall be deemed, for the purposes of this Act, not to be an employees profit sharing plan or a retirement compensation arrangement. 
  
  ### Payments out of profits
  
  (16) Where the terms of an arrangement under which an employer makes payments to a trustee specifically provide that the payments shall be made “out of profits”, the arrangement shall be deemed, for the purpose of subsection 147(1), to be an arrangement for payments “computed by reference to an employer’s profits from the employer’s business”. 
  
  ### Interpretation of 
  *other beneficiary* 
  
  (17) Where the expression “employee or other beneficiary” under a profit sharing plan occurs in this section, the words 
  *other beneficiary* shall be construed as meaning any person, other than the employee, to whom any amount is or may become payable by a trustee under the plan as a result of payments made to the trustee under the plan in trust for the benefit of employees, including the employee.  
  
  ### Inadequate consideration on purchase from or sale to trust
  
  (18) Where a trust governed by a deferred profit sharing plan or revoked plan 
  (a) disposes of property to a taxpayer for a consideration less than the fair market value of the property at the time of the transaction, or for no consideration, or 
  (b) acquires property from a taxpayer for a consideration greater than the fair market value of the property at the time of the transaction, the difference between that fair market value and the consideration, if any, 
  (c) shall, for the purposes of subsections 147(10) and 147(15), be deemed to be an amount received by the taxpayer at the time of the disposal or acquisition, as the case may be, from a trustee under the plan as if the taxpayer were a beneficiary under the plan, and 
  (d) is an amount taxable under section 201 for the calendar year in which the trust disposes of or acquires the property, as the case may be. 
  
  ### Transfer to RPP, RRSP or DPSP
  
  (19) An amount is transferred from a deferred profit sharing plan in accordance with this subsection if the amount 
  (a) is not part of a series of periodic payments; 
  (b) is transferred on behalf of an individual 
  (i) who is an employee or former employee of an employer who participated in the plan on the employee’s behalf, or 
  (ii) who is a spouse or common-law partner, or former spouse or common-law partner, of an employee or former employee referred to in subparagraph (i) and who is entitled to the amount 
  (A) as a consequence of the death of the employee or former employee, or 
  (B) under a decree, an order or a judgment of a competent tribunal, or under a written agreement, that relates to a division of property between the employee or former employee and the individual in settlement of rights that arise out of, or on a breakdown of, their marriage or common-law partnership; in full or partial satisfaction of the individual’s entitlement to benefits under the plan; 
  (c) would, if it were paid directly to the individual, be included under subsection 147(10) in computing the individual’s income for a taxation year; and 
  (d) is transferred for the benefit of the individual directly to 
  (i) a registered pension plan, 
  (ii) a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), 
  (iii) a deferred profit sharing plan that can reasonably be expected to have at least 5 beneficiaries at all times throughout the calendar year in which the transfer is made, 
  (iv) a registered retirement income fund under which the individual is the annuitant (within the meaning assigned by subsection 146.3(1)), or 
  (v) a licensed annuities provider to acquire an advanced life deferred annuity, if the individual is an employee or former employee of an employer who participated in the plan on the employee’s behalf. 
  
  ### Taxation of amount transferred
  
  (20) Where an amount is transferred on behalf of an individual in accordance with subsection 147(19), 
  (a) the amount shall not, by reason only of that transfer, be included by virtue of this section in computing the income of any taxpayer; and 
  (b) no deduction may be made under any provision of this Act in respect of the amount in computing the income of any taxpayer. 
  
  ### Restriction re transfers
  
  (21) A deferred profit sharing plan becomes a revocable plan at any time that an amount is transferred from the plan to a registered pension plan, a registered retirement savings plan or another deferred profit sharing plan unless 
  (a) the transfer is in accordance with subsection 147(19); or 
  (b) the amount is deductible under paragraph 60(j) or 60(j.2) of this Act or paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, by the individual on whose behalf the transfer is made.  
  
  ### Excess transfer
  
  (22) Where 
  (a) the transfer of an amount from a deferred profit sharing plan in a calendar year on behalf of a beneficiary under the plan would, but for this subsection, be in accordance with subsection 147(19), and 
  (b) the requirements of subsection 147(5.1) in respect of the plan are not satisfied for the year by reason that the beneficiary’s pension credits or pension adjustments do not comply with any of paragraphs 147(5.1)(a) to 147(5.1)(c), such portion of the amount transferred as may reasonably be considered to derive from amounts allocated or reallocated to the beneficiary in the year or from earnings reasonably attributable to those amounts shall, except to the extent otherwise expressly provided in writing by the Minister, be deemed to be an amount that was not transferred in accordance with subsection 147(19). 
  
  ## Registered Pension Plans 
  
  ### Definitions
  
  147.1 (1) In this section and sections 147.2 and 147.3,  
  *actuary* means a Fellow of the Canadian Institute of Actuaries; (actuaire)   
  *administrator* of a pension plan means the person or body of persons that has ultimate responsibility for the administration of the plan; (administrateur)   
  *average wage* for a calendar year means the amount that is obtained by dividing by 12 the total of all amounts each of which is the wage measure for a month in the 12 month period ending on June 30 of the immediately preceding calendar year; (salaire moyen)   
  *compensation* of an individual from an employer for a calendar year means the total of all amounts each of which is  
  (a) an amount in respect of the individual’s employment with the employer, or an office in respect of which the individual is remunerated by the employer, that is required (or that would be required but for paragraph 81(1)(a) as it applies with respect to the Indian Act or the Foreign Missions and International Organizations Act) by section 5 or 6 to be included in computing the individual’s income for the year, except such portion of the amount that  
  (i) meets the following conditions: 
  (A) the portion may reasonably be considered to relate to a period throughout which the individual was not resident in Canada, and 
  (B) the portion is 
  (I) not attributable to the performance of the duties of the office or employment in Canada, or 
  (II) exempt from income tax in Canada by reason of a tax treaty, or 
  (ii) is deducted under paragraph 8(1)(o.2) in computing the taxpayer’s income for the year, 
  (b) a prescribed amount, or 
  (c) an amount acceptable to the Minister in respect of remuneration received by the individual from any employer for a period in the year throughout which the individual was not resident in Canada, to the extent that the amount is not otherwise included in the total; ( rétribution)   
  *defined benefit provision* of a pension plan means terms of the plan under which benefits in respect of each member are determined in any way other than that described in the definition 
  *money purchase provision* in this subsection; (disposition à prestations déterminées)   
  *designated money purchase provision*, in a calendar year, means a money purchase provision of a registered pension plan under which accounts are maintained in respect of at least 10 members throughout the year or under which the total contributions made for the year on behalf of an individual described in paragraph 8515(4)(a) or (b) of the Income Tax Regulations do not exceed 50% of the total contributions made for the year; (disposition à cotisations déterminées désignée)   
  *former limit* for each calendar year after 2005 and before 2010 means the greater of  
  (a) the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of 
  (i) $18,000, and 
  (ii) the quotient obtained when the average wage for the year is divided by the average wage for 2005, and 
  (b) for 2006, $18,000, and for any other of those calendar years, the former limit for the preceding calendar year; ( ancien plafond)   
  *member* of a pension plan means an individual who has a right, either immediate or in the future and either absolute or contingent, to receive benefits under the plan, other than an individual who has such a right only by reason of the participation of another individual in the plan; (participant)   
  *money purchase limit* for a calendar year means  
  (a) for years before 1990, nil, 
  (b) for 1990, $11,500, 
  (c) for 1991 and 1992, $12,500, 
  (d) for 1993, $13,500, 
  (e) for 1994, $14,500, 
  (f) for 1995, $15,500, 
  (g) for years after 1995 and before 2003, $13,500, 
  (h) for 2003, $15,500, 
  (i) for 2004, $16,500, 
  (j) for 2005, $18,000, 
  (k) for 2006, the greater of $19,000 and the former limit for the year, 
  (l) for 2007, the greater of $20,000 and the former limit for the year, 
  (m) for 2008, the greater of $21,000 and the former limit for the year, 
  (n) for 2009, the greater of $22,000 and the former limit for the year, and 
  (o) for each year after 2009, the greater of 
  (i) the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of 
  (A) the money purchase limit for 2009, and 
  (B) the quotient obtained when the average wage for the year is divided by the average wage for 2009, and 
  (ii) the money purchase limit for the preceding year; ( plafond des cotisations déterminées)   
  *money purchase provision* of a pension plan means terms of the plan  
  (a) which provide for a separate account to be maintained in respect of each member, to which are credited contributions made to the plan by, or in respect of, the member and any other amounts allocated to the member, and to which are charged payments made in respect of the member, and 
  (b) under which the only benefits in respect of a member are benefits 
  (i) determined solely with reference to, and provided by, the amount in the member’s account, or 
  (ii) provided under a VPLA fund described in subsection 8506(13) of the Income Tax Regulations ; (disposition à cotisations déterminées)   
  *multi-employer plan* in a calendar year has the meaning assigned by regulation; (régime interentreprises)   
  *participating employer*, in relation to a pension plan, means an employer who has made, or is required to make, contributions to the plan in respect of the employer’s employees or former employees, or payments under the plan to the employer’s employees or former employees, and includes a prescribed employer; (employeur participant)   
  *past service event* has the meaning assigned by regulation; (fait lié aux services passés)   
  *permitted corrective contribution* to a registered pension plan means a contribution in a calendar year in respect of an individual that would otherwise have been made in one or more of the 10 immediately preceding years (each such year referred to in this definition as a “retroactive year”) in accordance with the money purchase provision of the plan as registered or a money purchase provision of a registered pension plan of a predecessor employer (for the purposes of this definition, as defined in subsection 8500(1) of the Regulations), but for an error that caused a failure to enroll the individual as a member of the plan or a failure to make a required contribution, to the extent that the amount of the contribution does not exceed the lesser of  
  (a) the total of all amounts each of which is an amount, for a retroactive year, determined by the formula is the total of all amounts each of which is an amount by which a contribution required to be made at a particular time in the retroactive year under the provision in respect of the individual exceeds the amount contributed at the particular time in respect of the individual, is the amount of interest, if any, calculated in respect of each amount determined for A at a rate that 
  (i) is required by the Pension Benefits Standards Act, 1985 or a similar law of a province, or  
  (ii) if subparagraph (i) does not apply, does not exceed a reasonable rate, and is the total amount previously contributed to the provision in respect of the individual under subsection (20) for the retroactive year, and 
  (b) the amount determined by the formula is 150% of the money purchase limit for the calendar year, and is the total amount previously contributed in respect of the individual under subsection (20) to the provision, or to any other money purchase provision, if a participating employer under the provision or a predecessor employer has been a participating employer in respect of the individual under that other provision; ( cotisation corrective permise)   
  *single amount* means an amount that is not part of a series of periodic payments; (montant unique)   
  *specified multi-employer plan* in a calendar year has the meaning assigned by regulation; (régime interentreprises déterminé)   
  *spouse* [Repealed, 1994, c. 7, Sch. VIII, s. 85(2)]   
  *wage measure* for a month means the average weekly wages and salaries of  
  (a) the Industrial Aggregate in Canada for the month as published by Statistics Canada under the Statistics Act, or  
  (b) in the event that the Industrial Aggregate ceases to be published, such other measure for the month as is prescribed by regulation under the Canada Pension Plan for the purposes of paragraph 18(5)(b) of that Act. (mesure des gains)  
  
  ### Registration of plan
  
  (2) The following rules apply with respect to the registration of pension plans: 
  (a) the Minister shall not register a pension plan unless 
  (i) application for registration is made in prescribed manner by the plan administrator, 
  (ii) the plan complies with prescribed conditions for registration, and 
  (iii) where the plan is required to be registered under the Pension Benefits Standards Act, 1985 or a similar law of a province, application for such registration has been made;  
  (b) where a pension plan that was submitted for registration before 1992 is registered by the Minister, the registration is effective from the day specified in writing by the Minister; and 
  (c) where a pension plan that is submitted for registration after 1991 is registered by the Minister, the registration is effective from the later of 
  (i) January 1 of the calendar year in which application for registration is made in prescribed manner by the plan administrator, and 
  (ii) the day the plan began. 
  
  ### Deemed registration
  
  (3) Where application is made to the Minister for registration of a pension plan for the purposes of this Act and, where the manner for making the application has been prescribed, the application is made in that manner by the administrator, 
  (a) subject to paragraph 147.1(3)(b), the plan is, for the purposes of this Act other than paragraphs 60(j) and 60(j.2) and sections 147.3 and 147.4, deemed to be a registered pension plan throughout the period that begins on the latest of 
  (i) January 1 of the calendar year in which the application is made, 
  (ii) the day of commencement of the plan, and 
  (iii) January 1, 1989 and ending on the day on which a final determination is made with respect to the application; and 
  (b) where the final determination made with respect to the application is a refusal to register the plan, this Act shall, after the day of the final determination, apply as if the plan had never been deemed, under paragraph 147.1(3)(a), to be a registered pension plan, except that 
  (i) any information return otherwise required to be filed under subsection 207.7(3) before the particular day that is 90 days after the day of the final determination is not required to be filed until the particular day, and 
  (ii) subsections 227(8) and 227(8.2) are not applicable with respect to contributions made to the plan on or before the day of the final determination. 
  
  ### Acceptance of amendments
  
  (4) The Minister shall not accept an amendment to a registered pension plan unless 
  (a) application for the acceptance is made in prescribed manner by the plan administrator; 
  (b) the plan as amended complies with prescribed conditions for registration; and 
  (c) the amendment complies with prescribed conditions. 
  
  ### Additional conditions
  
  (5) The Minister may, at any time, impose reasonable conditions applicable with respect to registered pension plans, a class of such plans or a particular registered pension plan. 
  
  ### Administrator
  
  (6) There shall, for each registered pension plan, be a person or a body of persons that has ultimate responsibility for the administration of the plan and, except as otherwise permitted in writing by the Minister, the person or a majority of the persons who constitute the body shall be a person or persons resident in Canada. 
  
  ### Obligations of administrator
  
  (7) The administrator of a registered pension plan shall 
  (a) administer the plan in accordance with the terms of the plan as registered except that, where the plan fails to comply with the prescribed conditions for registration or any other requirement of this Act or the regulations, the administrator may administer the plan as if it were amended to so comply; 
  (b) before July, 1990, in the case of a person or body that is the administrator on January 1, 1989 or becomes the administrator before June, 1990, and, in any other case, within 30 days after becoming the administrator, inform the Minister in writing 
  (i) of the name and address of the person who is the administrator, or 
  (ii) of the names and addresses of the persons who constitute the body that is the administrator; and 
  (c) where there is any change in the information provided to the Minister in accordance with this paragraph or paragraph 147.1(7)(b), inform the Minister in writing, within 60 days after the change, of the new information. 
  
  ### Pension adjustment limits
  
  (8) Except as otherwise provided by regulation, a registered pension plan (other than a multi-employer plan) becomes, at the end of a calendar year after 1990, a revocable plan where 
  (a) the pension adjustment for the year of a member of the plan in respect of a participating employer exceeds the lesser of 
  (i) the money purchase limit for the year, and 
  (ii) 18% of the member’s compensation from the employer for the year; or 
  (b) the total of 
  (i) the pension adjustment for the year of a member of the plan in respect of a participating employer, and 
  (ii) the total of all amounts each of which is the member’s pension adjustment for the year in respect of an employer who, at any time in the year, does not deal at arm’s length with the employer referred to in subparagraph 147.1(8)(b)(i) exceeds the money purchase limit for the year. 
  
  ### Idem — multi-employer plans
  
  (9) Except as otherwise provided by regulation, a registered pension plan that is a multi-employer plan (other than a specified multi-employer plan) in a calendar year after 1990 becomes, at the end of the year, a revocable plan where 
  (a) for a member and an employer, the total of all amounts each of which is the member’s pension credit (as prescribed by regulation) for the year in respect of the employer under a defined benefit or money purchase provision of the plan exceeds the lesser of 
  (i) the money purchase limit for the year, and 
  (ii) 18% of the member’s compensation from the employer for the year; or 
  (b) for a member, the total of all amounts each of which is the member’s pension credit (as prescribed by regulation) for the year in respect of an employer under a defined benefit or money purchase provision of the plan exceeds the money purchase limit for the year. 
  
  ### Past service benefits
  
  (10) With respect to each past service event that is relevant to the determination of benefits in respect of a member under a defined benefit provision of a registered pension plan, such benefits as are in respect of periods after 1989 and before the calendar year in which the event occurred shall be determined, for the purpose of a payment to be made from the plan or a contribution to be made to the plan at a particular time, with regard to the event only if 
  (a) where the member is alive at the particular time and except as otherwise provided by regulation, the Minister has certified in writing, before the particular time, that prescribed conditions are satisfied, 
  (b) where the member died before the particular time and the event occurred before the death of the member, 
  (i) this subsection did not require that the event be disregarded in determining benefits that were payable to the member immediately before the member’s death (or that would have been so payable had the member been entitled to receive benefits under the provision immediately before the member’s death), or 
  (ii) the event, as it affects the benefits provided to each individual who is entitled to benefits as a consequence of the death of the member, is acceptable to the Minister, 
  (c) where the member died before the particular time and the event occurred after the death of the member, the event, as it affects the benefits provided to each individual who is entitled to benefits as a consequence of the death of the member, is acceptable to the Minister, and 
  (d) no past service event that occurred before the event is required by reason of the application of this subsection to be disregarded at the particular time in determining benefits in respect of the member, and, for the purposes of this subsection as it applies with respect to contributions that may be made to a registered pension plan, where application has been made for a certification referred to in paragraph 147.1(10)(a) and the Minister has not refused to issue the certification, the Minister shall be deemed to have issued the certification. 
  
  ### Revocation of registration — notice of intention
  
  (11) Where, at any time after a pension plan has been registered by the Minister, 
  (a) the plan does not comply with the prescribed conditions for registration, 
  (b) the plan is not administered in accordance with the terms of the plan as registered, 
  (c) the plan becomes a revocable plan, 
  (d) a condition imposed by the Minister in writing and applicable with respect to the plan (including a condition applicable generally to registered pension plans or a class of such plans and a condition first imposed before 1989) is not complied with, 
  (e) a requirement under subsection 147.1(6) or 147.1(7) is not complied with, 
  (f) a benefit is paid by the plan, or a contribution is made to the plan, contrary to subsection 147.1(10), 
  (g) the administrator of the plan fails to file an information return or actuarial report relating to the plan or to a member of the plan as and when required by regulation, 
  (h) a participating employer fails to file an information return relating to the plan or to a member of the plan as and when required by regulation, or 
  (i) registration of the plan under the Pension Benefits Standards Act, 1985 or a similar law of a province is refused or revoked,  the Minister may give notice (in this subsection and subsection 147.1(12) referred to as a “notice of intent”) by registered mail to the plan administrator that the Minister proposes to revoke the registration of the plan as of a date specified in the notice of intent, which date shall not be earlier than the date as of which, 
  (j) where paragraph 147.1(11)(a) applies, the plan failed to so comply, 
  (k) where paragraph 147.1(11)(b) applies, the plan was not administered in accordance with its terms as registered, 
  (l) where paragraph 147.1(11)(c) applies, the plan became a revocable plan, 
  (m) where paragraph 147.1(11)(d) or 147.1(11)(e) applies, the condition or requirement was not complied with, 
  (n) where paragraph 147.1(11)(f) applies, the benefit was paid or the contribution was made, 
  (o) where paragraph 147.1(11)(g) or 147.1(11)(h) applies, the information return or actuarial report was required to be filed, and 
  (p) where paragraph 147.1(11)(i) applies, the registration referred to in that paragraph was refused or revoked. 
  
  ### Notice of revocation
  
  (12) Where the Minister gives a notice of intent to the administrator of a registered pension plan, or the plan administrator applies to the Minister in writing for the revocation of the plan’s registration, the Minister may, 
  (a) where the plan administrator has applied to the Minister in writing for the revocation of the plan’s registration, at any time after receiving the administrator’s application, and 
  (b) in any other case, after 30 days after the day of mailing of the notice of intent, give notice (in this subsection and subsection 147.1(13) referred to as a “notice of revocation”) by registered mail to the plan administrator that the registration of the plan is revoked as of the date specified in the notice of revocation, which date may not be earlier than the date specified in the notice of intent or the administrator’s application, as the case may be. 
  
  ### Revocation of registration
  
  (13) Where the Minister gives a notice of revocation to the administrator of a registered pension plan, the registration of the plan is revoked as of the date specified in the notice of revocation, unless the Federal Court of Appeal or a judge thereof, on application made at any time before the determination of an appeal pursuant to subsection 172(3), orders otherwise. 
  
  ### Anti-avoidance — multi-employer plans
  
  (14) Where at any time the Minister gives written notice to the administrators of two or more registered pension plans, each of which is a multi-employer plan, that this subsection is applicable in relation to those plans with respect to a calendar year, 
  (a) each of those plans that is a specified multi-employer plan in the year shall, for the purposes of subsection 147.1(9) (other than for the purpose of determining the pension credits referred to in paragraphs 147.1(9)(a) and 147.1(9)(b)), be deemed to be a multi-employer plan that is not a specified multi-employer plan; and 
  (b) the totals determined for the year under paragraphs 147.1(9)(a) and 147.1(9)(b) shall be the amounts that would be determined if all the plans were a single plan. 
  
  ### Plan as registered
  
  (15) Any reference in this Act and the regulations to a pension plan as registered means the terms of the plan on the basis of which the Minister has registered the plan for the purposes of this Act and as amended by 
  (a) each amendment that has been accepted by the Minister, and 
  (b) each amendment that has been submitted to the Minister for acceptance and that the Minister has neither accepted nor refused to accept, if it is reasonable to expect the Minister to accept the amendment, and includes all terms that are not contained in the documents constituting the plan but that are terms of the plan by reason of the Pension Benefits Standards Act, 1985 or a similar law of a province. 
  
  ### Separate liability for obligations
  
  (16) Every person who is a member of a body that is the administrator of a registered pension plan is subject to all obligations imposed on administrators by this Act or a regulation as if the person were the administrator of the plan. 
  
  ### Superintendent of Financial Institutions
  
  (17) The Minister may, for the purposes of this Act, obtain the advice of the Superintendent of Financial Institutions with respect to any matter relating to pension plans. 
  
  ### Regulations
  
  (18) The Governor in Council may make regulations 
  (a) prescribing conditions for the registration of pension plans and enabling the Minister to impose additional conditions or waive any conditions that are prescribed; 
  (b) prescribing circumstances under which a registered pension plan becomes a revocable plan; 
  (c) specifying the manner of determining, or enabling the Minister to determine, the portion of a member’s benefits under a registered pension plan that is in respect of any period; 
  (d) requiring administrators of registered pension plans to make determinations in connection with the computation of pension adjustments, past service pension adjustments, total pension adjustment reversals or any other related amounts (all such amounts referred to in this subsection as “specified amounts”); 
  (e) requiring that the method used to determine a specified amount be acceptable to the Minister, where more than one method would otherwise comply with the regulations; 
  (f) enabling the Minister to permit or require a specified amount to be determined in a manner different from that set out in the regulations; 
  (g) requiring that any person who has information required by another person in order to determine a specified amount provide the other person with that information; 
  (h) enabling the Minister to require any person to provide the Minister with information relating to the method used to determine a specified amount; 
  (i) enabling the Minister to require any person to provide the Minister with information relevant to a claim that paragraph 147.1(10)(a) is not applicable by reason of an exemption provided by regulation; 
  (j) respecting applications for certifications for the purposes of subsection 147.1(10); 
  (k) enabling the Minister to waive the requirement for a certification for the purposes of subsection 147.1(10); 
  (l) prescribing rules for the purposes of subsection 147.1(10), so that that subsection applies or does not apply with respect to benefits provided as a consequence of particular transactions, events or circumstances; 
  (m) requiring any person to provide the Minister or the administrator of a registered pension plan with information in connection with an application for certification for the purposes of subsection 147.1(10); 
  (n) requiring any person who obtains a certification for the purposes of subsection 147.1(10) to provide the individual in respect of whom the certification was obtained with an information return; 
  (o) requiring administrators of registered pension plans to file information with respect to amendments to such plans and to the arrangements for funding benefits thereunder; 
  (p) requiring administrators of registered pension plans to file information returns respecting such plans; 
  (q) enabling the Minister to require any person to provide the Minister with information for the purpose of determining whether the registration of a pension plan may be revoked; 
  (r) requiring administrators of registered pension plans to submit reports to the Minister, prescribing the class of persons by whom the reports shall be prepared and prescribing information to be contained in those reports; 
  (s) enabling the Minister to impose any requirement that may be imposed by regulation made under paragraph 147.1(18)(r); 
  (t) defining, for the purposes of this Act, the expressions 
  *multi-employer plan*, 
  *past service event*, 
  *past service pension adjustment*, 
  *pension adjustment*, 
  *specified multi-employer plan* and 
  *total pension adjustment reversal* ; and  
  (u) generally to carry out the purposes and provisions of this Act relating to registered pension plans and the determination and reporting of specified amounts. 
  
  ### Reasonable error
  
  (19) The administrator of a registered pension plan may make a payment (other than a payment made to avoid the revocation of the registration of the plan) that is a return of all or a portion of a contribution made by a member of the plan, or an employer who participates in the plan, if 
  (a) the contribution was made to the plan as a consequence of a reasonable error; 
  (b) the payment is made to the member or employer, as the case may be, who made the contribution; and 
  (c) the payment is made no later than December 31 of the year following the year in which the contribution was made. 
  
  ### Permitted corrective contribution
  
  (20) An individual or an employer may make a contribution in a calendar year under a money purchase provision of a registered pension plan in respect of the individual if it is a permitted corrective contribution and the provision was a designated money purchase provision in each of the prior years in respect of which the contribution is made. 
  
  ### Pension contributions deductible — employer contributions
  
  147.2 (1) For a taxation year ending after 1990, there may be deducted in computing the income of a taxpayer who is an employer the total of all amounts each of which is a contribution made by the employer after 1990 and either in the taxation year or within 120 days after the end of the taxation year to a registered pension plan in respect of the employer’s employees or former employees, to the extent that 
  (a) in the case of a contribution in respect of a money purchase provision of a plan, the contribution was made in respect of periods before the end of the taxation year 
  (i) in accordance with the plan as registered, or 
  (ii) under subsection 147.1(20); 
  (b) in the case of a contribution in respect of the defined benefit provisions of a plan (other than a specified multi-employer plan), the contribution 
  (i) is an eligible contribution, 
  (ii) was made to fund benefits provided to employees and former employees of the employer in respect of periods before the end of the taxation year, and 
  (iii) complies with subsection 147.1(10); 
  (c) in the case of a contribution made to a plan that is a specified multi-employer plan, the contribution was made in accordance with the plan as registered and in respect of periods before the end of the taxation year; and 
  (d) the contribution was not deducted in computing the income of the employer for a preceding taxation year. 
  
  ### Employer contributions — defined benefit provisions
  
  (2) For the purposes of subsection 147.2(1), a contribution made by an employer to a registered pension plan in respect of the defined benefit provisions of the plan is an eligible contribution if it is a prescribed contribution or if it complies with prescribed conditions and is made pursuant to a recommendation by an actuary in whose opinion the contribution is required to be made so that the plan will have sufficient assets to pay benefits under the defined benefit provisions of the plan, as registered, in respect of the employees and former employees of the employer, where 
  (a) the recommendation is based on an actuarial valuation that complies with the following conditions, except the conditions in subparagraphs 147.2(2)(a)(iii) and 147.2(2)(a)(iv) to the extent that they are inconsistent with any other conditions that apply for the purpose of determining whether the contribution is an eligible contribution: 
  (i) the effective date of the valuation is not more than 4 years before the day on which the contribution is made, 
  (ii) actuarial liabilities and current service costs are determined in accordance with an actuarial funding method that produces a reasonable matching of contributions with accruing benefits, 
  (iii) all assumptions made for the purposes of the valuation are reasonable at the time the valuation is prepared and at the time the contribution is made, 
  (iv) the valuation is prepared in accordance with generally accepted actuarial principles, 
  (v) the valuation complies with prescribed conditions, which conditions may include conditions regarding the benefits that may be taken into account for the purposes of the valuation, and 
  (vi) where more than one employer participates in the plan, assets and actuarial liabilities are apportioned in a reasonable manner among participating employers in respect of their employees and former employees, and 
  (b) the recommendation is approved by the Minister in writing, and, for the purposes of this subsection and except as otherwise provided by regulation, 
  (c) the benefits taken into account for the purposes of a recommendation may include anticipated cost-of-living and similar adjustments where the terms of a pension plan do not require that those adjustments be made but it is reasonable to expect that they will be made, and 
  (d) a recommendation with respect to the contributions required to be made by an employer in respect of the defined benefit provisions of a pension plan may be prepared without regard to such portion of the assets of the plan apportioned to the employer in respect of the employer’s employees and former employees as does not exceed the lesser of 
  (i) the amount of actuarial surplus in respect of the employer, and 
  (ii) 25% of the amount of actuarial liabilities apportioned to the employer in respect of the employer’s employees and former employees. 
  
  ### Filing of actuarial report
  
  (3) Where, for the purposes of subsection 147.2(2), a person seeks the Minister’s approval of a recommendation made by an actuary in connection with the contributions to be made by an employer to a registered pension plan in respect of the defined benefit provisions of the plan, the person shall file with the Minister a report prepared by the actuary that contains the recommendation and any other information required by the Minister. 
  
  ### Amount of employee’s pension contributions deductible
  
  (4) There may be deducted in computing the income of an individual for a taxation year ending after 1990 an amount equal to the total of 
  
  ### Service after 1989
  
  (a) the total of all amounts each of which is a contribution (other than a prescribed contribution) made by the individual in the year 
  (i) to a registered pension plan that is in respect of a period after 1989 or that is a prescribed eligible contribution, to the extent that the contribution was made in accordance with the plan as registered, or 
  (ii) under subsection 147.1(20); 
  
  ### Service before 1990 while not a contributor
  
  (b) the least of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is a contribution (other than an additional voluntary contribution or a prescribed contribution) made by the individual in the year or a preceding taxation year and after 1945 to a registered pension plan in respect of a particular year before 1990, if all or any part of the particular year is included in the individual’s eligible service under the plan and if 
  (I) in the case of a contribution that the individual made before March 28, 1988 or was obliged to make under the terms of an agreement in writing entered into before March 28, 1988, the individual was not a contributor to the plan in the particular year, or 
  (II) in any other case, the individual was not a contributor to any registered pension plan in the particular year exceeds 
  (B) the total of all amounts each of which is an amount deducted, in computing the individual’s income for a preceding taxation year, in respect of contributions included in the total determined in respect of the individual for the year under clause 147.2(4)(b)(i)(A), 
  (ii) $3,500, and 
  (iii) the amount determined by the formula is the number of calendar years before 1990 each of which is a year 
  (A) all or any part of which is included in the individual’s eligible service under a registered pension plan to which the individual has made a contribution that is included in the total determined under clause 147.2(4)(b)(i)(A) and in which the individual was not a contributor to any registered pension plan, or 
  (B) all or any part of which is included in the individual’s eligible service under a registered pension plan to which the individual has made a contribution 
  (I) that is included in the total determined under clause 147.2(4)(b)(i)(A), and 
  (II) that the individual made before March 28, 1988 or was obliged to make under the terms of an agreement in writing entered into before March 28, 1988, and in which the individual was not a contributor to the plan, and is the total of all amounts each of which is an amount deducted, in computing the individual’s income for a preceding taxation year, 
  (A) in respect of contributions included in the total determined in respect of the individual for the year under clause 147.2(4)(b)(i)(A), or 
  (B) where the preceding year was before 1987, under subparagraph 8(1)(m)(ii) (as it read in its application to that preceding year) in respect of additional voluntary contributions made in respect of a year that satisfies the conditions in the description of Y, and 
  
  ### Service before 1990 while a contributor
  
  (c) the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is a contribution (other than an additional voluntary contribution, a prescribed contribution or a contribution included in the total determined in respect of the individual for the year under clause 147.2(4)(b)(i)(A)) made by the individual in the year or a preceding taxation year and after 1962 to a registered pension plan in respect of a particular year before 1990 that is included, in whole or in part, in the individual’s eligible service under the plan exceeds 
  (B) the total of all amounts each of which is an amount deducted, in computing the individual’s income for a preceding taxation year, in respect of contributions included in the total determined in respect of the individual for the year under clause 147.2(4)(c)(i)(A), and 
  (ii) the amount, if any, by which $3,500 exceeds the total of the amounts deducted by reason of paragraphs 147.2(4)(a) and 147.2(4)(b) in computing the individual’s income for the year. 
  
  ### Teachers
  
  (5) For the purpose of determining whether a teacher may deduct an amount contributed by the teacher to a registered pension plan in computing the teacher’s income for a taxation year ending after 1990 and before 1995 during which the teacher was employed by Her Majesty or a person exempt from tax for the year under section 149, 
  (a) clause 147.2(4)(b)(i)(A) shall be read without reference to subclauses 147.2(4)(b)(i)(A)(I) and 147.2(4)(b)(i)(A)(II); and 
  (b) the description of Y in subparagraph 147.2(4)(b)(iii) shall be read as follows: is the number of calendar years before 1990 each of which is a year all or any part of which is included in the individual’s eligible service under a registered pension plan to which the individual has made a contribution that is included in the total determined under clause 147.2(5)(b)(i)(A), and” 
  
  ### Deductible contributions when taxpayer dies
  
  (6) Where a taxpayer dies in a taxation year, for the purpose of computing the taxpayer’s income for the year and the preceding taxation year, 
  (a) paragraph 147.2(4)(b) shall be read without reference to subparagraph 147.2(6)(a)(ii) and as if the reference to “the least of” were a reference to “the lesser of”; and 
  (b) paragraph 147.2(4)(c) shall be read without reference to subparagraph 147.2(6)(b)(ii) and the words “the lesser of”. 
  
  ### Letter of credit
  
  (7) For the purposes of this section and any regulations made under subsection 147.1(18) in respect of eligible contributions, an amount paid to a registered pension plan by the issuer of a letter of credit issued in connection with an employer’s funding obligations under a defined benefit provision of the plan is deemed to be an eligible contribution made to the plan in respect of the provision by the employer with respect to the employer’s employees or former employees, if 
  (a) the amount is paid under the letter of credit; 
  (b) the use of the letter of credit is permitted under the Pension Benefits Standards Act, 1985 or a similar law of a province; and  
  (c) the amount would have been an eligible contribution under subsection (2) if 
  (i) it had been paid to the plan by the employer, and 
  (ii) this section were read without reference to this subsection. 
  
  ### Former employee of predecessor employer
  
  (8) For the purposes of this section and any regulations made under subsection 147.1(18) in respect of eligible contributions, a former employee of a predecessor employer (as defined by regulation) of a participating employer in relation to a pension plan is deemed to be a former employee of the participating employer in relation to the plan if 
  (a) the former employee would not otherwise be an employee or former employee of the participating employer; and 
  (b) benefits are provided to the former employee under a defined benefit provision of the plan in respect of periods of employment with the predecessor employer. 
  
  ### Transfer — money purchase to money purchase, RRSP or RRIF
  
  147.3 (1) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount; 
  (b) is transferred on behalf of a member in full or partial satisfaction of the member’s entitlement to benefits under a money purchase provision of the plan as registered; and 
  (c) is transferred directly to 
  (i) another registered pension plan to provide benefits in respect of the member under a money purchase provision of that plan, 
  (ii) a registered retirement savings plan under which the member is the annuitant (within the meaning assigned by subsection 146(1)), 
  (iii) a registered retirement income fund under which the member is the annuitant (within the meaning assigned by subsection 146.3(1)), or 
  (iv) a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the member. 
  
  ### Transfer — money purchase to defined benefit
  
  (2) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount; 
  (b) is transferred on behalf of a member in full or partial satisfaction of the member’s entitlement to benefits under a money purchase provision of the plan as registered; and 
  (c) is transferred directly to another registered pension plan to fund benefits provided in respect of the member under a defined benefit provision of that plan. 
  
  ### Transfer — defined benefit to defined benefit
  
  (3) An amount is transferred from a registered pension plan (in this subsection referred to as the “transferor plan”) in accordance with this subsection if the amount 
  (a) is a single amount; 
  (b) consists of all or any part of the property held in connection with a defined benefit provision of the transferor plan; 
  (c) is transferred directly to another registered pension plan to be held in connection with a defined benefit provision of the other plan, unless the transfer is to an individual pension plan (as defined in subsection 8300(1) of the Income Tax Regulations) and is in respect of benefits that are attributable to employment with a former employer that is not a participating employer (or its predecessor employer); and  
  (d) is transferred as a consequence of benefits becoming provided under the defined benefit provision of the other plan to one or more individuals who were members of the transferor plan. 
  
  ### Transfer — defined benefit to money purchase, RRSP or RRIF
  
  (4) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount no portion of which relates to an actuarial surplus; 
  (b) is transferred on behalf of a member in full or partial satisfaction of benefits to which the member is entitled, either absolutely or contingently, under a defined benefit provision of the plan as registered; 
  (c) does not exceed a prescribed amount; and 
  (d) is transferred directly to 
  (i) another registered pension plan and allocated to the member under a money purchase provision of that plan, 
  (ii) a registered retirement savings plan under which the member is the annuitant (within the meaning assigned by subsection 146(1)), or 
  (iii) a registered retirement income fund under which the member is the annuitant (within the meaning assigned by subsection 146.3(1)). 
  
  ### Transfer of surplus — defined benefit to money purchase
  
  (4.1) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is transferred in respect of the actuarial surplus under a defined benefit provision of the plan; and 
  (b) is transferred directly to another registered pension plan and allocated under a money purchase provision of that plan to one or more members of that plan. 
  
  ### Transfer to RPP, RRSP or RRIF for spouse on marriage breakdown
  
  (5) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount no portion of which relates to an actuarial surplus; 
  (b) is transferred on behalf of an individual who is a spouse or common-law partner or former spouse or common-law partner of a member of the plan and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the individual in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership; and 
  (c) is transferred directly to 
  (i) another registered pension plan for the benefit of the individual, 
  (ii) a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), or 
  (iii) a registered retirement income fund under which the individual is the annuitant (within the meaning assigned by subsection 146.3(1)). 
  
  ### Transfer — pre-1991 contributions
  
  (6) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount; 
  (b) is transferred on behalf of a member who is entitled to the amount as a return of contributions made (or deemed by regulation to have been made) by the member under a defined benefit provision of the plan before 1991, or as interest (computed at a rate not exceeding a reasonable rate) in respect of those contributions; and 
  (c) is transferred directly to 
  (i) another registered pension plan for the benefit of the member, 
  (ii) a registered retirement savings plan under which the member is the annuitant (within the meaning assigned by subsection 146(1)), or 
  (iii) a registered retirement income fund under which the member is the annuitant (within the meaning assigned by subsection 146.3(1)). 
  
  ### Transfer — lump sum benefits on death
  
  (7) An amount is transferred from a registered pension plan in accordance with this subsection if the amount 
  (a) is a single amount no portion of which relates to an actuarial surplus; 
  (b) is transferred on behalf of an individual who is entitled to the amount as a consequence of the death of a member of the plan and who was a spouse or common-law partner or former spouse or common-law partner of the member at the date of the member’s death; and 
  (c) is transferred directly to 
  (i) another registered pension plan for the benefit of the individual, 
  (ii) a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), or 
  (iii) a registered retirement income fund under which the individual is the annuitant (within the meaning assigned by subsection 146.3(1)). 
  
  ### Transfer where money purchase plan replaces money purchase plan
  
  (7.1) An amount is transferred from a registered pension plan (in this subsection referred to as the “transferor plan”) in accordance with this subsection if 
  (a) the amount is a single amount; 
  (b) the amount is transferred in respect of the surplus (as defined by regulation) under a money purchase provision (in this subsection referred to as the “former provision”) of the transferor plan; 
  (c) the amount is transferred directly to another registered pension plan to be held in connection with a money purchase provision (in this subsection referred to as the “current provision”) of the other plan; 
  (d) the amount is transferred in conjunction with the transfer of amounts from the former provision to the current provision on behalf of all or a significant number of members of the transferor plan whose benefits under the former provision are replaced by benefits under the current provision; and 
  (e) the transfer is acceptable to the Minister and the Minister has so notified the administrator of the transferor plan in writing. 
  
  ### Transfer where money purchase plan replaces defined benefit plan
  
  (8) An amount is transferred from a registered pension plan (in this subsection referred to as the “transferor plan”) in accordance with this subsection if 
  (a) the amount is a single amount; 
  (b) the amount is transferred in respect of the actuarial surplus under a defined benefit provision of the transferor plan; 
  (c) the amount is transferred directly to another registered pension plan to be held in connection with a money purchase provision of the other plan; 
  (d) the amount is transferred in conjunction with the transfer of amounts from the defined benefit provision to the money purchase provision on behalf of all or a significant number of members of the transferor plan whose benefits under the defined benefit provision are replaced by benefits under the money purchase provision; and 
  (e) the transfer is acceptable to the Minister and the Minister has so notified the administrator of the transferor plan in writing. 
  
  ### Taxation of amount transferred
  
  (9) Where an amount is transferred in accordance with any of subsections 147.3(1) to (8), 
  (a) the amount shall not, by reason only of that transfer, be included by reason of subparagraph 56(1)(a)(i) in computing the income of any taxpayer; and 
  (b) no deduction may be made under any provision of this Act in respect of the amount in computing the income of any taxpayer. 
  
  ### Idem
  
  (10) Where, on behalf of an individual, an amount is transferred from a registered pension plan (in this subsection referred to as the “transferor plan”) to another plan or fund (in this subsection referred to as the “transferee plan”) that is a registered pension plan, a registered retirement savings plan or a registered retirement income fund and the transfer is not in accordance with any of subsections 147.3(1) to (7), 
  (a) the amount is deemed to have been paid from the transferor plan to the individual; 
  (b) subject to paragraph 147.3(10)(c), the individual shall be deemed to have paid the amount as a contribution or premium to the transferee plan; and 
  (c) where the transferee plan is a registered retirement income fund, for the purposes of subsection 146(5) and Part X.1, the individual shall be deemed to have paid the amount at the time of the transfer as a premium under a registered retirement savings plan under which the individual was the annuitant (within the meaning assigned by subsection 146(1)). 
  
  ### Division of transferred amount
  
  (11) Where an amount is transferred from a registered pension plan to another registered pension plan, to a registered retirement savings plan or to a registered retirement income fund and a portion, but not all, of the amount is transferred in accordance with any of subsections 147.3(1) to (8), 
  (a) subsection 147.3(9) applies with respect to the portion of the amount that is transferred in accordance with any of subsections 147.3(1) to (8); and 
  (b) subsection 147.3(10) applies with respect to the remainder of the amount. 
  
  ### Restriction re transfers
  
  (12) A registered pension plan becomes a revocable plan at any time that an amount is transferred from the plan to another registered pension plan, to a registered retirement savings plan or to a registered retirement income fund unless 
  (a) the amount is transferred in accordance with any of subsections 147.3(1) to (8); or 
  (b) where the amount is transferred on behalf of an individual, 
  (i) the amount is deductible by the individual under paragraph 60(j) or (j.2), or 
  (ii) the Pension Benefits Standards Act, 1985 or a similar law of a province prohibits the payment of the amount to the individual.  
  
  ### Excess transfer
  
  (13) Where 
  (a) the transfer in a calendar year of an amount from a registered pension plan on behalf of a member of the plan would, but for this subsection, be in accordance with subsection 147.3(1) or (2), and 
  (b) the plan becomes, at the end of the year, a revocable plan as a consequence of an excess determined under any of paragraphs 147.1(8)(a) and (b) and (9)(a) and (b) with respect to the member (whether or not such an excess is also determined with respect to any other member), such portion of the amount transferred as may reasonably be considered to derive from amounts allocated or reallocated to the member in the year or from earnings reasonably attributable to those amounts shall, except to the extent otherwise expressly provided in writing by the Minister, be deemed to be an amount that was not transferred in accordance with subsection 147.3(1) or (2), as the case may be. 
  
  ### Withdrawal of excessive transfers to RRSPs and RRIFs
  
  (13.1) There may be deducted in computing the income of an individual for a taxation year the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount included under clause 56(1)(a)(i)(C), paragraph 56(1)(z.3), subsections 146(8), (8.3) or (12) or 146.3(5), (5.1) or (11) in computing the individual’s income for the year, to the extent that the amount is not a prescribed withdrawal, exceeds 
  (ii) the total of all amounts each of which is an amount deductible under paragraph 60(l) or subsection 146(8.2) in computing the income of the individual for the year, and 
  (b) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that was 
  (A) transferred to a registered retirement savings plan or registered retirement income fund under which the individual was the annuitant (within the meaning assigned by subsection 146(1) or 146.3(1), as the case may be), 
  (B) included in computing the income of the individual for the year or a preceding taxation year, and 
  (C) deemed by paragraph 147.3(10)(b) or 147.3(10)(c) to have been paid by the individual as a premium to a registered retirement savings plan, exceeds 
  (ii) the total of all amounts each of which is an amount 
  (A) deductible under this subsection in computing the individual’s income for a preceding taxation year, or 
  (B) deducted under subsection 146(5) in computing the individual’s income for a preceding taxation year, to the extent that the amount can reasonably be considered to be in respect of an amount referred to in subparagraph 147.3(13.1)(b)(i). 
  
  ### Deemed transfer
  
  (14) For the purposes of this section and the regulations, where property held in connection with a particular pension plan is made available to pay benefits under another pension plan, the property shall be deemed to have been transferred from the particular plan to the other plan. 
  
  ### Transfer of property between provisions
  
  (14.1) Where property held in connection with a benefit provision of a registered pension plan is made available to pay benefits under another benefit provision of the plan, subsections 147.3(9) to 147.3(11) apply in respect of the transaction by which the property is made so available in the same manner as they would apply if the other benefit provision were in another registered pension plan. 
  (15)  [Repealed, 1998, c. 19, s. 175(2)]  
  
  ### RPP annuity contract
  
  147.4 (1) Where 
  (a) at any time an individual acquires, in full or partial satisfaction of the individual’s entitlement to benefits under a registered pension plan, an interest in an annuity contract (other than an advanced life deferred annuity) purchased from a licensed annuities provider, 
  (b) the rights provided for under the contract are not materially different from those provided for under the plan as registered, 
  (c) the contract does not permit premiums to be paid at or after that time, other than a premium paid at that time out of or under the plan to purchase the contract, 
  (d) either the plan is not a plan in respect of which the Minister may, under subsection 147.1(11), give a notice of intent to revoke the registration of the plan or the Minister waives the application of this paragraph with respect to the contract and so notifies the administrator of the plan in writing, and 
  (e) the individual does not acquire the interest as a consequence of a transfer of property from the plan to a registered retirement savings plan or a registered retirement income fund, the following rules apply for the purposes of this Act: 
  (f) the individual is deemed not to have received an amount out of or under the registered pension plan as a consequence of acquiring the interest, and 
  (g) other than for the purposes of sections 147.1 and 147.3, any amount received at or after that time by any individual under the contract is deemed to have been received under the registered pension plan. 
  
  ### Amended contract
  
  (2) Where 
  (a) an amendment is made at any time to an annuity contract to which subsection (1) or paragraph 254(a) applies, other than an amendment the sole effect of which is to 
  (i) defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, or 
  (ii) enhance benefits under the annuity contract in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purpose of section 139.1 to have been a party to the annuity contract, and 
  (b) the rights provided for under the contract are materially altered as a consequence of the amendment, the following rules apply for the purposes of this Act: 
  (c) each individual who has an interest in the contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time, 
  (d) the contract as amended is deemed to be a separate annuity contract issued at that time otherwise than pursuant to or under a superannuation or pension fund or plan, and 
  (e) each individual who has an interest in the separate annuity contract immediately after that time is deemed to have acquired the interest at that time at a cost equal to the fair market value of the interest immediately after that time. 
  
  ### New contract
  
  (3) For the purposes of this Act, where an annuity contract (in this subsection referred to as the “original contract”) to which subsection 147.4(1) or paragraph 254(a) applies is, at any time, substituted by another contract, 
  (a) if the rights provided for under the other contract 
  (i) are not materially different from those provided for under the original contract, or 
  (ii) are materially different from those provided for under the original contract only because of an enhancement of benefits that can reasonably be considered to have been provided solely in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purposes of section 139.1 to have been a party to the original contract, the other contract is deemed to be the same contract as, and a continuation of, the original contract; and 
  (b) in any other case, each individual who has an interest in the original contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time. 
  (4)  [Repealed, 2007, c. 29, s. 21]  
  
  ## Pooled Registered Pension Plans 
  
  ### Definitions
  
  147.5 (1) The following definitions apply in this section.  
  *administrator*, of a pooled pension plan, means  
  (a) a corporation resident in Canada that is responsible for the administration of the plan and that is authorized under the Pooled Registered Pension Plans Act or a similar law of a province to act as an administrator for one or more pooled pension plans; or  
  (b) an entity designated in respect of the plan under section 21 of the Pooled Registered Pension Plans Act or any provision of a law of a province that is similar to that section. (administrateur)   
  *designated pooled pension plan*, for a calendar year, means a pooled pension plan that, at any time in the year (other than the year in which the plan became registered as a PRPP), meets any of the following conditions:  
  (a) the plan has fewer than 10 participating employers; 
  (b) the fair market value of the property held in connection with the accounts of all members of the plan employed by a particular participating employer exceeds 50% of the fair market value of the property held in connection with the plan; 
  (c) more than 50% of the members of the plan are employed by a particular participating employer; or 
  (d) it is reasonable to conclude that the participation in the plan of one or more participating employers occurs primarily to avoid the application of any of paragraphs (a) to (c). ( régime de pension collectif désigné)   
  *exempt earned income*, of a taxpayer for a taxation year, means the total of all amounts each of which is an amount that is  
  (a) not included in the taxpayer’s earned income (as defined in subsection 146(1)) for the year and that would be so included but for paragraph 81(1)(a) as it applies with respect to the Indian Act ; and  
  (b) reported by the taxpayer in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. ( revenu gagné exonéré)   
  *exempt-income contribution amount*, of a taxpayer for a taxation year, means the total of  
  (a) all amounts each of which is a contribution to a PRPP made by the taxpayer for the year that is not deductible in computing the income of the taxpayer because of subsection (32), and 
  (b) the amount, if any, designated under subsection (34) by the taxpayer for the year in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. ( cotisation provenant du revenu exonéré)   
  *member*, of a pooled pension plan, means an individual (other than a trust) who holds an account under the plan. (participant)   
  *participating employer*, in relation to a pooled pension plan for a calendar year, means an employer that, in the year,  
  (a) makes contributions to the plan in respect of all or a class of its employees or former employees; or 
  (b) remits to the administrator of the plan contributions made by members of the plan under a contract with the administrator in respect of all or a class of its employees. ( employeur participant)   
  *pooled pension plan* means a plan that is registered under the Pooled Registered Pension Plans Act or a similar law of a province. (régime de pension collectif)   
  *pooled registered pension plan* or 
  *PRPP* means a pooled pension plan that has been accepted for registration by the Minister for the purposes of this Act, which registration has not been revoked. (régime de pension agréé collectif ou RPAC)   
  *qualifying annuity*, for an individual, means an annuity (other than an advanced life deferred annuity) that  
  (a) is payable to 
  (i) the individual for the individual’s life, or 
  (ii) the individual for the lives, jointly, of the individual and the individual’s spouse or common-law partner and to the survivor of them for the survivor’s life; 
  (b) is payable beginning no later than the later of 
  (i) the end of the calendar year in which the individual attains 71 years of age, and 
  (ii) the end of the calendar year in which the annuity is acquired; 
  (c) unless the annuity is subsequently commuted into a single payment, is payable 
  (i) at least annually, and 
  (ii) in equal amounts or is not so payable solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, in accordance with any of subparagraphs 146(3)(b)(iii) to (v); 
  (d) if the annuity includes a guaranteed period, requires that 
  (i) the period not exceed 15 years, and 
  (ii) in the event of the later of the death of the individual and that of the individual’s spouse or common-law partner during the period, any remaining amounts otherwise payable be commuted into a single payment as soon as practicable after the later death; and 
  (e) does not permit any premiums to be paid, other than the premium paid from the PRPP to acquire the annuity. ( rente admissible)   
  *qualifying survivor*, in relation to a member of a PRPP, means an individual who, immediately before the death of the member  
  (a) was a spouse or common-law partner of the member; or 
  (b) was a child or grandchild of the member who was financially dependent on the member for support. ( survivant admissible)   
  *restricted investment*, for a pooled pension plan, means  
  (a) a debt of a member of the plan; 
  (b) a share of, an interest in, or a debt of 
  (i) a corporation, partnership or trust in which a member of the plan has a significant interest, or 
  (ii) a person or partnership that does not deal at arm’s length with the member of the plan or with a person or partnership described in subparagraph (i); 
  (c) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b); or 
  (d) prescribed property. ( placement non admissible)   
  *single amount* means an amount that is not part of a series of periodic payments. (montant unique)   
  *successor member* means an individual who was the spouse or common-law partner of a member of a PRPP immediately before the death of the member and who acquires, as a consequence of the death, all of the member’s rights in respect of the member’s account under the PRPP. (participant remplaçant)   
  *unused non-deductible PRPP room*, of a taxpayer at the end of a taxation year, means the amount determined by the formula  is the amount of the taxpayer’s unused RRSP deduction room at the end of the year, determined in accordance with subsection (33); and is the taxpayer’s unused RRSP deduction room at the end of the year. ( somme inutilisée non déductible au titre des RPAC)  
  
  ### Registration conditions
  
  (2) The Minister may accept for registration a pooled pension plan for the purposes of this Act, but shall not accept for registration any plan unless application for registration is made in prescribed manner by the plan administrator and, in the Minister’s opinion, the plan complies with the following conditions: 
  (a) the primary purpose of the plan is to accept and invest contributions in order to provide retirement income to plan members, subject to the limits and other requirements under this Act; 
  (b) a single and separate account is maintained for each member under the member’s Social Insurance Number 
  (i) to which are credited all contributions made to the plan in respect of the member, and any earnings of the plan allocated to the member, and 
  (ii) to which are charged all payments and distributions made in respect of the member; 
  (c) the only benefits provided under the plan in respect of each member are benefits determined solely with reference to, and provided by, the amount in the member’s account; 
  (d) all earnings of the plan are allocated to plan members on a reasonable basis and no less frequently than annually; 
  (e) the arrangement under which property is held in connection with the plan is acceptable to the Minister; 
  (f) no right of a person under the plan is capable of being assigned, charged, anticipated, given as security or surrendered, other than 
  (i) an assignment pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the member’s spouse or common-law partner or former spouse or common-law partner, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, 
  (ii) an assignment by the legal representative of a deceased individual on the distribution of the individual’s estate, or 
  (iii) a surrender of benefits payable to a qualifying survivor of a member after the member’s death, to the extent permitted under the Pooled Registered Pension Plans Act or a similar law of a province;  
  (g) the plan requires that all amounts contributed or allocated to a member’s account vest immediately and indefeasibly for the benefit of the member; 
  (h) the plan permits the payment of an amount to a member if the amount is paid to reduce the amount of tax that would otherwise be payable under Part X.1 by the member; 
  (i) any amount payable from an account of a member after the death of the member is paid as soon as practicable after the death; 
  (j) there is no reason to expect that the plan may become a revocable plan; and 
  (k) any prescribed conditions. 
  
  ### Conditions applicable to PRPPs
  
  (3) A pooled registered pension plan becomes a revocable plan at any time that 
  (a) a contribution is made to the plan other than an amount 
  (i) paid by a member of the plan, 
  (ii) paid by an employer or former employer of a member of the plan in respect of the member, or 
  (iii) transferred to the plan in accordance with any of subsections (21), 146(16) and (21), 146.3(14) and (14.1), 147(19) and 147.3(1), (4) and (5) to (7); 
  (b) a contribution is made to the plan in respect of a member after the calendar year in which the member attains 71 years of age, other than an amount 
  (i) described in subparagraph (a)(iii), or 
  (ii) if subsection 60.022(1) applies, described in any of subclauses 60(l)(v)(B.2)(II) to (IV) as read in that subsection; 
  (c) a participating employer makes contributions to the plan in a calendar year in respect of a member of the plan in excess of the RRSP dollar limit for the year, except in accordance with a direction by the member; 
  (d) a distribution is made from the plan other than 
  (i) a payment of benefits in accordance with subsection (5), or 
  (ii) a return of contributions 
  (A) if a contribution to the plan has been made as a result of a reasonable error by a member of the plan or a participating employer in relation to the plan and the return of contributions is made to the person who made the contribution no later than December 31 of the year following the calendar year in which the contribution was made, 
  (B) to avoid the revocation of the registration of the plan, 
  (C) to reduce the amount of tax that would otherwise be payable under Part X.1 by a member, or 
  (D) to comply with any requirement under this Act; 
  (e) property is held in connection with the plan that 
  (i) the administrator knew or ought to have known was a restricted investment for the plan, or 
  (ii) in the case of a designated pooled pension plan, is a share or debt of, or an interest in, a participating employer of the plan or any person or partnership that does not deal at arm’s length with a participating employer, or an interest (or, for civil law, a right) in, or a right to acquire, such a share, debt or interest; 
  (f) the value of a member’s right under the plan depends on the value of, or income or capital gains in respect of, property that would be described in paragraph (e) if it were held in connection with the plan; 
  (g) the administrator borrows money or other property for the purposes of the plan; or 
  (h) the plan or the administrator does not comply with a prescribed condition. 
  
  ### Non-payment of minimum amount
  
  (4) A PRPP becomes a revocable plan at the beginning of a calendar year if the total amount distributed from a member’s account under the PRPP in the calendar year is less than the amount that would be the minimum amount for the calendar year under subsection 8506(5) of the Income Tax Regulations if the member’s account were an account under a money purchase provision of a registered pension plan.  
  
  ### Permissible benefits
  
  (5) The following benefits may be provided under a pooled pension plan: 
  (a) the payment of benefits to a member that would be in accordance with paragraph 8506(1)(e.1) or (e.2) of the Income Tax Regulations if the benefits were provided under a money purchase provision of a registered pension plan; and  
  (b) the payment of a single amount from the member’s account. 
  
  ### Additional conditions
  
  (6) The Minister may, at any time, impose reasonable conditions, in writing, applicable with respect to PRPPs, a class of PRPPs or a particular PRPP. 
  
  ### Acceptance of amendments
  
  (7) The Minister shall not accept an amendment to a PRPP unless 
  (a) application for the acceptance is made in prescribed manner by the administrator of the PRPP; and 
  (b) the amendment and the PRPP as amended comply with the registration conditions specified in subsection (2). 
  
  ### Trust not taxable
  
  (8) No tax is payable under this Part by a trust governed by a PRPP on its taxable income for a taxation year, except that, if at any time in the year, it carries on a business, tax is payable under this Part by the trust on the amount that would be its taxable income for the year if it had no income or losses from sources other than the business, and for this purpose, 
  (a) all capital gains and capital losses from the disposition of property held in connection with the business are deemed to be income or losses, as the case may be, from the business; and 
  (b) the trust’s income is to be computed without reference to subsections 104(6), (19) and (21). 
  
  ### Obligations of administrator
  
  (9) The administrator of a PRPP shall exercise the care, diligence and skill of a reasonably prudent trustee to minimize the possibility that the registration of the PRPP may be revoked other than at the request of the administrator. 
  
  ### Employer contributions deductible
  
  (10) There may be deducted in computing a taxpayer’s income for a taxation year, the total of all amounts each of which is a contribution made by the taxpayer in the year or within 120 days after the end of the year to a PRPP in respect of the taxpayer’s employees or former employees to the extent that the contribution 
  (a) was made in accordance with the PRPP as registered and in respect of periods before the end of the year; and 
  (b) was not deducted in computing the taxpayer’s income for a preceding taxation year. 
  
  ### Member contributions
  
  (11) For the purposes of paragraphs 60(j), (j.1) and (l), section 146 (other than subsections (8.3) to (8.7)), paragraphs 146.01(3)(a) and 146.02(3)(a) and Parts X.1 and X.5, a contribution made to a PRPP by a member of a PRPP is deemed to be a premium paid by the member to an RRSP under which the member is the annuitant. 
  
  ### Member’s account
  
  (12) For the purposes of paragraph 18(1)(u), subparagraph (a)(i) of the definition excluded right or interest in subsection 128.1(10), paragraph 146(8.2)(b), subsection 146(8.21), paragraphs 146(16)(a) and (b), subparagraph 146(21)(a)(i), paragraph (b) of the definition excluded premium in subsection 146.01(1), paragraph (c) of the definition excluded premium in subsection 146.02(1), subsections 146.3(14) and 147(19) to (21), sections 147.3 and 160.2 and paragraphs 212(1)(j.1) and (m), and of regulations made under subsection 147.1(18), a member’s account under a PRPP is deemed to be a registered retirement savings plan under which the member is the annuitant.  
  
  ### Taxable amounts
  
  (13) There shall be included in computing the income of a taxpayer for a taxation year 
  (a) if the taxpayer is a member of a PRPP, the total of all amounts each of which is a distribution made in the year from the member’s account under the PRPP, other than an amount that is 
  (i) included in computing the income of another taxpayer for the year under paragraph (b), 
  (ii) described in subsection (22), or 
  (iii) distributed after the death of the member; 
  (b) if the taxpayer is a participating employer in relation to a PRPP, the total of all amounts each of which is a return of contributions that is described in clause (3)(d)(ii)(A) and that is made to the taxpayer in the year. 
  
  ### Treatment on death — no successor member
  
  (14) If a member of a PRPP dies and there is no successor member in respect of the deceased member’s account under the PRPP, an amount, equal to the amount by which the fair market value of all property held in connection with the account immediately before the death exceeds the total of all amounts distributed from the account that are described in subsection (16), is deemed to have been distributed from the account immediately before the death. 
  
  ### Treatment on death — successor member
  
  (15) If a member of a PRPP dies and there is a successor member in respect of the deceased member’s account under the PRPP, 
  (a) the account ceases to be an account of the deceased member at the time of the death; 
  (b) the successor member is, after the time of the death, deemed to hold the account as a member of the PRPP; and 
  (c) the successor member is deemed to be a separate member in respect of any other account under the PRPP that the successor member holds. 
  
  ### Qualifying survivor
  
  (16) If, as a consequence of the death of a member of a PRPP, an amount is distributed in a taxation year from the member’s account under the PRPP to, or on behalf of, a qualifying survivor of the member, the amount shall be included in computing the survivor’s income for the year, except to the extent that it is an amount described in subsection (22). 
  
  ### Deemed distribution to qualifying survivor
  
  (17) If an amount is distributed at any time from a deceased member’s account under a PRPP to the member’s legal representative and a qualifying survivor of the member is entitled to all or a portion of the amount in full or partial satisfaction of the survivor’s rights as a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, then, for the purposes of subsection (16), the amount or portion of the amount, as the case may be, is deemed to have been distributed at that time from the member’s account to the qualifying survivor (and not to the legal representative) to the extent that it is so designated jointly by the legal representative and the qualifying survivor in prescribed form filed with the Minister. 
  
  ### Post-death increase in value
  
  (18) There shall be included in computing the income for a taxation year of a taxpayer who is not a qualifying survivor in relation to a member of a PRPP, the total of all amounts each of which is an amount determined by the formula is the amount of a distribution made in the year from the member’s account under the PRPP as a consequence of the member’s death to, or on behalf of, the taxpayer, and is an amount designated by the administrator of the PRPP not exceeding the lesser of 
  (a) the amount of the distribution, and 
  (b) the amount by which the fair market value of all property held in connection with the account immediately before the death exceeds the total of all amounts each of which is 
  (i) the value of B in respect of any prior distribution made from the account, or 
  (ii) an amount distributed from the account to, or on behalf of, a qualifying survivor in relation to the member as a consequence of the death of the member. 
  
  ### Post-death decrease in value
  
  (19) There may be deducted in computing the income of a member of a PRPP for the taxation year in which the member dies, an amount not exceeding the amount determined, after all amounts payable from the member’s account under the PRPP have been distributed, by the formula is the total of all amounts each of which is an amount in respect of the account 
  (a) included in the member’s income under subsection (13) because of the application of subsection (14), 
  (b) included in the income of another taxpayer under subsection (16) or (18), or 
  (c) transferred in accordance with subsection (21) in circumstances described in subparagraph (21)(b)(iii); and is the total of all distributions made from the account after the member’s death. 
  
  ### Subsection (19) not applicable
  
  (20) Except where the Minister has waived in writing the application of this subsection with respect to all or any portion of the amount determined in subsection (19) in respect of a member’s account under a PRPP, that subsection does not apply if the last distribution from the account was made after the end of the calendar year following the year in which the member died. 
  
  ### Transfer of amounts
  
  (21) An amount is transferred from a member’s account under a PRPP in accordance with this subsection if the amount 
  (a) is a single amount; 
  (b) is transferred on behalf of an individual who 
  (i) is the member, 
  (ii) is a spouse or common-law partner or former spouse or common-law partner of the member and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or 
  (iii) is entitled to the amount as a consequence of the death of the member and was a spouse or common-law partner of the member immediately before the death; and 
  (c) is transferred directly to 
  (i) the individual’s account under the PRPP, 
  (ii) another PRPP in respect of the individual, 
  (iii) a registered pension plan for the benefit of the individual, 
  (iv) a registered retirement savings plan or registered retirement income fund under which the individual is the annuitant, 
  (v) a licensed annuities provider to acquire a qualifying annuity for the individual, or 
  (vi) a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the member. 
  
  ### Taxation of transfers
  
  (22) If subsection (21) applies to an amount transferred from a member’s account under a PRPP on behalf of an individual, 
  (a) the amount shall not, by reason only of that transfer, be included in computing the income of the individual; and 
  (b) no deduction may be made in respect of the amount in computing the income of any taxpayer. 
  
  ### Taxation of qualifying annuity
  
  (23) If an amount is transferred in accordance with subsection (21) to acquire a qualifying annuity, there shall be included — under this section and not under any other provision of this Act — in computing an individual’s income for a taxation year any amount received by the individual during the year out of or under the annuity or as proceeds from a disposition in respect of the annuity. 
  
  ### Notice of intent
  
  (24) The Minister may give notice (in subsections (25) and (26) referred to as a “notice of intent”) to an administrator of a PRPP in writing that the Minister intends to revoke the registration of the plan as a PRPP if 
  (a) the plan does not comply with the conditions for registration in subsection (2); 
  (b) the plan is not administered in accordance with the terms of the plan as registered; 
  (c) the plan becomes a revocable plan; 
  (d) a condition imposed under subsection (6) that applies with respect to the plan is not complied with; or 
  (e) registration of the plan under the Pooled Registered Pension Plans Act or a similar law of a province is refused or revoked.  
  
  ### Date of revocation
  
  (25) The notice of intent shall specify the date on which revocation of a PRPP is to be effective, which date shall not be earlier than the earliest date on which one of the events described in subsection (24) occurs. 
  
  ### Notice of revocation
  
  (26) At any time after 30 days after the day on which the notice of intent is mailed to an administrator of a PRPP, the Minister may give notice (in this subsection and in subsection (27) referred to as a “notice of revocation”) in writing to the administrator that the registration of the PRPP is revoked as of the date specified in the notice of revocation and that date may not be earlier than the date specified in the notice of intent. 
  
  ### Revocation of registration
  
  (27) If the Minister gives a notice of revocation to the administrator of a PRPP, the registration of the PRPP is revoked as of the date specified in the notice of revocation, unless the Federal Court of Appeal or a judge of that Court, on application made at any time before the determination of an appeal pursuant to subsection 172(3), orders otherwise. 
  
  ### Voluntary revocation
  
  (28) If the administrator of a PRPP so requests in writing, the Minister may give notice in writing to the administrator that the registration of the PRPP is revoked as of a specified date and that date may not be earlier than the date specified in the administrator’s request. 
  
  ### Single employer
  
  (29) For the purposes of the definition 
  *designated pooled pension plan* in subsection (1), all employers that are related to each other are deemed to be a single employer and all the structural units of a trade union, including each local, branch, national and international unit, are deemed to be a single employer.  
  
  ### Significant interest
  
  (30) For the purposes of the definition 
  *restricted investment* in subsection (1), a member of a pooled pension plan has a significant interest in a corporation, trust or partnership at any time if, at that time,  
  (a) in the case of a corporation, the member is a specified shareholder of the corporation; and 
  (b) in the case of a partnership or trust, 
  (i) the member is a specified unitholder of the partnership or the trust, as the case may be, or 
  (ii) the total fair market value of the member’s interests in the partnership or the trust, as the case may be, together with all interests in the partnership or the trust held by persons or partnerships with whom the member does not deal at arm’s length or is affiliated, is 10% or more of the fair market value of all interests in the partnership or the trust. 
  
  ### Contributions from exempt income
  
  (31) Contributions may be made to a PRPP in respect of a member of the PRPP as if the member’s earned income (as defined in subsection 146(1)) for a taxation year included the member’s exempt earned income for the year. 
  
  ### Non-deductible contributions
  
  (32) A contribution made by a member of a PRPP to the member’s account under the PRPP out of or from the member’s exempt earned income may not be deducted in computing the income of the member for any taxation year. 
  
  ### Contribution deemed not paid
  
  (32.1) Where a member of a PRPP or a participating employer in relation to the PRPP has, at any time in a taxation year, received a distribution from the member’s account under the PRPP that is a return of a contribution described in clause 147.5(3)(d)(ii)(A) or (B), the contribution is deemed not to have been a contribution made by the member or the participating employer, as the case may be, to the PRPP to the extent that the contribution is not deducted in computing the taxpayer’s income for the year or a preceding taxation year. 
  
  ### Exempt contributions not over-contributions
  
  (33) For the purposes of Part X.1 as it applies because of subsection (11) in respect of contributions made to a PRPP, 
  (a) an individual’s earned income (as defined in subsection 146(1)) for any taxation year after 2012 includes the individual’s exempt earned income for that year; 
  (b) an individual’s exempt-income contribution amount for any taxation year is deemed to have been deducted by the individual under subsection 146(5) in computing the individual’s income for that year; and 
  (c) the description of D in paragraph (b) of the definition 
  *unused RRSP deduction room* in subsection 146(1) is to be read without reference to subparagraph (iv).  
  
  ### Designation of exempt-income contribution amount
  
  (34) A taxpayer may designate an amount as the taxpayer’s exempt-income contribution amount for a taxation year if the amount designated does not exceed the lesser of 
  (a) the taxpayer’s unused non-deductible PRPP room at the end of the preceding taxation year, and 
  (b) the total of the taxpayer’s contributions as a member to a PRPP for the year (other than contributions to which subsection (32) applies). 
  
  ### Regulations — other
  
  (35) The Governor in Council may make regulations 
  (a) prescribing conditions applicable to administrators; 
  (b) requiring administrators to file information returns respecting pooled pension plans; 
  (c) enabling the Minister to require any person to provide the Minister with information for the purposes and provisions of this Act relating to PRPPs; and 
  (d) generally to carry out the purposes and provisions of this Act relating to PRPPs. 
  
  ## Life Insurance Policies 
  
  ### Amounts included in computing policyholder’s income
  
  148 (1) There shall be included in computing the income for a taxation year of a policyholder in respect of the disposition of an interest in a life insurance policy, other than a policy that is or is issued pursuant to 
  (a) a registered pension fund or plan, 
  (b) a registered retirement savings plan, 
  (b.1) a registered retirement income fund, 
  (b.2) a TFSA, 
  (b.3) a pooled registered pension plan, 
  (b.4) a FHSA, 
  (c) an income-averaging annuity contract, 
  (d) a deferred profit sharing plan, or 
  (e) an annuity contract if 
  (i) the payment for the annuity contract was deductible under paragraph 60(l) in computing the policyholder’s income, 
  (i.1) the annuity contract is a qualifying trust annuity with respect to a taxpayer and the amount paid to acquire it was deductible under paragraph 60(l) in computing the taxpayer’s income, or 
  (ii) the policyholder acquired the annuity contract in circumstances to which subsection 146(21) applied, the amount, if any, by which the proceeds of the disposition of the policyholder’s interest in the policy that the policyholder, beneficiary or assignee, as the case may be, became entitled to receive in the year exceeds the adjusted cost basis to the policyholder of that interest immediately before the disposition. 
  
  ### Amount included in computing taxpayer’s income
  
  (1.1) There shall be included in computing the income for a taxation year of a taxpayer in respect of a disposition of an interest in a life insurance policy described in paragraph (e) of the definition 
  *disposition* in subsection 148(9) the amount, if any, by which the amount of a payment described in paragraph (e) of that definition that the taxpayer became entitled to receive in the year exceeds the amount that would be the taxpayer’s adjusted cost basis of the taxpayer’s interest in the policy immediately before the disposition if, for the purposes of the definition 
  *adjusted cost basis* in subsection 148(9), the taxpayer were, in respect of that interest in the policy, the policyholder.  
  
  ### Deemed proceeds of disposition
  
  (2) For the purposes of subsections 148(1) and 20(20) and the definition 
  *adjusted cost basis* in subsection 148(9)  
  (a) where at any time a policyholder becomes entitled to receive under a life insurance policy a particular amount as, on account of, in lieu of payment of or in satisfaction of, a policy dividend, the policyholder shall be deemed 
  (i) to have disposed of an interest in the policy at that time, and 
  (ii) to have become entitled to receive proceeds of the disposition equal to the amount, if any, by which 
  (A) the particular amount exceeds 
  (B) the part of the particular amount applied immediately after that time to pay a premium under the policy or to repay a policy loan under the policy, as provided for under the terms and conditions of the policy; 
  (b) where in a taxation year a holder of an interest in, or a person whose life is insured or who is the annuitant under, a life insurance policy (other than an annuity contract or an exempt policy) last acquired after December 1, 1982 or an annuity contract (other than a life annuity contract, as defined by regulation, entered into before November 13, 1981 or a prescribed annuity contract) dies, the policyholder shall be deemed to have disposed of the policyholder’s interest in the policy or the contract, as the case may be, immediately before the death; 
  (c) where, as a consequence of a death, a disposition of an interest in a life insurance policy is deemed to have occurred under paragraph 148(2)(b), the policyholder immediately after the death shall be deemed to have acquired the interest at a cost equal to the accumulating fund in respect thereof, as determined in prescribed manner, immediately after the death; 
  (d) where at any time a life insurance policy last acquired after December 1, 1982, or a life insurance policy to which subsection 12.2(9) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, applies by virtue of paragraph 12.2(9)(b) of that Act, ceases to be an exempt policy (otherwise than as a consequence of the death of an individual whose life is insured under the policy or at a time when that individual is totally and permanently disabled), the policyholder shall be deemed to have disposed of the policyholder’s interest in the policy at that time for proceeds of disposition equal to the accumulating fund with respect to the interest, as determined in prescribed manner, at that time and to have reacquired the interest immediately after that time at a cost equal to those proceeds; and  
  (e) a policyholder with an interest in a life insurance policy, issued after 2016, that gives rise to an entitlement (of the policyholder, beneficiary or assignee, as the case may be) to receive all or a portion of an excess described in subparagraph (iv) is deemed, at a particular time, to dispose of a part of the interest and to be entitled to receive proceeds of the disposition equal to that excess or portion, as the case may be, if 
  (i) the policy is an exempt policy, 
  (ii) a benefit on death (as defined in subsection 1401(3) of the Income Tax Regulations) under a coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations) under the policy is paid at the particular time,  
  (iii) the payment results in the termination of the coverage but not the policy, and 
  (iv) the amount of the fund value benefit (as defined in subsection 1401(3) of the Income Tax Regulations) paid at the particular time in respect of the coverage exceeds the amount  
  (A) in the case where there is no policy anniversary (as defined in section 310 of the Income Tax Regulations) before the date of death of the individual whose life is insured under the coverage, that would be determined — on the policy anniversary that is on or that first follows that date of death and as though the coverage were not terminated — in respect of the coverage under subclause (A)(I) of the description of B in subparagraph 306(4)(a)(iii) of the Income Tax Regulations, and  
  (B) in any other case, that is determined — on the last policy anniversary before the date of the death of the individual whose life is insured under the coverage — in respect of the coverage under subclause (A)(I) of the description of B in subparagraph 306(4)(a)(iii) of the Income Tax Regulations as it applies for the purpose of subparagraph 306(1)(b)(ii) of the Income Tax Regulations.  
  
  ### Special rules for certain policies
  
  (3) For the purposes of this section, where all or any part of an insurer’s reserves for a life insurance policy vary in amount depending on the fair market value of a specified group of properties (in this subsection referred to as a “segregated fund”), 
  (a) in computing the adjusted cost basis of the policy, 
  (i) an amount paid by the policyholder or on the policyholder’s behalf as or on account of premiums under the policy or to acquire an interest in the policy shall, to the extent that the amount was used by the insurer to acquire property for the purposes of the segregated fund, be deemed not to have been so paid, and 
  (ii) any transfer of property by the insurer from the segregated fund that resulted in an increase in the portion of its reserves for the policy that do not vary with the fair market value of the segregated fund shall be deemed to have been a premium paid under the policy by the policyholder; and 
  (b) the proceeds of the disposition of an interest in the policy shall be deemed not to include the portion thereof, if any, payable out of the segregated fund. 
  
  ### Partial surrender — ACB prorated
  
  (4) If a taxpayer disposes (other than because of paragraph (2)(a) or as described in paragraph (b) of the definition 
  *disposition* in subsection (9)) of a part of the taxpayer’s interest in a life insurance policy (other than an annuity contract) last acquired after December 1, 1982 or an annuity contract, the adjusted cost basis to the taxpayer, immediately before the disposition, of the part is the amount determined by the formula  is the adjusted cost basis to the taxpayer of the taxpayer’s interest immediately before the disposition, is the proceeds of the disposition, and is 
  (a) if the policy is a policy (other than an annuity contract) issued after 2016, the amount determined by the formula is the interest’s cash surrender value immediately before the disposition, and is the total of all amounts each of which is an amount payable, immediately before the disposition, by the taxpayer in respect of a policy loan in respect of the policy, and 
  (b) in any other case, the accumulating fund with respect to the taxpayer’s interest, as determined in prescribed manner, immediately before the disposition. 
  
  ### Repayment of policy loan on partial surrender
  
  (4.01) For the purposes of the definition adjusted cost basis in subsection (9) and paragraph 60(s), a particular amount is deemed to be a repayment made immediately before a particular time by a taxpayer in respect of a policy loan in respect of a life insurance policy if  
  (a) the policy is issued after 2016; 
  (b) the taxpayer disposes of a part of the taxpayer’s interest in the policy at the particular time; 
  (c) paragraph (a) of the definition 
  *proceeds of the disposition* in subsection (9) applies to determine the proceeds of the disposition of the interest;  
  (d) the particular amount is not 
  (i) otherwise a repayment by the taxpayer in respect of the policy loan, and 
  (ii) described in subparagraph (i) of the description of C in paragraph (a) of the definition proceeds of the disposition in subsection (9); and  
  (e) the amount payable by the taxpayer in respect of the policy loan is reduced by the particular amount as a consequence of the disposition. 
  
  ### 10/8 policy surrender
  
  (5) If a policyholder has after March 20, 2013 and before April 2014 disposed of an interest in a 10/8 policy because of a partial or complete surrender of the policy, the policyholder may deduct in computing their income for the taxation year in which the disposition occurs an amount that does not exceed the least of 
  (a) the portion of an amount, included under subsection (1) in computing their income for the year in respect of the disposition, that is attributable to an investment account described in paragraph (b) of the definition 
  *10/8 policy* in subsection 248(1) in respect of the policy,  
  (b) the total of all amounts each of which is an amount, to the extent that the amount has not otherwise been included in determining an amount under this paragraph, of a payment made after March 20, 2013 and before April 2014 that reduces the amount outstanding of a borrowing or policy loan, as the case may be, described in paragraph (a) of the definition 
  *10/8 policy* in subsection 248(1) in respect of the policy, and  
  (c) the total of all amounts each of which is an amount, to the extent that the amount has not otherwise been included in determining an amount under this paragraph, that the policyholder is entitled to receive as a result of the disposition and that is paid after March 20, 2013 and before April 2014 out of an investment account described in paragraph (b) of the definition 
  *10/8 policy* in subsection 248(1) in respect of the policy.  
  
  ### Proceeds receivable as annuity
  
  (6) Where, under the terms of a life insurance policy (other than an annuity contract) last acquired before December 2, 1982, a policyholder became entitled to receive from the insurer at any time before the death of the person whose life was insured thereunder, all the proceeds (other than policy dividends) payable at that time under the policy in the form of an annuity contract or annuity payments, 
  (a) the payments shall be regarded as annuity payments made under an annuity contract; 
  (b) the purchase price of the annuity contract shall be deemed to be the adjusted cost basis of the policy to the policyholder immediately before the first payment under that contract became payable; and 
  (c) the annuity contract or annuity payments shall be deemed not to be proceeds of the disposition of an interest in the policy. 
  
  ### Disposition at non-arm’s length and similar cases
  
  (7) If an interest of a policyholder in a life insurance policy is, at any time (referred to in this subsection as the 
  *disposition time*), disposed of (other than a disposition under paragraph (2)(b)) by way of a gift, by distribution from a corporation or by operation of law only to any person, or in any manner whatever to any person with whom the policyholder was not dealing at arm’s length,  
  (a) the policyholder is deemed to become entitled to receive, at the disposition time, proceeds of the disposition equal to the greatest of 
  (i) the value of the interest at the disposition time, 
  (ii) an amount equal to 
  (A) if the disposition time is before March 22, 2016, nil, and 
  (B) if the disposition time is after March 21, 2016, the fair market value at the disposition time of the consideration, if any, given for the interest, and 
  (iii) an amount equal to 
  (A) if the disposition time is before March 22, 2016, nil, and 
  (B) if the disposition time is after March 21, 2016, the adjusted cost basis to the policyholder of the interest immediately before the disposition time; 
  (b) the person that acquires the interest because of the disposition is deemed to acquire it, at the disposition time, at a cost equal to the amount determined under paragraph (a) in respect of the disposition; 
  (c) in computing the paid-up capital in respect of each class of shares of the capital stock of a corporation at any time at or after the disposition time there shall be deducted the amount determined by the formula is the increase, if any, as a result of the disposition, in the paid-up capital in respect of all the shares of the capital stock of the corporation, is the amount determined under paragraph (a) in respect of the disposition, is 
  (i) if consideration is given for the interest, the fair market value at the disposition time of consideration that is shares of the capital stock of the corporation given for the interest, and 
  (ii) if no consideration is given for the interest, 1, is 
  (i) if consideration is given for the interest, the fair market value at the disposition time of the consideration given for the interest, and 
  (ii) if no consideration is given for the interest, 1, and is the increase, if any, as a result of the disposition, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition; 
  (d) any contribution of capital to a corporation or partnership in connection with the disposition is deemed, to the extent that it exceeds the amount determined under subparagraph (a)(i) in respect of the disposition, not to result in a contribution of capital for the purpose of applying paragraphs 53(1)(c) and (e) at or after the disposition time; 
  (e) any contributed surplus of a corporation that arose in connection with the disposition is deemed, to the extent that it exceeds the amount determined under subparagraph (a)(i) in respect of the disposition, not to be contributed surplus for the purpose of applying subsection 84(1) at or after the disposition time; and 
  (f) if the disposition time is before March 22, 2016, 
  (i) subparagraphs (ii) and (iii) and paragraphs (c) to (e) apply in respect of the disposition only if the disposition is after 1999 and at least one person whose life was insured under the policy before March 22, 2016 is alive on March 22, 2016, 
  (ii) in applying paragraphs (c) to (e) in respect of the disposition, a reference in those paragraphs to “the disposition time” is to be read as “the beginning of March 22, 2016”, 
  (iii) if at any time (referred to in this subparagraph as the 
  *conversion time*) before March 22, 2016 the paid-up capital of a class of shares of the capital stock of a corporation was increased, the increase occurred as a result of any action by which the corporation converted any of its contributed surplus into paid-up capital in respect of the class of shares, the contributed surplus arose in connection with the disposition, and subsection 84(1) did not apply to deem the corporation to pay a dividend at the conversion time in respect of the increase, in computing the paid-up capital in respect of that class of shares after March 21, 2016, there shall be deducted the amount determined by the formula  is the increase, if any, as a result of the conversion, in the paid-up capital in respect of all the shares of the capital stock of the corporation, computed without reference to this paragraph as it applies to the disposition, is the amount determined under subparagraph (a)(i) in respect of the disposition, is the increase, if any, as a result of the conversion, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition, and is the total amount of the corporation’s contributed surplus that arose in connection with the disposition, and 
  (iv) if any consideration given for the interest includes a share of the capital stock of a corporation, the share (or a share substituted for the share) is disposed of (referred to in this subparagraph as the 
  *share disposition*) after March 21, 2016 by a taxpayer and subsection 84.1(1) applies in respect of the share disposition, then for the purposes of applying section 84.1, the adjusted cost base to the taxpayer of the share immediately before the share disposition is to be reduced by the amount determined by the formula  is the total of all amounts each of which is the fair market value at the disposition time of a share of that capital stock given as consideration for the interest, is the greater of the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition and the adjusted cost basis to the policyholder of the interest immediately before the disposition, is the fair market value at the disposition time of the consideration, if any, given for the interest, and is the total number of shares of that capital stock given as consideration for the interest. 
  
  ### Idem
  
  (8) Notwithstanding any other provision in this section, where 
  (a) an interest of a policyholder in a life insurance policy (other than an annuity contract) has been transferred to the policyholder’s child for no consideration, and 
  (b) a child of the policyholder or a child of the transferee is the person whose life is insured under the policy, the interest shall be deemed to have been disposed of by the policyholder for proceeds of the disposition equal to the adjusted cost basis to the policyholder of the interest immediately before the transfer, and to have been acquired by the person who acquired the interest at a cost equal to those proceeds. 
  
  ### Inter vivos transfer to spouse
  
  (8.1) Notwithstanding any other provision of this section, where 
  (a) an interest of a policyholder in a life insurance policy (other than a policy that is, or is issued under, a plan or contract referred to in any of paragraphs 148(1)(a) to 148(1)(e)) is transferred to 
  (i) the policyholder’s spouse or common-law partner, or 
  (ii) a former spouse or common-law partner of the policyholder in settlement of rights arising out of their marriage or common-law partnership, and 
  (iii)  [Repealed, 1994, c. 7, Sch. VIII, s. 87(3)]  
  (b) both the policyholder and the transferee are resident in Canada at the time of the transfer, unless an election is made in the policyholder’s return of income under this Part for the taxation year in which the interest was transferred to have this subsection not apply, the interest shall be deemed to have been disposed of by the policyholder for proceeds of the disposition equal to the adjusted cost basis to the policyholder of the interest immediately before the transfer and to have been acquired by the transferee at a cost equal to those proceeds. 
  
  ### Transfer to spouse at death
  
  (8.2) Notwithstanding any other provision of this section, where, as a consequence of the death of a policyholder who was resident in Canada immediately before the policyholder’s death, an interest of the policyholder in a life insurance policy (other than a policy that is or is issued under a plan or contract referred to in any of paragraphs 148(1)(a) to 148(1)(e)) is transferred or distributed to the policyholder’s spouse or common-law partner who was resident in Canada immediately before the death, unless an election is made in the policyholder’s return of income under this Part for the taxation year in which the policyholder died to have this subsection not apply, the interest shall be deemed to have been disposed of by the policyholder immediately before the death for proceeds of the disposition equal to the adjusted cost basis to the policyholder of the interest immediately before the transfer and to have been acquired by the spouse or common-law partner at a cost equal to those proceeds. 
  
  ### Definitions
  
  (9) In this section and paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,   
  *adjusted cost basis*, at any time to a policyholder of the policyholder’s interest in a life insurance policy, means the amount determined by the formula  is the total of all amounts each of which is the cost of an interest in the policy acquired by the policyholder before that time but not including an amount referred to in the description of B or E, is the total of all amounts each of which is an amount paid before that time by or on behalf of the policyholder in respect of a premium under the policy, other than amounts referred to in clause 148(2)(a)(ii)(B), in subparagraph (iii) of the description of C in paragraph (a) of the definition 
  *proceeds of the disposition* or in subparagraph (b)(i) of that definition,  is the total of all amounts each of which is an amount in respect of the disposition of an interest in the policy before that time that was required to be included in computing the policyholder’s income or taxable income earned in Canada for a taxation year, is the total of all amounts each of which is an amount in respect of the policyholder’s interest in the policy that was included by virtue of subsection 12(3) or section 12.2 or of paragraph 56(1)(d.1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the policyholder’s income for any taxation year ending before that time or the portion of an amount paid to the policyholder in respect of the policyholder’s interest in the policy on which tax was imposed by virtue of paragraph 212(1)(o) before that time,  is the total of all amounts each of which is an amount that is in respect of the repayment, before that time and after March 31, 1978, of a policy loan and that does not exceed the amount determined by the formula, is the total of 
  (a) the proceeds of the disposition, if any, in respect of the loan, 
  (b) if the policy is issued after 2016 (and, in the case where the particular time at which the policy is issued is determined under subsection (11), the repayment is at or after the particular time), the portion of the loan applied, immediately after the loan, to pay a premium under the policy as provided for under the terms and conditions of the policy (except to the extent that the portion is described in subparagraph (i) of the description of C in paragraph (a) of the definition proceeds of the disposition in this subsection), and  
  (c) the amount, if any, described in the description of J in this definition (but not including any payment of interest) in respect of the loan, and is the total all amounts each of which is an amount in respect of a repayment, of the loan, referred to in clause (2)(a)(ii)(B) or deductible under paragraph 60(s) of this Act or paragraph 20(1)(hh) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 (as it applied in taxation years before 1985),  is the amount, if any, by which the cash surrender value of the policy as at its first anniversary date after March 31, 1977 exceeds the adjusted cost basis (determined under the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it would have read on that date if subsection 148(8) of that Act, as it read in its application to the period ending immediately before April 1, 1978, had not been applicable) of the policyholder’s interest in the policy on that date,  is, in the case of an interest in a life annuity contract, as defined by regulation, to which subsection 12.2(1) applies for the taxation year that includes that time (or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest), the total of all amounts each of which is a mortality gain, as defined by regulation and determined by the issuer of the contract in accordance with the regulations, in respect of the interest immediately before the end of the calendar year ending in a taxation year commencing before that time, is, in the case of an interest in a life insurance policy (other than an annuity contract) to which subsection (8.2) applied before that time, the total of all amounts each of which is a mortality gain, as defined by regulation and determined by the issuer of the policy in accordance with the regulations, in respect of the interest immediately before the end of the calendar year that ended in a taxation year that began before that time, is the total of all amounts each of which is the proceeds of the disposition of the policyholder’s interest in the policy that the policyholder became entitled to receive before that time, is the total of all amounts each of which is an amount in respect of the policyholder’s interest in the policy that was deducted by virtue of subsection 20(19) in computing the policyholder’s income for any taxation year commencing before that time, is the amount payable on March 31, 1978 in respect of a policy loan in respect of the policy, is the total of all amounts each of which is an amount received before that time in respect of the policy that the policyholder was entitled to deduct under paragraph 60(a) in computing the policyholder’s income for a taxation year, is 
  (a) in the case of an interest in a life insurance policy (other than an annuity contract) that was last acquired after December 1, 1982 by the policyholder, the total of all amounts each of which is the net cost of pure insurance, as defined by regulation and determined by the issuer of the policy in accordance with the regulations, in respect of the interest immediately before the end of the calendar year ending in a taxation year commencing after May 31, 1985 and before that time, 
  (b) in the case of an interest in an annuity contract to which subsection 12.2(1) applies for the taxation year that includes that time (or would apply if the contract had an anniversary day in the year and while the taxpayer held the interest), the total of all annuity payments paid in respect of the interest before that time and while the policyholder held the interest, or 
  (c) in the case of an interest in a contract referred to in the description of G, the total of all amounts each of which is a mortality loss, as defined by regulation and determined by the issuer of the contract in accordance with the regulations, in respect of the interest before that time, is, in the case of a policy that is issued after 2016 and is not an annuity contract, the total of all amounts each of which is a premium paid by or on behalf of the policyholder, or a cost of insurance charge incurred by the policyholder, before that time (and, in the case where the particular time at which the policy is issued is determined under subsection (11), at or after the particular time), to the extent that the premium or charge is in respect of a benefit under the policy other than a benefit on death (as defined in subsection 1401(3) of the Income Tax Regulations),  is, in the case of a policy that is issued after 2016 and is not an annuity contract, the total of all amounts each of which is the policyholder’s interest in an amount paid — to the extent that the cash surrender value of the policy, if any, or the fund value of the policy (as defined in subsection 1401(3) of the Income Tax Regulations), if any, is reduced by the amount paid — before that time (and, in the case where the particular time at which the policy is issued is determined under subsection (11), at or after the particular time) that  
  (a) is a benefit on death (as defined in subsection 1401(3) of the Income Tax Regulations), or a disability benefit, under the policy, and  
  (b) does not result in the termination of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations) under the policy,  is, in the case of a policy that is issued after 2016 and is not an annuity contract, the total of all amounts each of which is — if a benefit on death (as defined in subsection 1401(3) of the Income Tax Regulations) under a coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations) under the policy is paid before that time as a consequence of the death of an individual whose life is insured under the coverage (and, in the case where the particular time at which the policy is issued is determined under subsection (11), at or after the particular time) and the payment results in the termination of the coverage — the amount, if any, determined with respect to the coverage by the formula  is the adjusted cost basis of the policyholder’s interest immediately before the termination, is the amount of the fund value benefit (as defined in subsection 1401(3) of the Income Tax Regulations) under the policy paid in respect of the coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations) on the termination,  is the total of all amounts — each of which is in respect of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations) in respect of a specific life or two or more specific lives jointly insured under the coverage referred to in the description of O — that would be the present value, determined for the purposes of section 307 of the Income Tax Regulations, on the last policy anniversary (as defined in section 310 of the Income Tax Regulations) on or before the termination, of the fund value of the coverage (as defined in subsection 1401(3) of the Income Tax Regulations) if the fund value of the coverage on that policy anniversary were equal to the fund value of the coverage on the termination,  is the total of all amounts — each of which is in respect of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations and referred to in this description as a “particular coverage”) in respect of a specific life or two or more specific lives jointly insured under the coverage referred to in the description of O — that would be determined, on that policy anniversary, for paragraph (a) of the description of C in the definition net premium reserve in subsection 1401(3) of the Income Tax Regulations in respect of the particular coverage, if the benefit on death under the particular coverage, and the fund value of the coverage (as defined in subsection 1401(3) of the Income Tax Regulations), on that policy anniversary were equal to the benefit on death under the particular coverage and the fund value of the coverage, as the case may be, on the termination,  is the amount that would be, on that policy anniversary, the net premium reserve (as defined in subsection 1401(3) of the Income Tax Regulations) in respect of the policy for the purposes of section 307 of the Income Tax Regulations, if the fund value benefit (as defined in subsection 1401(3) of the Income Tax Regulations) under the policy, the benefit on death under each coverage (as defined in subsection 1401(3) of the Income Tax Regulations) and the fund value of each coverage (as defined in subsection 1401(3) of the Income Tax Regulations) on that policy anniversary were equal to the fund value benefit, the benefit on death under each coverage and the fund value of each coverage, as the case may be, under the policy on the termination, and  is the amount, if any, determined under subsection (4) in respect of a disposition before that time of the interest because of paragraph (2)(e) in respect of the payment in respect of the fund value benefit under the policy paid in respect of the coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations) on the termination; (coût de base rajusté)   
  *amount payable*, in respect of a policy loan, has the meaning assigned by subsection 138(12); (montant payable)   
  *cash surrender value* at a particular time of a life insurance policy means its cash surrender value at that time computed without regard to any policy loans made under the policy, any policy dividends (other than paid-up additions) payable under the policy or any interest payable on those dividends; (valeur de rachat)   
  *child* of a policyholder includes a child as defined in subsection 70(10); (enfant)   
  *disposition*, in relation to an interest in a life insurance policy, includes  
  (a) a surrender thereof, 
  (b) a policy loan made after March 31, 1978, 
  (c) the dissolution of that interest by virtue of the maturity of the policy, 
  (d) a disposition of that interest by operation of law only, and 
  (e) the payment by an insurer of an amount (other than an annuity payment, a policy loan or a policy dividend) in respect of a policy (other than a policy described in paragraph 148(1)(a), 148(1)(b), 148(1)(c), 148(1)(d) or 148(1)(e)) that is a life annuity contract, as defined by regulation, entered into after November 16, 1978, and before November 13, 1981, but does not include 
  (f) an assignment of all or any part of an interest in the policy for the purpose of securing a debt or a loan other than a policy loan, 
  (g) a lapse of the policy in consequence of the premiums under the policy remaining unpaid, if the policy was reinstated not later than 60 days after the end of the calendar year in which the lapse occurred, 
  (h) a payment under a policy as a disability benefit or as an accidental death benefit, 
  (i) an annuity payment, 
  (j) a payment under a life insurance policy (other than an annuity contract) that 
  (i) was last acquired before December 2, 1982, or 
  (ii) is an exempt policy in consequence of the death of any person whose life was insured under the policy, or 
  (k) any transaction or event by which an individual becomes entitled to receive, under the terms of an exempt policy, all of the proceeds (including or excluding policy dividends) payable under the policy in the form of an annuity contract or annuity payments, if, at the time of the transaction or event, the individual whose life is insured under the policy was totally and permanently disabled; ( disposition)   
  *interest*, in relation to a policy loan, has the meaning assigned by subsection 138(12); (intérêt)   
  *policy loan* means an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of the life insurance policy; (avance sur police)   
  *premium* under a policy includes  
  (a) interest paid after 1977 to a life insurer in respect of a policy loan, other than interest deductible in the 1978 or any subsequent taxation year pursuant to paragraph 20(1)(c) or 20(1)(d), and 
  (b) a prepaid premium under the policy to the extent that it cannot be refunded otherwise than on termination or cancellation of the policy, but does not include 
  (c) the portion of any amount paid under the policy with respect to an accidental death benefit, a disability benefit, an additional risk as a result of insuring a substandard life, an additional risk in respect of the conversion of a term policy into another policy after the end of the year, an additional risk under a settlement option, or an additional risk under a guaranteed insurability benefit, if 
  (i) in the case of an annuity contract, a policy issued before 2017 or in respect of which the particular time at which the policy is issued is determined under subsection (11), where the interest in the policy was last acquired after December 1, 1982, the payment is made after May 31, 1985 and, if the particular time at which the policy is issued is determined under subsection (11), before the particular time, or 
  (ii) in the case where the taxpayer’s interest in the policy was last acquired before December 2, 1982, 
  (A) subsection 12.2(9) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, applies to the interest,  
  (B) the particular time at which the policy is issued is determined under subsection (11), and 
  (C) the payment is made in the period that starts at the later of May 31, 1985 and the first time at which that subsection 12.2(9) applies in respect of the interest and that ends at the particular time; ( prime)   
  *proceeds of the disposition* of an interest in a life insurance policy means the amount of the proceeds that the policyholder, beneficiary or assignee, as the case may be, is entitled to receive on a disposition of an interest in the policy and for greater certainty,  
  (a) in respect of a surrender or maturity thereof, means the amount determined by the formula is the cash surrender value of the interest in the policy at the time of surrender or maturity, is that portion of the cash surrender value represented by A that is applicable to the policyholder’s interest in the related segregated fund trust as referred to in paragraph 138.1(1)(e), and is the total of amounts each of which is 
  (i) an amount by which the amount payable in respect of a policy loan in respect of the policy is reduced as a consequence of the disposition, except that if the policy is issued after 2016 and the disposition is of a part of the interest (and, in the case where the particular time at which the policy is issued is determined under subsection (11), the disposition occurs at or after the particular time), only to the extent that the amount represents the portion of the loan applied, immediately after the loan, to pay a premium under the policy, as provided for under the terms and conditions of the policy, 
  (ii) a premium under the policy that is due but unpaid at that time, or 
  (iii) an amount applied, immediately after the time of the surrender, to pay a premium under the policy, as provided for under the terms and conditions of the policy, 
  (b) in respect of a policy loan made after March 31, 1978 means the lesser of 
  (i) the amount of the loan, other than the part thereof applied, immediately after the loan, to pay a premium under the policy, as provided for under the terms and conditions of the policy, and 
  (ii) the amount, if any, by which the cash surrender value of the policy immediately before the loan was made exceeds the total of the balances outstanding at that time of any policy loans in respect of the policy, 
  (c) in respect of a payment described in paragraph (e) of the definition 
  *disposition* in this subsection, means the amount of that payment, and  
  (d) in respect of a disposition deemed to have occurred under paragraph 148(2)(b), means the accumulating fund in respect of the interest, as determined in prescribed manner, 
  (i) immediately before the time of death in respect of a life insurance policy (other than an annuity contract) last acquired after December 1, 1982, or 
  (ii) immediately after the time of death in respect of an annuity contract; ( produit de disposition)   
  *relevant authority* [Repealed, 1997, c. 25, s. 46(1)   
  *tax anniversary date*, in relation to a life insurance policy, means the second anniversary date of the policy to occur after October 22, 1968; (jour anniversaire d’imposition)   
  *value* at a particular time of an interest in a life insurance policy means  
  (a) where the interest includes an interest in the cash surrender value of the policy, the amount in respect thereof that the holder of the interest would be entitled to receive if the policy were surrendered at that time, and 
  (b) in any other case, nil. ( valeur)  
  
  ### Application of s. 12.2(11)
  
  (9.1) The definitions in subsection 12.2(11) apply to this section. 
  
  ### Life annuity contracts
  
  (10) For the purposes of this section, 
  (a) a reference to “insurer” or “life insurer” shall be deemed to include a reference to a person who is licensed or otherwise authorized under a law of Canada or a province to issue contracts that are annuity contracts; 
  (b) a reference to a “person whose life was insured” shall be deemed to include a reference to an annuitant under a life annuity contract, as defined by regulation, entered into before November 17, 1978; 
  (c) where a policyholder is a person who has held an interest in a life insurance policy continuously since its issue date, the interest shall be deemed to have been acquired on the later of the date on which 
  (i) the policy came into force, and 
  (ii) the application in respect of the policy signed by the policyholder was filed with the insurer; 
  (d) except as otherwise provided, a policyholder shall be deemed not to have disposed of or acquired an interest in a life insurance policy (other than an annuity contract) as a result only of the exercise of any provision (other than a conversion into an annuity contract) of the policy; and 
  (e) where an interest in a life insurance policy (other than an annuity contract) last acquired before December 2, 1982 to which subsection 12.2(9) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, does not apply has been acquired by a taxpayer from a person with whom the taxpayer was not dealing at arm’s length, the interest shall be deemed to have been last acquired by the taxpayer before December 2, 1982.  
  
  ### Loss of grandfathering
  
  (11) For the purposes of determining at and after a particular time whether a life insurance policy (other than an annuity contract) issued before 2017 is treated as issued after 2016 under this section (other than this subsection) and sections 306 (other than subsections (9) and (10)), 307, 308, 310, 1401 and 1403 of the Income Tax Regulations (except as they apply for the purposes of subsection 211.1(3)), the policy is deemed to be a policy issued at the particular time if the particular time is the first time after 2016 at which life insurance — in respect of a life, or two or more lives jointly insured, and in respect of which a particular schedule of premium or cost of insurance rates applies — is  
  (a) if the insurance is term insurance, converted to permanent life insurance within the policy; or 
  (b) if the insurance (other than insurance paid for with policy dividends or that is reinstated) is medically underwritten after 2016 (other than to obtain a reduction in the premium or cost of insurance rates under the policy), added to the policy. 
  
  ## Eligible Funeral Arrangements 
  
  ### Definitions
  
  148.1 (1) In this section,  
  *cemetery care trust* means a trust established pursuant to an Act of a province for the care and maintenance of a cemetery; (fiducie pour l’entretien d’un cimetière)   
  *cemetery services* with respect to an individual means property (including interment vaults, markers, flowers, liners, urns, shrubs and wreaths) and services that relate directly to cemetery arrangements in Canada in consequence of the death of the individual including, for greater certainty, property and services to be funded out of a cemetery care trust; (services de cimetière)   
  *custodian* of an arrangement means  
  (a) where a trust is governed by the arrangement, a trustee of the trust, and 
  (b) in any other case, a qualifying person who receives a contribution under the arrangement as a deposit for the provision by the person of funeral or cemetery services; ( dépositaire)   
  *eligible funeral arrangement* at a particular time means an arrangement established and maintained by a qualifying person solely for the purpose of funding funeral or cemetery services with respect to one or more individuals and of which there is one or more custodians each of whom was resident in Canada at the time the arrangement was established, where  
  (a) each contribution made before the particular time under the arrangement was made for the purpose of funding funeral or cemetery services to be provided by the qualifying person with respect to an individual, and 
  (b) for each such individual, the total of all relevant contributions made before the particular time in respect of the individual does not exceed 
  (i) $15,000, where the arrangement solely covers funeral services with respect to the individual, 
  (ii) $20,000, where the arrangement solely covers cemetery services with respect to the individual, and 
  (iii) $35,000, in any other case, and for the purpose of this definition, any payment (other than the portion of the payment to be applied as a contribution to a cemetery care trust) that is made in consideration for the immediate acquisition of a right to burial in or on property that is set apart or used as a place for the burial of human remains or of any interest in a building or structure for the permanent placement of human remains, shall be considered to have been made pursuant to a separate arrangement that is not an eligible funeral arrangement; ( arrangement de services funéraires)   
  *funeral or cemetery services* with respect to an individual means funeral services with respect to the individual, cemetery services with respect to the individual or any combination of such services; (services de funérailles ou de cimetière)   
  *funeral services* with respect to an individual means property and services (other than cemetery services with respect to the individual) that relate directly to funeral arrangements in Canada in consequence of the death of the individual; (services funéraires)   
  *qualifying person* means a person licensed or otherwise authorized under the laws of a province to provide funeral or cemetery services with respect to individuals; (personne admissible)   
  *relevant contribution* in respect of an individual under a particular arrangement means  
  (a) a contribution under the particular arrangement (other than a contribution made by way of a transfer from an eligible funeral arrangement) for the purpose of funding funeral or cemetery services with respect to the individual, or 
  (b) such portion of a contribution to another arrangement that was an eligible funeral arrangement (other than any such contribution made by way of a transfer from any eligible funeral arrangement) as can reasonably be considered to have subsequently been used to make a contribution under the particular arrangement by way of a transfer from an eligible funeral arrangement for the purpose of funding funeral or cemetery services with respect to the individual. ( versement admissible)  
  
  ### Exemption for eligible funeral arrangements
  
  (2) Notwithstanding any other provision of this Act, 
  (a) no amount that has accrued, is credited or is added to an eligible funeral arrangement shall be included in computing the income of any person solely because of such accrual, crediting or adding; 
  (b) subject to paragraph 148.1(2)(c) and subsection 148.1(3), no amount shall be 
  (i) included in computing a person’s income solely because of the provision by another person of funeral or cemetery services under an eligible funeral arrangement, or 
  (ii) included in computing a person’s income because of the disposition of an interest under an eligible funeral arrangement or an interest in a trust governed by an eligible funeral arrangement; and 
  (c) subparagraph 148.1(2)(b)(ii) shall not affect the consequences under this Act of the disposition of any right under an eligible funeral arrangement to payment for the provision of funeral or cemetery services. 
  
  ### Income inclusion on return of funds
  
  (3) Where at any particular time in a taxation year a particular amount is distributed (otherwise than as payment for the provision of funeral or cemetery services with respect to an individual) to a taxpayer from an arrangement that was, at the time it was established, an eligible funeral arrangement and the particular amount is paid from the balance in respect of the individual under the arrangement, there shall be added in computing the taxpayer’s income for the year from property the lesser of the particular amount and the amount determined by the formula is the balance in respect of the individual under the arrangement immediately before the particular time (determined without regard to the value of property in a cemetery care trust); is the total of all payments made from the arrangement before the particular time for the provision of funeral or cemetery services with respect to the individual (other than cemetery services funded by property in a cemetery care trust); and is the amount determined by the formula is the total of all relevant contributions made before the particular time in respect of the individual under the arrangement (other than contributions in respect of the individual that were in a cemetery care trust), and is the total of all amounts each of which is the amount, if any, by which 
  (a) an amount relating to the balance in respect of the individual under the arrangement that is deemed by subsection (4) to have been distributed before the particular time from the arrangement exceeds 
  (b) the portion of the amount referred to in paragraph (a) that is added, because of this subsection, in computing a taxpayer’s income. 
  
  ### Deemed distribution on transfer
  
  (4) If at a particular time an amount relating to the balance in respect of an individual (referred to in this subsection and in subsection (5) as the “transferor”) under an eligible funeral arrangement (referred to in this subsection and in subsection (5) as the “transferor arrangement”) is transferred, credited or added to the balance in respect of the same or another individual (referred to in this subsection and in subsection (5) as the “recipient”) under the same or another eligible funeral arrangement (referred to in this subsection and in subsection (5) as the “recipient arrangement”), 
  (a) the amount is deemed to be distributed to the transferor (or, if the transferor is deceased at the particular time, to the recipient) at the particular time from the transferor arrangement and to be paid from the balance in respect of the transferor under the transferor arrangement; and 
  (b) the amount is deemed to be a contribution made (other than by way of a transfer from an eligible funeral arrangement) at the particular time under the recipient arrangement for the purpose of funding funeral or cemetery services with respect to the recipient. 
  
  ### Non-application of subsection (4)
  
  (5) Subsection (4) does not apply if 
  (a) the transferor and the recipient are the same individual; 
  (b) the amount that is transferred, credited or added to the balance in respect of the individual under the recipient arrangement is equal to the balance in respect of the individual under the transferor arrangement immediately before the particular time; and 
  (c) the transferor arrangement is terminated immediately after the transfer. 
  
  # DIVISION H 
  
  ## Exemptions 
  
  ## Miscellaneous Exemptions 
  
  ### Miscellaneous exemptions
  
  149 (1) No tax is payable under this Part on the taxable income of a person for a period when that person was 
  
  ### Employees of a country other than Canada
  
  (a) an officer or servant of the government of a country other than Canada whose duties require that person to reside in Canada 
  (i) if, immediately before assuming those duties, the person resided outside Canada, 
  (ii) if that country grants a similar privilege to an officer or servant of Canada of the same class, 
  (iii) if the person was not, at any time in the period, engaged in a business or performing the duties of an office or employment in Canada other than the person’s position with that government, and 
  (iv) if the person was not during the period a Canadian citizen; 
  
  ### Members of the family and servants of employees of a country other than Canada
  
  (b) a member of the family of a person described in paragraph 149(1)(a) who resides with that person, or a servant employed by a person described in that paragraph, 
  (i) if the country of which the person described in paragraph 149(1)(a) is an officer or servant grants a similar privilege to members of the family residing with and servants employed by an officer or servant of Canada of the same class, 
  (ii) in the case of a member of the family, if that member was not at any time lawfully admitted to Canada for permanent residence, or at any time in the period engaged in a business or performing the duties of an office or employment in Canada, 
  (iii) in the case of a servant, if, immediately before assuming his or her duties as a servant of a person described in paragraph 149(1)(a), the servant resided outside Canada and, since first assuming those duties in Canada, has not at any time engaged in a business in Canada or been employed in Canada other than by a person described in that paragraph, and 
  (iv) if the member of the family or servant was not during the period a Canadian citizen; 
  
  ### Municipal authorities
  
  (c) a municipality in Canada, or a municipal or public body performing a function of government in Canada; 
  
  ### Corporations owned by the Crown
  
  (d) a corporation, commission or association all of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more persons each of which is Her Majesty in right of Canada or Her Majesty in right of a province; 
  
  ### Corporations 90% owned by the Crown
  
  (d.1) a corporation, commission or association not less than 90% of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more persons each of which is Her Majesty in right of Canada or Her Majesty in right of a province; 
  
  ### Wholly-owned corporations
  
  (d.2) a corporation all of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more persons each of which is a corporation, commission or association to which this paragraph or paragraph (d) applies for the period; 
  
  ### 90% owned corporations
  
  (d.3) a corporation, commission or association not less than 90% of the shares (except directors’ qualifying shares) or of the capital of which was owned by 
  (i) one or more persons each of which is Her Majesty in right of Canada or a province or a person to which paragraph (d) or (d.2) applies for the period, or 
  (ii) one or more municipalities in Canada in combination with one or more persons each of which is Her Majesty in right of Canada or a province or a person to which paragraph 149(1)(d) or 149(1)(d.2) applies for the period; 
  
  ### Combined ownership
  
  (d.4) a corporation all of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more persons each of which is a corporation, commission or association to which this paragraph or any of paragraphs (d) to (d.3) applies for the period; 
  
  ### Income within boundaries of entities
  
  (d.5) subject to subsections (1.2) and (1.3), a corporation, commission or association not less than 90% of the capital of which was owned by one or more entities each of which is a municipality in Canada, or a municipal or public body performing a function of government in Canada, if the income for the period of the corporation, commission or association from activities carried on outside the geographical boundaries of the entities does not exceed 10% of its income for the period; 
  
  ### Subsidiaries of municipal corporations
  
  (d.6) subject to subsections (1.2) and (1.3), a particular corporation all of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more entities (referred to in this paragraph as “qualifying owners”) each of which is, for the period, a corporation, commission or association to which paragraph (d.5) applies, a corporation to which this paragraph applies, a municipality in Canada, or a municipal or public body performing a function of government in Canada, if no more than 10% of the particular corporation’s income for the period is from activities carried on outside 
  (i) if a qualifying owner is a municipality in Canada, or a municipal or public body performing a function of government in Canada, the geographical boundaries of each such qualifying owner, 
  (ii) if paragraph (d.5) applies to a qualifying owner, the geographical boundaries of the municipality, or municipal or public body, referred to in that paragraph in its application to each such qualifying owner, and 
  (iii) if this paragraph applies to a qualifying owner, the geographical boundaries of the municipality, or municipal or public body, referred to in subparagraph (i) or paragraph (d.5), as the case may be, in their respective applications to each such qualifying owner; 
  
  ### Certain organizations
  
  (e) an agricultural organization, a board of trade or a chamber of commerce, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof; 
  
  ### Registered charities
  
  (f) a registered charity; 
  
  ### Registered Canadian amateur athletic association
  
  (g) a registered Canadian amateur athletic association; 
  
  ### Registered journalism organizations
  
  (h) a registered journalism organization; 
  
  ### Association of Universities and Colleges of Canada
  
  (h.1) the Association of Universities and Colleges of Canada, incorporated by the Act to incorporate Association of Universities and Colleges of Canada, chapter 75 of the Statutes of Canada, 1964-65; 
  
  ### Certain housing corporations
  
  (i) a corporation that was constituted exclusively for the purpose of providing low-cost housing accommodation for the aged, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof; 
  
  ### Non-profit corporations for scientific research and experimental development
  
  (j) a corporation that was constituted exclusively for the purpose of carrying on or promoting scientific research and experimental development, no part of whose income was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof, that has not acquired control of any other corporation and that, during the period, 
  (i) did not carry on any business, and 
  (ii) expended amounts in Canada each of which is 
  (A) an expenditure on scientific research and experimental development (within the meaning that would be assigned by paragraph 37(8)(a) if subsection 37(8) were read without reference to paragraph 37(8)(d)) directly undertaken by or on behalf of the corporation, or 
  (B) a payment to an association, university, college or research institute or other similar institution, described in clause 37(1)(a)(ii)(A) or 37(1)(a)(ii)(B) to be used for scientific research and experimental development, and the total of which is not less than 90% of the amount, if any, by which the corporation’s gross revenue for the period exceeds the total of all amounts paid in the period by the corporation because of subsection 149(7.1); 
  
  ### Labour organizations
  
  (k) a labour organization or society or a benevolent or fraternal benefit society or order; 
  
  ### Non-profit organizations
  
  (l) a club, society or association that, in the opinion of the Minister, was not a charity within the meaning assigned by subsection 149.1(1) and that was organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose except profit, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder was a club, society or association the primary purpose and function of which was the promotion of amateur athletics in Canada; 
  
  ### Mutual insurance corporations
  
  (m) a mutual insurance corporation that received its premiums wholly from the insurance of churches, schools or other charitable organizations; 
  
  ### Housing companies
  
  (n) a limited-dividend housing company (within the meaning of that expression as defined in section 2 of the National Housing Act), all or substantially all of the business of which is the construction, holding or management of low-rental housing projects;  
  
  ### Pension trusts
  
  (o) a trust governed by a registered pension plan; 
  
  ### Pension corporations
  
  (o.1) a corporation 
  (i) incorporated and operated throughout the period either 
  (A) solely for the administration of a registered pension plan, or 
  (B) for the administration of a registered pension plan and for no other purpose other than acting as trustee of, or administering, a trust governed by a retirement compensation arrangement, where the terms of the arrangement provide for benefits only in respect of individuals who are provided with benefits under the registered pension plan, and 
  (ii) accepted by the Minister as a funding medium for the purpose of the registration of the pension plan; 
  
  ### Idem
  
  (o.2) a corporation 
  (i) incorporated before November 17, 1978 solely in connection with, or for the administration of, a registered pension plan, 
  (ii) that has at all times since the later of November 16, 1978 and the date on which it was incorporated 
  (A) limited its activities to 
  (I) acquiring, holding, maintaining, improving, leasing or managing capital property that is real property or an interest in real property — or immovables or a real right in immovables — owned by the corporation, another corporation described by this subparagraph and subparagraph (iv) or a registered pension plan, and 
  (II) investing its funds in a partnership that limits its activities to acquiring, holding, maintaining, improving, leasing or managing capital property that is real property or an interest in real property — or immovables or a real right in immovables — owned by the partnership, 
  (B) made no investments other than in real property or an interest in real property — or immovables or a real right in immovables — or investments that a pension plan is permitted to make under the Pension Benefits Standards Act, 1985 or a similar law of a province, and  
  (C) borrowed money solely for the purpose of earning income from real property or an interest in real property or from immovables or a real right in immovables, 
  (ii.1) that throughout the period 
  (A) limited its activities to 
  (I) acquiring Canadian resource properties by purchase or by incurring Canadian exploration expense or Canadian development expense, or 
  (II) holding, exploring, developing, maintaining, improving, managing, operating or disposing of its Canadian resource properties, 
  (B) made no investments other than in 
  (I) Canadian resource properties, 
  (II) property to be used in connection with Canadian resource properties described in clause 149(1)(o.2)(ii.1)(A), 
  (III) loans secured by Canadian resource properties for the purpose of carrying out any activity described in clause 149(1)(o.2)(ii.1)(A) with respect to Canadian resource properties, or 
  (IV) investments that a pension fund or plan is permitted to make under the Pension Benefits Standards Act, 1985 or a similar law of a province, and  
  (C) borrowed money solely for the purpose of earning income from Canadian resource properties, or 
  (iii) that made no investments other than investments that a pension fund or plan was permitted to make under the Pension Benefits Standards Act, 1985 or a similar law of a province, and  
  (A) the assets of which were at least 98% cash and investments, 
  (B) that had not accepted deposits or issued bonds, notes, debentures or similar obligations, and 
  (C) that had derived at least 98% of its income for the period that is a taxation year of the corporation from, or from the disposition of, investments if, at all times since the later of November 16, 1978 and the date on which it was incorporated, 
  (iv) all of the shares, and rights to acquire shares, of the capital stock of the corporation are owned by 
  (A) one or more registered pension plans, 
  (B) one or more trusts all the beneficiaries of which are registered pension plans, 
  (C) one or more related segregated fund trusts (within the meaning assigned by paragraph 138.1(1)(a)) all the beneficiaries of which are registered pension plans, or 
  (D) one or more prescribed persons, or 
  (v) in the case of a corporation without share capital, all the property of the corporation has been held exclusively for the benefit of one or more registered pension plans, and for the purposes of subparagraph 149(1)(o.2)(iv), where a corporation has been formed as a result of the merger of two or more other corporations, it shall be deemed to be the same corporation as, and a continuation of, each such other corporation and the shares of the merged corporations shall be deemed to have been altered, in form only, by virtue of the merger and to have continued in existence in the form of shares of the corporation formed as a result of the merger; 
  
  ### Prescribed small business investment corporations
  
  (o.3) a corporation that is prescribed to be a small business investment corporation; 
  
  ### Master trusts
  
  (o.4) a trust that is prescribed to be a master trust and that elects to be such a trust under this paragraph in its return of income for its first taxation year ending in the period; 
  
  ### Pension Benefits Guarantee Fund
  
  (o.5) the Pension Benefits Guarantee Fund under the Pension Benefits Act, R.S.O. 1990, c. P.8, and any corporation established solely for investing the assets of the Pension Benefits Guarantee Fund;  
  
  ### Trusts under profit sharing plan
  
  (p) a trust under an employees profit sharing plan to the extent provided by section 144; 
  
  ### Trusts under a registered supplementary unemployment benefit plan
  
  (q) a trust under a registered supplementary unemployment benefit plan to the extent provided by section 145; 
  
  ### RCA trusts
  
  (q.1) an RCA trust (within the meaning assigned by subsection 207.5(1)); 
  
  ### Trusts under registered retirement savings plan
  
  (r) a trust under a registered retirement savings plan to the extent provided by section 146; 
  
  ### Trusts under deferred profit sharing plan
  
  (s) a trust under a deferred profit sharing plan to the extent provided by section 147; 
  
  ### Trust governed by eligible funeral arrangement
  
  (s.1) a trust governed by an eligible funeral arrangement; 
  
  ### Cemetery care trust
  
  (s.2) a cemetery care trust; 
  (t)  [Repealed, 2017, c. 20, s. 24]  
  
  ### Registered education savings plans
  
  (u) a trust governed by a registered education savings plan to the extent provided by section 146.1; 
  
  ### Trusts under registered disability savings plans
  
  (u.1) a trust governed by a registered disability savings plan to the extent provided by section 146.4; 
  
  ### TFSA trust
  
  (u.2) a trust governed by a TFSA to the extent provided by section 146.2; 
  
  ### Pooled registered pension plan
  
  (u.3) a trust governed by a pooled registered pension plan to the extent provided under section 147.5; 
  
  ### FHSA trust
  
  (u.4) a trust governed by a FHSA to the extent provided by section 146.6; 
  
  ### Amateur athlete trust
  
  (v) an amateur athlete trust; 
  
  ### Trusts to provide compensation
  
  (w) a trust established as required under a law of Canada or of a province in order to provide funds out of which to compensate persons for claims against an owner of a business identified in the relevant law where that owner is unwilling or unable to compensate a customer or client, if no part of the property of the trust, after payment of its proper trust expenses, is available to any person other than as a consequence of that person being a customer or client of a business so identified; 
  
  ### Registered retirement income funds
  
  (x) a trust governed by a registered retirement income fund to the extent provided by section 146.3; 
  
  ### Trusts to provide vacation pay
  
  (y) a trust established pursuant to the terms of a collective agreement between an employer or an association of employers and employees or their labour organization for the sole purpose of providing for the payment of vacation or holiday pay, if no part of the property of the trust, after payment of its reasonable expenses, is 
  (i) available at any time after 1980, or 
  (ii) paid after December 11, 1979 to any person (other than a person described in paragraph 149(1)(k)) otherwise than as a consequence of that person being an employee or an heir or legal representative thereof; 
  
  ### Qualifying environmental trust
  
  (z) a qualifying environmental trust; 
  
  ###  Environmental Quality Act trust 
  
  (z.1) a trust 
  (i) that was created because of a requirement imposed by section 56 of the Environment Quality Act, R.S.Q., c. Q-2,  
  (ii) that is resident in Canada, and 
  (iii) in which the only persons that are beneficially interested are 
  (A) Her Majesty in right of Canada, 
  (B) Her Majesty in right of a province, or 
  (C) a municipality (as defined in section 1 of that Act) that is exempt because of this subsection from tax under this Part on all of its taxable income; or 
  
  ###  Nuclear Fuel Waste Act trust 
  
  (z.2) a trust 
  (i) that was created because of a requirement imposed by subsection 9(1) of the Nuclear Fuel Waste Act, S.C. 2002, c. 23,  
  (ii) that is resident in Canada, and 
  (iii) in which the only persons that are beneficially interested are 
  (A) Her Majesty in right of Canada, 
  (B) Her Majesty in right of a province, 
  (C) a nuclear energy corporation (as defined in section 2 of that Act) all the shares of the capital stock of which are owned by one or more persons described in clause (A) or (B), 
  (D) the waste management organization established under section 6 of that Act if all the shares of its capital stock are owned by one or more nuclear energy corporations described in clause (C), or 
  (E) Atomic Energy of Canada Limited, being the company incorporated or acquired in accordance with subsection 10(2) of the Atomic Energy Control Act, R.S.C. 1970, c. A-19.  
  
  ### Exception
  
  (1.1) Where at a particular time 
  (a) a corporation, commission or association (in this subsection referred to as “the entity”) would, but for this subsection, be described in any of paragraphs (1)(d) to (d.6), 
  (b) one or more other persons (other than Her Majesty in right of Canada or a province, a municipality in Canada or a person which, at the particular time, is a person described in any of subparagraphs (1)(d) to (d.6)) have at the particular time one or more rights in equity or otherwise, either immediately or in the future and either absolutely or contingently to, or to acquire, shares or capital of the entity, and 
  (c) the exercise of the rights referred to in paragraph (b) would result in the entity not being a person described in any of paragraphs (1)(d.1) to (d.6) at the particular time, the entity is deemed not to be, at the particular time, a person described in any of paragraphs (1)(d) to (d.6). 
  
  ### Election
  
  (1.11) Subsection (1) does not apply in respect of a person’s taxable income for a particular taxation year that begins after 1998 where 
  (a) paragraph (1)(d) did not apply in respect of the person’s taxable income for the person’s last taxation year that began before 1999; 
  (b) paragraph (1)(d.2), (d.3) or (d.4) would, but for this subsection, have applied in respect of the person’s taxable income for the person’s first taxation year that began after 1998; 
  (c) there has been no change in the direct or indirect control of the person during the period that 
  (i) began at the beginning of the person’s first taxation year that began after 1998, and 
  (ii) ends at the end of the particular year; 
  (d) the person elects in writing before 2002 that this subsection apply; and 
  (e) the person has not notified the Minister in writing before the particular year that the election has been revoked. 
  
  ### Deemed election
  
  (1.12) If at any time there is an amalgamation (within the meaning assigned by subsection 87(1)) of a corporation (in this subsection referred to as the “parent”) and one or more other corporations (each of which in this subsection is referred to as the “subsidiary”) each of which is a subsidiary wholly-owned corporation of the parent, and immediately before that time the parent is a person to which subsection (1) does not apply by reason of the application of subsection (1.11), the new corporation is deemed, for the purposes of subsection (1.11), to be the same corporation as, and a continuation of, the parent. 
  
  ### Income test
  
  (1.2) For the purposes of paragraphs (1)(d.5) and (d.6), income of a corporation, a commission or an association from activities carried on outside the geographical boundaries of a municipality or of a municipal or public body does not include income from activities carried on 
  (a) under an agreement that meets the following conditions: 
  (i) the agreement is in writing between 
  (A) the corporation, commission or association, and 
  (B) a person who is His Majesty in right of Canada or of a province, a municipality, a municipal or public body or a corporation to which any of paragraphs (1)(d) to (d.6) applies and that is controlled by His Majesty in right of Canada or of a province, by a municipality in Canada or by a municipal or public body in Canada, 
  (ii) the agreement is applicable within the geographical boundaries of 
  (A) if the person is His Majesty in right of Canada or a corporation controlled by His Majesty in right of Canada, Canada, 
  (B) if the person is His Majesty in right of a province or a corporation controlled by His Majesty in right of a province, the province, 
  (C) if the person is a municipality in Canada or a corporation controlled by a municipality in Canada, the municipality, and 
  (D) if the person is a municipal or public body or a corporation controlled by such a body, the area described in subsection (11) in respect of the person, 
  (iii) the income earned from the activities carried on under the agreement is paid from the party described in clause (i)(B) to the party described in clause (i)(A), and 
  (iv) the activities under the agreement are activities normally carried out by a local government; or 
  (b) in a province as 
  (i) a producer of electrical energy or natural gas, or 
  (ii) a distributor of electrical energy, heat, natural gas or water, where the activities are regulated under the laws of the province. 
  
  ### Votes or de facto control 
  
  (1.3) Paragraphs (1)(d) to (d.6) do not apply in respect of a person’s taxable income for a period in a taxation year if at any time during the period 
  (a) the person is a corporation shares of the capital stock of which are owned by one or more other persons that, in total, give them more than 10% of the votes that could be cast at a meeting of shareholders of the corporation, other than shares that are owned by one or more persons each of which is 
  (i) Her Majesty in right of Canada or of a province, 
  (ii) a municipality in Canada, 
  (iii) a municipal or public body performing a function of government in Canada, or 
  (iv) a corporation, a commission or an association, to which any of paragraphs (1)(d) to (d.6) apply; or 
  (b) the person is, or would be if the person were a corporation, controlled, directly or indirectly in any manner whatever, by a person, or by a group of persons that includes a person, who is not 
  (i) Her Majesty in right of Canada or of a province, 
  (ii) a municipality in Canada, 
  (iii) a municipal or public body performing a function of government in Canada, or 
  (iv) a corporation, a commission or an association, to which any of paragraphs (1)(d) to (d.6) apply. 
  
  ### Determination of income
  
  (2) For the purposes of paragraphs 149(1)(e), 149(1)(i), 149(1)(j) and 149(1)(l), in computing the part, if any, of any income that was payable to or otherwise available for the personal benefit of any person or the total of any amounts that is not less than a percentage specified in any of those paragraphs of any income for a period, the amount of such income shall be deemed to be the amount thereof determined on the assumption that the amount of any taxable capital gain or allowable capital loss is nil. 
  
  ### Application of s. (1)
  
  (3) Subsection 149(1) does not apply in respect of the taxable income of a benevolent or fraternal society or order from carrying on a life insurance business or, for greater certainty, from the sale of property used by it in the year in, or held by it in the year in the course of, carrying on a life insurance business. 
  
  ### Idem
  
  (4) For the purposes of subsection 149(3), the taxable income of a benevolent or fraternal benefit society or order from carrying on a life insurance business shall be computed on the assumption that it had no income or loss from any other sources. 
  (4.1) to (4.3)  [Repealed, 2017, c. 20, s. 24]  
  
  ### Exception — investment income of certain clubs
  
  (5) Notwithstanding subsections (1) and (2), where a club, society or association was for any period, a club, society or association described in paragraph (1)(l) the main purpose of which was to provide dining, recreational or sporting facilities for its members (in this subsection referred to as the “club”), a trust is deemed to have been created on the later of the commencement of the period and the end of 1971 and to have continued in existence throughout the period, and, throughout that period, the following rules apply: 
  (a) the property of the club shall be deemed to be the property of the trust; 
  (b) where the club is a corporation, the corporation shall be deemed to be the trustee having control of the trust property; 
  (c) where the club is not a corporation, the officers of the club shall be deemed to be the trustees having control of the trust property; 
  (d) tax under this Part is payable by the trust on its taxable income for each taxation year; 
  (e) the income and taxable income of the trust for each taxation year shall be computed on the assumption that it had no incomes or losses other than 
  (i) incomes and losses from property, and 
  (ii) taxable capital gains and allowable capital losses from dispositions of property, other than property used exclusively for and directly in the course of providing the dining, recreational or sporting facilities provided by it for its members; 
  (f) in computing the taxable income of the trust for each taxation year 
  (i) there may be deducted, in addition to any other deductions permitted by this Part, $2,000, and 
  (ii) no deduction shall be made under section 112 or 113; and 
  (g) the provisions of Subdivision K of Division B (except subsections 104(1) and 104(2)) do not apply in respect of the trust. 
  
  ### Apportionment rule
  
  (6) Where it is necessary for the purpose of this section to ascertain the taxable income of a taxpayer for a period that is a part of a taxation year, the taxable income for the period shall be deemed to be the proportion of the taxable income for the taxation year that the number of days in the period is of the number of days in the taxation year. 
  
  ### Time for filing
  
  (7) A corporation the taxable income of which for a taxation year is exempt from tax under this Part because of paragraph 149(1)(j) shall file with the Minister a prescribed form containing prescribed information on or before its filing-due date for the year. 
  
  ### Penalty for failure to file on time
  
  (7.1) Where a corporation fails to file the prescribed form as required by subsection 149(7) for a taxation year, it is liable to a penalty equal to the amount determined by the formula is the greater of 
  (a) $500, and 
  (b) 2% of its taxable income for the year; and is the lesser of 
  (a) 12, and 
  (b) the number of months in whole or in part that are in the period that begins on the day on or before which the prescribed form is required to be filed and ends on the day it is filed. 
  
  ### Interpretation of para. (1)(j)
  
  (8) For the purpose of paragraph 149(1)(j), 
  (a) a corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to 
  (i) the other corporation, or 
  (ii) the other corporation and persons with whom the other corporation does not deal at arm’s length, but a corporation shall be deemed not to have acquired control of a corporation if it has not purchased (or otherwise acquired for a consideration) any of the shares in the capital stock of that corporation; and 
  (b) there shall be included in computing a corporation’s income and in determining its gross revenue the amount of all gifts received by the corporation and all amounts contributed to the corporation to be used for scientific research and experimental development. 
  
  ### Rules for determining gross revenue
  
  (9) In determining the gross revenue of a corporation for the purpose of determining whether it is described by paragraph 149(1)(j) for a taxation year, 
  (a) there may be deducted an amount not exceeding its gross revenue for the year computed without including or deducting any amount under this subsection; and 
  (b) there shall be included any amount that has been deducted under this subsection for the preceding taxation year. 
  
  ### Becoming or ceasing to be exempt
  
  (10) If at any time (in this subsection referred to as that time), a person — that is a corporation or, if that time is after September 12, 2013, a trust — becomes or ceases to be exempt from tax under this Part on its taxable income, the following rules apply:  
  (a) the taxation year of the person that would, but for this paragraph, have included that time is deemed to end immediately before that time, a new taxation year of the person is deemed to begin at that time and, for the purpose of determining the person’s fiscal period after that time, the person is deemed not to have established a fiscal period before that time; 
  (a.1) for the purpose of computing the person’s income for its first taxation year that ends after that time, the person is deemed to have deducted under sections 20, 138 and 140 in computing the person’s income for its taxation year that ended immediately before that time, the greatest amount that could have been claimed or deducted by the person for that year as a reserve under those sections; 
  (b) the person is deemed to have disposed, at the time (in this subsection referred to as the “disposition time”) that is immediately before the time that is immediately before that time, of each property held by the person immediately before that time for an amount equal to its fair market value at that time and to have reacquired the property at that time at a cost equal to that fair market value; and 
  (c) for the purposes of applying sections 37, 65 to 66.4, 66.7, 111 and 126, subsections 127(5) to (36) and section 127.3 to the person, the person is deemed to be a new corporation or trust, as the case may be, the first taxation year of which began at that time. 
  (d)  [Repealed, 2016, c. 12, s. 54]  
  
  ### Geographical boundaries — body performing government functions
  
  (11) For the purpose of this section, the geographical boundaries of a municipal or public body performing a function of government are 
  (a) the geographical boundaries that encompass the area in respect of which an Act of Parliament or an agreement given effect by an Act of Parliament recognizes or grants to the body a power to impose taxes; or 
  (b) if paragraph (a) does not apply, the geographical boundaries within which that body has been authorized by the laws of Canada or of a province to exercise that function. 
  
  ### Information returns
  
  (12) Every person who, because of paragraph 149(1)(e) or 149(1)(l), is exempt from tax under this Part on all or part of the person’s taxable income shall, within 6 months after the end of each fiscal period of the person and without notice or demand therefor, file with the Minister an information return for the period in prescribed form and containing prescribed information, if 
  (a) the total of all amounts each of which is a taxable dividend or an amount received or receivable by the person as, on account of, in lieu of or in satisfaction of, interest, rentals or royalties in the period exceeds $10,000; 
  (b) at the end of the person’s preceding fiscal period the total assets of the person (determined in accordance with generally accepted accounting principles) exceeded $200,000; or 
  (c) an information return was required to be filed under this subsection by the person for a preceding fiscal period. 
  149.01  [Repealed, 2017, c. 12, s. 12]  
  
  ## Qualified Donees 
  
  ### Definitions
  
  149.1 (1) In this section and section 149.2,  
  *Canadian amateur athletic association* means an association that  
  (a) was created under any law in force in Canada, 
  (b) is resident in Canada, 
  (c) has no part of its income payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder of the association unless the proprietor, member or shareholder was a club, society or association the primary purpose and primary function of which was the promotion of amateur athletics in Canada, 
  (d) has the promotion of amateur athletics in Canada on a nationwide basis as its exclusive purpose and exclusive function, and 
  (e) devotes all its resources to that purpose and function; ( association canadienne de sport amateur)   
  *capital gains pool* [Repealed, 2010, c. 25, s. 37]   
  *charitable activities* includes public policy dialogue and development activities carried on in furtherance of a charitable purpose; (activités de bienfaisance)   
  *charitable foundation* means a corporation or trust that is constituted and operated exclusively for charitable purposes, no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settlor thereof, and that is not a charitable organization; (fondation de bienfaisance)   
  *charitable organization*, at any particular time, means an organization, whether or not incorporated,  
  (a) constituted and operated exclusively for charitable purposes, 
  (a.1) all the resources of which are devoted to charitable activities carried on by the organization itself or to making qualifying disbursements, 
  (b) no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settlor thereof, 
  (c) more than 50% of the directors, trustees, officers or like officials of which deal at arm’s length with each other and with 
  (i) each of the other directors, trustees, officers and like officials of the organization, 
  (ii) each person described by subparagraph (d)(i) or (ii), and 
  (iii) each member of a group of persons (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)) who do not deal with each other at arm’s length, if the group would, if it were a person, be a person described by subparagraph (d)(i), and 
  (d) that is not, at the particular time, and would not at the particular time be, if the organization were a corporation, controlled directly or indirectly in any manner whatever 
  (i) by a person (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)), 
  (A) who immediately after the particular time, has contributed to the organization amounts that are, in total, greater than 50% of the capital of the organization immediately after the particular time, and 
  (B) who immediately after the person’s last contribution at or before the particular time, had contributed to the organization amounts that were, in total, greater than 50% of the capital of the organization immediately after the making of that last contribution, or 
  (ii) by a person, or by a group of persons that do not deal at arm’s length with each other, if the person or any member of the group does not deal at arm’s length with a person described in subparagraph (i); ( oeuvre de bienfaisance)   
  *charitable purposes* includes making qualifying disbursements; (fins de bienfaisance)   
  *charity* means a charitable organization or charitable foundation; (organisme de bienfaisance)   
  *designated gift* means that portion of a gift of property made in a taxation year by a particular registered charity, to another registered charity with which it does not deal at arm’s length, that is designated by the particular registered charity in its information return for the taxation year; (don déterminé)   
  *disbursement quota*, for a taxation year of a registered charity, means the amount determined by the formula  is the number of days in the taxation year, and is 
  (a) 3.5% of the prescribed amount for the year, in respect of all or a portion of a property owned by the charity at any time in the 24 months immediately preceding the taxation year that was not used directly in charitable activities or administration, if the prescribed amount is equal to or less than $1 million but greater than 
  (i) if the registered charity is a charitable organization, $100,000, and 
  (ii) in any other case, $25,000, 
  (b) if the prescribed amount for the year in respect of all or a portion of a property owned by the charity at any time in the 24 months immediately preceding the taxation year that was not used directly in charitable activities or administration is greater than $1 million, $35,000 plus 5% of the amount by which the prescribed amount exceeds $1 million, and 
  (c) in any other case, nil; ( contingent des versements)   
  *divestment obligation percentage* of a private foundation for a particular taxation year, in respect of a class of shares of the capital stock of a corporation, is the percentage, if any, that is the lesser of  
  (a) the excess, if any, at the end of the taxation year, of the percentage of issued and outstanding shares of that class that are held by the private foundation over the exempt shares percentage of the private foundation, and 
  (b) the percentage determined by the formula is the percentage determined under this paragraph in respect of the private foundation in respect of the class for the preceding taxation year, is the total of all percentages, each of which is the portion of a net increase in the excess corporate holdings percentage of the private foundation in respect of the class for the particular taxation year or for a preceding taxation year that is allocated to the particular taxation year in accordance with subsection 149.2(5), and is the total of all percentages, each of which is the portion of a net decrease in the excess corporate holdings percentage of the private foundation in respect of the class for the particular taxation year or for a preceding taxation year that is allocated to the particular taxation year in accordance with subsection 149.2(7); ( pourcentage de dessaisissement)   
  *enduring property* [Repealed, 2010, c. 25, s. 37]   
  *entrusted shares percentage* [Repealed, 2009, c. 2, s. 55]   
  *equity percentage* of a person in a corporation has, subject to subsection 149.2(2.1), the same meaning as defined in subsection 95(4); (pourcentage d’intérêt)   
  *excess corporate holdings percentage* of a private foundation, in respect of a class of shares of the capital stock of a corporation, at any time means  
  (a) if the private foundation is not, at that time, a registered charity, 0%, 
  (b) if the private foundation holds, at that time, an insignificant interest in respect of the class, 0%, and 
  (c) in any other case, the number of percentage points, if any, by which the total corporate holdings percentage of the private foundation in respect of the class, at that time, exceeds the greater of 20% and the exempt shares percentage, at that time, of the private foundation in respect of the class; ( pourcentage de participation excédentaire)   
  *exempt shares* held by a private foundation at any particular time means shares, of a class of the capital stock of a corporation,  
  (a) that were acquired by the private foundation by way of a gift that was subject to a trust or direction that the shares are to be held by the private foundation for a period ending not earlier than the particular time, if the gift was made 
  (i) before March 19, 2007, 
  (ii) on or after March 19, 2007 and before March 19, 2012 
  (A) under the terms of a will that was executed by a taxpayer before March 19, 2007 and not amended, by codicil or otherwise, on or after March 19, 2007, and 
  (B) in circumstances where no other will of the taxpayer was executed or amended on or after March 19, 2007, or 
  (iii) on or after March 19, 2007, under the terms of a trust created before March 19, 2007, and not amended on or after March 19, 2007, 
  (b) that were last acquired by the private foundation before March 19, 2007, other than shares that, at the particular time, 
  (i) are described in paragraph (a), 
  (ii) are listed on a designated stock exchange, or 
  (iii) are shares of the capital stock of a particular corporation, which particular corporation has an equity percentage greater than 0% in a public corporation, a class of the shares of the capital stock of which is listed on a designated stock exchange, if 
  (A) a corporation (in this subparagraph referred to as a “controlled corporation” and which may, for greater certainty, be the particular corporation) 
  (I) owns one or more shares of a class of the capital stock of the public corporation, and 
  (II) is controlled, directly or indirectly in any manner whatever, by one or more relevant persons in respect of the private foundation, or by the private foundation alone or together with one or more such relevant persons, 
  (B) the private foundation, if it held directly the shares described in subclause (A)(I), would have an excess corporate holdings percentage (determined without reference to subsection 149.2(8)) in respect of that class of shares that is greater than 0%, and 
  (C) the private foundation, alone or together with all controlled corporations, holds more than an insignificant interest in respect of the class of shares described in subclause (A)(I), or 
  (c) that are substituted shares held by the private foundation; ( actions exonérées)   
  *exempt shares percentage* of a private foundation at any time, in respect of a class of shares of the capital stock of a corporation, is the total of all amounts, each of which is the percentage of the issued and outstanding shares of that class that are exempt shares held by the private foundation at that time; (pourcentage d’actions exonérées)   
  *grantee organization* includes a person, club, society, association or organization or prescribed entity, but does not include a qualified donee; (organisation donataire)   
  *ineligible individual*, at any time, means an individual who has been  
  (a) convicted of a relevant criminal offence unless it is a conviction for which 
  (i) a pardon has been granted and the pardon has not been revoked or ceased to have effect, or 
  (ii) a record suspension has been ordered under the Criminal Records Act and the record suspension has not been revoked or ceased to have effect,  
  (b) convicted of a relevant offence in the five-year period preceding that time, 
  (c) a director, trustee, officer or like official of a registered charity or a registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that can reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which the registration of the charity or association was revoked in the five-year period preceding that time, 
  (d) an individual who controlled or managed, directly or indirectly, in any manner whatever, a registered charity or a registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that can reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which its registration was revoked in the five-year period preceding that time, 
  (e) a promoter in respect of a tax shelter that involved a registered charity or a registered Canadian amateur athletic association, the registration of which was revoked in the five-year period preceding that time for reasons that included or were related to participation in the tax shelter, 
  (f) a listed terrorist entity, or a member of a listed terrorist entity, 
  (g) a director, trustee, officer or like official of a listed terrorist entity during a period in which that entity supported or engaged in terrorist activities, including a period prior to the date on which the entity became a listed terrorist entity, or 
  (h) an individual who controlled or managed, directly or indirectly, in any manner whatever, a listed terrorist entity during a period in which that entity supported or engaged in terrorist activities, including a period prior to the date on which the entity became a listed terrorist entity; ( particulier non admissable)   
  *listed terrorist entity*, at any time, means a person, partnership, group, fund, unincorporated association or organization that is at that time a listed entity, as defined in subsection 83.01(1) of the Criminal Code ; (entité terroriste inscrite)   
  *material transaction* of a private foundation, in respect of a class of shares of the capital stock of a corporation, means a transaction or a series of transactions or events in shares of the class, in respect of which the total fair market value of the shares of the class that are acquired or disposed of by the private foundation or any relevant person in respect of the private foundation as part of the transaction or series (determined at the time of the transaction, or at the end of the series, as the case may be) exceeds the lesser of  
  (a) $100,000, and 
  (b) 0.5% of the total fair market value of all of the issued and outstanding shares of the class; ( opération importante)   
  *non-qualified investment* of a private foundation means  
  (a) a debt (other than a pledge or undertaking to make a gift) owing to the foundation by 
  (i) a person (other than an excluded corporation) 
  (A) who is a member, shareholder, trustee, settlor, officer, official or director of the foundation, 
  (B) who has, or is a member of a group of persons who do not deal with each other at arm’s length who have, contributed more than 50% of the capital of the foundation, or 
  (C) who does not deal at arm’s length with any person described in clause (A) or (B), or 
  (ii) a corporation (other than an excluded corporation) controlled by the foundation, by any person or group of persons referred to in subparagraph (i), by the foundation and any other private foundation with which it does not deal at arm’s length or by any combination thereof, 
  (b) a share of a class of the capital stock of a corporation (other than an excluded corporation) referred to in paragraph (a) held by the foundation (other than a share listed on a designated stock exchange or a share that would be a qualifying share within the meaning assigned by subsection 192(6) if that subsection were read without reference to the expression “issued after May 22, 1985 and before 1987”), and 
  (c) a right held by the foundation to acquire a share referred to in paragraph (b), and, for the purpose of this definition, an 
  *excluded corporation* is  
  (d) a limited-dividend housing company to which paragraph 149(1)(n) applies, 
  (e) a corporation all of the property of which is used by a registered charity in its administration or in carrying on its charitable activities, or 
  (f) a corporation all of the issued shares of which are held by the foundation; ( placement non admissible)   
  *original corporate holdings percentage* of a private foundation, in respect of a class of shares of the capital stock of a corporation, means the total corporate holdings percentage of the private foundation, in respect of that class, held on March 18, 2007; (pourcentage de participation initiale)   
  *political activity* [Repealed, 2018, c. 27, s. 17]   
  *private foundation* means a charitable foundation that is not a public foundation; (fondation privée)   
  *promoter* has the meaning assigned by section 237.1; (promoteur)   
  *public foundation*, at a particular time, means a charitable foundation  
  (a) more than 50% of the directors, trustees, officers or like officials of which deal at arm’s length with each other and with 
  (i) each of the other directors, trustees, officers and like officials of the foundation, 
  (ii) each person described by subparagraph (b)(i) or (ii), and 
  (iii) each member of a group of persons (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)) who do not deal with each other at arm’s length, if the group would, if it were a person, be a person described by subparagraph (b)(i), and 
  (b) that is not, at the particular time, and would not at the particular time be, if the foundation were a corporation, controlled directly or indirectly in any manner whatever 
  (i) by a person (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)), 
  (A) who immediately after the particular time, has contributed to the foundation amounts that are, in total, greater than 50% of the capital of the foundation immediately after the particular time, and 
  (B) who immediately after the person’s last contribution at or before the particular time, had contributed to the foundation amounts that were, in total, greater than 50% of the capital of the foundation immediately after the making of that last contribution, or 
  (ii) by a person, or by a group of persons that do not deal at arm’s length with each other, if the person or any member of the group does not deal at arm’s length with a person described in subparagraph (i); ( fondation publique)   
  *qualified donee*, at any time, means a person that is  
  (a) registered by the Minister and that is 
  (i) a housing corporation resident in Canada and exempt from tax under this Part because of paragraph 149(1)(i) that has applied for registration, 
  (ii) a municipality in Canada, 
  (iii) a municipal or public body performing a function of government in Canada that has applied for registration, 
  (iv) a university outside Canada, the student body of which ordinarily includes students from Canada, that has applied for registration, or 
  (v) a foreign charity that has applied to the Minister for registration under subsection (26), 
  (b) a registered charity, 
  (b.1) a registered journalism organization, 
  (c) a registered Canadian amateur athletic association, or 
  (d) Her Majesty in right of Canada or a province, the United Nations or an agency of the United Nations; ( donataire reconnu)   
  *qualifying disbursement* means a disbursement by a charity, by way of a gift or by otherwise making resources available,  
  (a) subject to subsection (6.001), to a qualified donee, or 
  (b) to a grantee organization, if 
  (i) the disbursement is in furtherance of a charitable purpose (determined without reference to the definition charitable purposes in this subsection) of the charity,  
  (ii) the charity ensures that the disbursement is exclusively applied to charitable activities in furtherance of a charitable purpose of the charity, and 
  (iii) the charity maintains documentation sufficient to demonstrate 
  (A) the purpose for which the disbursement is made, and 
  (B) that the disbursement is exclusively applied by the grantee organization to charitable activities in furtherance of a charitable purpose of the charity; ( versement admissible)   
  *qualifying journalism organization* means a corporation or trust that meets the following conditions:  
  (a) it is a qualified Canadian journalism organization, 
  (b) it is constituted and operated for purposes exclusively related to journalism, 
  (c) any business activities it carries on are related to its purposes, 
  (d) it has trustees or a board of directors, each of whom deals at arm’s length with each other, 
  (e) it is not controlled, directly or indirectly in any manner whatever, by a person or by a group of persons that do not deal with each other at arm’s length, 
  (f) it may not, in a taxation year, receive gifts from any one source that represent more than 20% of its total revenues (including donations) for the taxation year, other than a gift 
  (i) made by way of bequest, 
  (ii) made within 12 months after the time the organization is first registered, or 
  (iii) approved, on a case-by-case basis, by the Minister, 
  (g) no part of its income is payable to, or otherwise available for the personal benefit of, any proprietor, member, shareholder, director, trustee, settlor or like individual, and 
  (h) it is primarily engaged in the production of original news content; ( organisation journalistique admissible)   
  *related business*, in relation to a charity or Canadian amateur athletic association, includes a business that is unrelated to the purposes of the charity or association if substantially all persons employed by the charity or association in the carrying on of that business are not remunerated for that employment; (activité commerciale complémentaire)   
  *relevant criminal offence* means a criminal offence under the laws of Canada, and an offence that would be a criminal offence if it were committed in Canada, that  
  (a) relates to financial dishonesty, including tax evasion, theft and fraud, or 
  (b) in respect of a charity or Canadian amateur athletic association, is relevant to the operation of the charity or association; ( infraction criminelle pertinente)   
  *relevant offence* means an offence, other than a relevant criminal offence, under the laws of Canada or a province, and an offence that would be such an offence if it took place in Canada, that  
  (a) relates to financial dishonesty, including an offence under charitable fundraising legislation, consumer protection legislation and securities legislation, or 
  (b) in respect of a charity or Canadian amateur athletic association, is relevant to the operation of the charity or association; ( infraction pertinente)   
  *relevant person* in respect of a private foundation means a person who, at any time in respect of which the expression is relevant, deals not at arm’s length with the private foundation (determined as if subsection 251(2) were applied as if the private foundation were a corporation), but does not include  
  (a) a person who at that time is considered to deal not at arm’s length with the private foundation solely because of a right referred to in paragraph 251(5)(b), or 
  (b) an individual 
  (i) who at that time has attained the age of 18 years and lives separate and apart from any other individual (referred to in this definition as a “controlling individual”) who would, if the private foundation were a corporation, control, or be a member of a related group that controls, the private foundation, and 
  (ii) in respect of whom the Minister is satisfied, upon review of an application by the private foundation, that the individual would, if subsection 251(1) were read without reference to its paragraphs (a) and (b), at that time, deal at arm’s length with all controlling individuals; ( personne intéressée)   
  *specified gift* [Repealed, 2010, c. 25, s. 37]   
  *substituted shares* held by a private foundation means shares acquired by the private foundation, in exchange for exempt shares held by the private foundation, in the course of a transaction to which section 51, subsection 85.1(1) or section 86 or 87 applies; (actions de remplacement)   
  *taxation year* means, in the case of a registered charity or registered Canadian amateur athletic association, a fiscal period; (année d’imposition)   
  *total corporate holdings percentage* of a private foundation, in respect of a class of shares of the capital stock of a corporation, at any particular time means the percentage of the issued and outstanding shares of that class that are held at that time by the private foundation, or by a relevant person in respect of the private foundation who holds a material interest in respect of that class; (pourcentage de participation totale)  
  
  ### Deeming rule — Safe Streets and Communities Act 
  
  (1.01) In this section, a reference to a record suspension is deemed also to be a reference to a pardon that is granted or issued under the Criminal Records Act.  
  
  ### Deeming rule — listed terrorist entity
  
  (1.02) If, but for this subsection, a person, partnership, group, fund, unincorporated association or organization becomes a listed terrorist entity at a particular time and ceases to be a listed terrorist entity at a later time further to an application made under subsection 83.05(2) of the Criminal Code or as a result of paragraph 83.05(6)(d) of that Act, then the entity is deemed not to have become a listed terrorist entity and to not have been a listed terrorist entity throughout that period.  
  
  ### Exclusions
  
  (1.1) For the purposes of paragraphs (2)(b), (3)(b) and (4)(b) and subsection (21), the following shall be deemed to be neither an amount expended in a taxation year on charitable activities nor a gift made to a qualified donee: 
  (a) a designated gift; 
  (b)  [Repealed, 2018, c. 27, s. 17]  
  (c) a transfer that has, because of paragraph (c) of the description of B in subsection 188(1.1), paragraph 189(6.2)(b) or subsection 189(6.3), reduced the amount of a liability under Part V; and 
  (d) expenditures on administration and management of the charity. 
  
  ### Authority of Minister
  
  (1.2) For the purposes of the determination of B in the definition disbursement quota in subsection 149.1(1), the Minister may  
  (a) authorize a change in the number of periods chosen by a registered charity in determining the prescribed amount; and 
  (b) accept any method for the determination of the fair market value of property or a portion thereof that may be required in determining the prescribed amount. 
  
  ### Revocation of registration of charitable organization
  
  (2) The Minister may, in the manner described in section 168, revoke the registration of a charitable organization for any reason described in subsection 168(1) or where the organization 
  (a) carries on a business that is not a related business of that charity; 
  (b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the organization’s disbursement quota for that year; or 
  (c) makes a disbursement, other than 
  (i) a disbursement made in the course of charitable activities carried on by it, or 
  (ii) a qualifying disbursement. 
  
  ### Revocation of registration of public foundation
  
  (3) The Minister may, in the manner described in section 168, revoke the registration of a public foundation for any reason described in subsection 168(1) or where the foundation 
  (a) carries on a business that is not a related business of that charity; 
  (b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the foundation’s disbursement quota for that year; 
  (b.1) makes a disbursement, other than 
  (i) a disbursement made in the course of charitable activities carried on by it, or 
  (ii) a qualifying disbursement; 
  (c) since June 1, 1950, acquired control of any corporation; 
  (d) since June 1, 1950, incurred debts, other than debts for current operating expenses, debts incurred in connection with the purchase and sale of investments and debts incurred in the course of administering charitable activities; or 
  (e) at any time within the 24 month period preceding the day on which notice is given to the foundation by the Minister pursuant to subsection 168(1) and at a time when the foundation was a private foundation, took any action or failed to expend amounts such that the Minister was entitled, pursuant to subsection 149.1(4), to revoke its registration as a private foundation. 
  
  ### Revocation of registration of private foundation
  
  (4) The Minister may, in the manner described in section 168, revoke the registration of a private foundation for any reason described in subsection 168(1) or where the foundation 
  (a) carries on any business; 
  (b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the foundation’s disbursement quota for that year; 
  (b.1) makes a disbursement, other than 
  (i) a disbursement made in the course of charitable activities carried on by it, or 
  (ii) a qualifying disbursement; 
  (c) has, in respect of a class of shares of the capital stock of a corporation, a divestment obligation percentage at the end of any taxation year; 
  (d) since June 1, 1950, incurred debts, other than debts for current operating expenses, debts incurred in connection with the purchase and sale of investments and debts incurred in the course of administering charitable activities. 
  
  ### Revocation of registration of registered charity
  
  (4.1) The Minister may, in the manner described in section 168, revoke the registration 
  (a) of a registered charity, if it has entered into a transaction (including a gift to another registered charity) and it may reasonably be considered that a purpose of the transaction was to avoid or unduly delay the expenditure of amounts on charitable activities; 
  (b) of a registered charity, if it may reasonably be considered that a purpose of entering into a transaction (including the acceptance of a gift) with another registered charity to which paragraph (a) applies was to assist the other registered charity in avoiding or unduly delaying the expenditure of amounts on charitable activities; 
  (c) of a registered charity, if a false statement (as defined in subsection 163.2(1)) was made in circumstances amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of information for the purpose of obtaining or maintaining its registration;  
  (d) of a registered charity, if it has in a taxation year received a gift of property (other than a designated gift) from another registered charity with which it does not deal at arm’s length and it has expended, before the end of the next taxation year, in addition to its disbursement quota for each of those taxation years, an amount that is less than the fair market value of the property, on charitable activities carried on by it or by way of gifts that are qualifying disbursements to qualified donees or grantee organizations, with which it deals at arm’s length; 
  (e) of a registered charity, if an ineligible individual is a director, trustee, officer or like official of the charity, or controls or manages the charity, directly or indirectly, in any manner whatever; and 
  (f) of a registered charity, if it accepts a gift from a foreign state, as defined in section 2 of the State Immunity Act, that is set out on the list referred to in subsection 6.1(2) of that Act.  
  
  ### Revocation of registration of Canadian amateur athletic association
  
  (4.2) The Minister may, in the manner described in section 168, revoke the registration of a registered Canadian amateur athletic association 
  (a) for any reason described in subsection 168(1); 
  (b) if the association carries on a business that is not a related business of that association; 
  (c) if an ineligible individual is a director, trustee, officer or like official of the association, or controls or manages the association, directly or indirectly, in any manner whatever; or 
  (d) if the association accepts a gift from a foreign state, as defined in section 2 of the State Immunity Act, that is set out on the list referred to in subsection 6.1(2) of that Act.  
  
  ### Revocation of a qualified donee
  
  (4.3) The Minister may, in the manner described in section 168, revoke the registration of a qualified donee referred to in paragraph (a) or (b.1) of the definition qualified donee in subsection (1) for any reason described in subsection 168(1).  
  
  ### Reduction
  
  (5) The Minister may, on application made to the Minister in prescribed form by a registered charity, specify an amount in respect of the charity for a taxation year and the registered charity’s disbursement quota shall be deemed to be reduced by that amount. 
  
  ### Devotion of resources — charitable activity
  
  (6) A charitable organization shall be considered to be devoting its resources to charitable activities carried on by it to the extent that it uses those resources in carrying on a related business. 
  
  ### Qualifying disbursement limit — charitable organizations
  
  (6.001) In any taxation year, disbursements of income of a charitable organization by way of gifts to a qualified donee (other than disbursements of income to a registered charity that the Minister has designated in writing as a charity associated with the charitable organization) in excess of 50% of the charitable organization’s income for that year are not qualifying disbursements. 
  
  ### Devoting resources to purpose and function
  
  (6.01) A Canadian amateur athletic association is considered to devote its resources to its exclusive purpose and exclusive function to the extent that it carries on 
  (a) a related business; or 
  (b) activities involving the participation of professional athletes, if those activities are ancillary and incidental to its exclusive purpose and exclusive function. 
  
  ### Charitable purposes
  
  (6.1) For the purposes of the definition charitable foundation in subsection (1), a corporation or trust that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.  
  
  ### Charitable purposes
  
  (6.2) For the purposes of the definition charitable organization in subsection (1), an organization that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.  
  
  ### Activities of Canadian amateur athletic associations
  
  (6.201) For the purposes of the definition Canadian amateur athletic association in subsection (1), an association that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to devote that part of its resources to its exclusive purpose and exclusive function.  
  
  ### Marriage for civil purposes
  
  (6.21) For greater certainty, subject to subsections (6.1) and (6.2), a registered charity with stated purposes that include the advancement of religion shall not have its registration revoked or be subject to any other penalty under Part V solely because it or any of its members, officials, supporters or adherents exercises, in relation to marriage between persons of the same sex, the freedom of conscience and religion guaranteed under the Canadian Charter of Rights and Freedoms.  
  
  ### Designation as public foundation, etc.
  
  (6.3) The Minister may, by notice sent by registered mail to a registered charity, on the Minister’s own initiative or on application made to the Minister in prescribed form, designate the charity to be a charitable organization, private foundation or public foundation and the charity shall be deemed to be registered as a charitable organization, private foundation or public foundation, as the case may be, for taxation years commencing after the day of mailing of the notice unless and until it is otherwise designated under this subsection or its registration is revoked under subsection 149.1(2), 149.1(3), 149.1(4), 149.1(4.1) or 168(2). 
  
  ### National arts service organizations
  
  (6.4) Where an organization that 
  (a) has, on written application to the Minister of Communications describing all of its objects and activities, been designated by that Minister on approval of those objects and activities to be a national arts service organization, 
  (b) has, as its exclusive purpose and its exclusive function, the promotion of arts in Canada on a nation-wide basis, 
  (c) is resident in Canada and was formed or created in Canada, and 
  (d) complies with prescribed conditions applies in prescribed form to the Minister of National Revenue for registration, that Minister may register the organization for the purposes of this Act and, where the organization so applies or is so registered, this section, paragraph 38(a.1), sections 110.1, 118.1, 168, 172, 180 and 230, subsection 241(3.2) and Part V apply, with such modifications as the circumstances require, to the organization as if it were an applicant for registration as a charitable organization or as if it were a registered charity that is designated as a charitable organization, as the case may be. 
  
  ### Revocation of designation
  
  (6.5) The Minister of Communications may, at any time, revoke the designation of an organization made for the purpose of subsection 149.1(6.4) where 
  (a) an incorrect statement was made in the furnishing of information for the purpose of obtaining the designation, or 
  (b) the organization has amended its objects after its last designation was made, and, where the designation is so revoked, the organization shall be deemed for the purpose of section 168 to have ceased to comply with the requirements of this Act for its registration under this Act. 
  
  ### Designation of associated charities
  
  (7) On application made to the Minister in prescribed form, the Minister may, in writing, designate a registered charity as a charity associated with one or more specified registered charities where the Minister is satisfied that the charitable aim or activity of each of the registered charities is substantially the same, and on and after a date specified in such a designation, the charities to which it relates shall, until such time, if any, as the Minister revokes the designation, be deemed to be associated. 
  (8)  [Repealed, 2022, c. 19, s. 34]  
  (9)  [Repealed, 2010, c. 25, s. 37]  
  (10)  [Repealed, 2022, c. 10, s. 16]  
  
  ### Public policy activities
  
  (10.1) Subject to subsections (6.1) and (6.2), public policy dialogue and development activities carried on by an organization, corporation or trust in support of its stated purposes shall be considered to be carried on in furtherance of those purposes and not for any other purpose. 
  
  ### Partnership look-through rule
  
  (11) For the purposes of this section and sections 149.2 and 188.1, each member of a partnership at any time is deemed at that time to own the portion of each property of the partnership equal to the proportion that the fair market value of the member’s interest in the partnership at that time is of the fair market value of all interests in the partnership at that time. 
  
  ### Rules
  
  (12) For the purposes of this section, 
  (a) a corporation is controlled by a charitable foundation if more than 50% of the corporation’s issued share capital, having full voting rights under all circumstances, belongs to 
  (i) the foundation, or 
  (ii) the foundation and persons with whom the foundation does not deal at arm’s length, but, for the purpose of paragraph (3)(c), a charitable foundation is deemed not to have acquired control of a corporation if it has not purchased or otherwise acquired for consideration more than 5% of the issued shares of any class of the capital stock of that corporation; 
  (b) there shall be included in computing the income of a charity for a taxation year all gifts received by it in the year including gifts from any other charity but not including 
  (i) a designated gift, 
  (ii) any gift or portion of a gift in respect of which it is established that the donor is not a charity and 
  (A) has not been allowed a deduction under paragraph 110.1(1)(a) in computing the donor’s taxable income or under subsection 118.1(3) in computing the donor’s tax payable under this Part, or 
  (B) was not taxable under section 2 for the taxation year in which the gift was made, or 
  (iii) any gift or portion of a gift in respect of which it is established that the donor is a charity and that the gift was not made out of the income of the donor; and 
  (c) subsections 104(6) and 104(12) are not applicable in computing the income of a charitable foundation that is a trust. 
  
  ### Designation of private foundation as public
  
  (13) On application made to the Minister by a private foundation, the Minister may, on such terms and conditions as the Minister considers appropriate, designate the foundation to be a public foundation, and on and after the date specified in such a designation, the foundation to which it relates shall, until such time, if any, as the Minister revokes the designation, be deemed to be a public foundation. 
  
  ### Information returns
  
  (14) Every registered charity and registered Canadian amateur athletic association shall, within six months from the end of each taxation year of the charity or association and without notice or demand, file with the Minister both an information return and a public information return for the year in prescribed form and containing prescribed information. 
  
  ### Information returns
  
  (14.1) Every registered journalism organization shall, within six months from the end of each taxation year of the organization without notice or demand, file with the Minister both an information return and a public information return for the year in prescribed form and containing prescribed information including, for the public information return, for each donor whose total gifts to the organization in the year exceed $5,000, the name of the donor and the total amount donated. 
  
  ### Information may be communicated
  
  (15) Notwithstanding section 241, 
  (a) the information contained in a public information return referred to in subsection (14) or (14.1), and the filing status of information returns required by that subsection, shall be communicated or otherwise made available to the public by the Minister in such manner as the Minister considers appropriate; 
  (b) the Minister may make available to the public in any manner that the Minister considers appropriate, in respect of each registered, or previously registered, charity, Canadian amateur athletic association, journalism organization and qualified donee referred to in paragraph (a) of the definition qualified donee in subsection (1),  
  (i) its name, address and date of registration, 
  (ii) in the case of a registered, or previously registered, charity, Canadian amateur athletic association or journalism organization, its registration number, and 
  (iii) the effective date of any suspension, revocation, annulment or termination of registration; and 
  (c) if, at any time during a taxation year of a private foundation that is a registered charity, the private foundation holds more than an insignificant interest in respect of a class of shares of the capital stock of a corporation, the Minister shall make available to the public in such manner as the Minister deems appropriate, 
  (i) the name of the corporation, and 
  (ii) in respect of each class of shares of the corporation, that portion of the total corporate holdings percentage of the private foundation in respect of the class that is attributable to 
  (A) holdings of shares of that class by the private foundation, and 
  (B) the total of all holdings of shares of that class by relevant persons in respect of the private foundation. 
  (d)  [Repealed, 2017, c. 20, s. 25]  
  
  ### Rule regarding disbursement excess
  
  (20) Where a registered charity has expended a disbursement excess for a taxation year, the charity may, for the purpose of determining whether it complies with the requirements of paragraph (2)(b), (3)(b) or (4)(b), as the case may be, for the immediately preceding taxation year of the charity and five or less of its immediately subsequent taxation years, include in the computation of the amounts expended on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, such portion of that disbursement excess as was not so included under this subsection for any preceding taxation year. 
  
  ### Definition of disbursement excess 
  
  (21) For the purpose of subsection (20), 
  *disbursement excess*, for a taxation year of a charity, means the amount, if any, by which the total of amounts expended in the year by the charity on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements exceeds its disbursement quota for the year.  
  
  ### Refusal to register
  
  (22) The Minister may, by registered mail, give notice to a person that the application of the person for registration as a registered charity, registered Canadian amateur athletic association, registered journalism organization or qualified donee referred to in subparagraph (a)(i) or (iii) of the definition qualified donee in subsection (1) is refused.  
  
  ### Annulment of registration
  
  (23) The Minister may, by registered mail, give notice to a person that the registration of the person as a registered charity is annulled and deemed not to have been so registered, if the person was so registered by the Minister in error or the person has, solely as a result of a change in law, ceased to be a charity. 
  
  ### Receipts issued before annulment
  
  (24) An official receipt referred to in Part XXXV of the Income Tax Regulations issued, by a person whose registration has been annulled under subsection (23), before that annulment is, if the receipt would have been valid were the person a registered charity at the time the receipt was issued, deemed to be a valid receipt under that Part.  
  
  ### Refusal to register
  
  (25) The Minister may refuse to register a charity or Canadian amateur athletic association that has applied for registration as a registered charity or registered Canadian amateur athletic association if 
  (a) the application for registration is made on its behalf by an ineligible individual; 
  (b) an ineligible individual is a director, trustee, officer or like official of the charity or association, or controls or manages the charity or association, directly or indirectly, in any manner whatever; or 
  (c) the charity or association has accepted a gift from a foreign state, as defined in section 2 of the State Immunity Act, that is set out on the list referred to in subsection 6.1(2) of that Act.  
  
  ### Foreign charities
  
  (26) For the purposes of subparagraph (a)(v) of the definition qualified donee in subsection (1), the Minister may register, in consultation with the Minister of Finance, a foreign charity for a 24-month period that includes the time at which Her Majesty in right of Canada has made a gift to the foreign charity, if  
  (a) the foreign charity is not resident in Canada; and 
  (b) the Minister is satisfied that the foreign charity is 
  (i) carrying on relief activities in response to a disaster, 
  (ii) providing urgent humanitarian aid, or 
  (iii) carrying on activities in the national interest of Canada. 
  
  ### Material and insignificant interests
  
  149.2 (1) In this section and section 149.1, 
  (a) a person has, at any time, a material interest in respect of a class of shares of the capital stock of a corporation if, at that time, 
  (i) the percentage of the shares of that class held by the person exceeds 0.5% of all the issued and outstanding shares of that class, or 
  (ii) the fair market value of the shares so held exceeds $100,000; and 
  (b) a private foundation has, at any time, an insignificant interest in respect of a class of shares of the capital stock of a corporation if, at that time, the percentage of shares of that class held by the private foundation does not exceed 2% of all the issued and outstanding shares of that class. 
  
  ### Material transaction — anti-avoidance
  
  (2) If a private foundation or a relevant person in respect of the private foundation has engaged in one or more transactions or series of transactions or events, a purpose of which may reasonably be considered to be to avoid the application of the definition 
  *material transaction*, each of those transactions or series of transactions or events is deemed to be a material transaction.  
  
  ### Ownership
  
  (2.1) For the purposes of the definition 
  *equity percentage*, and subparagraph (b)(iii) of the definition 
  *exempt shares*, in subsection 149.1(1), a person who, if paragraph 251(5)(b) applied would be deemed by that paragraph to have the same position in relation to the control of a corporation as if the person owned a share, is deemed to own the share.  
  
  ### Net increase in excess corporate holdings percentage
  
  (3) The net increase in the excess corporate holdings percentage of a private foundation for a taxation year, in respect of a class of shares of the capital stock of a corporation, is the number of percentage points, if any, determined by the formula is the excess corporate holdings percentage of the private foundation at the end of the taxation year, in respect of the class, and is 
  (a) 0%, if 
  (i) at the beginning of the taxation year the private foundation was not both a private foundation and a registered charity, or 
  (ii) the private foundation was both a registered charity and a private foundation on March 18, 2007 and the taxation year is the first taxation year of the private foundation that begins after that date; and 
  (b) in any other case, the excess corporate holdings percentage of the private foundation in respect of the class at the end of its preceding taxation year. 
  
  ### Net decrease in excess corporate holdings percentage
  
  (4) The net decrease in the excess corporate holdings percentage of a private foundation for a taxation year, in respect of a class of shares of the capital stock of a corporation, is the number of percentage points, if any, by which the percentage determined for B in the formula in subsection (3) for the taxation year exceeds the percentage determined for A in that formula for the taxation year. 
  
  ### Allocation of net increase in excess corporate holdings percentage
  
  (5) For the purpose of the description of B in the definition 
  *divestment obligation percent-age* in subsection 149.1(1), the net increase in the excess corporate holdings percentage of a private foundation in respect of a class of shares of the capital stock of a corporation, for a taxation year (in this subsection referred to as the “current year”) is to be allocated in the following order:  
  (a) first to the divestment obligation percent-age of the private foundation in respect of that class for the current year, to the extent that the private foundation has in the current year acquired for consideration shares of that class; 
  (b) then to the divestment obligation percent-age of the private foundation in respect of that class for its fifth subsequent taxation year, to the extent of the lesser of 
  (i) that portion of the net increase in the excess corporate holdings percentage of the private foundation in respect of that class for the current year that is not allocated under paragraph (a), and 
  (ii) the percentage of the issued and outstanding shares of that class that were acquired by the private foundation in the current year by way of bequest; 
  (c) then to the divestment obligation percent-age of the private foundation in respect of that class for its second subsequent taxation year, to the extent of the lesser of 
  (i) that portion of the net increase in the excess corporate holdings percentage of the private foundation in respect of that class for the current year that is not allocated under paragraph (a) or (b), and 
  (ii) the total of 
  (A) the percentage of the issued and outstanding shares of that class that were acquired by the private foundation in the current year by way of gift, other than from a relevant person or by way of bequest, and 
  (B) the portion of the net increase in the excess corporate holdings percentage of the private foundation that is attributable to the redemption, acquisition or cancellation of any of the issued and outstanding shares of that class in the current year by the corporation; and 
  (d) then to the divestment obligation percent-age of the private foundation in respect of that class for its subsequent taxation year, to the extent of that portion of the net increase in the excess corporate holdings percentage of the private foundation in respect of that class for the current year that is not allocated under paragraph (a), (b) or (c). 
  
  ### Minister’s discretion
  
  (6) Notwithstanding subsection (5), on application by a private foundation, the Minister may, if the Minister believes it would be just and equitable to do so, reallocate any portion of the net increase in the excess corporate holdings percentage of the private foundation in respect of a class of shares of the capital stock of a corporation for a taxation year, that would otherwise be allocated under subsection (5) to the private foundation’s divestment obligation percentage in respect of that class for a particular taxation year, to the private foundation’s divestment obligation percentage in respect of that class for any of the ten taxation years subsequent to the particular taxation year. 
  
  ### Allocation of net decrease in excess corporate holdings percentage
  
  (7) For the purpose of the description of C in the definition 
  *divestment obligation percent-age* in subsection 149.1(1), the net decrease in the excess corporate holdings percentage of a private foundation in respect of a class of shares of the capital stock of a corporation for a taxation year (in this subsection referred to as the “current year”) is to be allocated in the following order:  
  (a) first, to the divestment obligation percentage of the private foundation in respect of that class for the current year, to the extent of that divestment obligation percentage; and 
  (b) then to the divestment obligation percent-age of the private foundation in respect of that class for a subsequent taxation year of the private foundation (referred to in this paragraph as the “subject year”), to the extent of the lesser of 
  (i) that portion of the net decrease in the excess corporate holdings percentage of the private foundation in respect of that class for the current year that is not allocated under paragraph (a), or under this paragraph, to the divestment obligation percentage of the private foundation in respect of that class for a taxation year of the private foundation that precedes the subject year, and 
  (ii) the amount of the divestment obligation percentage of the private foundation in respect of that class for the subject year, calculated as at the end of the current year and without reference to this subsection. 
  
  ### Transitional rule
  
  (8) If the original corporate holdings percent-age of a private foundation in respect of a class of shares of the capital stock of a corporation exceeds 20%, for the purpose of applying the definition “excess corporate holdings percent-age” in subsection 149.1(1) to 
  (a) the first taxation year of the private foundation that begins after March 18, 2007, the reference to 20% in that definition in respect of that class is to be read as the original corporate holdings percentage of the private foundation in respect of that class; 
  (b) taxation years of the private foundation that are after the taxation year referred to in paragraph (a) and that begin before March 19, 2012, the reference to 20% in that definition in respect of that class is to be read as the greater of 
  (i) 20%, and 
  (ii) the lesser of 
  (A) the total corporate holdings percent-age of the private foundation in respect of the class at the end of the immediately preceding taxation year, and 
  (B) the original corporate holdings percentage in respect of that class; 
  (c) taxation years of the private foundation that begin after March 18, 2012 and before March 19, 2017, the reference to 20% in that definition in respect of that class is to be read as the greater of 
  (i) 20%, and 
  (ii) the lesser of 
  (A) the total corporate holdings percentage of the private foundation in respect of the class at the end of the preceding taxation year, and 
  (B) the number of percentage points, if any, by which the private foundation’s original corporate holdings percentage in respect of that class exceeds 20%; 
  (d) taxation years of the private foundation that begin after March 18, 2017 and before March 19, 2022, the reference to 20% in that definition in respect of that class is to be read as the greater of 
  (i) 20%, and 
  (ii) the lesser of 
  (A) the total corporate holdings percent-age of the private foundation in respect of the class at the end of the preceding taxation year, and 
  (B) the number of percentage points, if any, by which the private foundation’s original corporate holdings percentage in respect of that class exceeds 40%; and 
  (e) taxation years of the private foundation that begin after March 18, 2022 and before March 19, 2027, the reference to 20% in that definition in respect of that class is to be read as the greater of 
  (i) 20%, and 
  (ii) the lesser of 
  (A) the total corporate holdings percentage of the private foundation in respect of the class at the end of the preceding taxation year, and 
  (B) the number of percentage points, if any, by which the private foundation’s original corporate holdings percentage in respect of that class exceeds 60%. 
  
  ### Where subsection (10) applies
  
  (9) Subsection (10) applies for the purposes of applying section 149.1 and subsections (8) and 188.1(3.1) to a private foundation at a particular time if, both on March 18, 2007 and at the particular time, 
  (a) the private foundation was the sole trustee of a trust, or was a majority interest beneficiary (within the meaning assigned by section 251.1) of a trust more than 50% of the trustees of which were the private foundation and one or more relevant persons in respect of the private foundation; and 
  (b) the trust held one or more shares of a class of the capital stock of a corporation. 
  
  ### Shares held through a trust on March 18, 2007
  
  (10) If this subsection applies at a particular time to a private foundation in respect of shares of a class of the capital stock of a corporation held by a trust, the private foundation is deemed to hold at the particular time that number of those shares as is determined by the formula is the lesser of the number of those shares held by the trust on March 18, 2007 and the number so held at the particular time; is the total fair market value of all interests held by the private foundation in the trust at the particular time; and is the total fair market value of all property held by the trust at the particular time. 
  
  ### Discretionary trusts
  
  (11) For the purpose of subsection (10), if the amount of income or capital of a trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be. 
  
  # DIVISION I 
  
  ## Returns, Assessments, Payment and Appeals 
  
  ## Returns 
  
  ### Filing returns of income — general rule
  
  150 (1) Subject to subsection (1.1), a return of income that is in prescribed form and that contains prescribed information shall be filed with the Minister, without notice or demand for the return, for each taxation year of a taxpayer, 
  
  ### Corporations
  
  (a) in the case of a corporation, by or on behalf of the corporation within six months after the end of the year if 
  (i) at any time in the year the corporation 
  (A) is resident in Canada, 
  (B) carries on business in Canada, unless the corporation’s only revenue from carrying on business in Canada in the year consists of amounts in respect of which tax was payable by the corporation under subsection 212(5.1), 
  (C) has a taxable capital gain (otherwise than from an excluded disposition), or 
  (D) disposes of a taxable Canadian property (otherwise than in an excluded disposition), or 
  (ii) tax under this Part 
  (A) is payable by the corporation for the year, or 
  (B) would be, but for a tax treaty, payable by the corporation for the year (otherwise than in respect of a disposition of taxable Canadian property that is treaty-protected property of the corporation); 
  
  ### Deceased individuals
  
  (b) in the case of an individual who dies after October of the year and on or before the day that would be the individual’s filing due date for the year if the individual had not died, by the individual’s legal representatives on or before the day that is the later of the day on or before which the return would otherwise be required to be filed and the day that is 6 months after the day of death; 
  
  ### Trusts or estates
  
  (c) in the case of an estate or trust, within 90 days from the end of the year; 
  
  ### Individuals
  
  (d) in the case of any other person, on or before 
  (i) the following April 30 by that person or, if the person is unable for any reason to file the return, by the person’s guardian, committee or other legal representative (in this paragraph referred to as the person’s “guardian”), 
  (ii) the following June 15 by that person or, if the person is unable for any reason to file the return, by the person’s guardian where the person is 
  (A) an individual who carried on a business in the year, unless the expenditures made in the course of carrying on the business were primarily the cost or capital cost of tax shelter investments (as defined in subsection 143.2(1)), or 
  (B) at any time in the year a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual to whom clause 150(1)(d)(ii)(A) applies, or 
  (iii) where at any time in the year the person is a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual to whom paragraph 150(1)(b) applies for the year, on or before the day that is the later of the day on or before which the person’s return would otherwise be required to be filed and the day that is 6 months after the day of the individual’s death; or 
  
  ### Designated persons
  
  (e) in a case where no person described by paragraph 150(1)(a), 150(1)(b) or 150(1)(d) has filed the return, by such person as is required by notice in writing from the Minister to file the return, within such reasonable time as the notice specifies. 
  
  ### Exception
  
  (1.1) Subject to subsection (1.2), subsection (1) does not apply to a taxation year of a taxpayer if 
  (a) the taxpayer is a corporation that was a registered charity throughout the year; or 
  (b) the taxpayer is an individual unless 
  (i) tax is payable under this Part by the individual for the year, 
  (ii) where the individual is resident in Canada at any time in the year, the individual has a taxable capital gain or disposes of capital property in the year, 
  (iii) where the individual is non-resident throughout the year, the individual has a taxable capital gain (otherwise than from an excluded disposition) or disposes of a taxable Canadian property (otherwise than in an excluded disposition) in the year, or 
  (iv) at the end of the year the individual’s HBP balance or LLP balance (as defined in subsection 146.01(1) or 146.02(1)) is a positive amount. 
  
  ### Exception — trusts
  
  (1.2) Subsection (1.1) does not apply to a taxation year of a trust if the trust is resident in Canada and is an express trust, or for civil law purposes a trust other than a trust that is established by law or by judgement, unless the trust 
  (a) had been in existence for less than three months at the end of the year; 
  (b) holds assets with a total fair market value that does not exceed $50,000 throughout the year, if the only assets held by the trust throughout the year are one or more of 
  (i) money, 
  (ii) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3),  
  (iii) a share, debt obligation or right listed on a designated stock exchange, 
  (iv) a share of the capital stock of a mutual fund corporation, 
  (v) a unit of a mutual fund trust, 
  (vi) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), and 
  (vii) an interest as a beneficiary under a trust, all the units of which are listed on a designated stock exchange; 
  (c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided the trust is not maintained as a separate trust for a particular client or clients; 
  (d) is a registered charity; 
  (e) is a club, society or association described in paragraph 149(1)(l); 
  (f) is a mutual fund trust; 
  (g) is, for greater certainty, a related segregated fund trust, within the meaning assigned by paragraph 138.1(1)(a); 
  (h) is a trust, all the units of which are listed on a designated stock exchange; 
  (i) is prescribed to be a master trust; 
  (j) is, for greater certainty, a graduated rate estate; 
  (k) is a qualified disability trust, as defined in subsection 122(3);  
  (l) is an employee life and health trust; 
  (m) is a trust described under paragraph 81(1)(g.3); 
  (n) is a trust under or governed by 
  (i) a deferred profit sharing plan, 
  (ii) a pooled registered pension plan, 
  (iii) a registered disability savings plan, 
  (iv) a registered education savings plan, 
  (v) a registered pension plan, 
  (vi) a registered retirement income fund, 
  (vii) a registered retirement savings plan, 
  (viii) a tax-free savings account, 
  (ix) an employee profit sharing plan, 
  (x) a registered supplementary unemployment benefit plan, or 
  (xi) a first home savings account; or 
  (o) is a cemetery care trust or a trust governed by an eligible funeral arrangement. 
  
  ### Bare trusts and arrangements — inclusion
  
  (1.3) For the purposes of this section, a trust includes an arrangement under which a trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property. 
  
  ### Solicitor-client privilege
  
  (1.4) For greater certainty, subsections (1.1) to (1.3) do not require the disclosure of information that is subject to solicitor-client privilege. 
  
  ### Demands for returns
  
  (2) Every person, whether or not the person is liable to pay tax under this Part for a taxation year and whether or not a return has been filed under subsection (1) or (3), shall, on demand sent by the Minister, file, within such reasonable time stipulated in the demand, with the Minister in prescribed form and containing prescribed information a return of the income for the taxation year designated in the demand. 
  
  ### Trustees, etc.
  
  (3) Every trustee in bankruptcy, assignee, liquidator, curator, receiver, trustee or committee and every agent or other person administering, managing, winding up, controlling or otherwise dealing with the property, business, estate or income of a person who has not filed a return for a taxation year as required by this section shall file a return in prescribed form of that person’s income for that year. 
  
  ### Death of partner or proprietor
  
  (4) Where 
  (a) subsection 34.1(9) or 34.2(8) applies in computing an individual’s income for a taxation year from a business, or 
  (b) an individual who carries on a business in a taxation year dies in the year and after the end of a fiscal period of the business that ends in the year, another fiscal period of the business (in this subsection referred to as the “short period”) ends in the year because of the individual’s death, and the individual’s legal representative elects that this subsection apply, the individual’s income from businesses for short periods, if any, shall not be included in computing the individual’s income for the year and the individual’s legal representative shall file an additional return of income for the year in respect of the individual as if the return were filed in respect of another person and shall pay the tax payable under this Part by that other person for the year computed as if 
  (c) the other person’s only income for the year were the amount determined by the formula is the total of all amounts each of which is the individual’s income from a business for a short fiscal period, is the total of all amounts each of which is an amount deducted under subsection 34.2(8) in computing the individual’s income for the taxation year in which the individual dies, and is the total of all amounts each of which is an amount included under subsection 34.1(9) in computing the individual’s income for the taxation year in which the individual dies, and 
  (d) subject to sections 114.2 and 118.93, that other person were entitled to the deductions to which the individual is entitled under sections 110, 118 to 118.7 and 118.9 for the year in computing the individual’s taxable income or tax payable under this Part, as the case may be, for the year. 
  
  ### Excluded disposition
  
  (5) For the purposes of this section, a disposition of a property by a taxpayer at any time in a taxation year is an excluded disposition if 
  (a) the taxpayer is non-resident at that time; 
  (b) no tax is payable under this Part by the taxpayer for the taxation year; 
  (c) the taxpayer is, at that time, not liable to pay any amount under this Act in respect of any previous taxation year (other than an amount for which the Minister has accepted, and holds, adequate security under section 116 or 220); and 
  (d) each taxable Canadian property disposed of by the taxpayer in the taxation year is 
  (i) excluded property within the meaning assigned by subsection 116(6), or 
  (ii) a property in respect of the disposition of which the Minister has issued to the taxpayer a certificate under subsection 116(2), (4) or (5.2). 
  
  ### Definition of 
  *electronic filing* 
  
  150.1 (1) For the purposes of this section, 
  *electronic filing* means using electronic media in a manner specified in writing by the Minister.  
  
  ### Filing of return by electronic transmission
  
  (2) A person who meets the criteria specified in writing by the Minister may file a return of income for a taxation year by way of electronic filing. 
  
  ### Mandatory filing of return by electronic transmission
  
  (2.1) If a corporation is, in respect of a taxation year, a prescribed corporation, the corporation shall file its return of income for the taxation year by way of electronic filing. 
  
  ### Definition of tax preparer 
  
  (2.2) In this section and subsection 162(7.3), 
  *tax preparer*, for a calendar year, means a person or partnership who, in the year, accepts consideration to prepare more than five returns of income of corporations, more than five returns of income of individuals (other than trusts) or more than five returns of income of estates or trusts, but does not include an employee who prepares returns of income in the course of performing their duties of employment.  
  
  ### Electronic filing — tax preparer
  
  (2.3) A tax preparer shall file any return of income prepared by the tax preparer for consideration by way of electronic filing, except that five of the returns of corporations, five of the returns of individuals (other than trusts) and five of the returns of estates or trusts may be filed other than by way of electronic filing. 
  
  ### Exceptions
  
  (2.4) Subsection (2.3) does not apply to a tax preparer for a calendar year in respect of a return of income 
  (a) of a type for which the tax preparer has applied to the Minister for authority to file by way of electronic filing for the year and for which that authority has not been granted because the tax preparer does not meet the criteria referred to in subsection (2); 
  (b) of a corporation described in any of paragraphs 205.1(2)(a) to (c) of the Income Tax Regulations ; or  
  (c) of a type that the Minister does not accept by way of electronic filing. 
  
  ### Deemed date of filing
  
  (3) For the purposes of section 150, where a return of income of a taxpayer for a taxation year is filed by way of electronic filing, it shall be deemed to be a return of income filed with the Minister in prescribed form on the day the Minister acknowledges acceptance of it. 
  
  ### Declaration
  
  (4) If a return of income of a taxpayer for a taxation year is filed by way of electronic filing by a particular person (in this subsection referred to as the “filer”) other than the person who is required to file the return, the person who is required to file the return shall make an information return in prescribed form containing prescribed information, retain a copy of it and provide the filer with the information return, and that return and the copy shall be deemed to be a record referred to in section 230 in respect of the filer and the other person. 
  
  ### Electronic notice of assessment
  
  (4.1) Notwithstanding subsection 244(14.1), a notice of assessment in respect of a return of income for a taxation year of an individual is presumed to have been sent to the individual and received by the individual on the day that it is made available, using electronic means, to the individual, if 
  (a) the return of income is filed by way of electronic filing; and 
  (b) the individual has authorized that notices or other communications may be made available in that manner and has not before that date revoked that authorization in a manner specified by the Minister. 
  
  ### Application to other Parts
  
  (5) This section also applies to Parts I.2 to XIII, with such modifications as the circumstances require. 
  
  ## Estimate of Tax 
  
  ### Estimate of tax
  
  151 Every person required by section 150 to file a return of income shall in the return estimate the amount of tax payable. 
  
  ## Assessment 
  
  ### Assessment
  
  152 (1) The Minister shall, with all due dispatch, examine a taxpayer’s return of income for a taxation year, assess the tax for the year, the interest and penalties, if any, payable and determine 
  (a) the amount of refund, if any, to which the taxpayer may be entitled by virtue of section 129, 131, 132 or 133 for the year; or 
  (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. 
  
  ### Determination of disability tax credit eligibility
  
  (1.01) The Minister shall, if an individual requests by prescribed form, determine with all due dispatch whether an amount is deductible, or would if this Act were read without reference to paragraph 118.3(1)(c) be deductible, under section 118.3 in computing the individual’s tax payable under this Part for a taxation year and send a notice of the determination to the individual. 
  
  ### Determination of losses
  
  (1.1) Where the Minister ascertains the amount of a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss for a taxation year and the taxpayer has not reported that amount as such a loss in the taxpayer’s return of income for that year, the Minister shall, at the request of the taxpayer, determine, with all due dispatch, the amount of the loss and shall send a notice of determination to the person by whom the return was filed. 
  
  ### Determination under subsection 245(2)
  
  (1.11) If at any time the Minister ascertains the tax consequences to a taxpayer because of subsection 245(2) with respect to a transaction, the Minister 
  (a) shall, in the case of a determination under subsection 245(8), determine any amount that is, or could at a subsequent time be, relevant for the purposes of computing the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or amount refundable to, the taxpayer under this Act; 
  (b) may, in any case not described in paragraph (a), determine any amount referred to in paragraph (a); and 
  (c) shall, if a determination is made under this subsection, send to the taxpayer, with all due dispatch, a notice of determination stating the amount so determined. 
  
  ### Application of s. 245(1)
  
  (1.111) The definitions in subsection 245(1) apply to subsection 152(1.11). 
  
  ### When determination not to be made
  
  (1.12) A determination of an amount shall not be made with respect to a taxpayer under subsection 152(1.11) at a time where that amount is relevant only for the purposes of computing the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or amount refundable to, the taxpayer under this Act for a taxation year ending before that time. 
  
  ### Provisions applicable
  
  (1.2) Paragraphs 56(1)(l) and 60(o), this Division and Division J, as they relate to an assessment or a reassessment and to assessing or reassessing tax, apply, with any modifications that the circumstances require, to a determination or redetermination under subsection (1.01) and to a determination or redetermination of an amount under this Division or an amount deemed under section 122.61 to be an overpayment on account of a taxpayer’s liability under this Part, except that 
  (a) subsections (1) and (2) do not apply to determinations made under subsections (1.01), (1.1) and (1.11); 
  (b) an original determination of a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss for a taxation year may be made by the Minister only at the request of the taxpayer; 
  (c) subsection 164(4.1) does not apply to a determination made under subsection 152(1.4); and 
  (d) the Minister determines the amount deemed by any of subsections 122.5(3) to (3.003), 122.72(1) or 122.8(4) to have been paid by an individual for a taxation year to be nil, subsection (2) does not apply to the determination unless the individual requests a notice of determination from the Minister. 
  
  ### Determination binding
  
  (1.3) For greater certainty, where the Minister makes a determination of the amount of a taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss for a taxation year or makes a determination under subsection 152(1.11) with respect to a taxpayer, the determination is (subject to the taxpayer’s rights of objection and appeal in respect of the determination and to any redetermination by the Minister) binding on both the Minister and the taxpayer for the purpose of calculating the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or amount refundable to, the taxpayer, as the case may be, for any taxation year. 
  
  ### Determination in respect of a partnership
  
  (1.4) The Minister may, within 3 years after the day that is the later of 
  (a) the day on or before which a member of a partnership is, or but for subsection 220(2.1) would be, required under section 229 of the Income Tax Regulations to make an information return for a fiscal period of the partnership, and  
  (b) the day the return is filed, determine any income or loss of the partnership for the fiscal period and any deduction or other amount, or any other matter, in respect of the partnership for the fiscal period that is relevant in determining the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or any amount refundable to or deemed to have been paid or to have been an overpayment by, any member of the partnership for any taxation year under this Part. 
  
  ### Notice of determination
  
  (1.5) Where a determination is made under subsection 152(1.4) in respect of a partnership for a fiscal period, the Minister shall send a notice of the determination to the partnership and to each person who was a member of the partnership during the fiscal period. 
  
  ### Absence of notification
  
  (1.6) No determination made under subsection 152(1.4) in respect of a partnership for a fiscal period is invalid solely because one or more persons who were members of the partnership during the period did not receive a notice of the determination. 
  
  ### Binding effect of determination
  
  (1.7) Where the Minister makes a determination under subsection 152(1.4) or a redetermination in respect of a partnership, 
  (a) subject to the rights of objection and appeal of the member of the partnership referred to in subsection 165(1.15) in respect of the determination or redetermination, the determination or redetermination is binding on the Minister and each member of the partnership for the purposes of calculating the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or any amount refundable to or deemed to have been paid or to have been an overpayment by, the members for any taxation year under this Part; and 
  (b) notwithstanding subsections 152(4), 152(4.01), 152(4.1) and 152(5), the Minister may, before the end of the day that is one year after the day on which all rights of objection and appeal expire or are determined in respect of the determination or redetermination, assess the tax, interest, penalties or other amounts payable and determine an amount deemed to have been paid or to have been an overpayment under this Part in respect of any member of the partnership and any other taxpayer for any taxation year as may be necessary to give effect to the determination or redetermination or a decision of the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada. 
  
  ### Time to assess
  
  (1.8) Where, as a result of representations made to the Minister that a person was a member of a partnership in respect of a fiscal period, a determination is made under subsection 152(1.4) for the period and the Minister, the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada concludes at a subsequent time that the partnership did not exist for the period or that, throughout the period, the person was not a member of the partnership, the Minister may, notwithstanding subsections 152(4), 152(4.1) and 152(5), within one year after that subsequent time, assess the tax, interest, penalties or other amounts payable, or determine an amount deemed to have been paid or to have been an overpayment under this Part, by any taxpayer for any taxation year, but only to the extent that the assessment or determination can reasonably be regarded 
  (a) as relating to any matter that was relevant in the making of the determination made under subsection 152(1.4); 
  (b) as resulting from the conclusion that the partnership did not exist for the period; or 
  (c) as resulting from the conclusion that the person was, throughout the period, not a member of the partnership. 
  
  ### Waiver of determination limitation period
  
  (1.9) A waiver in respect of the period during which the Minister may make a determination under subsection (1.4) in respect of a partnership for a fiscal period may be made by one member of the partnership if that member is 
  (a) designated for that purpose in the information return made under section 229 of the Income Tax Regulations for the fiscal period; or  
  (b) otherwise expressly authorized by the partnership to so act. 
  
  ### Notice of assessment
  
  (2) After examination of a return, the Minister shall send a notice of assessment to the person by whom the return was filed. 
  
  ### Liability not dependent on assessment
  
  (3) Liability for the tax under this Part is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made. 
  
  ### Definition of 
  *normal reassessment period* 
  
  (3.1) For the purposes of subsections (4), (4.01), (4.2), (4.3), (5) and (9), the normal reassessment period for a taxpayer in respect of a taxation year is 
  (a) if at the end of the year the taxpayer is a mutual fund trust or a corporation other than a Canadian-controlled private corporation, the period that ends four years after the earlier of the day of sending of a notice of an original assessment under this Part in respect of the taxpayer for the year and the day of sending of an original notification that no tax is payable by the taxpayer for the year; and 
  (b) in any other case, the period that ends three years after the earlier of the day of sending of a notice of an original assessment under this Part in respect of the taxpayer for the year and the day of sending of an original notification that no tax is payable by the taxpayer for the year. 
  
  ### Determination of deemed overpayment
  
  (3.2) A taxpayer may, during any month, request in writing that the Minister determine the amount deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for a taxation year that arose during the month or any of the 11 preceding months. 
  
  ### Notice of determination
  
  (3.3) On receipt of the request referred to in subsection 152(3.2), the Minister shall, with all due dispatch, determine the amounts deemed by subsection 122.61(1) to be overpayments on account of the taxpayer’s liability under this Part that arose during the months in respect of which the request was made or determine that there is no such amount, and shall send a notice of the determination to the taxpayer. 
  
  ### COVID-19 — notice of determination
  
  (3.4) The Minister may at any time determine the amount deemed by any of subsections 125.7(2) to (2.2) to be an overpayment on account of a taxpayer’s liability under this Part that arose during a qualifying period (as defined in subsection 125.7(1)), or determine that there is no such amount, and send a notice of the determination to the taxpayer.  
  (3.5)  [Repealed, 2013, c. 34, s. 309]  
  
  ### Assessment and reassessment
  
  (4) The Minister may at any time make an assessment, reassessment or additional assessment of tax for a taxation year, interest or penalties, if any, payable under this Part by a taxpayer or notify in writing any person by whom a return of income for a taxation year has been filed that no tax is payable for the year, except that an assessment, reassessment or additional assessment may be made after the taxpayer’s normal reassessment period in respect of the year only if 
  (a) the taxpayer or person filing the return 
  (i) has made any misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in filing the return or in supplying any information under this Act, or 
  (ii) has filed with the Minister a waiver in prescribed form within the normal reassessment period for the taxpayer in respect of the year; 
  (b) the assessment, reassessment or additional assessment is made before the day that is 3 years after the end of the normal reassessment period for the taxpayer in respect of the year and 
  (i) is required under subsection (6) or (6.1), or would be so required if the taxpayer had claimed an amount by filing the prescribed form referred to in the subsection on or before the day referred to in the subsection, 
  (ii) is made as a consequence of the assessment or reassessment pursuant to this paragraph or subsection 152(6) of tax payable by another taxpayer, 
  (iii) is made 
  (A) as a consequence of a transaction (as defined in subsection 247(1)) involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm’s length, or  
  (B) in respect of any income, loss or other amount in relation to a foreign affiliate of the taxpayer, 
  (iii.1) is made, if the taxpayer is non-resident and carries on a business in Canada, as a consequence of 
  (A) an allocation by the taxpayer of revenues or expenses as amounts in respect of the Canadian business (other than revenues and expenses that relate solely to the Canadian business, that are recorded in the books of account of the Canadian business, and the documentation in support of which is kept in Canada), or 
  (B) a notional transaction between the taxpayer and its Canadian business, where the transaction is recognized for the purposes of the computation of an amount under this Act or an applicable tax treaty. 
  (iv) is made as a consequence of a payment or reimbursement of any income or profits tax to or by the government of a country other than Canada or a government of a state, province or other political subdivision of any such country, 
  (v) is made as a consequence of a reduction under subsection 66(12.73) of an amount purported to be renounced under section 66, 
  (v.1) is made in respect of an amount deducted under subsection 127(5) in respect of a flow-through critical mineral mining expenditure as defined in subsection 127(9),  
  (vi) is made in order to give effect to the application of subsection 118.1(15) or 118.1(16), or 
  (vii) is made to give effect to the application of any of sections 94, 94.1 and 94.2; 
  (b.1) an information return described in subsection 237.1(7) that is required to be filed in respect of a deduction or claim made by the taxpayer in relation to a tax shelter is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is three years after the day on which the information return is filed; 
  (b.2) the assessment, reassessment or additional assessment is made before the day that is three years after the end of the normal reassessment period for the taxpayer in respect of the year and if 
  (i) the taxpayer, or a partnership of which the taxpayer is a member, has failed to file for the year a prescribed form as and when required under subsection 233.3(3) or to report on the prescribed form the information required in respect of a specified foreign property (as defined in subsection 233.3(1)) held by the taxpayer at any time during the year, and 
  (ii) the taxpayer has failed to report, in the return of income for the year, an amount in respect of a specified foreign property that is required to be included in computing the taxpayer’s income for the year; 
  (b.3) the following conditions apply: 
  (i) the taxpayer, or a partnership of which the taxpayer is a member (directly or indirectly through one or more partnerships), disposes in the year of real or immovable property, 
  (ii) the taxpayer is not a real estate investment trust (as defined in subsection 122.1(1)) for the year,  
  (iii) if the disposition is by a corporation or partnership, the property is capital property of the corporation or partnership, as the case may be, 
  (iv) the disposition is not reported in 
  (A) if the disposition is by the taxpayer, the return of income of the taxpayer under this Part for the year, or 
  (B) if the disposition is by a partnership, the partnership’s return required to be filed for the year under section 229 of the Income Tax Regulations, and  
  (v) in the case that the disposition is not reported in the return described in clause (iv)(A) or (B) and the taxpayer subsequently reports the disposition by filing a prescribed form amending the taxpayer’s return of income under this Part for the year, the assessment, reassessment or additional assessment is made before the day that is three years after the day on which the prescribed form amending the return is filed; 
  (b.4) the assessment, reassessment or additional assessment is made before the day that is six years after the end of the normal reassessment period for the taxpayer in respect of the year if 
  (i) a reassessment of tax for the year was required under subsection (6), or would have been so required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to in that subsection, in order to take into account a deduction claimed under section 111 in respect of a loss for a subsequent taxation year, 
  (ii) an assessment, reassessment, additional assessment of tax or notification that no tax is payable for the subsequent taxation year referred to in subparagraph (i) was made or issued after the normal reassessment period in respect of the subsequent taxation year as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm’s length, and 
  (iii) the assessment, reassessment, additional assessment or notification that no tax is payable referred to in subparagraph (ii) reduced the amount of the loss for the subsequent taxation year; 
  (b.5) an information return that is required to be filed under subsection 237.3(2) in respect of a reportable transaction (as defined in subsection 237.3(1)) entered into by the taxpayer, or by a person for the benefit of the taxpayer, is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is  
  (i) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the information return is filed, or 
  (ii) in any other case, three years after the day on which the information return is filed; 
  (b.6) an information return that is required to be filed under subsection 237.4(4) in respect of a notifiable transaction (as defined in subsection 237.4(1)) entered into by the taxpayer, or by a person for the benefit of the taxpayer, is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is  
  (i) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the information return is filed, or 
  (ii) in any other case, three years after the day on which the information return is filed; 
  (b.7) an information return that is required to be filed under subsection 237.5(2) in respect of a reportable uncertain tax treatment (as defined in subsection 237.5(1)) of the taxpayer is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is  
  (i) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the information return is filed, or 
  (ii) in any other case, three years after the day on which the information return is filed; 
  (c) the taxpayer or person filing the return of income has filed with the Minister a waiver in prescribed form within the additional three-year period referred to in paragraph (b) or (b.1); 
  (c.1) the taxpayer or person filing the return of income has filed with the Minister a waiver in prescribed form within the additional three-year period referred to in paragraph (b.2); or 
  (d) as a consequence of a change in the allocation of the taxpayer’s taxable income earned in a province as determined under the law of a province that provides rules similar to those prescribed for the purposes of section 124, an assessment, reassessment or additional assessment of tax for a taxation year payable by a corporation under a law of a province that imposes on the corporation a tax similar to the tax imposed under this Part (in this paragraph referred to as a “provincial reassessment”) is made, and as a consequence of the provincial reassessment, an assessment, reassessment or additional assessment is made on or before the day that is one year after the later of 
  (i) the day on which the Minister is advised of the provincial reassessment, and 
  (ii) the day that is 90 days after the day of sending of a notice of the provincial reassessment. 
  
  ### Extended period of assessment
  
  (4.01) Notwithstanding subsections (4) and (5), an assessment, reassessment or additional assessment to which any of paragraphs (4)(a) to (b.1) or (b.3) to (c) applies in respect of a taxpayer for a taxation year may be made after the taxpayer’s normal reassessment period in respect of the year to the extent that, but only to the extent that, it can reasonably be regarded as relating to, 
  (a) where paragraph 152(4)(a) applies to the assessment, reassessment or additional assessment, 
  (i) any misrepresentation made by the taxpayer or a person who filed the taxpayer’s return of income for the year that is attributable to neglect, carelessness or wilful default or any fraud committed by the taxpayer or that person in filing the return or supplying any information under this Act, or 
  (ii) a matter specified in a waiver filed with the Minister in respect of the year; 
  (b) if any of paragraphs (4)(b), (b.1) or (b.5) to (c) applies to the assessment, reassessment or additional assessment, 
  (i) the assessment, reassessment or additional assessment to which subparagraph 152(4)(b)(i) applies, 
  (ii) the assessment or reassessment referred to in subparagraph 152(4)(b)(ii), 
  (iii) the transaction, income, loss or other amount referred to in subparagraph (4)(b)(iii), 
  (iv) the payment or reimbursement referred to in subparagraph 152(4)(b)(iv), 
  (v) the reduction referred to in subparagraph 152(4)(b)(v), 
  (vi) the application referred to in subparagraph 152(4)(b)(vi), 
  (vii) the deduction or claim referred to in paragraph (4)(b.1), 
  (viii) the reportable transaction referred to in paragraph (4)(b.5), 
  (ix) the notifiable transaction referred to in paragraph (4)(b.6), or 
  (x) any transaction, or series of transactions, to which the reportable uncertain tax treatment referred to in paragraph (4)(b.7) relates; 
  (c) if paragraph (4)(b.3) applies to the assessment, reassessment or additional assessment, the disposition referred to in that paragraph; and 
  (d) if paragraph (4)(b.4) applies to the assessment, reassessment or additional assessment, the reduction under subparagraph (4)(b.4)(iii). 
  
  ### If waiver revoked
  
  (4.1) If the Minister would, but for this subsection, be entitled to reassess, make an additional assessment or assess tax, interest or penalties by virtue only of the filing of a waiver under subparagraph (4)(a)(ii) or paragraph (4)(c) or (c.1), the Minister may not make such a reassessment, additional assessment or assessment after the day that is six months after the date on which a notice of revocation of the waiver in prescribed form is filed. 
  
  ### Reassessment with taxpayer’s consent
  
  (4.2) Notwithstanding subsections (4), (4.1) and (5), for the purpose of determining — at any time after the end of the normal reassessment period, of a taxpayer who is an individual (other than a trust) or a graduated rate estate, in respect of a taxation year — the amount of any refund to which the taxpayer is entitled at that time for the year, or a reduction of an amount payable under this Part by the taxpayer for the year, the Minister may, if the taxpayer makes an application for that determination on or before the day that is 10 calendar years after the end of that taxation year, 
  (a) reassess tax, interest or penalties payable under this Part by the taxpayer in respect of that year; and 
  (b) redetermine the amount, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 122.91(1), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the year. 
  
  ### Consequential assessment
  
  (4.3) Notwithstanding subsections (4), (4.1) and (5), if the result of an assessment or a decision on an appeal is to change a particular balance of a taxpayer for a particular taxation year, the Minister may, or if the taxpayer so requests in writing, shall, before the later of the expiration of the normal reassessment period in respect of a subsequent taxation year and the end of the day that is one year after the day on which all rights of objection and appeal expire or are determined in respect of the particular year, reassess the tax, interest or penalties payable by the taxpayer, redetermine an amount deemed to have been paid or to have been an overpayment by the taxpayer or modify the amount of a refund or other amount payable to the taxpayer, under this Part in respect of the subsequent taxation year, but only to the extent that the reassessment, redetermination or modification can reasonably be considered to relate to the change in the particular balance of the taxpayer for the particular year. 
  
  ### Definition of 
  *balance* 
  
  (4.4) For the purpose of subsection 152(4.3), a 
  *balance* of a taxpayer for a taxation year is the income, taxable income, taxable income earned in Canada or any loss of the taxpayer for the year, or the tax or other amount payable by, any amount refundable to, or any amount deemed to have been paid or to have been an overpayment by, the taxpayer for the year.  
  
  ### Limitation on assessments
  
  (5) There shall not be included in computing the income of a taxpayer for a taxation year, for the purpose of an assessment, reassessment or additional assessment made under this Part after the taxpayer’s normal reassessment period in respect of the year, any amount that was not included in computing the taxpayer’s income for the purpose of an assessment, reassessment or additional assessment made under this Part before the end of the period. 
  
  ### Reassessment where certain deductions claimed
  
  (6) Where a taxpayer has filed for a particular taxation year the return of income required by section 150 and an amount is subsequently claimed by the taxpayer or on the taxpayer’s behalf for the year as 
  (a) a deduction under paragraph 3(e) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, by virtue of the taxpayer’s death in a subsequent taxation year and the consequent application of section 71 of that Act in respect of an allowable capital loss for the year,  
  (b) a deduction under section 41 in respect of the taxpayer’s listed-personal-property loss for a subsequent taxation year, 
  (b.1) a deduction under paragraph 60(i) in respect of a premium (within the meaning assigned by subsection 146(1)) paid in a subsequent taxation year under a registered retirement savings plan where the premium is deductible by reason of subsection 146(6.1), 
  (c) a deduction under section 118.1 in respect of a gift made in a subsequent taxation year or under section 111 in respect of a loss for a subsequent taxation year, 
  (c.1)  [Repealed, 2013, c. 34, s. 309]  
  (d) a deduction under subsection 127(5) in respect of property acquired or an expenditure made in a subsequent taxation year, 
  (e)  [Repealed, 2013, c. 34, s. 309]  
  (f) a deduction under section 125.3 in respect of an unused Part I.3 tax credit (within the meaning assigned by subsection 125.3(3)) for a subsequent taxation year, 
  (f.1) a deduction under subsection 126(2) in respect of an unused foreign tax credit (within the meaning assigned by subsection 126(7)), or under subsection 126(2.21) or (2.22) in respect of foreign taxes paid, for a subsequent taxation year, 
  (f.2) a deduction under subsection 128.1(8) as a result of a disposition in a subsequent taxation year, 
  (f.3) a deduction (including for the purposes of this subsection a reduction of an amount otherwise required to be included in computing a taxpayer’s income) under subsection 146(8.9) or (8.92), 146.3(6.2) or (6.3) or 147.5(14) or (19), 
  (g) a deduction under subsection 147.2(4) because of the application of subsection 147.2(6) as a result of the taxpayer’s death in the subsequent taxation year, or 
  (h) a deduction by virtue of an election for a subsequent taxation year under paragraph 164(6)(c) or 164(6)(d) by the taxpayer’s legal representative, by filing with the Minister, on or before the day on or before which the taxpayer is, or would be if a tax under this Part were payable by the taxpayer for that subsequent taxation year, required by section 150 to file a return of income for that subsequent taxation year, a prescribed form amending the return, the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular taxation year) in order to take into account the deduction claimed. 
  
  ### Reassessment if amount under subsection 91(1) is reduced
  
  (6.1) If 
  (a) a taxpayer has filed for a particular taxation year the return of income required by section 150, 
  (b) the amount included in computing the taxpayer’s income for the particular year under subsection 91(1) is subsequently reduced because of a reduction in the foreign accrual property income of a foreign affiliate of the taxpayer for a taxation year (referred to in this paragraph as the “claim year”) of the affiliate that ends in the particular year, if 
  (i) the reduction is 
  (A) attributable to a foreign accrual property loss (within the meaning assigned by subsection 5903(3) of the Income Tax Regulations) of the affiliate for a taxation year of the affiliate that ends in a subsequent taxation year of the taxpayer, and  
  (B) included in the description of F in the definition 
  *foreign accrual property income* in subsection 95(1) in respect of the affiliate for the claim year, or  
  (ii) the reduction is 
  (A) attributable to a foreign accrual capital loss (within the meaning assigned by subsection 5903.1(3) of the Income Tax Regulations) of the affiliate for a taxation year of the affiliate that ends in a subsequent taxation year of the taxpayer, and  
  (B) included in the description of F.1 in the definition 
  *foreign accrual property income* in subsection 95(1) in respect of the affiliate for the claim year, and  
  (c) the taxpayer has filed with the Minister, on or before the filing-due date for that subsequent taxation year, a prescribed form amending the return, the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular year) in order to take into account the reduction in the amount included under subsection 91(1) in computing the income of the taxpayer for the particular year. 
  
  ### Extended reassessment period
  
  (6.2) The Minister shall reassess a taxpayer’s tax for a particular taxation year, in order to take into account the application of paragraph (d) of the definition 
  *excluded property* in subsection 142.2(1), or the application of subsection 142.6(1.6), in respect of property held by the taxpayer, if  
  (a) the taxpayer has filed for the particular taxation year the return of income required by section 150; and 
  (b) the taxpayer files with the Minister a prescribed form amending the return, on or before the filing-due date for the taxpayer’s taxation year that 
  (i) if the filing is in respect of paragraph (d) of that definition 
  *excluded property*, includes the acquisition of control time referred to in that paragraph, and  
  (ii) if the filing is in respect of subsection 142.6(1.6), immediately follows the particular taxation year. 
  
  ### Reassessment for section 119 credit
  
  (6.3) If a taxpayer has filed for a particular taxation year the return of income required by section 150 and an amount is subsequently claimed by the taxpayer, or on the taxpayer’s behalf, for the particular year as a deduction under section 119 in respect of a disposition in a subsequent taxation year, and the taxpayer files with the Minister a prescribed form amending the return on or before the filing-due date of the taxpayer for the subsequent taxation year, the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular taxation year) in order to take into account the deduction claimed. 
  
  ### Assessment not dependent on return or information
  
  (7) The Minister is not bound by a return or information supplied by or on behalf of a taxpayer and, in making an assessment, may, notwithstanding a return or information so supplied or if no return has been filed, assess the tax payable under this Part. 
  
  ### Assessment deemed valid and binding
  
  (8) An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission in the assessment or in any proceeding under this Act relating thereto. 
  
  ### Alternative basis for assessment
  
  (9) At any time after the normal reassessment period, the Minister may advance an alternative basis or argument — including that all or any portion of the income to which an amount relates was from a different source — in support of all or any portion of the total amount determined on assessment to be payable or remittable by a taxpayer under this Act unless, on an appeal under this Act 
  (a) there is relevant evidence that the taxpayer is no longer able to adduce without the leave of the court; and 
  (b) it is not appropriate in the circumstances for the court to order that the evidence be adduced. 
  
  ### Tax deemed not assessed
  
  (10) Notwithstanding any other provision of this section, an amount of tax is deemed, for the purpose of any agreement entered into by or on behalf of the Government of Canada under section 7 of the Federal-Provincial Fiscal Arrangements Act, not to have been assessed under this Act until  
  (a) the end of the period during which the security is accepted by the Minister, if adequate security for the tax is accepted by the Minister under subsection 220(4.5) or (4.6); or 
  (b) the amount is collected by the Minister, if information relevant to the assessment of the amount was provided to the Canada Revenue Agency under a contract entered into by a person under a program administered by the Canada Revenue Agency to obtain information relating to tax non-compliance. 
  
  ## Payment of Tax 
  
  ### Withholding
  
  153 (1) Every person paying at any time in a taxation year 
  (a) salary, wages or other remuneration, other than 
  (i) amounts described in subsection 212(5.1), and 
  (ii) amounts paid at any time by an employer to an employee if, at that time, the employer is a qualifying non-resident employer and the employee is a qualifying non-resident employee, 
  (b) a superannuation or pension benefit, 
  (c) a retiring allowance, 
  (d) a death benefit, 
  (d.1) an amount described in subparagraph 56(1)(a)(iv) or (vii), 
  (d.2) an amount described in paragraph 56(1)(a.3), 
  (e) an amount as a benefit under a supplementary unemployment benefit plan, 
  (f) an annuity payment or a payment in full or partial commutation of an annuity, 
  (g) fees, commissions or other amounts for services, other than amounts described in subsection 115(2.3) or 212(5.1), 
  (h) a payment under a deferred profit sharing plan or a plan referred to in section 147 as a revoked plan, 
  (i) a payment from a registered disability savings plan, 
  (j) a payment out of or under a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan”, 
  (k) an amount as, on account or in lieu of payment of, or in satisfaction of, proceeds of the surrender, cancellation or redemption of an income-averaging annuity contract, 
  (l) a payment out of or under a registered retirement income fund or a fund referred to in subsection 146.3(11) as an “amended fund”, 
  (m) a prescribed benefit under a government assistance program, 
  (m.1)  [Repealed, 1994, c. 21, s. 77(1)]  
  (n) one or more amounts to an individual who has elected for the year in prescribed form in respect of all such amounts, 
  (o) an amount described in paragraph 115(2)(c.1), 
  (p) a contribution under a retirement compensation arrangement, 
  (q) an amount as a distribution to one or more persons out of or under a retirement compensation arrangement, 
  (r) an amount on account of the purchase price of an interest in a retirement compensation arrangement, 
  (s) an amount described in paragraph 56(1)(r), (z.2) or (z.4), 
  (t) a payment made under a plan that was a registered education savings plan, 
  (u) a payment out of or under an advanced life deferred annuity, or 
  (v) a payment out of or under 
  (i) a FHSA, if the amount is required by section 146.6 to be included in computing a taxpayer’s income, or 
  (ii) an arrangement that ceased to be a FHSA by application of subsection 146.6(16) must deduct or withhold from the payment the amount determined in accordance with prescribed rules and must, at the prescribed time, remit that amount to the Receiver General on account of the payee’s tax for the year under this Part or Part XI.3, as the case may be, and, where at that prescribed time the person is a prescribed person, the remittance must be made to the account of the Receiver General at or through a designated financial institution. 
  
  ### Withholding — stock option benefits
  
  (1.01) An amount that is deemed to have been received by a taxpayer as a benefit under or because of any of paragraphs 7(1)(a) to (d.1) is remuneration paid as a bonus for the purposes of paragraph (1)(a), except the portion, if any, of the amount that is 
  (a) deductible by the taxpayer under paragraph 110(1)(d) in computing the taxpayer’s taxable income for a taxation year; 
  (b) deemed to have been received in a taxation year as a benefit because of a disposition of securities to which subsection 7(1.1) applies; or 
  (c) determined under paragraph 110(2.1)(b) to be deductible by the taxpayer under paragraph 110(1)(d.01) in computing the taxpayer’s taxable income for a taxation year. 
  
  ### COVID-19 — deemed remittance
  
  (1.02) For the purposes of this Act, if an eligible employer pays, at a particular time that is within the eligible period, eligible remuneration in respect of which a particular amount is required to be deducted or withheld under subsection (1), then the eligible employer is deemed to have remitted to the Receiver General at the particular time in respect of the particular amount, an amount equal to the least of 
  (a) the amount determined by the formula is the prescribed amount, and is the total of all amounts, each of which is an amount deemed to have been remitted by the eligible employer under this subsection prior to the particular time (and, if more than one such payment is made at the particular time, the eligible employer may designate the order in which the amounts are considered to have been paid), 
  (b) the amount determined by the formula is the prescribed percentage, and is the amount of the eligible remuneration, and 
  (c) the amount determined by the formula is the prescribed amount, and is the total number of eligible employees employed by the eligible employer during the eligible period. 
  
  ### Definitions — subsection (1.02)
  
  (1.03) The following definitions apply for the purposes of this subsection and subsection (1.02).  
  *eligible employee* means an individual who is employed in Canada. (employé admissible)   
  *eligible employer* means a person or partnership that  
  (a) employs one or more eligible employees; 
  (b) has, on March 18, 2020, a business number in respect of which the person or partnership is registered with the Minister to make remittances required under this section; and 
  (c) is any of 
  (i) a Canadian-controlled private corporation for the purposes of section 125 that 
  (A) would have a business limit for its last taxation year that ended before the start of the eligible period greater than nil, if the amount determined for paragraph 125(5.1)(b) were deemed to be nil, or 
  (B) if the corporation does not have a taxation year that ended before the start of the eligible period, would meet the condition in clause (A) if its taxation year ended immediately before the start of the eligible period, 
  (ii) an individual (other than a trust), 
  (iii) a partnership, all of the members of which are described in subparagraphs (i) to (iii) or (v), 
  (iv) a person exempt from tax under Part I because of paragraph 149(1)(l), and 
  (v) a registered charity. ( employeur admissible)   
  *eligible period* means the period beginning on March 18, 2020 and that ends on June 19, 2020. (période d’admissibilité)   
  *eligible remuneration* means salary, wages or other remuneration paid to an eligible employee during the eligible period. (rémunération admissible)  
  
  ### Deemed remittances under subsection (1.02)
  
  (1.04) For greater certainty, amounts deemed under subsection (1.02) to have been remitted to the Receiver General are deemed to not be held in trust under subsections 227(4) and (4.1). 
  
  ### Undue hardship
  
  (1.1) Where the Minister is satisfied that the deducting or withholding of the amount otherwise required to be deducted or withheld under subsection 153(1) from a payment would cause undue hardship, the Minister may determine a lesser amount and that amount shall be deemed to be the amount determined under that subsection as the amount to be deducted or withheld from that payment. 
  
  ### Election to increase withholding
  
  (1.2) Where a taxpayer so elects in prescribed manner and prescribed form, the amount required to be deducted or withheld under subsection 153(1) from any payment to the taxpayer shall be deemed to be the total of 
  (a) the amount, if any, otherwise required to be deducted or withheld under that subsection from that payment, and 
  (b) the amount specified by the taxpayer in that election with respect to that payment or with respect to a class of payments that includes that payment. 
  
  ### Reduction not permitted
  
  (1.3) A joint election made or expected to be made under section 60.03 is not to be considered a basis on which the Minister may determine a lesser amount under subsection (1.1). 
  
  ### Non-cash stock option benefit
  
  (1.31) An amount deemed to have been received as a benefit under or because of any of paragraphs 7(1)(a) to (d.1) shall not be considered a basis on which the Minister may determine a lesser amount under subsection (1.1) solely because it is received as a non-cash benefit. 
  
  ### Exception — remittance to designated financial institution
  
  (1.4) For the purpose of subsection (1), a prescribed person referred to in that subsection is deemed to have remitted an amount to the account of the Receiver General at or through a designated financial institution if the prescribed person has remitted the amount to the Receiver General at least one day before the day upon which the amount is due. 
  
  ### Deemed withholding
  
  (2) If a pensioner and a pension transferee (as those terms are defined in section 60.03) make a joint election under section 60.03 in respect of a split-pension amount (as defined in that section) for a taxation year, the portion of the amount deducted or withheld under subsection (1) that may be reasonably considered to be in respect of the split-pension amount is deemed to have been deducted or withheld on account of the pension transferee’s tax for the taxation year under this Part and not on account of the pensioner’s tax for the taxation year under this Part. 
  
  ### Deemed effect of deduction
  
  (3) When an amount has been deducted or withheld under subsection 153(1), it shall, for all the purposes of this Act, be deemed to have been received at that time by the person to whom the remuneration, benefit, payment, fees, commissions or other amounts were paid. 
  
  ### Amounts paid in error
  
  (3.1) For the purposes of this Act, an amount (referred to in this subsection as the “excess amount”) is deemed to not have been deducted or withheld under subsection (1) by a person if 
  (a) the excess amount was, absent the application of this subsection, deducted or withheld by the person under subsection (1); 
  (b) the excess amount is in respect of an excess payment (referred to in this subsection as the “total excess payment”) of an individual’s salary, wages or other remuneration by the person to the individual in a particular year, that was paid as a result of a clerical, administrative or system error; 
  (c) before the end of the third year after the calendar year in which the excess amount is deducted or withheld, 
  (i) the person elects in prescribed manner to have this subsection apply in respect of the excess amount, and 
  (ii) the individual has repaid, or made an arrangement to repay, the total excess payment less the excess amount; 
  (d) an information return correcting for the total excess payment has not been issued by the person to the individual prior to the making of the election in subparagraph (c)(i); and 
  (e) any additional criteria specified by the Minister have been met. 
  
  ### Unclaimed dividends, interest and proceeds
  
  (4) Where at the end of a taxpayer’s taxation year the person beneficially entitled to an amount received by the taxpayer after 1984 and before the year as or in respect of dividends, interest or proceeds of disposition of property is unknown to the taxpayer, the taxpayer shall remit to the Receiver General on or before the day that is 60 days after the end of the year on account of the tax payable under this Act by that person an amount equal to 
  (a) in the case of dividends, 33 1/3% of the total amount of the dividends, 
  (b) in the case of interest, 50% of the total amount of the interest, and 
  (c) in the case of proceeds of disposition of property, 50% of the total of all amounts each of which is the amount, if any, by which the proceeds of disposition of a property exceed the total of any outlays and expenses made or incurred by the taxpayer for the purpose of disposing of the property (to the extent that those outlays and expenses were not deducted in computing the taxpayer’s income for any taxation year or attributable to any other property), except that no remittance under this subsection shall be required in respect of an amount that was included in computing the taxpayer’s income for the year or a preceding taxation year or in respect of an amount on which the tax under this subsection was previously remitted. 
  
  ### Deemed effect of remittance
  
  (5) An amount remitted by a taxpayer under subsection 153(4) in respect of dividends, interest or proceeds of disposition of property shall be deemed 
  (a) to have been received by the person beneficially entitled thereto; and 
  (b) to have been deducted or withheld from the amount otherwise payable by the taxpayer to the person beneficially entitled thereto. 
  
  ### Definitions
  
  (6) The following definitions apply in this section.  
  *designated financial institution* means a corporation that  
  (a) is a bank, other than an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act ;  
  (b) is authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public; or 
  (c) is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables. ( institution financière désignée)   
  *qualifying non-resident employee*, at any time in respect of a payment referred to in paragraph (1)(a), means an employee who  
  (a) is, at that time, resident in a country with which Canada has a tax treaty; 
  (b) is not liable to tax under this Part in respect of the payment because of that treaty; and 
  (c) works in Canada for less than 45 days in the calendar year that includes that time or is present in Canada for less than 90 days in any 12-month period that includes that time. ( employé non-résident admissible)   
  *qualifying non-resident employer*, at any time, means an employer  
  (a) that at that time 
  (i) in the case of an employer that is not a partnership, 
  (A) is a resident of a country with which Canada has a tax treaty, or 
  (B) is a corporation that does not satisfy the condition in clause (A), but would be a resident of a country with which Canada has a tax treaty if the corporation were treated, for the purpose of income taxation in that country, as a body corporate, and 
  (ii) in the case of an employer that is a partnership, is a partnership in respect of which the total of all amounts, each of which is a share of the partnership’s income or loss for the fiscal period that includes that time of a member that, at that time, is a resident of a country with which Canada has a tax treaty (or is a corporation that satisfies the condition in clause (i)(B)), is not less than 90% of the income or loss of the partnership for the period (for the purposes of this subparagraph, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000); and 
  (b) that is at that time certified by the Minister under subsection (7). ( employeur non-résident admissible)  
  
  ### Certification by Minister
  
  (7) The Minister may 
  (a) certify an employer for a specified period of time if the employer has applied in prescribed form containing prescribed information and the Minister is satisfied that the employer 
  (i) meets the conditions in paragraph (a) of the definition 
  *qualifying non-resident employer* in subsection (6), and  
  (ii) meets the conditions established by the Minister; and 
  (b) revoke an employer’s certification if the Minister is no longer satisfied that the employer meets the conditions referred to in subparagraph (a)(i) or (ii). 
  
  ### Agreements providing for tax transfer payments
  
  154 (1) The Minister may, with the approval of the Governor in Council, enter into an agreement with the government of a province to provide for tax transfer payments and the terms and conditions relating to such payments. 
  
  ### Tax transfer payment
  
  (2) Where, on account of the tax for a taxation year payable by an individual under this Part, an amount has been deducted or withheld under subsection 153(1) on the assumption that the individual was resident in a place other than the province in which the individual resided on the last day of the year, and the individual 
  (a) has filed a return of income for the year with the Minister, 
  (b) is liable to pay tax under this Part for the year, and 
  (c) is resident on the last day of the year in a province with which an agreement described in subsection 154(1) has been entered into, the Minister may make a tax transfer payment to the government of the province not exceeding an amount equal to the product obtained by multiplying the amount or the total of the amounts so deducted or withheld by a prescribed rate. 
  
  ### Payment deemed received by individual
  
  (3) Where, pursuant to an agreement entered into under subsection 154(1), an amount has been transferred by the Minister to the government of a province with respect to an individual, the amount shall, for all purposes of this Act, be deemed to have been received by the individual at the time the amount was transferred. 
  
  ### Payment deemed received by Receiver General
  
  (4) Where, pursuant to an agreement entered into under subsection 154(1), an amount has been transferred by the government of a province to the Minister with respect to an individual, the amount shall, for all purposes of this Act, be deemed to have been received by the Receiver General on account of the individual’s tax under this Part for the year in respect of which the amount was transferred. 
  
  ### Amount not to include refund
  
  (5) In this section, an amount deducted or withheld does not include any refund made in respect of that amount. 
  
  ### Farmers and fishermen
  
  155 (1) Subject to section 156.1, every individual whose chief source of income for a taxation year is farming or fishing shall, on or before December 31 in the year, pay to the Receiver General in respect of the year, 2/3 of 
  (a) the amount estimated by the individual to be the tax payable under this Part by the individual for the year, or 
  (b) the individual’s instalment base for the preceding taxation year. 
  
  ### Definition of 
  *instalment base* 
  
  (2) In this section, 
  *instalment base* of an individual for a taxation year means the amount determined in prescribed manner to be the individual’s instalment base for the year.  
  
  ### Other individuals
  
  156 (1) Subject to section 156.1, in respect of each taxation year every individual (other than one to whom section 155 applies for the year) shall pay to the Receiver General 
  (a) on or before March 15, June 15, September 15 and December 15 in the year, an amount equal to 1/4 of 
  (i) the amount estimated by the individual to be the tax payable under this Part by the individual for the year, or 
  (ii) the individual’s instalment base for the preceding taxation year, or 
  (b) on or before 
  (i) March 15 and June 15 in the year, an amount equal to 1/4 of the individual’s instalment base for the second preceding taxation year, and 
  (ii) September 15 and December 15 in the year, an amount equal to 1/2 of the amount, if any, by which 
  (A) the individual’s instalment base for the preceding taxation year exceeds 
  (B) 1/2 of the individual’s instalment base for the second preceding taxation year. 
  
  ### Payment by mutual fund trusts
  
  (2) Notwithstanding subsection 156(1), the amount payable by a mutual fund trust to the Receiver General on or before any day referred to in paragraph 156(1)(a) in a taxation year shall be deemed to be the amount, if any, by which 
  (a) the amount so payable otherwise determined under that subsection, exceeds 
  (b) 1/4 of the trust’s capital gains refund (within the meaning assigned by section 132) for the year. 
  
  ### Definition of 
  *instalment base* 
  
  (3) In this section, 
  *instalment base* of an individual for a taxation year means the amount determined in prescribed manner to be the individual’s instalment base for the year.  
  
  ### Payments by SIFT trusts
  
  (4) Subsections (1) to (3) and section 156.1 do not apply to a SIFT trust. 
  
  ### Definitions
  
  156.1 (1) For the purposes of this section,  
  *instalment threshold* of an individual for a taxation year means  
  (a) in the case of an individual resident in the Province of Quebec at the end of the year, $1,800, and 
  (b) in any other case, $3,000; ( plafond des acomptes provisionnels)   
  *net tax owing* by an individual for a taxation year means  
  (a) in the case of an individual resident in the Province of Quebec at the end of the year, the amount determined by the formula and 
  (b) in any other case, the amount determined by the formula where is the total of the taxes payable under this Part and Parts I.2, X.5 and XI.4 by the individual for the year, is the total of all income taxes payable by the individual for the year under any law of a province or of an Aboriginal government with which the Minister of Finance has entered into an agreement for the collection of income taxes payable by individuals to the province or Aboriginal government under that law, is the total of the taxes deducted or withheld under section 153 and Part I.2 on behalf of the individual for the year, is the amount determined under subsection 120(2) in respect of the individual for the year, is the total of all amounts deducted or withheld on behalf of the individual for the year under a law of a province or of an Aboriginal government with which the Minister of Finance has entered into an agreement for the collection of income taxes payable by individuals to the province or Aboriginal government under that law, and is the amount determined under subsection 120(2.2) in respect of the individual for the year. ( impôt net à payer)  
  
  ### Values of A and B in 
  *net tax owing* 
  
  (1.1) For the purposes of determining the values of A and B in the definition 
  *net tax owing* in subsection 156.1(1), income taxes payable by an individual for a taxation year are determined  
  (a) before taking into consideration the specified future tax consequences for the year; and 
  (b) after deducting all tax credits to which the individual is entitled for the year relating to those taxes (other than tax credits that become payable to the individual after the individual’s balance-due day for the year, prescribed tax credits and amounts deemed to have been paid because of the application of either subsection 120(2) or (2.2)). 
  
  ### Value of D in 
  *net tax owing* 
  
  (1.2) For the purpose of determining the value of D in the definition 
  *net tax owing* in subsection 156.1(1), the amount deemed by subsection 120(2) to have been paid on account of an individual’s tax under this Part for a taxation year is determined before taking into consideration the specified future tax consequences for the year.  
  
  ### Value of F in 
  *net tax owing* 
  
  (1.3) For the purpose of determining the value of F in the definition 
  *net tax owing* in subsection (1), the amount deemed by subsection 120(2.2) to have been paid on account of an individual’s tax under this Part for a taxation year is determined before taking into consideration the specified future tax consequences for the year.  
  
  ### No instalment required
  
  (2) Sections 155 and 156 do not apply to an individual for a particular taxation year where 
  (a) the individual’s chief source of income for the particular year is farming or fishing and the individual’s net tax owing for the particular year, or either of the 2 preceding taxation years, does not exceed the individual’s instalment threshold for that year; 
  (b) the individual’s net tax owing for the particular year, or for each of the 2 preceding taxation years, does not exceed the individual’s instalment threshold for that year; or 
  (c) the individual is a graduated rate estate for the particular year. 
  
  ### Idem
  
  (3) Sections 155 and 156 do not require the payment of any amount in respect of an individual that would otherwise become due under either of those sections on or after the day on which the individual dies. 
  
  ### Payment of remainder
  
  (4) Every individual shall, on or before the individual’s balance-due day for each taxation year, pay to the Receiver General in respect of the year the amount, if any, by which the individual’s tax payable under this Part for the year exceeds the total of 
  (a) all amounts deducted or withheld under section 153 from remuneration or other payments received by the individual in the year, and 
  (b) all other amounts paid to the Receiver General on or before that day on account of the individual’s tax payable under this Part for the year. 
  
  ### Payment by corporation
  
  157 (1) Subject to subsections (1.1) and (1.5), every corporation shall, in respect of each of its taxation years, pay to the Receiver General 
  (a) either 
  (i) on or before the last day of each month in the year, an amount equal to 1/12 of the total of the amounts estimated by it to be the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the year, 
  (ii) on or before the last day of each month in the year, an amount equal to 1/12 of its first instalment base for the year, or 
  (iii) on or before the last day of each of the first two months in the year, an amount equal to 1/12 of its second instalment base for the year, and on or before the last day of each of the following months in the year, an amount equal to 1/10 of the amount remaining after deducting the amount computed pursuant to this subparagraph in respect of the first two months from its first instalment base for the year; and 
  (b) the remainder of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the year on or before its balance-due day for the year. 
  
  ### Special case
  
  (1.1) A small-CCPC may, in respect of each of its taxation years, pay to the Receiver General 
  (a) one of the following: 
  (i) on or before the last day of each three-month period in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/4 of the total of the amounts estimated by it to be the taxes payable by it under this Part and Part VI.1 for the taxation year, 
  (ii) on or before the last day of each three-month period in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/4 of its first instalment base for the taxation year, or 
  (iii) on or before the last day 
  (A) of the first period in the taxation year not exceeding three months, an amount equal to 1/4 of its second instalment base for the taxation year, and 
  (B) of each of the following three-month periods in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/3 of the amount remaining after deducting the amount computed pursuant to clause (A) from its first instalment base for the taxation year; and 
  (b) the remainder of the taxes payable by it under this Part and Part VI.1 for the taxation year on or before its balance-due day for the taxation year. 
  
  ### Small-CCPC
  
  (1.2) For the purpose of subsection (1.1), a small-CCPC, at a particular time during a taxation year, is a Canadian-controlled private corporation 
  (a) for which the amount determined under subsection (1.3) for the taxation year, or for the preceding taxation year, does not exceed $500,000; 
  (b) for which the amount determined under subsection (1.4) for the taxation year, or for the preceding taxation year, does not exceed $10 million; 
  (c) in respect of which an amount is deducted under section 125 of the Act in computing the corporation’s tax payable for the taxation year or for the preceding taxation year; and 
  (d) that has throughout the 12-month period that ends at the time its last remittance under this section is due, 
  (i) remitted, on or before the day on or before which the amounts were required to be remitted, all amounts that were required to be remitted under subsection 153(1), under Part IX of the Excise Tax Act, under subsection 82(1) of the Employment Insurance Act or under subsection 21(1) of the Canada Pension Plan ; and  
  (ii) filed, on or before the day on or before which the returns were required to be filed, all returns that were required to be filed under this Act or under Part IX of the Excise Tax Act.  
  
  ### Taxable income — small-CCPC
  
  (1.3) The amount determined under this subsection in respect of a corporation for a particular taxation year is 
  (a) if the corporation is not associated with another corporation in the particular taxation year, the amount that is the corporation’s taxable income for the particular taxation year; or 
  (b) if the corporation is associated with another corporation in the particular taxation year, the amount that is the total of all amounts each of which is the taxable income of the corporation for the particular taxation year or the taxable income of a corporation with which it is associated in the particular taxation year for a taxation year of that other corporation that ends in the particular taxation year. 
  
  ### Taxable capital — small-CCPC
  
  (1.4) The amount determined under this subsection in respect of a corporation for a particular taxation year is 
  (a) if the corporation is not associated with another corporation in the particular taxation year, the amount that is the corporation’s taxable capital employed in Canada (for the purpose of this subsection, within the meaning assigned by section 181.2 or 181.3, as the case may be) for the particular taxation year; or 
  (b) if the corporation is associated with another corporation in the particular taxation year, the amount that is the total of all amounts each of which is the taxable capital employed in Canada of the corporation for the particular taxation year or the taxable capital employed in Canada of a corporation with which it is associated in the particular taxation year for a taxation year of that other corporation that ends in the particular taxation year. 
  
  ### No longer a small-CCPC
  
  (1.5) Notwithstanding subsection (1), where a corporation, that has remitted amounts in accordance with subsection (1.1), ceases at any particular time in a taxation year to be eligible to remit in accordance with subsection (1.1), the corporation shall pay to the Receiver General, the following amounts for the taxation year, 
  (a) on or before the last day of each month, in the taxation year, that ends after the particular time, either 
  (i) the amount determined by the formula is the total of the amounts estimated by the corporation to be the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year, is the total of all payments payable by the corporation in the taxation year in accordance with subsection (1.1), and is the number of months that end in the taxation year and after the particular time, or 
  (ii) the total of 
  (A) the amount determined by the formula is the corporation’s first instalment base for the taxation year, is the total of all payments payable by the corporation in the taxation year in accordance with subsection (1.1), and is the number of months that end in the taxation year and after the particular time; and 
  (B) the amount obtained when the estimated tax payable by the corporation, if any, under Parts VI and XIII.1 for the taxation year is divided by the number of months that end in the taxation year and after the particular time; and 
  (b) the remainder of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year on or before its balance-due day for the year. 
  
  ### Application to SIFT trusts
  
  (2) Subsections (1), (2.1) and (4) apply to a SIFT trust with any modifications that the circumstances require. 
  
  ### $3,000 threshold
  
  (2.1) A corporation may, instead of paying the instalments required for a taxation year by paragraph (1)(a) or by subsection (1.1), pay to the Receiver General, under paragraph (1)(b), the total of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year, if 
  (a) the total of the taxes payable under this Part and Parts VI, VI.1 and XIII.1 by the corporation for the taxation year (determined before taking into consideration the specified future tax consequences for the year) is equal to or less than $3,000; or 
  (b) the corporation’s first instalment base for the year is equal to or less than $3,000. 
  
  ### Reduced instalments
  
  (3) Notwithstanding subsection (1) and (1.5), the amount payable under subsection (1) or (1.5) for a taxation year by a corporation to the Receiver General on or before the last day of any month in the year is deemed to be the amount, if any, by which 
  (a) the amount so payable as determined under that subsection for the month exceeds 
  (b) where the corporation is neither a mutual fund corporation nor a non-resident-owned investment corporation, 1/12 of the corporation’s dividend refund (within the meaning assigned by subsection 129(1)) for the year, 
  (c) if the corporation is a mutual fund corporation, 1/12 of the total of 
  (i) the corporation’s capital gains refund (within the meaning assigned by section 131) for the year, and 
  (ii) the amount that, because of subsection 131(5) or (11), is the corporation’s dividend refund (within the meaning assigned by section 129) for the year, 
  (d) where the corporation is a non-resident-owned investment corporation, 1/12 of the corporation’s allowable refund (within the meaning assigned by section 133) for the year, and 
  (e) 1/12 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1) or 127.41(3) to have been paid on account of the corporation’s tax payable under this Part for the year. 
  
  ### Amount of payment — three-month period
  
  (3.1) Notwithstanding subsection (1.1), the amount payable under subsection (1.1) for a taxation year by a corporation to the Receiver General on or before the last day of any period in the year is deemed to be the amount, if any, by which 
  (a) the amount so payable as determined under that subsection for the period exceeds the total of 
  (b) 1/4 of the corporation’s dividend refund (within the meaning assigned by subsection 129(1)) for the taxation year, and 
  (c) 1/4 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1) or 127.41(3) to have been paid on account of the corporation’s tax payable under this Part for the taxation year. 
  
  ### Definitions
  
  (4) In this section, 
  *first instalment base* and 
  *second instalment base* of a corporation for a taxation year have the meanings prescribed by regulation.  
  
  ### Instalment deferral for January, February and March 2002 - definitions
  
  157.1 (1) The following definitions apply in this section.  
  *eligible corporation*, for a particular taxation year, means a corporation  
  (a) that is resident in Canada throughout the particular taxation year; and 
  (b) of which the taxable capital employed in Canada, within the meaning assigned by Part I.3, for its preceding taxation year did not exceed, 
  (i) if the corporation is not associated with any other corporation in the particular taxation year, $15 million, and 
  (ii) if the corporation is associated with one or more other corporations in the particular taxation year, the amount by which $15 million exceeds the total of the taxable capital employed in Canada, within the meaning assigned by Part I.3, of those other corporations for their last taxation years that ended in the last calendar year that ended before the end of the particular taxation year. ( société admissible)   
  *eligible instalment day* of an eligible corporation means a day in January, February or March, 2002, on which an instalment on account of the corporation’s tax payable under this Part for the taxation year that includes that day would become payable  
  (a) if this Act were read without reference to this section; and 
  (b) if, in the case of a corporation that is not required by section 157 to make instalment payments on account of its tax payable under this Part for the taxation year, it were so required. ( jour admissible)  
  
  ### Deferred balance-due day
  
  (2) An eligible corporation’s balance-due day for a taxation year that ends after 2001 is deemed to be the later of 
  (a) the day that would otherwise be the corporation’s balance-due day for the taxation year, and 
  (b) the day that is six months after the corporation’s last eligible instalment day in the taxation year. 
  
  ### Deferred instalment day
  
  (3) An amount that would, because of paragraph 157(1)(a), otherwise become payable in respect of a taxation year by an eligible corporation on an eligible instalment day of the corporation does not become payable on that day but becomes payable 
  (a) if the particular day that is six months after the eligible instalment day is in the taxation year, on the particular day; and 
  (b) in any other case, on the day that is deemed by subsection (2) to be the corporation’s balance-due day for the taxation year. 
  
  ### Payment of remainder
  
  158 Where the Minister mails a notice of assessment of any amount payable by a taxpayer, that part of the amount assessed then remaining unpaid is payable forthwith by the taxpayer to the Receiver General. 
  
  ### Person acting for another
  
  159 (1) For the purposes of this Act, where a person is a legal representative of a taxpayer at any time, 
  (a) the legal representative is jointly and severally, or solidarily, liable with the taxpayer 
  (i) to pay each amount payable under this Act by the taxpayer at or before that time and that remains unpaid, to the extent that the legal representative is at that time in possession or control, in the capacity of legal representative, of property that belongs or belonged to, or that is or was held for the benefit of, the taxpayer or the taxpayer’s estate, and 
  (ii) to perform any obligation or duty imposed under this Act on the taxpayer at or before that time and that remains outstanding, to the extent that the obligation or duty can reasonably be considered to relate to the responsibilities of the legal representative acting in that capacity; and 
  (b) any action or proceeding in respect of the taxpayer taken under this Act at or after that time by the Minister may be so taken in the name of the legal representative acting in that capacity and, when so taken, has the same effect as if it had been taken directly against the taxpayer and, if the taxpayer no longer exists, as if the taxpayer continued to exist. 
  
  ### Certificate before distribution
  
  (2) Every legal representative (other than a trustee in bankruptcy) of a taxpayer shall, before distributing to one or more persons any property in the possession or control of the legal representative acting in that capacity, obtain a certificate from the Minister, by applying for one in prescribed form, certifying that all amounts 
  (a) for which the taxpayer is or can reasonably be expected to become liable under this Act at or before the time the distribution is made, and 
  (b) for the payment of which the legal representative is or can reasonably be expected to become liable in that capacity have been paid or that security for the payment thereof has been accepted by the Minister. 
  
  ### Personal liability
  
  (3) If a legal representative (other than a trustee in bankruptcy) of a taxpayer distributes to one or more persons property in the possession or control of the legal representative, acting in that capacity, without obtaining a certificate under subsection (2) in respect of the amounts referred to in that subsection, 
  (a) the legal representative is personally liable for the payment of those amounts to the extent of the value of the property distributed; 
  (b) the Minister may at any time assess the legal representative in respect of any amount payable because of this subsection; and 
  (c) the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, to an assessment made under this subsection as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Appropriation of property
  
  (3.1) For the purposes of subsections 159(2) and 159(3), an appropriation by a legal representative of a taxpayer of property in the possession or control of the legal representative acting in that capacity is deemed to be a distribution of the property to a person. 
  (4) and (4.1)  [Repealed, 2001, c. 17, s. 154(1)]  
  
  ### Election where certain provisions applicable
  
  (5) Where subsection 70(2), 70(5) or 70(5.2) of this Act or subsection 70(9.4) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, is applicable in respect of a taxpayer who has died, and the taxpayer’s legal representative so elects and furnishes the Minister with security acceptable to the Minister for payment of any tax the payment of which is deferred by the election, notwithstanding any provision of this Part or the Income Tax Application Rules respecting the time within which payment shall be made of the tax payable under this Part by the taxpayer for the taxation year in which the taxpayer died, all or any portion of such part of that tax as is equal to the amount, if any, by which that tax exceeds the amount that that tax would be, if this Act were read without reference to subsections 70(2), (5) and (5.2) and the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, were read without reference to subsections 70(2), (5), (5.2) and (9.4) of that Act, may be paid in such number (not exceeding 10) of equal consecutive annual instalments as is specified by the legal representative in the election, the first instalment of which shall be paid on or before the day on or before which payment of that tax would, but for the election, have been required to be made and each subsequent instalment of which shall be paid on or before the next following anniversary of that day.  
  
  ### Idem
  
  (5.1) Where, in the taxation year in which a taxpayer dies, an amount is included in computing the taxpayer’s income by virtue of paragraph 23(3)(c) of the Income Tax Application Rules, the provisions of subsection 159(5) apply, with such modifications as the circumstances require, as though the amount were an amount included in computing the taxpayer’s income for the year by virtue of subsection 70(2) or an amount deemed to have been received by the taxpayer by virtue of subsection 70(5).  
  
  ### Idem
  
  (6) For the purposes of subsection 159(5), the 
  *tax payable under this Part* by a taxpayer for the taxation year in which the taxpayer died includes any tax payable under this Part by virtue of an election in respect of the taxpayer’s death made by the taxpayer’s legal representative under subsection 70(2) or under the provisions of that subsection as they are required to be read by virtue of the Income Tax Application Rules.  
  
  ### Election where subsection 104(4) applicable
  
  (6.1) Where a time determined under paragraph 104(4)(a), (a.1), (a.2), (a.3), (a.4), (b) or (c) in respect of a trust occurs in a taxation year of the trust and the trust so elects and furnishes to the Minister security acceptable to the Minister for payment of any tax the payment of which is deferred by the election, notwithstanding any other provision of this Part respecting the time within which payment shall be made of the tax payable under this Part by the trust for the year, all or any portion of the part of that tax that is equal to the amount, if any, by which that tax exceeds the amount that that tax would be if this Act were read without reference to paragraph 104(4)(a), (a.1), (a.2), (a.3), (a.4), (b) or (c), as the case may be, may be paid in the number (not exceeding 10) of equal consecutive annual instalments that is specified by the trust in the election, the first instalment of which shall be paid on or before the day on or before which payment of that tax would, but for the election, have been required to be made and each subsequent instalment of which shall be paid on or before the next following anniversary of that day. 
  
  ### Form and manner of election and interest
  
  (7) Every election made by a taxpayer under subsection 159(4) or 159(6.1) or by the legal representative of a taxpayer under subsection 159(5) shall be made in prescribed form and on condition that, at the time of payment of any amount payment of which is deferred by the election, the taxpayer shall pay to the Receiver General interest on the amount at the prescribed rate in effect at the time the election was made, computed from the day on or before which the amount would, but for the election, have been required to be paid to the day of payment. 
  
  ### Interpretation
  
  160 (0.1) In this section and section 160.01, a transaction includes an arrangement or event. 
  
  ### Tax liability re property transferred not at arm’s length
  
  (1) Where a person has, on or after May 1, 1951, transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to 
  (a) the person’s spouse or common-law partner or a person who has since become the person’s spouse or common-law partner, 
  (b) a person who was under 18 years of age, or 
  (c) a person with whom the person was not dealing at arm’s length, the following rules apply: 
  (d) the transferee and transferor are jointly and severally, or solidarily, liable to pay a part of the transferor’s tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of sections 74.1 to 75.1 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of any income from, or gain from the disposition of, the property so transferred or property substituted for it, and  
  (e) the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of 
  (i) the amount, if any, by which the fair market value of the property at the time it was transferred exceeds the fair market value at that time of the consideration given for the property, and 
  (ii) the total of all amounts each of which is an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) in or in respect of the taxation year in which the property was transferred or any preceding taxation year, but nothing in this subsection limits the liability of the transferor under any other provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection. 
  
  ### Joint and several, or solidary, liability — subsection 69(11)
  
  (1.1) If a particular person or partnership is deemed by subsection 69(11) to have disposed of a property at any time, the person referred to in that subsection to whom a benefit described in that subsection was available in respect of a subsequent disposition of the property or property substituted for the property is jointly and severally, or solidarily, liable with each other taxpayer to pay a part of the other taxpayer’s liabilities under this Act in respect of each taxation year equal to the amount determined by the formula is the total of amounts payable under this Act by the other taxpayer in respect of the year, and is the amount that would, if the particular person or partnership were not deemed by subsection 69(11) to have disposed of the property, be determined for A in respect of the other taxpayer in respect of the year, but nothing in this subsection limits the liability of the other taxpayer under any other provision of this Act or of any person for the interest that the person is liable to pay under this Act on an assessment in respect of the amount that the person is liable to pay because of this subsection. 
  
  ### Joint and several, or solidary, liability — tax on split income
  
  (1.2) If an amount is required to be added because of subsection 120.4(2) in computing a specified individual’s tax payable under this Part for a taxation year and the specified individual has not attained the age of 24 years before the start of the year, the following rules apply: 
  (a) subject to paragraph (b), a particular individual is jointly and severally, or solidarily, liable with the specified individual for the amount if 
  (i) where the specified individual has not attained the age of 17 years before the year, the particular individual is a parent of the specified individual, and 
  (ii) where the specified individual has attained the age of 17 years before the year, 
  (A) the particular individual is a source individual in respect of the specified individual, 
  (B) the amount was derived directly or indirectly from a related business (within the meaning of paragraph 120.4(1.1)(d)) in respect of the specified individual, and 
  (C) the particular individual meets the conditions in any of paragraphs (a) to (c) in the definition related business in subsection 120.4(1) in respect of the related business;  
  (b) the particular individual’s liability under paragraph (a) in respect of the specified individual for the year is to be determined as though the only amounts included in the specified individual’s split income for the year are amounts derived from the related business referred to in subparagraph (a)(ii); and 
  (c) nothing in this subsection limits the liability of 
  (i) the specified individual under any other provision of this Act, or 
  (ii) the particular individual for the interest that the particular individual is liable to pay under this Act on an assessment in respect of the amount that the particular individual is liable to pay because of this subsection. 
  
  ### Joint liability — tax on split-pension income
  
  (1.3) Where a pensioner and a pension transferee (as those terms are defined in section 60.03) make a joint election under section 60.03 in respect of a split-pension amount (as defined in that section) for a taxation year, they are jointly and severally, or solidarily, liable for the tax payable by the pension transferee under this Part for the taxation year to the extent that that tax payable is greater than it would have been if no amount were required to be added because of paragraph 56(1)(a.2) in computing the income of the pension transferee under this Part for the taxation year. 
  
  ### Joint liability — spousal and similar trusts
  
  (1.4) If subsection 104(13.4) deems an amount to have become payable in a taxation year of a trust to an individual, the individual and the trust are jointly and severally, or solidarily, liable for the tax payable by the individual under this Part for the individual’s taxation year that includes the day on which the individual dies to the extent that that tax payable is greater than it would have been if the amount were not included in computing the individual’s income under this Part for the taxation year. 
  
  ### Assessment
  
  (2) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Assessment
  
  (2.1) The Minister may at any time assess a taxpayer in respect of any amount payable because of paragraph 94(3)(d) or (e) or subsection 94(17) and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Discharge of liability
  
  (3) If a particular taxpayer has become jointly and severally, or solidarily, liable with another taxpayer under this section or because of paragraph 94(3)(d) or (e) or subsection 94(17) in respect of part or all of a liability under this Act of the other taxpayer, 
  (a) a payment by the particular taxpayer on account of that taxpayer’s liability shall to the extent of the payment discharge their liability; but 
  (b) a payment by the other taxpayer on account of that taxpayer’s liability discharges the particular taxpayer’s liability only to the extent that the payment operates to reduce that other taxpayer’s liability to an amount less than the amount in respect of which the particular taxpayer is, by this section, made jointly and severally, or solidarily, liable. 
  
  ### Fair market value of undivided interest or right
  
  (3.1) For the purposes of this section and section 160.4, the fair market value at any time of an undivided interest, or for civil law an undivided right, in a property, expressed as a proportionate interest or right in that property, is, subject to subsection (4), deemed to be equal to the same proportion of the fair market value of that property at that time. 
  
  ### Special rules re transfer of property to spouse or common-law partner
  
  (4) Notwithstanding subsection 160(1), where at any time a taxpayer has transferred property to the taxpayer’s spouse or common-law partner pursuant to a decree, order or judgment of a competent tribunal or pursuant to a written separation agreement and, at that time, the taxpayer and the spouse or common-law partner were separated and living apart as a result of the breakdown of their marriage or common-law partnership, the following rules apply: 
  (a) in respect of property so transferred after February 15, 1984, 
  (i) the spouse or common-law partner shall not be liable under subsection 160(1) to pay any amount with respect to any income from, or gain from the disposition of, the property so transferred or property substituted therefor, and 
  (ii) for the purposes of paragraph 160(1)(e), the fair market value of the property at the time it was transferred shall be deemed to be nil, and 
  (b) in respect of property so transferred before February 16, 1984, where the spouse common-law partner would, but for this paragraph, be liable to pay an amount under this Act by virtue of subsection 160(1), the spouse’s or common-law partner’s liability in respect of that amount shall be deemed to have been discharged on February 16, 1984, but nothing in this subsection shall operate to reduce the taxpayer’s liability under any other provision of this Act. 
  
  ### Anti-avoidance rules
  
  (5) For the purposes of subsections (1) to (4), if a person (referred to in this section as the “transferor”) has transferred property either directly or indirectly, by means of a trust or by any other means whatever to another person (referred to in this section as the “transferee”) in a transaction or as part of a series of transactions 
  (a) the transferor is deemed to not be dealing at arm’s length with the transferee at all times in the transaction or series of transactions if 
  (i) at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, the transferor and transferee do not deal at arm’s length, and 
  (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and transferor for an amount payable under this Act; 
  (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) is deemed to have become payable in the taxation year in which the property was transferred if it is reasonable to conclude that one of the purposes for the transfer of property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and 
  (c) the amount determined under subparagraph (1)(e)(i) is deemed to be the greater of 
  (i) the amount otherwise determined under that subparagraph without reference to this paragraph, and 
  (ii) the amount determined by the formula is the fair market value of the property at the time of the transfer, and is 
  (A) the lowest fair market value of the consideration (that is held by the transferor) given for the property at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, or 
  (B) if the consideration is in a form that is cancelled or extinguished during the period referred to in clause (A), 
  (I) the amount that is the lowest of the amount determined in clause (A) and the fair market value during the period of any property, other than property that is cancelled or extinguished during the period, that is substituted for the consideration referred to in clause (A), or 
  (II) if there is no property that is substituted for the consideration referred to in clause (A), other than property cancelled or extinguished during the period, nil. 
  
  ### Definitions
  
  160.01 (1) The following definitions apply in this section.  
  *gross entitlements* of a person at any time, in respect of a planning activity of the person, means all amounts to which the person, or another person not dealing at arm’s length with the person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the activity. (droits à paiement)   
  *person* includes a partnership. (personne)   
  *planning activity* has the same meaning as in subsection 163.2(1). (activité de planification)   
  *section 160 avoidance planning* by a person, means planning activity in respect of a transaction or series of transactions that  
  (a) is, or is part of, a section 160 avoidance transaction; and 
  (b) one of the purposes of the transaction or series of transactions is to 
  (i) reduce a transferee’s joint and several, or solidary, liability for tax owing under this Act by the transferor (or that would be owing by the transferor if not for a tax attribute transaction), or 
  (ii) reduce the person’s or another person’s ability to pay any amount owing, or that may become owing, under this Act. ( planification d’évitement en vertu de l’article 160)   
  *section 160 avoidance transaction* means a transaction or series of transactions in respect of which  
  (a) the conditions set out in paragraph 160(5)(a) or (b) are met; or 
  (b) if subsection 160(5) applied to the transaction or series of transactions, the amount determined under subparagraph 160(5)(c)(ii) would exceed the amount determined under subparagraph 160(5)(c)(i). ( opération d’évitement en vertu de l’article 160)   
  *tax attribute* means a balance, pool or other amount determined under this Act that is or may be relevant in computing income or in determining a taxpayer’s liability for tax under this Act in any taxation year and includes  
  (a) a capital loss, non-capital loss, restricted farm loss, farm loss and limited partnership loss; 
  (b) an amount that is deductible in computing a person’s income; 
  (c) any balance of undeducted outlays, expenses or other amounts; 
  (d) paid-up capital in respect of a share of any class of the capital stock of a corporation; 
  (e) cost or capital cost of a property; 
  (f) an amount deductible from an amount otherwise payable under this Act; and 
  (g) an amount that is deemed to have been remitted as an amount payable under this Act. ( attribut fiscal)   
  *tax attribute transaction* means a transaction or series of transactions in which a tax attribute – of a person that dealt at arm’s length with a transferor or transferee immediately before the transaction or series of transactions – is used, directly or indirectly, to provide a tax benefit for the transferor or transferee (or, if either the transferor or transferee is amalgamated with another corporation, the new corporation within the meaning assigned by subsection 87(1)). (opération d’attribut fiscal)   
  *tax benefit* has the same meaning as in subsection 163.2(1). (avantage fiscal)   
  *transferee* has the meaning assigned by subsections 160(1) and (5). (bénéficiaire du transfert)   
  *transferor* has the meaning assigned by subsections 160(1) and (5). (auteur du transfert)  
  
  ### Penalty
  
  (2) Every person that engages in, participates in, assents to or acquiesces in planning activity that they know is section 160 avoidance planning, or would reasonably be expected to know is section 160 avoidance planning, but for circumstances amounting to gross negligence is liable to a penalty that is the lesser of 
  (a) 50% of the amount payable under this Act (determined without reference to this subsection), the joint and several, or solidary, liability for which was sought to be avoided through the planning, and 
  (b) the total of $100,000 and the person’s gross entitlements at the time at which the notice of assessment of the penalty is sent to the person in respect of the planning. 
  
  ### Clerical or secretarial services
  
  (3) Subsection (2) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the planning. 
  
  ### Where excess refunded
  
  160.1 (1) Where at any time the Minister determines that an amount has been refunded to a taxpayer for a taxation year in excess of the amount to which the taxpayer was entitled as a refund under this Act, the following rules apply: 
  (a) the excess shall be deemed to be an amount that became payable by the taxpayer on the day on which the amount was refunded; and 
  (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion of the excess that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61, 122.72 or 122.8) from the day it became payable to the date of payment. 
  
  ### Liability for refund by reason of s. 122.5
  
  (1.1) If a person is a qualified relation of an individual (within the meaning assigned by subsection 122.5(1)), in relation to one or more months specified for a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay the lesser of 
  (a) any excess described in subsection (1) that was refunded in respect of the taxation year to, or applied to a liability of, the individual as a consequence of the operation of section 122.5, and 
  (b) the total of the amounts deemed by subsection 122.5(3), (3.002) or (3.003) to have been paid by the individual during those specified months. 
  
  ### Liability for refund — Climate Action Incentive
  
  (1.2) If a person is a qualified relation of an individual (within the meaning assigned by subsection 122.8(1)), in relation to one or more months specified for a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay the lesser of 
  (a) any excess described in subsection (1) that was refunded in respect of the taxation year to, or applied to a liability of, the individual as a consequence of the operation of section 122.8; and 
  (b) the total of the amounts deemed by subsection 122.8(4) to have been paid by the individual during those specified months. 
  
  ### Liability under other provisions
  
  (2) Subsections (1.1) and (1.2) do not limit a person’s liability under any other provision of this Act. 
  
  ### Liability for refunds by reason of section 122.61
  
  (2.1) If a person was a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual at the end of a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay any excess described in subsection (1) that was refunded in respect of the year to, or applied to a liability of, the individual as a consequence of the operation of section 122.61 if the person was the individual’s cohabiting spouse or common-law partner at the time the excess was refunded, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act. 
  
  ### Liability for excess refunds under section 126.1 to partners
  
  (2.2) Every taxpayer who, on the day on which an amount has been refunded to, or applied to the liability of, a member of a partnership as a consequence of the operation of subsection 126.1(7) or (13) in excess of the amount to which the member was so entitled, is a member of that partnership is jointly and severally, or solidarily, liable with each other taxpayer who on that day is a member of the partnership to pay the excess and to pay interest on the excess, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act. 
  
  ### Assessment
  
  (3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of any of subsections (1) to (1.2) or for which the taxpayer is liable because of subsection (2.1) or (2.2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61, 122.72 or 122.8. 
  
  ### Where amount applied to liability
  
  (4) Where an amount is applied to a liability of a taxpayer to Her Majesty in right of Canada in excess of the amount to which the taxpayer is entitled as a refund under this Act, this section applies as though that amount had been refunded to the taxpayer on the day it was so applied. 
  
  ### Joint and several liability in respect of amounts received out of or under RRSP
  
  160.2 (1) Where 
  (a) an amount is received out of or under a registered retirement savings plan by a taxpayer other than an annuitant (within the meaning assigned by subsection 146(1)) under the plan, and 
  (b) that amount or part thereof would, but for paragraph (a) of the definition 
  *benefit* in subsection 146(1), be received by the taxpayer as a benefit (within the meaning assigned by that definition),  the taxpayer and the last annuitant under the plan are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146(8.8) that the total of all amounts each of which is an amount determined under paragraph (b) in respect of the taxpayer is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection. 
  
  ### Joint and several liability in respect of amounts received out of or under RRIF
  
  (2) Where 
  (a) an amount is received out of or under a registered retirement income fund by a taxpayer other than an annuitant (within the meaning assigned by subsection 146.3(1)) under the fund, and 
  (b) that amount or part thereof would, but for paragraph 146.3(5)(a), be included in computing the taxpayer’s income for the year of receipt pursuant to subsection 146.3(5), the taxpayer and the annuitant are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146.3(6) that the amount determined under paragraph (b) is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection. 
  
  ### Joint and several liability in respect of a qualifying trust annuity
  
  (2.1) If a taxpayer is deemed by section 75.2 to have received at any time an amount out of or under an annuity that is a qualifying trust annuity with respect to the taxpayer, the taxpayer, the annuitant under the annuity and the policyholder are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for the taxation year of the taxpayer that includes that time that is equal to the amount, if any, determined by the formula is the amount of the taxpayer’s tax under this Part for that taxation year; and is the amount that would be the taxpayer’s tax under this Part for that taxation year if no amount were deemed by section 75.2 to have been received by the taxpayer out of or under the annuity in that taxation year. 
  
  ### No limitation on liability
  
  (2.2) Subsection (2.1) limits neither 
  (a) the liability of the taxpayer referred to in that subsection under any other provision of this Act; nor 
  (b) the liability of an annuitant or policyholder referred to in that subsection for the interest that the annuitant or policyholder is liable to pay under this Act on an assessment in respect of the amount that the annuitant or policyholder is liable to pay because of that subsection. 
  
  ### Joint and several liability — FHSA
  
  (2.3) If an amount required to be included in the income of a holder of a FHSA because of section 146.6 is received by a taxpayer other than the holder, that taxpayer is jointly and severally, or solidarily, liable with the holder to pay a part of the holder’s tax under this Part for the taxation year in which the amount is received equal to the amount by which the holder’s tax for the year exceeds the amount that would be the holder’s tax for the year if the amount had not been received, but nothing in this subsection limits the liability of the holder under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection. 
  
  ### Assessment
  
  (3) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Rules applicable
  
  (4) If a taxpayer and an annuitant or holder have, by virtue of subsection (1), (2) or (2.3), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant or holder under this Act, the following rules apply: 
  (a) a payment by the taxpayer on account of the taxpayer’s liability shall to the extent thereof discharge their liability; but 
  (b) a payment by the annuitant or holder on account of the liability of the annuitant or holder discharges the taxpayer’s liability only to the extent that the payment operates to reduce the liability of the annuitant or holder to an amount less than the amount in respect of which the taxpayer was, by subsection (1), (2) or (2.3), as the case may be, made jointly and severally, or solidarily, liable. 
  
  ### Rules applicable — qualifying trust annuity
  
  (5) If an annuitant or policyholder has, because of subsection (2.1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply: 
  (a) a payment by the annuitant on account of the annuitant’s liability, or by the policyholder on account of the policyholder’s liability, shall to the extent of the payment discharge their liability, but 
  (b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the annuitant’s and the policyholder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the annuitant and the policyholder were, by subsection (2.1), made liable. 
  
  ### Joint and several liability — registered disability savings plan
  
  160.21 (1) Where, in computing income for a taxation year, a taxpayer is required to include an amount in respect of a disability assistance payment (as defined in subsection 146.4(1)) that is deemed by subsection 146.4(10) to have been made at any particular time from a registered disability savings plan, the taxpayer and each holder (as defined in subsection 146.4(1)) of the plan immediately after the particular time are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for that taxation year that is equal to the amount, if any, determined by the formula is the amount of the taxpayer’s tax under this Part for that taxation year; and is the amount that would be the taxpayer’s tax under this Part for that taxation year if no disability assistance payment were deemed by subsection 146.4(10) to have been paid from the plan at the particular time. 
  
  ### No limitation on liability
  
  (2) Subsection (1) limits neither 
  (a) the liability of the taxpayer referred to in that subsection under any other provision of this Act, nor 
  (b) the liability of any holder referred to in that subsection for the interest that the holder is liable to pay under this Act on an assessment in respect of the amount that the holder is liable to pay because of that subsection. 
  
  ### Rules applicable — registered disability savings plans
  
  (3) Where a holder (as defined in subsection 146.4(1)) of a registered disability savings plan has, because of subsection (1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply: 
  (a) a payment by the holder on account of the holder’s liability shall to the extent of the payment discharge the holder’s liability, but 
  (b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the holder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the holder was, by subsection (1), made liable. 
  
  ### Assessment
  
  (4) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Liability in respect of amounts received out of or under RCA trust
  
  160.3 (1) If an amount required to be included in the income of a taxpayer because of paragraph 56(1)(x) is received by a person with whom the taxpayer is not dealing at arm’s length, that person is jointly and severally, or solidarily, liable with the taxpayer to pay a part of the taxpayer’s tax under this Part for the taxation year in which the amount is received equal to the amount by which the taxpayer’s tax for the year exceeds the amount that would be the taxpayer’s tax for the year if the amount had not been received, but nothing in this subsection limits the liability of the taxpayer under any other provision of this Act or of the person for the interest that the person is liable to pay under this Act on an assessment in respect of the amount that the person is liable to pay because of this subsection. 
  
  ### Assessment
  
  (2) The Minister may at any time assess a person in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Rules applicable
  
  (3) If a taxpayer and another person have, by virtue of subsection (1), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the taxpayer under this Act, the following rules apply: 
  (a) a payment by the other person on account of the other person’s liability shall to the extent thereof discharge their liability; but 
  (b) a payment by the taxpayer on account of the taxpayer’s liability discharges the other person’s liability only to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the other person was, by subsection (1), made jointly and severally, or solidarily, liable. 
  
  ### Liability in respect of transfers by insolvent corporations
  
  160.4 (1) If property is transferred at any time by a corporation to a taxpayer with whom the corporation does not deal at arm’s length at that time and the corporation is not entitled because of subsection 61.3(3) to deduct an amount under section 61.3 in computing its income for a taxation year because of the transfer or because of the transfer and one or more other transactions, the taxpayer is jointly and severally, or solidarily, liable with the corporation to pay the lesser of the corporation’s tax payable under this Part for the year and the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given for the property, but nothing in this subsection limits the liability of the corporation under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection. 
  
  ### Indirect transfers
  
  (2) Where 
  (a) property is transferred at any time from a taxpayer (in this subsection referred to as the “transferor”) to another taxpayer (in this subsection referred to as the “transferee”) with whom the transferor does not deal at arm’s length, 
  (b) the transferor is liable because of subsection 160.4(1) or this subsection to pay an amount of the tax of another person (in this subsection referred to as the “debtor”) under this Part, and 
  (c) it can reasonably be considered that one of the reasons of the transfer would, but for this subsection, be to prevent the enforcement of this section, the transferee is jointly and severally, or solidarily, liable with the transferor and the debtor to pay an amount of the debtor’s tax under this Part equal to the lesser of the amount of that tax that the transferor was liable to pay at that time and the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given for the property, but nothing in this subsection limits the liability of the debtor or the transferor under any provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection. 
  
  ### Assessment
  
  (3) The Minister may at any time assess a person in respect of any amount payable by the person because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it had been made under section 152 in respect of taxes payable under this Part. 
  
  ### Rules applicable
  
  (4) If a corporation and another person have, because of subsection (1) or (2), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the corporation under this Act 
  (a) a payment by the other person on account of that person’s liability shall to the extent thereof discharge their liability; and 
  (b) a payment by the corporation on account of the corporation’s liability discharges the other person’s liability only to the extent that the payment operates to reduce the corporation’s liability to an amount less than the amount in respect of which the other person was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable. 
  
  ## Electronic Payments 
  
  ### Definitions
  
  160.5 (1) The following definitions apply in this section.  
  *designated financial institution* has the same meaning as in subsection 153(6). (institution financière désignée)   
  *electronic payment* means any payment or remittance to the Receiver General that is made through electronic services offered by a designated financial institution or by any electronic means specified by the Minister. (paiement électronique)  
  
  ### Requirement – electronic payments
  
  (2) The remittance or payment of an amount to the Receiver General must be made as an electronic payment if the amount of the remittance or payment exceeds $10,000, unless the payor or remitter cannot reasonably remit or pay the amount in that manner. 
  
  ## Interest 
  
  ### General
  
  161 (1) Where at any time after a taxpayer’s balance-due day for a taxation year 
  (a) the total of the taxpayer’s taxes payable under this Part and Parts I.3, VI, VI.1 and VI.2 (determined in accordance with subsection 191.5(9)) for the year exceeds 
  (b) the total of all amounts each of which is an amount paid at or before that time on account of the taxpayer’s tax payable and applied as at that time by the Minister against the taxpayer’s liability for an amount payable under this Part or Part I.3, VI, VI.1 or VI.2 for the year, the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess, computed for the period during which that excess is outstanding. 
  
  ### Interest on instalments
  
  (2) In addition to the interest payable under subsection 161(1), where a taxpayer who is required by this Part to pay a part or instalment of tax has failed to pay all or any part thereof on or before the day on or before which the tax or instalment, as the case may be, was required to be paid, the taxpayer shall pay to the Receiver General interest at the prescribed rate on the amount that the taxpayer failed to pay computed from the day on or before which the amount was required to be paid to the day of payment, or to the beginning of the period in respect of which the taxpayer is required to pay interest thereon under subsection 161(1), whichever is earlier. 
  (2.1)  [Repealed, 2003, c. 15, s. 116(1)]  
  
  ### Contra interest
  
  (2.2) Notwithstanding subsections (1) and (2), the total amount of interest payable by a taxpayer (other than a graduated rate estate) under those subsections, for the period that begins on the first day of the taxation year for which a part or instalment of tax is payable and ends on the taxpayer’s balance-due day for the year, in respect of the taxpayer’s tax or instalments of tax payable for the year shall not exceed the amount, if any, by which 
  (a) the total amount of interest that would be payable for the period by the taxpayer under subsections 161(1) and 161(2) in respect of the taxpayer’s tax and instalments of tax payable for the year if no amount were paid on account of the tax or instalments exceeds 
  (b) the amount of interest that would be payable under subsection 164(3) to the taxpayer in respect of the period on the amount that would be refunded to the taxpayer in respect of the year or applied to another liability if 
  (i) no tax were payable by the taxpayer for the year, 
  (ii) no amount had been remitted under section 153 to the Receiver General on account of the taxpayer’s tax for the year, 
  (iii) the rate of interest prescribed for the purpose of subsection 161(1) were prescribed for the purpose of subsection 164(3), and 
  (iv) the latest of the days described in paragraphs 164(3)(a), 164(3)(b) and 164(3)(c) were the first day of the year. 
  (3)  [Repealed, 1994, c. 7, Sch. II, s. 133(3)]  
  
  ### Limitation — farmers and fishermen
  
  (4) For the purposes of subsection 161(2) and section 163.1, where an individual is required to pay a part or instalment of tax for a taxation year computed by reference to a method described in subsection 155(1), the individual shall be deemed to have been liable to pay on or before the day referred to in subsection 155(1) a part or instalment computed by reference to 
  (a) the amount, if any, by which 
  (i) the tax payable under this Part by the individual for the year, determined before taking into consideration the specified future tax consequences for the year, exceeds 
  (ii) the amounts deemed by subsections 120(2) and (2.2) to have been paid on account of the individual’s tax under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, 
  (b) the individual’s instalment base for the preceding taxation year, or 
  (c) the amount stated to be the amount of the instalment payable by the individual for the year in the notice, if any, sent to the individual by the Minister, whichever method gives rise to the least amount required to be paid by the individual on or before that day. 
  
  ### Limitation — other individuals
  
  (4.01) For the purposes of subsection 161(2) and section 163.1, where an individual is required to pay a part or instalment of tax for a taxation year computed by reference to a method described in subsection 156(1), the individual shall be deemed to have been liable to pay on or before each day referred to in subsection 156(1) a part or instalment computed by reference to 
  (a) the amount, if any, by which 
  (i) the tax payable under this Part by the individual for the year, determined before taking into consideration the specified future tax consequences for the year, exceeds 
  (ii) the amounts deemed by subsections 120(2) and (2.2) to have been paid on account of the individual’s tax under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, 
  (b) the individual’s instalment base for the preceding taxation year, 
  (c) the amounts determined under paragraph 156(1)(b) in respect of the individual for the year, or 
  (d) the amounts stated to be the amounts of instalments payable by the individual for the year in the notices, if any, sent to the individual by the Minister, reduced by the amount, if any, determined under paragraph 156(2)(b) in respect of the individual for the year, whichever method gives rise to the least total amount of such parts or instalments required to be paid by the individual by that day. 
  
  ### Limitation — corporations
  
  (4.1) For the purposes of subsection (2) and section 163.1, where a corporation is required to pay a part or instalment of tax for a taxation year computed by reference to a method described in subsection 157(1), (1.1) or (1.5), as the case may be, the corporation is deemed to have been liable to pay on or before each day on or before which subparagraph 157(1)(a)(i), (ii) or (iii), subparagraph 157(1.1)(a)(i), (ii) or (iii), or subparagraph 157(1.5)(a)(i) or (ii), as the case may be, requires a part or instalment to be made equal to the amount, if any, by which 
  (a) the part or instalment due on that day computed in accordance with whichever allowable method in the circumstances gives rise to the least total amount of such parts or instalments of tax for the year, computed by reference to 
  (i) the total of the taxes payable under this Part and Parts VI, VI.1 and XIII.1 by the corporation for the year, determined before taking into consideration the specified future tax consequences for the year, 
  (ii) its first instalment base for the year, or 
  (iii) its second instalment base and its first instalment base for the year, exceeds 
  (b) the amount, if any, determined under any of paragraphs 157(3)(b) to (e) or under paragraph 157(3.1)(b) or (c), as the case may be, in respect of that instalment. 
  (5)  [Repealed, 2012, c. 19, s. 11]  
  
  ### Income of resident from a foreign country in blocked currency
  
  (6) Where the income of a taxpayer for a taxation year, or part thereof, is from sources in another country and the taxpayer by reason of monetary or exchange restrictions imposed by the law of that country is unable to transfer it to Canada, the Minister may, if the Minister is satisfied that payment as required by this Part of the whole of the additional tax under this Part for the year reasonably attributable to income from sources in that country would impose extreme hardship on the taxpayer, postpone the time for payment of the whole or a part of that additional tax for a period to be determined by the Minister, but no such postponement may be granted if any of the income for the year from sources in that country has been 
  (a) transferred to Canada, 
  (b) used by the taxpayer for any purpose whatever, other than payment of income tax to the government of that other country on income from sources in that country, or 
  (c) disposed of by the taxpayer, and no interest is payable under this section in respect of that additional tax, or part thereof, during the period of postponement. 
  
  ### Foreign tax credit adjustment
  
  (6.1) Notwithstanding any other provision in this section, where the tax payable under this Part by a taxpayer for a particular taxation year is increased because of 
  (a) an adjustment of an income or profits tax payable by the taxpayer to the government of a country other than Canada or to the government of a state, province or other political subdivision of such a country, or 
  (b) a reduction in the amount of foreign tax deductible under subsection 126(1) or (2) in computing the taxpayer’s tax otherwise payable under this Part for the particular year, as a result of the application of subsection 126(4.2) in respect of a share or debt obligation disposed of by the taxpayer in the taxation year following the particular year, no interest is payable, in respect of the increase in the taxpayer’s tax payable, for the period 
  (c) that ends 90 days after the day on which the taxpayer is first notified of the amount of the adjustment, if paragraph (a) applies, and 
  (d) before the date of the disposition, if paragraph (b) applies. 
  
  ### Flow-through share renunciations
  
  (6.2) Where the tax payable under this Part by a taxpayer for a taxation year is more than it otherwise would be because of a consequence for the year described in paragraph (b) of the definition 
  *specified future tax consequence* in subsection 248(1) in respect of an amount purported to be renounced in a calendar year, for the purposes of the provisions of this Act (other than this subsection) relating to interest payable under this Act, an amount equal to the additional tax payable is deemed  
  (a) to have been paid on the taxpayer’s balance-due day for the taxation year on account of the taxpayer’s tax payable under this Part for the year; and 
  (b) to have been refunded on April 30 of the following calendar year to the taxpayer on account of the taxpayer’s tax payable under this Part for the taxation year. 
  
  ### Effect of carryback of loss, etc.
  
  (7) For the purpose of computing interest under subsection 161(1) or 161(2) on tax or a part of an instalment of tax for a taxation year, and for the purpose of section 163.1, 
  (a) the tax payable under this Part and Parts I.3, VI and VI.1 by the taxpayer for the year is deemed to be the amount that it would be if the consequences of the deduction, reduction or exclusion of the following amounts were not taken into consideration: 
  (i) any amount deducted under section 119 in respect of a disposition in a subsequent taxation year, 
  (ii) any amount deducted under section 41 in respect of the taxpayer’s listed-personal-property loss for a subsequent taxation year, 
  (iii) any amount excluded from the taxpayer’s income for the year by virtue of section 49 in respect of the exercise of an option in a subsequent taxation year, 
  (iv) any amount deducted under section 118.1 in respect of a gift made in a subsequent taxation year or under section 111 in respect of a loss for a subsequent taxation year, 
  (iv.1) any amount deducted under subsection 126(2) in respect of an unused foreign tax credit (within the meaning assigned by subsection 126(7)), or under subsection 126(2.21) or (2.22) in respect of foreign taxes paid, for a subsequent taxation year, 
  (iv.2) any amount deducted in computing the taxpayer’s income for the year by virtue of an election in a subsequent taxation year under paragraph 164(6)(c) or 164(6)(d) by the taxpayer’s legal representative, 
  (v) any amount deducted under subsection 127(5) in respect of property acquired or an expenditure made in a subsequent taxation year, 
  (vi)  [Repealed, 2013, c. 34, s. 318]  
  (vii) any amount deducted under section 125.3 in respect of an unused Part I.3 tax credit (within the meaning assigned by subsection 125.3(3)) for a subsequent taxation year, 
  (viii) any amount deducted, in respect of a repayment under subsection 68.4(7) of the Excise Tax Act made in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii),  
  (viii.1) any amount deducted under subsection 147.2(4) in computing the taxpayer’s income for the year because of the application of subsection 147.2(6) as a result of the taxpayer’s death in the subsequent taxation year, 
  (ix) any amount deducted under subsection 181.1(4) in respect of any unused surtax credit (within the meaning assigned by subsection 181.1(6)) of the taxpayer for a subsequent taxation year, 
  (x) any amount deducted under subsection 190.1(3) in respect of any unused Part I tax credit (within the meaning assigned by subsection 190.1(5)) of the taxpayer for a subsequent taxation year, 
  (xi) any amount deducted under any of subsections 128.1(6) to (8) from the taxpayer’s proceeds of disposition of a property because of an election made in a return of income for a subsequent taxation year, and 
  (xii) any amount by which the amount included under subsection 91(1) for the year is reduced because of a reduction referred to in paragraph 152(6.1)(b) in the foreign accrual property income of a foreign affiliate of the taxpayer for a taxation year of the affiliate that ends in the year; and 
  (b) the amount by which the tax payable under this Part and Parts I.3, VI and VI.1 by the taxpayer for the year is reduced as a consequence of the deduction or exclusion of amounts described in paragraph (a) is deemed to have been paid on account of the taxpayer’s tax payable under this Part for the year on the day that is 30 days after the latest of 
  (i) the first day immediately following that subsequent taxation year, 
  (ii) the day on which the taxpayer’s or the taxpayer’s legal representative’s return of income for that subsequent taxation year was filed, 
  (iii) if an amended return of the taxpayer’s income for the year or a prescribed form amending the taxpayer’s return of income for the year was filed under subsection 49(4) or 152(6) or (6.1) or paragraph 164(6)(e), the day on which the amended return or prescribed form was filed, and 
  (iv) where, as a consequence of a request in writing, the Minister reassessed the taxpayer’s tax for the year to take into account the deduction or exclusion, the day on which the request was made. 
  
  ### Certain amounts deemed to be paid as instalments
  
  (8) For the purposes of subsection 161(2), where in a taxation year an amount has been paid by a non-resident person pursuant to subsection 116(2) or 116(4) or an amount has been paid on that person’s behalf by another person in accordance with subsection 116(5), the amount shall be deemed to have been paid by that non-resident person in the year as an instalment of tax on the first day on which the non-resident person was required under this Act to pay an instalment of tax for that year. 
  
  ### Definitions of 
  *instalment base*, etc. 
  
  (9) In this section, 
  (a)  
  *instalment base* of an individual for a taxation year means the amount determined in prescribed manner to be the individual’s instalment base for the year; and  
  (b)  
  *first instalment base* and 
  *second instalment base* of a corporation for a taxation year have the meanings prescribed by regulation.  
  
  ### When amount deemed paid
  
  (10) For the purposes of subsection 161(2), where an amount has been deducted by virtue of paragraph 127.2(1)(a) or 127.3(1)(a) in computing the tax payable under this Part by a taxpayer for a taxation year, the amount so deducted shall be deemed to have been paid by the taxpayer 
  (a) in the case of a taxpayer who has filed a return of income under this Part for the year as required by section 150, on the last day of the year; and 
  (b) in any other case, on the day on which the taxpayer filed the taxpayer’s return of income under this Part for the year. 
  
  ### Interest on penalties
  
  (11) Where a taxpayer is required to pay a penalty, the taxpayer shall pay the penalty to the Receiver General together with interest thereon at the prescribed rate computed, 
  (a) in the case of a penalty payable under section 162, 163 or 235, from the day on or before which 
  (i) the taxpayer’s return of income for a taxation year in respect of which the penalty is payable was required to be filed, or would have been required to be filed if tax under this Part were payable by the taxpayer for the year, or 
  (ii) the information return, return, ownership certificate or other document in respect of which the penalty is payable was required to be made, as the case may be, to the day of payment; 
  (b) in the case of a penalty payable for a taxation year because of section 163.1, from the taxpayer’s balance-due day for the year to the day of payment of the penalty; 
  (b.1) in the case of a penalty under subsection 237.1(7.4), 237.3(8), 237.4(12) or 237.5(5), from the day on which the taxpayer became liable to the penalty to the day of payment; and 
  (c) in the case of a penalty payable by reason of any other provision of this Act, from the day of sending of the notice of original assessment of the penalty to the day of payment. 
  (12)  [Repealed, 2000, c. 19, s. 47(3)]  
  
  ## Offset of Refund Interest and Arrears Interest 
  
  ### Definitions
  
  161.1 (1) The definitions in this subsection apply in this section.  
  *accumulated overpayment amount*, of a corporation for a period, means the overpayment amount of the corporation for the period together with refund interest (including, for greater certainty, compound interest) that accrued with respect to the overpayment amount before the date specified under paragraph (3)(b) by the corporation in its application for the period. (trop-payé accumulé)   
  *accumulated underpayment amount*, of a corporation for a period, means the underpayment amount of the corporation for the period together with arrears interest (including, for greater certainty, compound interest) that accrued with respect to the underpayment amount before the date specified under paragraph (3)(b) by the corporation in its application for the period. (moins-payé accumulé)   
  *arrears interest* means interest computed under paragraph (5)(b), 129(2.2)(b), 131(3.2)(b), 132(2.2)(b), 133(7.02)(b) or 160.1(1)(b), subsection 161(1) or (11), paragraph 164(3.1)(b) or (4)(b) or subsection 187(2). (intérêts débiteurs)   
  *overpayment amount*, of a corporation for a period, means the amount referred to in subparagraph (2)(a)(i) that is refunded to the corporation, or the amount referred to in subparagraph (2)(a)(ii) to which the corporation is entitled. (trop-payé)   
  *refund interest* means interest computed under subsection 129(2.1), 131(3.1), 132(2.1), 133(7.01) or 164(3) or (3.2). (intérêts créditeurs)   
  *underpayment amount*, of a corporation for a period, means the amount referred to in paragraph (2)(b) payable by the corporation on which arrears interest is computed. (moins-payé)  
  
  ### Concurrent refund interest and arrears interest
  
  (2) A corporation may apply in writing to the Minister for the reallocation of an accumulated overpayment amount for a period that begins after 1999 on account of an accumulated underpayment amount for the period if, in respect of tax paid or payable by the corporation under this Part or Part I.3, II, IV, IV.1, VI, VI.1 or XIV, 
  (a) refund interest for the period 
  (i) is computed on an amount refunded to the corporation, or 
  (ii) would be computed on an amount to which the corporation is entitled, if that amount were refunded to the corporation; and 
  (b) arrears interest for the period is computed on an amount payable by the corporation. 
  
  ### Contents of application
  
  (3) A corporation’s application referred to in subsection (2) for a period is deemed not to have been made unless 
  (a) it specifies the amount to be reallocated, which shall not exceed the lesser of the corporation’s accumulated overpayment amount for the period and its accumulated underpayment amount for the period; 
  (b) it specifies the effective date for the reallocation, which shall not be earlier than the latest of 
  (i) the date from which refund interest is computed on the corporation’s overpayment amount for the period, or would be so computed if the overpayment amount were refunded to the corporation, 
  (ii) the date from which arrears interest is computed on the corporation’s underpayment amount for the period, and 
  (iii) January 1, 2000; and 
  (c) it is made on or before the day that is 90 days after the latest of 
  (i) the day of sending of the first notice of assessment giving rise to any portion of the corporation’s overpayment amount to which the application relates, 
  (ii) the day of sending of the first notice of assessment giving rise to any portion of the corporation’s underpayment amount to which the application relates, 
  (iii) if the corporation has served a notice of objection to an assessment referred to in subparagraph (i) or (ii), the day of sending of the notification under subsection 165(3) by the Minister in respect of the notice of objection, 
  (iv) if the corporation has appealed, or applied for leave to appeal, from an assessment referred to in subparagraph (i) or (ii) to a court of competent jurisdiction, the day on which the court dismisses the application, the application or appeal is discontinued or final judgment is pronounced in the appeal, and 
  (v) the day of sending of the first notice to the corporation indicating that the Minister has determined any portion of the corporation’s overpayment amount to which the application relates, if the overpayment amount has not been determined as a result of a notice of assessment sent before that day. 
  
  ### Reallocation
  
  (4) The amount to be reallocated that is specified under paragraph (3)(a) by a corporation is deemed to have been refunded to the corporation and paid on account of the accumulated underpayment amount on the date specified under paragraph (3)(b) by the corporation. 
  
  ### Repayment of refund
  
  (5) If an application in respect of a period is made under subsection (2) by a corporation and a portion of the amount to be reallocated has been refunded to the corporation, the following rules apply: 
  (a) a particular amount equal to the total of 
  (i) the portion of the amount to be reallocated that was refunded to the corporation, and 
  (ii) refund interest paid or credited to the corporation in respect of that portion is deemed to have become payable by the corporation on the day on which the portion was refunded; and 
  (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the particular amount from the day referred to in paragraph (a) to the date of payment. 
  
  ### Consequential reallocations
  
  (6) If a particular reallocation of an accumulated overpayment amount under subsection (4) results in a new accumulated overpayment amount of the corporation for a period, the new accumulated overpayment amount shall not be reallocated under this section unless the corporation so applies in its application for the particular reallocation. 
  
  ### Assessments
  
  (7) Notwithstanding subsections 152(4), (4.01) and (5), the Minister shall assess or reassess interest and penalties payable by a corporation in respect of any taxation year as necessary in order to take into account a reallocation of amounts under this section. 
  
  ### Period where interest not payable
  
  161.2 Notwithstanding any other provision of this Act, if the Minister notifies a taxpayer that the taxpayer is required to pay a specified amount under this Act and the taxpayer pays the specified amount in full before the end of the period that the Minister specifies with the notice, interest is not payable on the specified amount for the period. 
  
  ## Small Amounts Owing 
  
  ### Interest and penalty amounts of $25 or less
  
  161.3 If, at any time, a person pays an amount not less than the total of all amounts, other than interest and penalty, owing at that time to Her Majesty in right of Canada under this Act for a taxation year of the person and the total amount of interest and penalty payable by the person under this Act for that year is not more than $25.00, the Minister may cancel the interest and penalty. 
  
  ### Taxpayer
  
  161.4 (1) If the Minister determines, at any time, that the total of all amounts owing by a person to Her Majesty in right of Canada under this Act does not exceed two dollars, those amounts are deemed to be nil. 
  
  ### Minister
  
  (2) If, at any time, the total of all amounts payable by the Minister to a person under this Act does not exceed two dollars, the Minister may apply those amounts against any amount owing, at that time, by the person to Her Majesty in right of Canada. However, if the person, at that time, does not owe any amount to Her Majesty in right of Canada, those amounts payable are deemed to be nil. 
  
  ## Penalties 
  
  ### Failure to file return of income
  
  162 (1) Every person who fails to file a return of income for a taxation year as and when required by subsection 150(1) is liable to a penalty equal to the total of 
  (a) an amount equal to 5% of the person’s tax payable under this Part for the year that was unpaid when the return was required to be filed, and 
  (b) the product obtained when 1% of the person’s tax payable under this Part for the year that was unpaid when the return was required to be filed is multiplied by the number of complete months, not exceeding 12, from the date on which the return was required to be filed to the date on which the return was filed. 
  
  ### Repeated failure to file
  
  (2) Every person 
  (a) who fails to file a return of income for a taxation year as and when required by subsection 150(1), 
  (b) to whom a demand for a return for the year has been sent under subsection 150(2), and 
  (c) by whom, before the time of failure, a penalty was payable under this subsection or subsection 162(1) in respect of a return of income for any of the 3 preceding taxation years is liable to a penalty equal to the total of 
  (d) an amount equal to 10% of the person’s tax payable under this Part for the year that was unpaid when the return was required to be filed, and 
  (e) the product obtained when 2% of the person’s tax payable under this Part for the year that was unpaid when the return was required to be filed is multiplied by the number of complete months, not exceeding 20, from the date on which the return was required to be filed to the date on which the return was filed. 
  
  ### Failure to file - non-resident corporation
  
  (2.1) Notwithstanding subsections (1) and (2), if a non-resident corporation is liable to a penalty under subsection (1) or (2) for failure to file a return of income for a taxation year, the amount of the penalty is the greater of 
  (a) the amount computed under subsection (1) or (2), as the case may be, and 
  (b) an amount equal to the greater of 
  (i) $100, and 
  (ii) $25 times the number of days, not exceeding 100, from the day on which the return was required to be filed to the day on which the return is filed. 
  
  ### Failure to file by trustee
  
  (3) Every person who fails to file a return as required by subsection 150(3) is liable to a penalty of $10 for each day of default but not exceeding $50. 
  
  ### Ownership certificate
  
  (4) Every person who 
  (a) fails to complete an ownership certificate as required by section 234, 
  (b) fails to deliver an ownership certificate in the manner prescribed at the time prescribed and at the place prescribed by regulations made under that section, or 
  (c) cashes a coupon or warrant for which an ownership certificate has not been completed pursuant to that section, is liable to a penalty of $50. 
  
  ### Failure to provide information on form
  
  (5) Every person who fails to provide any information required on a prescribed form made under this Act or a regulation is liable to a penalty of $100 for each such failure, unless 
  (a) in the case of information required in respect of another person or partnership, a reasonable effort was made by the person to obtain the information from the other person or partnership; or 
  (b) in the case of a failure to provide a Social Insurance Number on a return of income, the person had applied for the assignment of the Number and had not received it at the time the return was filed. 
  
  ### Failure to provide claim preparer information
  
  (5.1) Every person or partnership who makes, or participates in, assents to or acquiesces in the making of, a false statement or omission in respect of claim preparer information required to be included in an SR&ED form is jointly and severally, or solidarily, liable, together with any claim preparer of the form, to a penalty equal to $1,000. 
  
  ### Due diligence
  
  (5.2) A claim preparer of an SR&ED form is not liable for a penalty under subsection (5.1) in respect of a false statement or omission if the claim preparer has exercised the degree of care, diligence and skill to prevent the making of the false statement or omission that a reasonably prudent person would have exercised in comparable circumstances. 
  
  ### Definitions
  
  (5.3) The following definitions apply in this subsection and subsections (5.1) and (5.2).  
  *claim preparer*, of an SR&ED form, means a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form but does not include an employee who prepares, or assists in the preparation of, the form in the course of performing their duties of employment. (préparateur)   
  *claim preparer information* means prescribed information regarding  
  (a) the identity of the claim preparer, if any, of an SR&ED form, and 
  (b) the arrangement under which the claim preparer agrees to accept consideration in respect of the preparation of the form. ( renseignements relatifs au préparateur)   
  *SR&ED form* means a prescribed form required to be filed under subsection 37(11). (formulaire de RS&DE)  
  
  ### Failure to provide identification number
  
  (6) Every person or partnership who fails to provide on request their business number, their Social Insurance Number, their trust account number or their U.S. federal taxpayer identifying number to a person required under this Act or the Regulations to make an information return requiring the number is liable to a penalty of $100 for each such failure, unless 
  (a) an application for the assignment of the number is made within 15 days (or, in the case of a U.S. federal taxpayer identifying number, 90 days) after the request was received; and 
  (b) the number is provided to the person who requested the number within 15 days after the person or partnership received it. 
  
  ### Failure to comply
  
  (7) Every person (other than a registered charity) or partnership who fails 
  (a) to file an information return as and when required by this Act or the regulations, or 
  (b) to comply with a duty or obligation imposed by this Act or the regulations is liable in respect of each such failure, except where another provision of this Act (other than subsection 162(10) or 162(10.1) or 163(2.22)) sets out a penalty for the failure, to a penalty equal to the greater of $100 and the product obtained when $25 is multiplied by the number of days, not exceeding 100, during which the failure continues. 
  
  ### Late filing penalty — prescribed information returns
  
  (7.01) Every person (other than a registered charity) or partnership who fails to file, when required by this Act or the regulations, one or more information returns of a type prescribed for the purpose of this subsection is liable to a penalty equal to the greater of $100 and 
  (a) where the number of those information returns is less than 51, $10 multiplied by the number of days, not exceeding 100, during which the failure continues; 
  (b) where the number of those information returns is greater than 50 and less than 501, $15 multiplied by the number of days, not exceeding 100, during which the failure continues; 
  (c) where the number of those information returns is greater than 500 and less than 2,501, $25 multiplied by the number of days, not exceeding 100, during which the failure continues; 
  (d) where the number of those information returns is greater than 2,500 and less than 10,001, $50 multiplied by the number of days, not exceeding 100, during which the failure continues; and 
  (e) where the number of those information returns is greater than 10,000, $75 multiplied by the number of days, not exceeding 100, during which the failure continues. 
  
  ### Failure to file in appropriate manner — prescribed information returns
  
  (7.02) Every person (other than a registered charity) or partnership who fails to file, in the manner required by the regulations, one or more information returns of a type prescribed for the purpose of this subsection is liable to a penalty equal to 
  (a) where the number of those information returns is greater than 5 and less than 51, $125; 
  (a.1) where the number of those information returns is greater than 50 and less than 251, $250; 
  (b) where the number of those information returns is greater than 250 and less than 501, $500; 
  (c) where the number of those information returns is greater than 500 and less than 2,501, $1,500; 
  (d) where the number of those information returns is greater than 2,500, $2,500; and 
  (e) in any other case, nil. 
  
  ### Failure to make partnership information return
  
  (7.1) Where a member of a partnership fails to file an information return as a member of the partnership for a fiscal period of the partnership as and when required by this Act or the regulations and subsection 162(10) does not set out a penalty for the failure, the partnership is liable to a penalty equal to the greater of $100 and the product obtained when $25 is multiplied by the number of days, not exceeding 100, during which the failure continues. 
  
  ### Failure to file in appropriate manner — return of income
  
  (7.2) Every person who fails to file a return of income for a taxation year as required by subsection 150.1(2.1) is liable to a penalty equal to $1,000. 
  
  ### Failure to file in appropriate manner — tax preparer
  
  (7.3) Every tax preparer who fails to file a return of income as required by subsection 150.1(2.3) is liable to a penalty equal to 
  (a) $25 for each such failure in respect of a return of an individual; and 
  (b) $100 for each such failure in respect of a return of a corporation. 
  
  ### Penalty — electronic payments
  
  (7.4) Every person who fails to comply with subsection 160.5(2) is liable to a penalty equal to $100 for each such failure. 
  
  ### Repeated failure to file
  
  (8) Where 
  (a) a penalty was payable under subsection 162(7.1) in respect of a failure by a member of a partnership to file an information return as a member of the partnership for a fiscal period of the partnership, 
  (b) a demand for the return or for information required to be contained in the return has been served under section 233 on the member, and 
  (c) a penalty was payable under subsection 162(7.1) in respect of the failure by a member of a partnership to file an information return as a member of the partnership for any of the 3 preceding fiscal periods, the partnership is liable, in addition to the penalty under subsection 162(7.1), to a penalty of $100 for each member of the partnership for each month or part of a month, not exceeding 24 months, during which the failure referred to in paragraph 162(8)(a) continues. 
  
  ### Rules — partnership liable to a penalty
  
  (8.1) If a partnership is liable to a penalty under any of subsections (5) to (7.1), (7.3), (7.4), (8) and (10), then sections 152, 158 to 160.1, 161 and 164 to 167 and Division J apply, with any modifications that the circumstances require, to the penalty as if the partnership were a corporation. 
  (9)  [Repealed, 1998, c. 19, s. 188(4)]  
  
  ### Failure to furnish foreign-based information
  
  (10) Every person or partnership who, 
  (a) knowingly or under circumstances amounting to gross negligence, fails to file an information return as and when required by any of sections 233.1 to 233.4 and 233.8, or 
  (b) where paragraph 162(10)(a) does not apply, knowingly or under circumstances amounting to gross negligence, fails to comply with a demand under section 233 to file a return is liable to a penalty equal to the amount determined by the formula is 
  (c) where paragraph 162(10)(a) applies, the lesser of 24 and the number of months, beginning with the month in which the return was required to be filed, during any part of which the return has not been filed, and 
  (d) where paragraph 162(10)(b) applies, the lesser of 24 and the number of months, beginning with the month in which the demand was served, during any part of which the return has not been filed, is 
  (e) where the person or partnership has failed to comply with a demand under section 233 to file a return, 2, and 
  (f) in any other case, 1, and is the penalty to which the person or partnership is liable under subsection 162(7) in respect of the return. 
  
  ### Additional penalty
  
  (10.1) Where 
  (a) a person or partnership is liable to a penalty under subsection 162(10) for the failure to file a return (other than an information return required to be filed under section 233.1), 
  (b) if paragraph 162(10)(a) applies, the number of months, beginning with the month in which the return was required to be filed, during any part of which the return has not been filed exceeds 24, and 
  (c) if paragraph 162(10)(b) applies, the number of months, beginning with the month in which the demand referred to in that paragraph was served, during any part of which the return has not been filed exceeds 24, the person or partnership is liable, in addition to the penalty determined under subsection 162(10), to a penalty equal to the amount determined by the formula is 
  (d) if the return is required to be filed under section 233.2 in respect of a trust, 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required, 
  (e) where the return is required to be filed under section 233.3 for a taxation year or fiscal period, 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a specified foreign property (as defined by subsection 233.3(1)) of the person or partnership, and 
  (f) where the return is required to be filed under section 233.4 for a taxation year or fiscal period in respect of a foreign affiliate of the person or partnership, 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a property of the person or partnership that is a share of the capital stock or indebtedness of the affiliate, and is the total of the penalties to which the person or partnership is liable under subsections 162(7) and 162(10) in respect of the return. 
  
  ### Application to trust contributions
  
  (10.11) In paragraph (d) of the description of A in subsection (10.1), subsections 94(1), (2) and (9) apply. 
  
  ### Shares or debt owned by controlled foreign affiliate
  
  (10.2) For the purpose of paragraph (f) of the description of A in subsection 162(10.1), 
  (a) shares or indebtedness owned by a controlled foreign affiliate of a person or partnership are deemed to be owned by the person or partnership; and 
  (b) the cost amount at any time of such shares or indebtedness to the person or partnership is deemed to be equal to 20% of the cost amount at that time to the controlled foreign affiliate of the shares or indebtedness. 
  
  ### Application to partnerships
  
  (10.3) For the purposes of paragraph (f) of the description of A in subsection 162(10.1) and subsection 162(10.2), in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a partnership, 
  (a) the definitions direct equity percentage and equity percentage in subsection 95(4) shall be read as if a partnership were a person; and  
  (b) the definitions controlled foreign affiliate and foreign affiliate in subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada.  
  
  ### Application to non-resident trusts
  
  (10.4) For the purposes of this subsection, paragraph (f) of the description of A in subsection 162(10.1) and subsection 162(10.2), 
  (a) a non-resident trust is deemed to be a controlled foreign affiliate of each beneficiary of which the trust is a controlled foreign affiliate for the purpose of section 233.4; 
  (b) the trust is deemed to be a non-resident corporation having a capital stock of a single class divided into 100 issued shares; 
  (c) each beneficiary under the trust is deemed to own at any time the number of the issued shares of the corporation that is equal to the proportion of 100 that 
  (i) the fair market value at that time of the beneficiary’s beneficial interest in the trust is of 
  (ii) the fair market value at that time of all beneficial interests in the trust; and 
  (d) the cost amount to a beneficiary at any time of a share of the corporation is deemed to be equal to the amount determined by the formula is the fair market value at that time of the beneficiary’s beneficial interest in the trust, and is the number of shares deemed under paragraph 162(10.4)(c) to be owned at that time by the beneficiary in respect of the corporation. 
  
  ### Effect of subsequent events
  
  (11) For the purpose of computing a penalty under subsection 162(1) or 162(2) in respect of a person’s return of income for a taxation year, the person’s tax payable under this Part for the year shall be determined before taking into consideration the specified future tax consequences for the year. 
  
  ### Repeated failure to report income
  
  163 (1) Every person is liable to a penalty who 
  (a) fails to report an amount, equal to or greater than $500, required to be included in computing the person’s income in a return filed under section 150 for a taxation year (in this subsection and subsection (1.1) referred to as the 
  *unreported amount*);  
  (b) had failed to report an amount, equal to or greater than $500, required to be included in computing the person’s income in any return filed under section 150 for any of the three preceding taxation years; and 
  (c) is not liable to a penalty under subsection (2) in respect of the unreported amount. 
  
  ### Amount of penalty
  
  (1.1) The amount of the penalty to which the person is liable under subsection (1) is equal to the lesser of 
  (a) 10% of the unreported amount, and 
  (b) the amount determined by the formula is the total of the amounts that would be determined under paragraphs (2)(a) to (g) if subsection (2) applied in respect of the unreported amount, and is any amount deducted or withheld under subsection 153(1) that may reasonably be considered to be in respect of the unreported amount. 
  
  ### False statements or omissions
  
  (2) Every person who, knowingly, or under circumstances amounting to gross negligence, has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a return, form, certificate, statement or answer (in this section referred to as a “return”) filed or made in respect of a taxation year for the purposes of this Act, is liable to a penalty of the greater of $100 and 50% of the total of 
  (a) the amount, if any, by which 
  (i) the amount, if any, by which 
  (A) the tax for the year that would be payable by the person under this Act exceeds 
  (B) the amounts that would be deemed by subsections 120(2) and (2.2) to have been paid on account of the person’s tax for the year if the person’s taxable income for the year were computed by adding to the taxable income reported by the person in the person’s return for the year that portion of the person’s understatement of income for the year that is reasonably attributable to the false statement or omission and if the person’s tax payable for the year were computed by subtracting from the deductions from the tax otherwise payable by the person for the year such portion of any such deduction as may reasonably be attributable to the false statement or omission exceeds 
  (ii) the amount, if any, by which 
  (A) the tax for the year that would have been payable by the person under this Act exceeds 
  (B) the amounts that would be deemed by subsections 120(2) and (2.2) to have been paid on account of the person’s tax for the year had the person’s tax payable for the year been assessed on the basis of the information provided in the person’s return for the year, 
  (b)  [Repealed, 1994, c. 7, Sch. VII, s. 17]  
  (c) the total of all amounts each of which is the amount, if any, by which 
  (i) the amount that would be deemed by subsection 122.61(1) to be an overpayment on account of the person’s liability under this Part for the year that arose during a particular month or, where that person is a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual at the end of the year and at the beginning of the particular month, of that individual’s liability under this Part for the year that arose during the particular month, as the case may be, if that total were calculated by reference to the information provided exceeds 
  (ii) the amount that is deemed by subsection 122.61(1) to be an overpayment on account of the liability of that person or that individual, as the case may be, under this Part for the year that arose during the particular month, 
  (c.1) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that would be deemed by section 122.5 to be paid by that person during a month specified for the year or, where that person is the qualified relation of an individual in relation to that specified month (within the meaning assigned by subsection 122.5(1)), by that individual, if that total were calculated by reference to the information provided in the person’s return of income (within the meaning assigned by subsection 122.5(1)) for the year exceeds 
  (ii) the total of all amounts each of which is an amount that is deemed by section 122.5 to be paid by that person or by an individual of whom the person is the qualified relation in relation to a month specified for the year (within the meaning assigned to subsection 122.5(1)), 
  (c.2) the amount, if any, by which 
  (i) the amount that would be deemed under subsection 122.51(2) to be paid on account of the person’s tax payable under this Part for the year if the amount were calculated by reference to the information provided in the return exceeds 
  (ii) the amount that is deemed under subsection 122.51(2) to be paid on account of the person’s tax payable under this Part for the year, 
  (c.3) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that would be deemed by subsection 122.7(2) or (3) to be a payment on account of the person’s tax payable under this Part or another person’s tax payable under this Part for the year if those amounts were calculated by reference to the information provided in the return exceeds 
  (ii) the total of all amounts each of which is an amount that is deemed by subsection 122.7(2) or (3) to be a payment on account of the person’s tax payable under this Part and, where applicable, the other person’s tax payable under this Part for the year, 
  (c.4) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that would be deemed by section 122.8 to be paid by that person during a month specified for the year or, where that person is the qualified relation of an individual in relation to that specified month (within the meaning assigned by subsection 122.8(1)), by that individual, if that total were calculated by reference to the information provided in the person’s return of income (within the meaning assigned by subsection 122.8(1)) for the year  exceeds 
  (ii) the total of all amounts each of which is an amount that is deemed by section 122.8 to be paid by that person or by an individual of whom the person is the qualified relation in relation to a month specified for the year (within the meaning assigned by subsection 122.8(1)),  
  (c.5) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that would be deemed by subsection 122.9(2) to have been paid on account of the person’s tax payable under this Part for the year if that amount were calculated by reference to the person’s claim for the year under the subsection exceeds 
  (ii) the total of all amounts each of which is the amount that the person is entitled to claim for the year under subsection 122.9(2), 
  (c.6) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount that would be deemed by subsection 122.91(1) to have been paid on account of the person’s tax payable under this Part for the year if those amounts were calculated by reference to the information provided in the return exceeds 
  (ii) the total of all amounts each of which is an amount that is deemed by subsection 122.91(1) to be a payment on account of the person’s tax payable under this Part for the taxation year, 
  (d) the amount, if any, by which 
  (i) the amount that would be deemed by subsection 127.1(1) to be paid for the year by the person if that amount were calculated by reference to the information provided in the return or form filed for the year pursuant to that subsection exceeds 
  (ii) the amount that is deemed by that subsection to be paid for the year by the person, 
  (e) the amount, if any, by which 
  (i) the amount that would be deemed by subsection 127.41(3) to have been paid for the year by the person if that amount were calculated by reference to the person’s claim for the year under that subsection exceeds 
  (ii) the maximum amount that the person is entitled to claim for the year under subsection 127.41(3), 
  (f) the amount, if any, by which 
  (i) the amount that would be deemed by subsection 125.4(3) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection exceeds 
  (ii) the amount that is deemed by that subsection to be paid for the year by the person, 
  (g) the amount, if any, by which 
  (i) the amount that would be deemed by subsection 125.5(3) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection exceeds 
  (ii) the amount that is deemed by that subsection to be paid for the year by the person, 
  (h) the amount, if any, by which 
  (i) the amount that would be deemed by subsection 125.6(2) or (2.1) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection exceeds 
  (ii) the amount that is deemed by that subsection to be paid for the year by the person, and 
  (i) the amount, if any, by which 
  (i) the amount that would be deemed by any of subsections 125.7(2) to (2.2) to have been an overpayment by the person or partnership if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying entity in subsection 125.7(1), paragraph (a) of the definition qualifying renter in subsection 125.7(1) or paragraph (a) of the definition qualifying recovery entity in subsection 125.7(1), as the case may be  exceeds 
  (ii) the amount that is deemed by that subsection to be an overpayment by the person or partnership. 
  
  ### Interpretation
  
  (2.1) For the purposes of subsection 163(2), the taxable income reported by a person in the person’s return for a taxation year shall be deemed not to be less than nil and the 
  *understatement of income* for a year of a person means the total of  
  (a) the amount, if any, by which 
  (i) the total of all amounts that were not reported by the person in the person’s return and that were required to be included in computing the person’s income for the year exceeds 
  (ii) the total of such of the amounts deductible by the person in computing the person’s income for the year under the provisions of this Act as were wholly applicable to the amounts referred to in subparagraph 163(2.1)(a)(i) and were not deducted by the person in computing the person’s income for the year reported by the person in the person’s return, 
  (b) the amount, if any, by which 
  (i) the total of all amounts deducted by the person in computing the person’s income for the year reported by the person in the person’s return exceeds 
  (ii) the total of such of the amounts referred to in subparagraph 163(2.1)(b)(i) as were deductible by the person in computing the person’s income for the year in accordance with the provisions of this Act, and 
  (c) the amount, if any, by which 
  (i) the total of all amounts deducted by the person (otherwise than by virtue of section 111) from the person’s income for the purpose of computing the person’s taxable income for the year reported by the person in the person’s return exceeds 
  (ii) the total of all amounts deductible by the person (otherwise than by virtue of section 111) from the person’s income for the purpose of computing the person’s taxable income for the year in accordance with the provisions of this Act. 
  
  ### False statement or omission
  
  (2.2) Every person who, knowingly or under circumstances amounting to gross negligence, has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a renunciation that was to have been effective as of a particular date and that is purported to have been made under any of subsections 66(10) to 66(10.3), 66(12.6), 66(12.601) and 66(12.62), otherwise than because of the application of subsection 66(12.66), is liable to a penalty of 25% of the amount, if any, by which 
  (a) the amount set out in the renunciation in respect of Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses exceeds 
  (b) the amount in respect of Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses, as the case may be, that the corporation was entitled under the applicable subsection to renounce as of that particular date. 
  
  ### False statement or omissions with respect to look-back rule
  
  (2.21) A person is liable to the penalty determined under subsection 163(2.22) where the person, 
  (a) knowingly or under circumstances amounting to gross negligence has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a document required to be filed under subsection 66(12.73) in respect of a renunciation purported to have been made because of the application of subsection 66(12.66); or 
  (b) fails to file the document on or before the day that is 24 months after the day on or before which it was required to be filed. 
  
  ### Penalty
  
  (2.22) For the purpose of subsection 163(2.21), the penalty to which a person is liable in respect of a document required to be filed under subsection 66(12.73) is equal to 25% of the amount, if any, by which 
  (a) the portion of the excess referred to in subsection 66(12.73) in respect of the document that was known or that ought to have been known by the person exceeds 
  (b) where paragraph 163(2.21)(b) does not apply, the portion of the excess identified in the document, and 
  (c) in any other case, nil. 
  
  ### Idem
  
  (2.3) Every person who, knowingly or under circumstances amounting to gross negligence, makes or participates in, assents to or acquiesces in the making of, a false statement or omission in a prescribed form required to be filed under subsection 66(12.691) or 66(12.701) is liable to a penalty of 25% of the amount, if any, by which 
  (a) the assistance required to be reported in respect of a person or partnership in the prescribed form exceeds 
  (b) the assistance reported in the prescribed form in respect of the person or partnership. 
  
  ### False statement or omission
  
  (2.4) Every person or partnership who, knowingly or under circumstances amounting to gross negligence, makes or participates in, assents to or acquiesces in, the making of a false statement or omission in a return is liable to a penalty of 
  (a) where the return is required to be filed under section 233.1, $24,000; 
  (b) if the return is required to be filed under section 233.2 in respect of a trust, the greater of 
  (i) $24,000, and 
  (ii) 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required; 
  (c) where the return is required to be filed under section 233.3 for a taxation year or fiscal period, the greater of 
  (i) $24,000, and 
  (ii) 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a specified foreign property (as defined by subsection 233.3(1)(a) of the person or partnership in respect of which the false statement or omission is made; 
  (d) where the return is required to be filed under section 233.4 for a taxation year or fiscal period, the greater of 
  (i) $24,000, and 
  (ii) 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a property of the person or partnership that is a share of the capital stock or indebtedness of the foreign affiliate in respect of which the return is being filed; and 
  (e) where the return is required to be filed under section 233.6 for a taxation year or fiscal period, the greater of 
  (i) $2,500, and 
  (ii) 5% of the total of 
  (A) all amounts each of which is the fair market value of a property that is distributed to the person or partnership in the year or period by the trust and in respect of which the false statement or omission is made, and 
  (B) all amounts each of which is the greatest unpaid principal amount of a debt that is owing to the trust by the person or partnership in the year or period and in respect of which the false statement or omission is made. 
  
  ### Application to trust contributions
  
  (2.41) In subparagraph (2.4)(b)(ii), subsections 94(1), (2) and (9) apply. 
  
  ### Shares or debt owned by controlled foreign affiliate
  
  (2.5) For the purpose of paragraph 163(2.4)(d), 
  (a) shares or indebtedness owned by a controlled foreign affiliate of a person or partnership are deemed to be owned by the person or partnership; and 
  (b) the cost amount at any time of such shares or indebtedness to the person or partnership is deemed to be equal to 20% of the cost amount at that time to the controlled foreign affiliate of the shares or indebtedness. 
  
  ### Application to partnerships
  
  (2.6) For the purposes of paragraph 163(2.4)(d) and subsection 163(2.5), in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a partnership 
  (a) the definitions 
  *direct equity percentage* and 
  *equity percentage* in subsection 95(4) shall be read as if a partnership were a person; and  
  (b) the definitions 
  *controlled foreign affiliate* and 
  *foreign affiliate* in subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada.  
  
  ### Application to partnerships
  
  (2.7) For the purpose of subsection 163(2.4), each act or omission of a member of a partnership in respect of an information return required to be filed by the partnership under section 233.3, 233.4 or 233.6 is deemed to be an act or omission of the partnership in respect of the return. 
  
  ### Application to members of partnerships
  
  (2.8) For the purposes of this subsection and subsection 163(2.7), a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership. 
  
  ### Partnership liable to penalty
  
  (2.9) If a partnership is liable to a penalty under paragraph (2)(i), subsection (2.4) or (2.901) or section 163.2, 237.1, 237.3 or 237.4, sections 152, 158 to 160.1, 161 and 164 to 167 and Division J apply, with any changes that the circumstances require, in respect of the penalty as if the partnership were a corporation. 
  
  ### Penalty — COVID-19
  
  (2.901) Every eligible entity that is deemed by subsection 125.7(6) to have an amount of qualifying revenue — for a current reference period for a qualifying period — is liable to a penalty equal to 25% of the amount that would be deemed by subsection 125.7(2) or (2.1) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying entity in subsection 125.7(1) or paragraph (a) of the definition qualifying renter in subsection 125.7(1), as the case may be.  
  
  ### Penalty — COVID-19
  
  (2.902) Every eligible entity that is deemed by subsection 125.7(6.1) to have an amount of total current period remuneration for a qualifying period is liable to a penalty equal to 25% of the amount that would be deemed by subsection 125.7(2.2) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying recovery entity in subsection 125.7(1).  
  
  ### Application to non-resident trusts
  
  (2.91) For the purposes of this subsection, paragraph 163(2.4)(d) and subsection 163(2.5), 
  (a) a non-resident trust is deemed to be a controlled foreign affiliate of each beneficiary of which the trust is a controlled foreign affiliate for the purpose of section 233.4; 
  (b) the trust is deemed to be a non-resident corporation having a capital stock of a single class divided into 100 issued shares; 
  (c) each beneficiary under the trust is deemed to own at any time the number of the issued shares of the corporation that is equal to the proportion of 100 that 
  (i) the fair market value at that time of the beneficiary’s beneficial interest in the trust is of 
  (ii) the fair market value at that time of all beneficial interests in the trust; and 
  (d) the cost amount to a beneficiary at any time of a share of the corporation is deemed to be equal to the amount determined by the formula is the fair market value at that time of the beneficiary’s beneficial interest in the trust, and is the number of shares deemed under paragraph 163(2.91)(c) to be owned at that time by the beneficiary in respect of the corporation. 
  
  ### Burden of proof in respect of penalties
  
  (3) Where, in an appeal under this Act, a penalty assessed by the Minister under this section or section 163.2 is in issue, the burden of establishing the facts justifying the assessment of the penalty is on the Minister. 
  
  ### Effect of carryback of losses etc.
  
  (4) In determining under subsection 163(2.1) the understatement of income for a taxation year of a person, the following amounts shall be deemed not to be deductible or excludable in computing the person’s income for the year: 
  (a) any amount that may be deducted under section 41 in respect of the person’s listed-personal-property loss for a subsequent taxation year; 
  (b) any amount that may be excluded from the person’s income because of section 49 in respect of the exercise of any option in a subsequent taxation year; 
  (b.1) any amount that may be deducted under subsection 147.2(4) in computing the person’s income for the year because of the application of subsection 147.2(6) as a result of the person’s death in the subsequent taxation year; and 
  (c) any amount that may be deducted in computing the person’s income for the year because of an election made under paragraph 164(6)(c) or 164(6)(d) in a subsequent taxation year by the person’s legal representative. 
  
  ### False statement or omission
  
  (5) A person or partnership is liable to a penalty if the person or partnership 
  (a) knowingly or under circumstances amounting to gross negligence 
  (i) makes — or participates in, assents to or acquiesces in, the making of — a false statement or omission in a return of income of a trust that is not subject to one of the exceptions listed in paragraphs 150(1.2)(a) to (o) for a taxation year, or 
  (ii) fails to file a return described in subparagraph (i); or 
  (b) fails to comply with a demand under subsection 150(2) or 231.2(1) to file a return described in subparagraph (a)(i). 
  
  ### False statement or omission — trust return
  
  (6) The amount of the penalty to which the person or partnership is liable under subsection (5) is equal to the greater of 
  (a) $2,500, and 
  (b) 5% of the highest amount at any time in the year that is equal to the total fair market value of all the property held by the trust referred to in subsection (5) at that time. 
  
  ### Penalty for late or deficient instalments
  
  163.1 Every person who fails to pay all or any part of an instalment of tax for a taxation year on or before the day on or before which the instalment is required by this Part to be paid is liable to a penalty equal to 50% of the amount, if any, by which 
  (a) the interest payable by the person under section 161 in respect of all instalments for the year exceeds the greater of 
  (b) $1,000, and 
  (c) 25% of the interest that would have been payable by the person under section 161 in respect of all instalments for the year if no instalment had been made for that year. 
  
  ## Misrepresentation of a Tax Matter by a Third Party 
  
  ### Definitions
  
  163.2 (1) The definitions in this subsection apply in this section.  
  *culpable conduct* means conduct, whether an act or a failure to act, that  
  (a) is tantamount to intentional conduct; 
  (b) shows an indifference as to whether this Act is complied with; or 
  (c) shows a wilful, reckless or wanton disregard of the law. ( conduite coupable)   
  *entity* includes an association, a corporation, a fund, a joint venture, an organization, a partnership, a syndicate and a trust. (entité)   
  *excluded activity*, in respect of a false statement, means the activity of  
  (a) promoting or selling (whether as principal or agent or directly or indirectly) an arrangement, an entity, a plan, a property or a scheme (in this definition referred to as the “arrangement”) where it can reasonably be considered that 
  (i) subsection 66(12.68) applies to the arrangement, 
  (ii) the definition 
  *tax shelter* in subsection 237.1(1) applies to a person’s interest in the arrangement, or  
  (iii) one of the main purposes for a person’s participation in the arrangement is to obtain a tax benefit; or 
  (b) accepting (whether as principal or agent or directly or indirectly) consideration in respect of the promotion or sale of an arrangement. ( activité exclue)   
  *false statement* includes a statement that is misleading because of an omission from the statement. (faux énoncé)   
  *gross compensation* of a particular person at any time, in respect of a false statement that could be used by or on behalf of another person, means all amounts to which the particular person, or any person not dealing at arm’s length with the particular person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the statement. (rétribution brute)   
  *gross entitlements* of a person at any time, in respect of a planning activity or a valuation activity of the person, means all amounts to which the person, or another person not dealing at arm’s length with the person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the activity. (droits à paiement)   
  *participate* includes  
  (a) to cause a subordinate to act or to omit information; and 
  (b) to know of, and to not make a reasonable attempt to prevent, the participation by a subordinate in an act or an omission of information. ( participer)   
  *person* includes a partnership. (personne)   
  *planning activity* includes  
  (a) organizing or creating, or assisting in the organization or creation of, an arrangement, an entity, a plan or a scheme; and 
  (b) participating, directly or indirectly, in the selling of an interest in, or the promotion of, an arrangement, an entity, a plan, a property or a scheme. ( activité de planification)   
  *subordinate*, in respect of a particular person, includes any other person over whose activities the particular person has direction, supervision or control whether or not the other person is an employee of the particular person or of another person, except that, if the particular person is a member of a partnership, the other person is not a subordinate of the particular person solely because the particular person is a member of the partnership. (subalterne)   
  *tax benefit* means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act. (avantage fiscal)   
  *valuation activity* of a person means anything done by the person in determining the value of a property or a service. (activité d’évaluation)  
  
  ### Penalty for misrepresentations in tax planning arrangements
  
  (2) Every person who makes or furnishes, participates in the making of or causes another person to make or furnish a statement that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by another person (in subsections (6) and (15) referred to as the “other person”) for a purpose of this Act is liable to a penalty in respect of the false statement. 
  
  ### Amount of penalty
  
  (3) The penalty to which a person is liable under subsection (2) in respect of a false statement is 
  (a) where the statement is made in the course of a planning activity or a valuation activity, the greater of $1,000 and the total of the person’s gross entitlements, at the time at which the notice of assessment of the penalty is sent to the person, in respect of the planning activity and the valuation activity; and 
  (b) in any other case, $1,000. 
  
  ### Penalty for participating in a misrepresentation
  
  (4) Every person who makes, or participates in, assents to or acquiesces in the making of, a statement to, or by or on behalf of, another person (in this subsection, subsections (5) and (6), paragraph (12)(c) and subsection (15) referred to as the “other person”) that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by or on behalf of the other person for a purpose of this Act is liable to a penalty in respect of the false statement. 
  
  ### Amount of penalty
  
  (5) The penalty to which a person is liable under subsection (4) in respect of a false statement is the greater of 
  (a) $1,000, and 
  (b) the lesser of 
  (i) the penalty to which the other person would be liable under subsection 163(2) if the other person made the statement in a return filed for the purposes of this Act and knew that the statement was false, and 
  (ii) the total of $100,000 and the person’s gross compensation, at the time at which the notice of assessment of the penalty is sent to the person, in respect of the false statement that could be used by or on behalf of the other person. 
  
  ### Reliance in good faith
  
  (6) For the purposes of subsections (2) and (4), a person (in this subsection and in subsection (7) referred to as the “advisor”) who acts on behalf of the other person is not considered to have acted in circumstances amounting to culpable conduct in respect of the false statement referred to in subsection (2) or (4) solely because the advisor relied, in good faith, on information provided to the advisor by or on behalf of the other person or, because of such reliance, failed to verify, investigate or correct the information. 
  
  ### Non-application of subsection (6)
  
  (7) Subsection (6) does not apply in respect of a statement that an advisor makes (or participates in, assents to or acquiesces in the making of) in the course of an excluded activity. 
  
  ### False statements in respect of a particular arrangement
  
  (8) For the purpose of applying this section (other than subsections (4) and (5)), 
  (a) where a person makes or furnishes, participates in the making of or causes another person to make or furnish two or more false statements, the false statements are deemed to be one false statement if the statements are made or furnished in the course of 
  (i) one or more planning activities that are in respect of a particular arrangement, entity, plan, property or scheme, or 
  (ii) a valuation activity that is in respect of a particular property or service; and 
  (b) for greater certainty, a particular arrangement, entity, plan, property or scheme includes an arrangement, an entity, a plan, a property or a scheme in respect of which 
  (i) an interest is required to have, or has, an identification number issued under section 237.1 that is the same number as the number that applies to each other interest in the property, 
  (ii) a selling instrument in respect of flow-through shares is required to be filed with the Minister because of subsection 66(12.68), or 
  (iii) one of the main purposes for a person’s participation in the arrangement, entity, plan or scheme, or a person’s acquisition of the property, is to obtain a tax benefit. 
  
  ### Clerical services
  
  (9) For the purposes of this section, a person is not considered to have made or furnished, or participated in, assented to or acquiesced in the making of, a false statement solely because the person provided clerical services (other than bookkeeping services) or secretarial services with respect to the statement. 
  
  ### Valuations
  
  (10) Notwithstanding subsections (6) and 163(3), a statement as to the value of a property or a service (which value is in this subsection referred to as the “stated value”), made by the person who opined on the stated value or by a person in the course of an excluded activity is deemed to be a statement that the person would reasonably be expected to know, but for circumstances amounting to culpable conduct, is a false statement if the stated value is 
  (a) less than the product obtained when the prescribed percentage for the property or service is multiplied by the fair market value of the property or service; or 
  (b) greater than the product obtained when the prescribed percentage for the property or service is multiplied by the fair market value of the property or service. 
  
  ### Exception
  
  (11) Subsection (10) does not apply to a person in respect of a statement as to the value of a property or a service if the person establishes that the stated value was reasonable in the circumstances and that the statement was made in good faith and, where applicable, was not based on one or more assumptions that the person knew or would reasonably be expected to know, but for circumstances amounting to culpable conduct, were unreasonable or misleading in the circumstances. 
  
  ### Special rules
  
  (12) For the purpose of applying this section, 
  (a) where a person is assessed a penalty that is referred to in subsection (2) the amount of which is based on the person’s gross entitlements at any time in respect of a planning activity or a valuation activity and another assessment of the penalty is made at a later time, 
  (i) if the person’s gross entitlements in respect of the activity are greater at that later time, the assessment of the penalty made at that later time is deemed to be an assessment of a separate penalty, and 
  (ii) in any other case, the notice of assessment of the penalty sent before that later time is deemed not to have been sent; 
  (b) a person’s gross entitlements at any time in respect of a planning activity or a valuation activity, in the course of which the person makes or furnishes, participates in the making of or causes another person to make or furnish a false statement, shall exclude the total of all amounts each of which is the amount of a penalty (other than a penalty the assessment of which is void because of subsection (13)) determined under paragraph (3)(a) in respect of the false statement for which notice of the assessment was sent to the person before that time; and 
  (c) where a person is assessed a penalty that is referred to in subsection (4), the person’s gross compensation at any time in respect of the false statement that could be used by or on behalf of the other person shall exclude the total of all amounts each of which is the amount of a penalty (other than a penalty the assessment of which is void because of subsection (13)) determined under subsection (5) to the extent that the false statement was used by or on behalf of that other person and for which notice of the assessment was sent to the person before that time. 
  
  ### Assessment void
  
  (13) For the purposes of this Act, if an assessment of a penalty that is referred to in subsection (2) or (4) is vacated, the assessment is deemed to be void. 
  
  ### Maximum penalty
  
  (14) A person who is liable at any time to a penalty under both subsections (2) and (4) in respect of the same false statement is liable to pay a penalty that is not more than the greater of 
  (a) the total amount of the penalties to which the person is liable at that time under subsection (2) in respect of the statement, and 
  (b) the total amount of the penalties to which the person is liable at that time under subsection (4) in respect of the statement. 
  
  ### Employees
  
  (15) Where an employee (other than a specified employee or an employee engaged in an excluded activity) is employed by the other person referred to in subsections (2) and (4), 
  (a) subsections (2) to (5) do not apply to the employee to the extent that the false statement could be used by or on behalf of the other person for a purpose of this Act; and 
  (b) the conduct of the employee is deemed to be that of the other person for the purposes of applying subsection 163(2) to the other person. 
  
  ### Definitions
  
  163.3 (1) The following definitions apply in this section.  
  *electronic cash register* means a device that keeps a register or supporting documents through the means of an electronic device or computer system designed to record transaction data or any other electronic point-of-sale system. (caisse enregistreuse électronique)   
  *electronic suppression of sales device* means  
  (a) a software program that falsifies the records of electronic cash registers, including transaction data and transaction reports; or 
  (b) a hidden programming option, whether preinstalled or installed at a later time, embedded in the operating system of an electronic cash register or hardwired into the electronic cash register that 
  (i) may be used to create a virtual second till, or 
  (ii) may eliminate or manipulate transaction records, which may or may not be preserved in digital formats, in order to represent the actual or manipulated record of transactions in the electronic cash register. ( appareil de suppression électronique des ventes)   
  *service* has the same meaning as in subsection 123(1) of the Excise Tax Act. (service)  
  
  ### Penalty  —  use
  
  (2) Every person that uses, or that knowingly, or under circumstances attributable to neglect, carelessness or wilful default, participates in, assents to or acquiesces in the use of, an electronic suppression of sales device or a similar device or software in relation to records that are required to be kept by any person under section 230 is liable to a penalty of 
  (a) unless paragraph (b) applies, $5,000; or 
  (b) $50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this section or section 285.01 of the Excise Tax Act.  
  
  ### Penalty  — possession
  
  (3) Every person that acquires or possesses an electronic suppression of sales device or a right in respect of an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230 is liable to a penalty of 
  (a) unless paragraph (b) applies, $5,000; or 
  (b) $50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this section or section 285.01 of the Excise Tax Act.  
  
  ### Penalty  — manufacturing or making available
  
  (4) Every person that designs, develops, manufactures, possesses for sale, offers for sale, sells, transfers or otherwise makes available to another person, or that supplies installation, upgrade or maintenance services for, an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230 is liable to a penalty of 
  (a) unless paragraph (b) or (c) applies, $10,000; 
  (b) unless paragraph (c) applies, $50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under subsection (2) or (3) or subsection 285.01(2) or (3) of the Excise Tax Act ; or  
  (c) $100,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this subsection or subsection 285.01(4) of the Excise Tax Act.  
  
  ### Assessment
  
  (5) The Minister may at any time assess a taxpayer in respect of any penalty payable by a person under subsections (2) to (4), and the provisions of this Division apply, with any modifications that the circumstances require, in respect of an assessment made under subsections (2) to (4) as though it had been made under section 152. 
  
  ### Limitation
  
  (6) Despite section 152, if at any time the Minister assesses a penalty payable by a person under subsections (2) to (4), the Minister is not to assess, at or after that time, another penalty payable by the person under subsections (2) to (4) that is in respect of an action of the person that occurred before that time. 
  
  ### Certain defences not available
  
  (7) Except as otherwise provided in subsection (8), a person does not have a defence in relation to a penalty assessed under subsections (2) to (4) by reason that the person exercised due diligence to prevent the action from occurring. 
  
  ### Due diligence
  
  (8) A person is not liable for a penalty under subsection (3) or (4) in respect of an action of the person if the person exercised the degree of care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the action from occurring. 
  
  ### Assessment vacated
  
  (9) For the purposes of subsections (2) to (8), if an assessment of a penalty under subsections (2) to (4) is vacated, the penalty is deemed to have never been assessed. 
  
  ## Refunds 
  
  ### Refunds
  
  164 (1) If the return of a taxpayer’s income for a taxation year has been made within 3 years from the end of the year, the Minister 
  (a) may, 
  (i) before sending the notice of assessment for the year, where the taxpayer is, for any purpose of the definition 
  *refundable investment tax credit* (as defined in subsection 127.1(2)), a qualifying corporation (as defined in that subsection) and claims in its return of income for the year to have paid an amount on account of its tax payable under this Part for the year because of subsection 127.1(1) in respect of its refundable investment tax credit (as defined in subsection 127.1(2)), refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the amount by which the total determined under paragraph (f) of the definition 
  *refundable investment tax credit* in subsection 127.1(2) in respect of the taxpayer for the year exceeds the total determined under paragraph (g) of that definition in respect of the taxpayer for the year,  
  (ii) before sending the notice of assessment for the year, where the taxpayer is a qualified corporation (as defined in subsection 125.4(1)), an eligible production corporation (as defined in subsection 125.5(1)) or a qualifying journalism organization (as defined in subsection 125.6(1)) and an amount is deemed under subsection 125.4(3), 125.5(3) or 125.6(2) or (2.1) to have been paid on account of its tax payable under this Part for the year, refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the total of those amounts so deemed to have been paid, and  
  (iii) on or after sending the notice of assessment for the year, refund any overpayment for the year, to the extent that the overpayment was not refunded pursuant to subparagraph (i) or (ii); and 
  (b) shall, with all due dispatch, make the refund referred to in subparagraph (a)(iii) after sending the notice of assessment if application for it is made in writing by the taxpayer within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the taxpayer for the year if that subsection were read without reference to paragraph 152(4)(a). 
  
  ### Repayment on objections and appeals
  
  (1.1) Subject to subsection 164(1.2), where a taxpayer 
  (a) has under section 165 served a notice of objection to an assessment and the Minister has not within 120 days after the day of service confirmed or varied the assessment or made a reassessment in respect thereof, or 
  (b) has appealed from an assessment to the Tax Court of Canada, and has applied in writing to the Minister for a payment or surrender of security, the Minister shall, where no authorization has been granted under subsection 225.2(2) in respect of the amount assessed, with all due dispatch repay all amounts paid on account of that amount or surrender security accepted therefor to the extent that 
  (c) the lesser of 
  (i) the total of the amounts so paid and the value of the security, and 
  (ii) the amount so assessed exceeds 
  (d) the total of 
  (i) the amount, if any, so assessed that is not in controversy, and 
  (ii) 1/2 of the amount so assessed that is in controversy if 
  (A) the taxpayer is a large corporation (within the meaning assigned by subsection 225.1(8)), or 
  (B) the amount is in respect of a particular amount claimed under section 110.1 or 118.1 and the particular amount was claimed in respect of a tax shelter. 
  
  ### Collection in jeopardy
  
  (1.2) Notwithstanding subsection 164(1.1), where, on application by the Minister made within 45 days after the receipt by the Minister of a written request by a taxpayer for repayment of an amount or surrender of a security, a judge is satisfied that there are reasonable grounds to believe that the collection of all or any part of an amount assessed in respect of the taxpayer would be jeopardized by the repayment of the amount or the surrender of the security to the taxpayer under that subsection, the judge shall order that the repayment of the amount or a part thereof not be made or that the security or part thereof not be surrendered or make such other order as the judge considers reasonable in the circumstances. 
  
  ### Notice of application
  
  (1.3) The Minister shall give 6 clear days notice of an application under subsection 164(1.2) to the taxpayer in respect of whom the application is made. 
  
  ### Application of ss. 225.2(4), (10), (12) and (13)
  
  (1.31) Where an application under subsection 164(1.2) is made by the Minister, subsections 225.2(4), 225.2(10), 225.2(12) and 225.2(13) are applicable in respect of the application with such modifications as the circumstances require. 
  
  ### Provincial refund
  
  (1.4) Where, at any time, a taxpayer is entitled to a refund or repayment on account of taxes imposed by a province or as a result of a deduction in computing the taxes imposed by a province and the Government of Canada has agreed to make the refund or repayment on behalf of the province, the amount thereof shall be a liability of the Minister of National Revenue to the taxpayer. 
  
  ### Exception
  
  (1.5) Notwithstanding subsection (1), the Minister may, on or after sending a notice of assessment for a taxation year, refund all or any portion of any overpayment of a taxpayer for the year 
  (a) if the taxpayer is an individual (other than a trust) or a graduated rate estate for the year and the taxpayer’s return of income under this Part for the year was filed on or before the day that is 10 calendar years after the end of the year; 
  (b) where an assessment or a redetermination was made under subsection 152(4.2) or 220(3.1) or 220(3.4) in respect of the taxpayer; or 
  (c) to the extent that the overpayment relates to an assessment of another taxpayer under subsection 227(10) or (10.1) (in this paragraph referred to as the “other assessment”), if the taxpayer’s return of income under this Part for the taxation year is filed on or before the day that is two years after the date of the other assessment and if the other assessment relates to 
  (i) in the case of an amount assessed under subsection 227(10), a payment to the taxpayer of a fee, commission or other amount in respect of services rendered in Canada by a non-resident person or partnership, and 
  (ii) in the case of an amount assessed under subsection 227(10.1), an amount payable under subsection 116(5) or (5.3) in respect of a disposition of property by the taxpayer. 
  
  ### When subsection (1.52) applies
  
  (1.51) Subsection (1.52) applies to a taxpayer for a taxation year if, at any time after the beginning of the year 
  (a) the taxpayer has, in respect of the tax payable by the taxpayer under this Part (and, if the taxpayer is a corporation, Parts I.3, VI, VI.1 and XIII.1) for the year, paid under any of sections 155 to 157 one or more instalments of tax; 
  (b) it is reasonable to conclude that the total amount of those instalments exceeds the total amount of taxes that will be payable by the taxpayer under those Parts for the year; and 
  (c) the Minister is satisfied that the payment of the instalments has caused or will cause undue hardship to the taxpayer. 
  
  ### Instalment refund
  
  (1.52) If this subsection applies to a taxpayer for a taxation year, the Minister may refund to the taxpayer all or any part of the excess referred to in paragraph (1.51)(b). 
  
  ### Penalties, interest not affected
  
  (1.53) For the purpose of the calculation of any penalty or interest under this Act, an instalment is deemed not to have been paid to the extent that all or any part of the instalment can reasonably be considered to have been refunded under subsection (1.52). 
  
  ### COVID-19 refunds
  
  (1.6) Notwithstanding subsection (2.01), at any time after the beginning of a taxation year of a taxpayer in which an overpayment is deemed to have arisen under any of subsections 125.7(2) to (2.2), the Minister may refund to the taxpayer all or any part of the overpayment. 
  
  ### COVID-19 refunds — partnerships
  
  (1.61) For the purposes of subsection (1.6), references to a taxpayer include a partnership and the reference to a taxation year includes a fiscal period. 
  
  ### Limitation of repayment on objections and appeals
  
  (1.7) Subsection 164(1.1) does not apply in respect of an amount paid or security furnished under section 116 by a non-resident person. 
  
  ### Request to pay refund to province
  
  (1.8) An individual (other than a trust) may, in the individual’s return of income for a taxation year, request the Minister to pay to Her Majesty in right of a prescribed province all or any part of a refund for the year claimed by the individual in the return and, where the individual makes such a request, 
  (a) the Minister may make the payment to Her Majesty in right of the province in accordance with the request; and 
  (b) the amount of the payment is deemed to have been refunded under this section to the individual at the time a notice of an original assessment of tax payable under this Part by the individual for the year, or a notification that no tax is payable under this Part by the individual for the year, is sent to the individual. 
  
  ### Application to other debts
  
  (2) Instead of making a refund or repayment that might otherwise be made under this section, the Minister may, where the taxpayer is, or is about to become, liable to make any payment to Her Majesty in right of Canada or in right of a province, apply the amount of the refund or repayment to that other liability and notify the taxpayer of that action. 
  
  ### Withholding of refunds
  
  (2.01) The Minister shall not, in respect of a taxpayer, refund, repay, apply to other debts or set-off amounts under this Act at any time unless all returns of which the Minister has knowledge and that are required to be filed by the taxpayer at or before that time under this Act, the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001, the Underused Housing Tax Act and the Select Luxury Items Tax Act have been filed with the Minister.  
  
  ### Application respecting refunds under s. 122.5
  
  (2.1) Where an amount deemed under section 122.5 to be paid by an individual during a month specified for a taxation year is applied under subsection 164(2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to Her Majesty in right of Canada. 
  
  ### Application respecting refunds re section 122.61
  
  (2.2) Subsection 164(2) does not apply to a refund to be made to a taxpayer and arising because of section 122.61 except to the extent that the taxpayer’s liability referred to in that subsection arose from the operation of paragraph 160.1(1)(a) with respect to an amount refunded to the taxpayer in excess of the amount to which the taxpayer was entitled because of section 122.61. 
  
  ### Application respecting refunds — Climate Action Incentive
  
  (2.21) Where an amount deemed under section 122.8 to be paid by an individual during a month specified for a taxation year is applied under subsection (2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to Her Majesty in right of Canada. 
  
  ### Application respecting refunds under section 122.72
  
  (2.22) Where an amount deemed under section 122.72 to be paid by an individual during a month specified for a taxation year is applied under subsection (2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to His Majesty in right of Canada. 
  
  ### Form deemed to be return of income
  
  (2.3) For the purpose of subsection (1), where a taxpayer files the form referred to in paragraph (b) of the definition 
  *return of income* in section 122.6 for a taxation year, the form is deemed to be a return of the taxpayer’s income for that year and a notice of assessment in respect of that return is deemed to have been sent by the Minister.  
  
  ### Interest on refunds and repayments
  
  (3) If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.5, 122.61, 122.72, 122.8 or 125.7) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied: 
  (a) if the taxpayer is an individual, the day that is 30 days after the individual’s balance-due day for the year; 
  (b) if the taxpayer is a corporation, the day that is 120 days after the end of the year; 
  (c) if the taxpayer is 
  (i) a corporation, the day that is 30 days after the day on which its return of income for the year was filed under section 150, unless the return was filed on or before the corporation’s filing-due date for the year, and 
  (ii) an individual, the day that is 30 days after the day on which the individual’s return of income for the year was filed under section 150; 
  (d) in the case of a refund of an overpayment, the day on which the overpayment arose; and 
  (e) in the case of a repayment of an amount in controversy, the day on which an overpayment equal to the amount of the repayment would have arisen if the total of all amounts payable on account of the taxpayer’s liability under this Part for the year were the amount by which 
  (i) the lesser of the total of all amounts paid on account of the taxpayer’s liability under this Part for the year and the total of all amounts assessed by the Minister as payable under this Part by the taxpayer for the year exceeds 
  (ii) the amount repaid. 
  
  ### Idem
  
  (3.1) Where at a particular time interest has been paid to, or applied to a liability of, a taxpayer under subsection 164(3) or 164(3.2) in respect of an overpayment and it is determined at a subsequent time that the actual overpayment was less than the overpayment in respect of which interest was paid or applied, 
  (a) the amount by which the interest that has been paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the actual overpayment shall be deemed to be an amount (in this subsection referred to as “the amount payable”) that became payable under this Part by the taxpayer at the particular time; 
  (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the amount payable computed from that particular time to the day of payment; and 
  (c) the Minister may at any time assess the taxpayer in respect of the amount payable and, where the Minister makes such an assessment, the provisions of this Division are applicable, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  
  ### Interest where amounts cancelled
  
  (3.2) Notwithstanding subsection (3), if an overpayment of a taxpayer for a taxation year is determined because of an assessment made under subsection 152(4.2) or 220(3.1) or (3.4) and an amount in respect of the overpayment is refunded to, or applied to another liability of, the taxpayer under subsection (1.5) or (2), the Minister shall pay or apply interest on the overpayment at the prescribed rate for the period beginning on the day that is 30 days after the day on which the Minister received a request in a manner satisfactory to the Minister to apply those subsections and ending on the day on which the amount is refunded or applied. 
  
  ### Interest on interest repaid
  
  (4) Where at any particular time interest has been paid to, or applied to a liability of, a taxpayer pursuant to subsection 164(3) in respect of the repayment of an amount in controversy made to, or applied to a liability of, the taxpayer and it is determined at a subsequent time that the repayment or a part thereof is payable by the taxpayer under this Part, the following rules apply: 
  (a) the interest so paid or applied on that part of the repayment that is determined at the subsequent time to be payable by the taxpayer under this Part shall be deemed to be an amount (in this subsection referred to as the “interest excess”) that became payable under this Part by the taxpayer at the particular time; 
  (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the interest excess computed from the particular time to the day of payment; and 
  (c) the Minister may at any time assess the taxpayer in respect of the interest excess and, where the Minister makes such an assessment, the provisions of this Division and Division J are applicable, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. 
  
  ### Duty of Minister
  
  (4.1) Where the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada has, on the disposition of an appeal in respect of taxes, interest or a penalty payable under this Act by a taxpayer resident in Canada, 
  (a) referred an assessment back to the Minister for reconsideration and reassessment, or 
  (b) varied or vacated an assessment, the Minister shall with all due dispatch, whether or not an appeal from the decision of the Court has been or may be instituted, 
  (c) where the assessment has been referred back to the Minister, reconsider the assessment and make a reassessment in accordance with the decision of the Court, unless otherwise directed in writing by the taxpayer, and 
  (d) refund any overpayment resulting from the variation, vacation or reassessment, and the Minister may repay any tax, interest or penalties or surrender any security accepted therefor by the Minister to that taxpayer or any other taxpayer who has filed another objection or instituted another appeal if, having regard to the reasons given on the disposition of the appeal, the Minister is satisfied that it would be just and equitable to do so, but for greater certainty, the Minister may, in accordance with the provisions of this Act, the Tax Court of Canada Act, the Federal Courts Act or the Supreme Court Act as they relate to appeals from decisions of the Tax Court of Canada or the Federal Court of Appeal, appeal from the decision of the Court notwithstanding any variation or vacation of any assessment by the Court or any reassessment made by the Minister under paragraph 164(4.1)(c).  
  
  ### Effect of carryback of loss, etc.
  
  (5) For the purpose of subsection 164(3), the portion of any overpayment of the tax payable by a taxpayer for a taxation year that arose as a consequence of 
  (a) the deduction of an amount, in respect of a repayment under subsection 68.4(7) of the Excise Tax Act made in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii),  
  (a.1) any amount deducted under section 119 in respect of the disposition of a taxable Canadian property in a subsequent taxation year, 
  (b) the deduction of an amount under section 41 in respect of the taxpayer’s listed-personal-property loss for a subsequent taxation year, 
  (c) the exclusion of an amount from the taxpayer’s income for the year by virtue of section 49 in respect of the exercise of an option in a subsequent taxation year, 
  (d) the deduction of an amount under section 118.1 in respect of a gift made in a subsequent taxation year or under section 111 in respect of a loss for a subsequent taxation year, 
  (e) the deduction of an amount under subsection 126(2) in respect of an unused foreign tax credit (within the meaning assigned by subsection 126(7)), or under subsection 126(2.21) or (2.22) in respect of foreign taxes paid, for a subsequent taxation year, 
  (f) the deduction of an amount under subsection 127(5) in respect of property acquired or an expenditure made in a subsequent taxation year, 
  (g)  [Repealed, 2013, c. 34, s. 321]  
  (h) the deduction of an amount under section 125.3 in respect of an unused Part I.3 tax credit (within the meaning assigned by subsection 125.3(3)) for a subsequent taxation year, 
  (h.01) the deduction of an amount under subsection 147.2(4) in computing the taxpayer’s income for the year because of the application of subsection 147.2(6) as a result of the taxpayer’s death in the following taxation year, 
  (h.02) the deduction under any of subsections 128.1(6) to (8) of an amount from the taxpayer’s proceeds of disposition of a property, because of an election made in a return of income for a subsequent taxation year, 
  (h.1) the deduction of an amount in computing the taxpayer’s income for the year by virtue of an election for a subsequent taxation year under paragraph 164(6)(c) or 164(6)(d) by the taxpayer’s legal representative, 
  (h.2) the deduction of an amount under subsection 181.1(4) in respect of an unused surtax credit (within the meaning assigned by subsection 181.1(6)) of the taxpayer for a subsequent taxation year, 
  (h.3) the deduction of an amount under subsection 190.1(3) in respect of an unused Part I tax credit (within the meaning assigned by subsection 190.1(5)) of the taxpayer for a subsequent taxation year, or 
  (h.4) the reduction of the amount included under subsection 91(1) for the year because of a reduction referred to in paragraph 152(6.1)(b) in the foreign accrual property income of a foreign affiliate of the taxpayer for a taxation year of the affiliate that ends in the year, is deemed to have arisen on the day that is 30 days after the latest of 
  (i) the first day immediately following that subsequent taxation year, 
  (j) the day on which the taxpayer’s or the taxpayer’s legal representative’s return of income for that subsequent taxation year was filed, 
  (k) if an amended return of a taxpayer’s income for the year or a prescribed form amending the taxpayer’s return of income for the year was filed under paragraph (6)(e) or subsection 49(4) or 152(6) or (6.1), the day on which the amended return or prescribed form was filed, and 
  (l) where, as a consequence of a request in writing, the Minister reassessed the taxpayer’s tax for the year to take into account the deduction or exclusion, the day on which the request was made. 
  
  ### Interest - disputed amounts
  
  (5.1) Where a portion of a repayment made under subsection (1.1) or (4.1), or an amount applied under subsection (2) in respect of a repayment, can reasonably be regarded as being in respect of a claim made by the taxpayer in an objection to or appeal from an assessment of tax for a taxation year for a deduction or exclusion described in subsection (5) in respect of a subsequent taxation year, interest shall not be paid or applied on the portion for any part of a period that is before the latest of the dates described in paragraphs (5)(i) to (l). 
  
  ### Disposition by legal representative of deceased
  
  (6) If in the course of administering the graduated rate estate of a taxpayer, the taxpayer’s legal representative has, within the first taxation year of the estate, 
  (a) disposed of capital property of the estate so that the total of all amounts each of which is a capital loss from the disposition of a property exceeds the total of all amounts each of which is a capital gain from the disposition of a property, or 
  (b) disposed of all of the depreciable property of a prescribed class of the estate so that the undepreciated capital cost to the estate of property of that class at the end of the first taxation year of the estate is, by virtue of subsection 20(16) or any regulation made under paragraph 20(1)(a), deductible in computing the income of the estate for that year, notwithstanding any other provision of this Act, the following rules apply: 
  (c) such parts of one or more capital losses of the estate from the disposition of properties in the year (the total of which is not to exceed the excess referred to in paragraph 164(6)(a)) as the legal representative so elects, in prescribed manner and within a prescribed time, are deemed (except for the purpose of subsection 112(3) and this paragraph) to be capital losses of the deceased taxpayer from the disposition of the properties by the taxpayer in the taxpayer’s last taxation year and not to be capital losses of the estate from the disposition of those properties, 
  (d) such part of the amount of any deduction described in paragraph 164(6)(b) (not exceeding the amount that, but for this subsection, would be the total of the non-capital loss and the farm loss of the estate for its first taxation year) as the legal representative so elects, in prescribed manner and within a prescribed time, shall be deductible in computing the income of the taxpayer for the taxpayer’s taxation year in which the taxpayer died and shall not be an amount deductible in computing any loss of the estate for its first taxation year, 
  (e) the legal representative shall, at or before the time prescribed for filing the election referred to in paragraphs 164(6)(c) and 164(6)(d), file an amended return of income for the deceased taxpayer for the taxpayer’s taxation year in which the taxpayer died to give effect to the rules in those paragraphs, and 
  (f) in computing the taxable income of the deceased taxpayer for a taxation year preceding the year in which the taxpayer died, no amount may be deducted in respect of an amount referred to in paragraph 164(6)(c) or 164(6)(d). 
  
  ### Realization of deceased employees’ options
  
  (6.1) Notwithstanding any other provision of this Act, if a right to acquire securities (as defined in subsection 7(7)) under an agreement in respect of which a benefit was deemed by paragraph 7(1)(e) to have been received by a taxpayer (in this subsection referred to as “the right”) is exercised or disposed of by the taxpayer’s legal representative within the first taxation year of the graduated rate estate of the taxpayer and the representative so elects in prescribed manner and on or before a prescribed day, 
  (a) the amount, if any, by which 
  (i) the amount of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in respect of the right exceeds the total of 
  (ii) the amount, if any, by which the value of the right immediately before the time it was exercised or disposed of exceeds the amount, if any, paid by the taxpayer to acquire the right, and 
  (iii) where in computing the taxpayer’s taxable income for the taxation year in which the taxpayer died an amount was deducted under paragraph 110(1)(d) in respect of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in that year by reason of paragraph 7(1)(e) in respect of that right, 1/2 of the amount, if any, by which the amount determined under subparagraph 164(6.1)(a)(i) exceeds the amount determined under subparagraph 164(6.1)(a)(ii), shall be deemed to be a loss of the taxpayer from employment for the year in which the taxpayer died; 
  (b) there shall be deducted in computing the adjusted cost base to the estate of the right at any time the amount of the loss that would be determined under paragraph 164(6.1)(a) if that paragraph were read without reference to subparagraph 164(6.1)(a)(iii); and 
  (c) the legal representative shall, at or before the time prescribed for filing the election under this subsection, file an amended return of income for the taxpayer for the taxation year in which the taxpayer died to give effect to paragraph 164(6.1)(a). 
  
  ### Definition of 
  *overpayment* 
  
  (7) In this section, 
  *overpayment* of a taxpayer for a taxation year means  
  (a) where the taxpayer is not a corporation, the total of all amounts paid on account of the taxpayer’s liability under this Part for the year minus all amounts payable in respect thereof; and 
  (b) where the taxpayer is a corporation, the total of all amounts paid on account of the corporation’s liability under this Part or Parts I.3, VI or VI.1 for the year minus all amounts payable in respect thereof. 
  164.1  [Repealed, 1994, c. 7, Sch. VII, s. 19]  
  
  ## Objections to Assessments 
  
  ### Objections to assessment
  
  165 (1) A taxpayer who objects to an assessment under this Part may serve on the Minister a notice of objection, in writing, setting out the reasons for the objection and all relevant facts, 
  (a) if the assessment is in respect of the taxpayer for a taxation year and the taxpayer is an individual (other than a trust) or a graduated rate estate for the year, on or before the later of 
  (i) the day that is one year after the taxpayer’s filing-due date for the year, and 
  (ii) the day that is 90 days after the day of sending of the notice of assessment; and 
  (b) in any other case, on or before the day that is 90 days after the day of sending of the notice of assessment. 
  
  ### Limitation of right to object to assessments or determinations
  
  (1.1) Notwithstanding subsection 165(1), where at any time the Minister assesses tax, interest, penalties or other amounts payable under this Part by, or makes a determination in respect of, a taxpayer 
  (a) under subsection 67.5(2) or 152(1.8), subparagraph 152(4)(b)(i) or subsection 152(4.3) or (6), 161.1(7), 164(4.1), 220(3.4) or 245(8) or in accordance with an order of a court vacating, varying or restoring an assessment or referring the assessment back to the Minister for reconsideration and reassessment, 
  (b) under subsection 165(3) where the underlying objection relates to an assessment or a determination made under any of the provisions or circumstances referred to in paragraph 165(1.1)(a), or 
  (c) under a provision of an Act of Parliament requiring an assessment to be made that, but for that provision, would not be made because of subsections 152(4) to 152(5), the taxpayer may object to the assessment or determination within 90 days after the day of sending of the notice of assessment or determination, but only to the extent that the reasons for the objection can reasonably be regarded 
  (d) where the assessment or determination was made under subsection 152(1.8), as relating to any matter or conclusion specified in paragraph 152(1.8)(a), 152(1.8)(b) or 152(1.8)(c), and 
  (e) in any other case, as relating to any matter that gave rise to the assessment or determination and that was not conclusively determined by the court, and this subsection shall not be read or construed as limiting the right of the taxpayer to object to an assessment or a determination issued or made before that time. 
  
  ### Objections by large corporations
  
  (1.11) Where a corporation that was a large corporation in a taxation year (within the meaning assigned by subsection 225.1(8)) objects to an assessment under this Part for the year, the notice of objection shall 
  (a) reasonably describe each issue to be decided; 
  (b) specify in respect of each issue, the relief sought, expressed as the amount of a change in a balance (within the meaning assigned by subsection 152(4.4)) or a balance of undeducted outlays, expenses or other amounts of the corporation; and 
  (c) provide facts and reasons relied on by the corporation in respect of each issue. 
  
  ### Late compliance
  
  (1.12) Notwithstanding subsection 165(1.11), where a notice of objection served by a corporation to which that subsection applies does not include the information required by paragraph 165(1.11)(b) or 165(1.11)(c) in respect of an issue to be decided that is described in the notice, the Minister may in writing request the corporation to provide the information, and those paragraphs shall be deemed to be complied with in respect of the issue if, within 60 days after the request is made, the corporation submits the information in writing to a Chief of Appeals referred to in subsection 165(2). 
  
  ### Limitation on objections by large corporations
  
  (1.13) Notwithstanding subsections 165(1) and 165(1.1), where under subsection 165(3) a particular assessment was made for a taxation year pursuant to a notice of objection served by a corporation that was a large corporation in the year (within the meaning assigned by subsection 225.1(8)), except where the objection was made to an earlier assessment made under any of the provisions or circumstances referred to in paragraph 165(1.1)(a), the corporation may object to the particular assessment in respect of an issue 
  (a) only if the corporation complied with subsection 165(1.11) in the notice with respect to that issue; and 
  (b) only with respect to the relief sought in respect of that issue as specified by the corporation in the notice. 
  
  ### Application of subsection (1.13)
  
  (1.14) Where a particular assessment is made under subsection 165(3) pursuant to an objection made by a taxpayer to an earlier assessment, subsection 165(1.13) does not limit the right of the taxpayer to object to the particular assessment in respect of an issue that was part of the particular assessment and not part of the earlier assessment. 
  
  ### Partnership
  
  (1.15) Notwithstanding subsection 165(1), where the Minister makes a determination under subsection 152(1.4) in respect of a fiscal period of a partnership, an objection in respect of the determination may be made only by one member of the partnership, and that member must be either 
  (a) designated for that purpose in the information return made under section 229 of the Income Tax Regulations for the fiscal period; or  
  (b) otherwise expressly authorized by the partnership to so act. 
  
  ### Limitation on objections
  
  (1.2) Notwithstanding subsections (1) and (1.1), no objection may be made by a taxpayer to an assessment made under subsection 118.1(11), 152(4.2), 169(3) or 220(3.1) nor, for greater certainty, in respect of an issue for which the right of objection has been waived in writing by the taxpayer. 
  
  ### Service
  
  (2) A notice of objection under this section shall be served by being addressed to the Chief of Appeals in a District Office or a Taxation Centre of the Canada Revenue Agency and delivered or mailed to that Office or Centre. 
  
  ### Application
  
  (2.1) Notwithstanding any other provision of this Act, paragraph (1)(a) shall apply only in respect of assessments, determinations and redeterminations under this Part and Part I.2. 
  
  ### Duties of Minister
  
  (3) On receipt of a notice of objection under this section, the Minister shall, with all due dispatch, reconsider the assessment and vacate, confirm or vary the assessment or reassess, and shall thereupon notify the taxpayer in writing of the Minister’s action. 
  (3.1) and (3.2)  [Repealed, 1998, c. 19, s. 192(4)]  
  (4)  [Repealed, 1994, c. 7, Sch. VIII, s. 98(3)]  
  
  ### Validity of reassessment
  
  (5) The limitations imposed under subsections 152(4) and 152(4.01) do not apply to a reassessment made under subsection 165(3). 
  
  ### Validity of notice of objection
  
  (6) The Minister may accept a notice of objection served under this section that was not served in the manner required by subsection 165(2). 
  
  ### Notice of objection not required
  
  (7) Where a taxpayer has served in accordance with this section a notice of objection to an assessment and thereafter the Minister reassesses the tax, interest, penalties or other amount in respect of which the notice of objection was served or makes an additional assessment in respect thereof and sends to the taxpayer a notice of the reassessment or of the additional assessment, as the case may be, the taxpayer may, without serving a notice of objection to the reassessment or additional assessment, 
  (a) appeal therefrom to the Tax Court of Canada in accordance with section 169; or 
  (b) amend any appeal to the Tax Court of Canada that has been instituted with respect to the assessment by joining thereto an appeal in respect of the reassessment or the additional assessment in such manner and on such terms, if any, as the Tax Court of Canada directs. 
  
  ## General 
  
  ### Irregularities
  
  166 An assessment shall not be vacated or varied on appeal by reason only of any irregularity, informality, omission or error on the part of any person in the observation of any directory provision of this Act. 
  
  ### Extension of time by Minister
  
  166.1 (1) Where no notice of objection to an assessment has been served under section 165, nor any request under subsection 245(6) made, within the time limited by those provisions for doing so, the taxpayer may apply to the Minister to extend the time for serving the notice of objection or making the request. 
  
  ### Contents of application
  
  (2) An application made under subsection 166.1(1) shall set out the reasons why the notice of objection or the request was not served or made, as the case may be, within the time otherwise limited by this Act for doing so. 
  
  ### How application made
  
  (3) An application under subsection 166.1(1) shall be made by being addressed to the Chief of Appeals in a District Office or a Taxation Centre of the Canada Revenue Agency and delivered or mailed to that Office or Centre, accompanied by a copy of the notice of objection or a copy of the request, as the case may be. 
  
  ### Idem
  
  (4) The Minister may accept an application under this section that was not made in the manner required by subsection 166.1(3). 
  
  ### Duties of Minister
  
  (5) On receipt of an application made under subsection 166.1(1), the Minister shall, with all due dispatch, consider the application and grant or refuse it, and shall thereupon notify the taxpayer in writing of the Minister’s decision. 
  
  ### Date of objection or request if application granted
  
  (6) If an application made under subsection (1) is granted, the notice of objection or the request, as the case may be, is deemed to have been served or made on the day on which the decision of the Minister is sent to the taxpayer. 
  
  ### When order to be made
  
  (7) No application shall be granted under this section unless 
  (a) the application is made within one year after the expiration of the time otherwise limited by this Act for serving a notice of objection or making a request, as the case may be; and 
  (b) the taxpayer demonstrates that 
  (i) within the time otherwise limited by this Act for serving such a notice or making such a request, as the case may be, the taxpayer 
  (A) was unable to act or to instruct another to act in the taxpayer’s name, or 
  (B) had a bona fide intention to object to the assessment or make the request,  
  (ii) given the reasons set out in the application and the circumstances of the case, it would be just and equitable to grant the application, and 
  (iii) the application was made as soon as circumstances permitted. 
  
  ### Extension of time by Tax Court
  
  166.2 (1) A taxpayer who has made an application under subsection 166.1 may apply to the Tax Court of Canada to have the application granted after either 
  (a) the Minister has refused the application, or 
  (b) 90 days have elapsed after service of the application under subsection 166.1(1) and the Minister has not notified the taxpayer of the Minister’s decision, but no application under this section may be made after the expiration of 90 days after the day on which notification of the decision was mailed to the taxpayer. 
  
  ### How application made
  
  (2) An application under subsection (1) shall be made by filing in the Registry of the Tax Court of Canada, in accordance with the provisions of the Tax Court of Canada Act, three copies of the documents referred to in subsection 166.1(3) and three copies of the notification, if any, referred to in subsection 166.1(5).  
  
  ### Copy to Deputy Minister
  
  (3) The Tax Court of Canada shall send a copy of each application made under this section to the office of the Commissioner of Revenue. 
  
  ### Powers of Court
  
  (4) The Tax Court of Canada may grant or dismiss an application made under subsection 166.2(1) and, in granting an application, may impose such terms as it deems just or order that the notice of objection be deemed to have been served on the date of its order. 
  
  ### When application to be granted
  
  (5) No application shall be granted under this section unless 
  (a) the application was made under subsection 166.1(1) within one year after the expiration of the time otherwise limited by this Act for serving a notice of objection or making a request, as the case may be; and 
  (b) the taxpayer demonstrates that 
  (i) within the time otherwise limited by this Act for serving such a notice or making such a request, as the case may be, the taxpayer 
  (A) was unable to act or to instruct another to act in the taxpayer’s name, or 
  (B) had a bona fide intention to object to the assessment or make the request,  
  (ii) given the reasons set out in the application and the circumstances of the case, it would be just and equitable to grant the application, and 
  (iii) the application was made under subsection 166.1(1) as soon as circumstances permitted. 
  
  ### Extension of time to appeal
  
  167 (1) Where an appeal to the Tax Court of Canada has not been instituted by a taxpayer under section 169 within the time limited by that section for doing so, the taxpayer may make an application to the Court for an order extending the time within which the appeal may be instituted and the Court may make an order extending the time for appealing and may impose such terms as it deems just. 
  
  ### Contents of application
  
  (2) An application made under subsection 167(1) shall set out the reasons why the appeal was not instituted within the time limited by section 169 for doing so. 
  
  ### How application made
  
  (3) An application made under subsection (1) shall be made by filing in the Registry of the Tax Court of Canada, in accordance with the provisions of the Tax Court of Canada Act, three copies of the application accompanied by three copies of the notice of appeal.  
  
  ### Copy to Deputy Attorney General
  
  (4) The Tax Court of Canada shall send a copy of each application made under this section to the office of the Deputy Attorney General of Canada. 
  
  ### When order to be made
  
  (5) No order shall be made under this section unless 
  (a) the application is made within one year after the expiration of the time limited by section 169 for appealing; and 
  (b) the taxpayer demonstrates that 
  (i) within the time otherwise limited by section 169 for appealing the taxpayer 
  (A) was unable to act or to instruct another to act in the taxpayer’s name, or 
  (B) had a bona fide intention to appeal,  
  (ii) given the reasons set out in the application and the circumstances of the case, it would be just and equitable to grant the application, 
  (iii) the application was made as soon as circumstances permitted, and 
  (iv) there are reasonable grounds for the appeal. 
  
  ## Revocation of Registration of Certain Organizations and Associations 
  
  ### Notice of intention to revoke registration
  
  168 (1) The Minister may, by registered mail, give notice to a person described in any of paragraphs (a) to (c) of the definition 
  *qualified donee* in subsection 149.1(1) that the Minister proposes to revoke its registration if the person  
  (a) applies to the Minister in writing for revocation of its registration; 
  (b) ceases to comply with the requirements of this Act for its registration; 
  (c) in the case of a registered charity, registered Canadian amateur athletic association or registered journalism organization, fails to file an information return as and when required under this Act or a regulation; 
  (d) issues a receipt for a gift otherwise than in accordance with this Act and the regulations or that contains false information; 
  (e) fails to comply with or contravenes any of sections 230 to 231.5; or 
  (f) in the case of a registered charity, registered Canadian amateur athletic association or registered journalism organization, accepts a gift the granting of which was expressly or implicitly conditional on the charity, association or organization making a gift to another person, club, society, association or organization other than a qualified donee. 
  
  ### Revocation of registration
  
  (2) If the Minister gives notice under subsection (1) to a registered charity, to a registered Canadian amateur athletic association or to a registered journalism organization, 
  (a) if it has applied to the Minister in writing for the revocation of its registration, the Minister shall, forthwith after the mailing of the notice, publish a copy of the notice in the Canada Gazette, and on that publication of a copy of the notice, the registration is revoked; and  
  (b) in any other case, the Minister may, after the expiration of 30 days from the day of mailing of the notice, or after the expiration of such extended period from the day of mailing of the notice as the Federal Court of Appeal or a judge of that Court, on application made at any time before the determination of any appeal pursuant to subsection 172(3) from the giving of the notice, may fix or allow, publish a copy of the notice in the Canada Gazette, and on that publication of a copy of the notice, the registration is revoked.  
  
  ###  Charities Registration (Security Information) Act 
  
  (3) Notwithstanding subsections (1), (2) and (4), if a registered charity is the subject of a certificate that is determined to be reasonable under subsection 7(1) of the Charities Registration (Security Information) Act, the registration of the charity is revoked as of the making of that determination.  
  
  ### Listed terrorist entities
  
  (3.1) Notwithstanding subsections (1), (2) and (4), if a qualified donee is a listed terrorist entity for the purposes of section 149.1, the registration of the qualified donee is revoked as of the date on which it became a listed terrorist entity. 
  
  ### Objection to proposal or designation
  
  (4) A person may, on or before the day that is 90 days after the day on which the notice was mailed, serve on the Minister a written notice of objection in the manner authorized by the Minister, setting out the reasons for the objection and all the relevant facts, and the provisions of subsections 165(1), (1.1) and (3) to (7) and sections 166, 166.1 and 166.2 apply, with any modifications that the circumstances require, as if the notice were a notice of assessment made under section 152, if 
  (a) in the case of a person that is or was registered as a registered charity or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(2) to (4.1), (6.3), (22) and (23); 
  (b) in the case of a person that is or was registered as a registered Canadian amateur athletic association or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(4.2) and (22); or 
  (c) in the case of a person described in any of subparagraphs (a)(i) to (v) and paragraph (b.1) of the definition qualified donee in subsection 149.1(1), that is or was registered by the Minister as a qualified donee or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(4.3) and (22).  
  
  ## Designation of Qualified Canadian Journalism Organizations 
  
  ### Date of designation
  
  168.1 (1) If an organization is designated for the purpose of the definition qualified Canadian journalism organization in subsection 248(1), the organization is deemed to have become designated on the date that the application for designation of the organization was made, unless otherwise specified by the Minister.  
  
  ### Revocation of designation
  
  (2) The Minister may, at any time, revoke the designation of an organization made for the purpose of the definition qualified Canadian journalism organization in subsection 248(1) and, for that purpose, the Minister shall take into account any recommendations of a body established for the purpose of that definition and referred to in paragraph (b) of that definition.  
  
  ### Notice and date of revocation
  
  (3) If the designation of an organization is revoked under subsection (2), 
  (a) the Minister shall provide notice of the revocation to the organization in writing; and 
  (b) the revocation is deemed to be effective as of the date on which the notice in paragraph (a) is sent, unless the Minister specifies an earlier date. 
  
  # DIVISION J 
  
  ## Appeals to the Tax Court of Canada and the Federal Court of Appeal 
  
  ### Appeal
  
  169 (1) Where a taxpayer has served notice of objection to an assessment under section 165, the taxpayer may appeal to the Tax Court of Canada to have the assessment vacated or varied after either 
  (a) the Minister has confirmed the assessment or reassessed, or 
  (b) 90 days have elapsed after service of the notice of objection and the Minister has not notified the taxpayer that the Minister has vacated or confirmed the assessment or reassessed, but no appeal under this section may be instituted after the expiration of 90 days from the day notice has been sent to the taxpayer under section 165 that the Minister has confirmed the assessment or reassessed. 
  
  ### Ecological gifts
  
  (1.1) Where at any particular time a taxpayer has disposed of a property, the fair market value of which has been confirmed or redetermined by the Minister of the Environment under subsection 118.1(10.4), the taxpayer may, within 90 days after the day on which that Minister has issued a certificate under subsection 118.1(10.5), appeal the confirmation or redetermination to the Tax Court of Canada. 
  
  ### Limitation of right to appeal from assessments or determinations
  
  (2) Notwithstanding subsection 169(1), where at any time the Minister assesses tax, interest, penalties or other amounts payable under this Part by, or makes a determination in respect of, a taxpayer 
  (a) under subsection 67.5(2) or 152(1.8), subparagraph 152(4)(b)(i) or subsection 152(4.3) or 152(6), 164(4.1), 220(3.4) or 245(8) or in accordance with an order of a court vacating, varying or restoring the assessment or referring the assessment back to the Minister for reconsideration and reassessment, 
  (b) under subsection 165(3) where the underlying objection relates to an assessment or a determination made under any of the provisions or circumstances referred to in paragraph 169(2)(a), or 
  (c) under a provision of an Act of Parliament requiring an assessment to be made that, but for that provision, would not be made because of subsections 152(4) to 152(5), the taxpayer may appeal to the Tax Court of Canada within the time limit specified in subsection 169(1), but only to the extent that the reasons for the appeal can reasonably be regarded 
  (d) where the assessment or determination was made under subsection 152(1.8), as relating to any matter specified in paragraph 152(1.8)(a), 152(1.8)(b) or 152(1.8)(c), and 
  (e) in any other case, as relating to any matter that gave rise to the assessment or determination and that was not conclusively determined by the Court, and this subsection shall not be read or construed as limiting the right of the taxpayer to appeal from an assessment or a determination issued or made before that time. 
  
  ### Limitation on appeals by large corporations
  
  (2.1) Notwithstanding subsections 169(1) and 169(2), where a corporation that was a large corporation in a taxation year (within the meaning assigned by subsection 225.1(8)) served a notice of objection to an assessment under this Part for the year, the corporation may appeal to the Tax Court of Canada to have the assessment vacated or varied only with respect to 
  (a) an issue in respect of which the corporation has complied with subsection 165(1.11) in the notice, or 
  (b) an issue described in subsection 165(1.14) where the corporation did not, because of subsection 165(7), serve a notice of objection to the assessment that gave rise to the issue and, in the case of an issue described in paragraph 169(2.1)(a), the corporation may so appeal only with respect to the relief sought in respect of the issue as specified by the corporation in the notice. 
  
  ### Waived issues
  
  (2.2) Notwithstanding subsections 169(1) and 169(2), for greater certainty a taxpayer may not appeal to the Tax Court of Canada to have an assessment under this Part vacated or varied in respect of an issue for which the right of objection or appeal has been waived in writing by the taxpayer. 
  
  ### Disposition of appeal on consent
  
  (3) Notwithstanding section 152, for the purpose of disposing of an appeal made under a provision of this Act, the Minister may at any time, with the consent in writing of the taxpayer, reassess tax, interest, penalties or other amounts payable under this Act by the taxpayer. 
  
  ### Provisions applicable
  
  (4) Division I applies, with such modifications as the circumstances require, in respect of a reassessment made under subsection 169(3) as though it had been made under section 152. 
  
  ### Notice to Deputy Minister
  
  170 (1) Where an appeal is made to the Tax Court of Canada under section 18 of the Tax Court of Canada Act, the Court shall forthwith send a copy of the notice of the appeal to the office of the Commissioner of Revenue.  
  (2)  [Repealed, 2013, c. 34, s. 322]  
  
  ### Disposal of Appeal
  
  171 (1) The Tax Court of Canada may dispose of an appeal by 
  (a) dismissing it; or 
  (b) allowing it and 
  (i) vacating the assessment, 
  (ii) varying the assessment, or 
  (iii) referring the assessment back to the Minister for reconsideration and reassessment. 
  
  ### Ecological gifts
  
  (1.1) On an appeal under subsection 169(1.1), the Tax Court of Canada may confirm or vary the amount determined to be the fair market value of a property and the value determined by the Court is deemed to be the fair market value of the property determined by the Minister of the Environment. 
  
  ### Partial disposition of appeal
  
  (2) If an appeal raises more than one issue, the Tax Court of Canada may, with the consent in writing of the parties to the appeal, dispose of a particular issue by 
  (a) dismissing the appeal with respect to the particular issue; or 
  (b) allowing the appeal with respect to the particular issue and 
  (i) varying the assessment, or 
  (ii) referring the assessment back to the Minister for reconsideration and reassessment. 
  
  ### Disposal of remaining issues
  
  (3) If a particular issue has been disposed of under subsection (2), the appeal with respect to the remaining issues may continue. 
  
  ### Appeal to Federal Court of Appeal
  
  (4) If the Tax Court of Canada has disposed of a particular issue under subsection (2), the parties to the appeal may, in accordance with the provisions of the Tax Court of Canada Act or the Federal Courts Act, as they relate to appeals from decisions of the Tax Court of Canada, appeal the disposition to the Federal Court of Appeal as if it were a final judgment of the Tax Court of Canada.  
  
  ### Appeal from refusal to register, revocation of registration, etc.
  
  172 (3) Where the Minister 
  (a) confirms a proposal or decision in respect of which a notice was issued under any of subsections 149.1(4.2) and (22) and 168(1) by the Minister, to a person that is or was registered as a registered Canadian amateur athletic association or is an applicant for registration as a registered Canadian amateur athletic association, or does not confirm or vacate that proposal or decision within 90 days after service of a notice of objection by the person under subsection 168(4) in respect of that proposal or decision, 
  (a.1) confirms a proposal, decision or designation in respect of which a notice was issued by the Minister to a person that is or was registered as a registered charity, or is an applicant for registration as a registered charity, under any of subsections 149.1(2) to (4.1), (6.3), (22) and (23) and 168(1), or does not confirm or vacate that proposal, decision or designation within 90 days after service of a notice of objection by the person under subsection 168(4) in respect of that proposal, decision or designation, 
  (a.2) confirms a proposal or decision in respect of which a notice was issued under any of subsections 149.1(4.3) and (22) and 168(1) by the Minister, to a person that is a person described in any of subparagraphs (a)(i) to (v) and paragraph (b.1) of the definition qualified donee in subsection 149.1(1) that is or was registered by the Minister as a qualified donee or is an applicant for such registration, or does not confirm or vacate that proposal or decision within 90 days after service of a notice of objection by the person under subsection 168(4) in respect of that proposal or decision,  
  (b) refuses to accept for registration for the purposes of this Act any retirement savings plan, 
  (c) refuses to accept for registration for the purposes of this Act any profit sharing plan or revokes the registration of such a plan, 
  (d)  [Repealed, 2011, c. 24, s. 54]  
  (e) refuses to accept for registration for the purposes of this Act an education savings plan, 
  (e.1) sends notice under subsection 146.1(12.1) to a promoter that the Minister proposes to revoke the registration of an education savings plan, 
  (f) refuses to register for the purposes of this Act any pension plan or gives notice under subsection 147.1(11) to the administrator of a registered pension plan that the Minister proposes to revoke its registration, 
  (f.1) refuses to accept an amendment to a registered pension plan, 
  (g) refuses to accept for registration for the purposes of this Act any retirement income fund, 
  (h) refuses to accept for registration for the purposes of this Act any pooled pension plan or gives notice under subsection 147.5(24) to the administrator of a pooled registered pension plan that the Minister proposes to revoke its registration, or 
  (i) refuses to accept an amendment to a pooled registered pension plan, the person described in paragraph (a), (a.1) or (a.2), the applicant in a case described in paragraph (b), (e) or (g), a trustee under the plan or an employer of employees who are beneficiaries under the plan, in a case described in paragraph (c), the promoter in a case described in paragraph (e.1), the administrator of the plan or an employer who participates in the plan, in a case described in paragraph (f) or (f.1), or the administrator of the plan in a case described in paragraph (h) or (i), may appeal from the Minister’s decision, or from the giving of the notice by the Minister, to the Federal Court of Appeal. 
  
  ### Exception — Charities Registration (Security Information) Act
  
  (3.1) Paragraphs (3)(a) and (a.1) do not apply to an applicant or a registered charity that is the subject of a certificate that has been determined to be reasonable under subsection 7(1) of the Charities Registration (Security Information) Act.  
  
  ### Deemed refusal to register
  
  (4) For the purposes of subsection 172(3), the Minister shall be deemed to have refused 
  (a) to register an applicant for registration as a Canadian amateur athletic association, 
  (a.1)  [Repealed, 2005, c. 19, s. 39]  
  (b) to accept for registration for the purposes of this Act any retirement savings plan or profit sharing plan, 
  (c)  [Repealed, 2011, c. 24, s. 54]  
  (d) to accept for registration for the purposes of this Act any education savings plan, or 
  (f) to accept for registration for the purposes of this Act any retirement income fund, where the Minister has not notified the applicant of the disposition of the application within 180 days after the filing of the application with the Minister, and, in any such case, subject to subsection (3.1), an appeal from the refusal to the Federal Court of Appeal pursuant to subsection (3) may, notwithstanding subsection 180(1), be instituted under section 180 at any time by filing a notice of appeal in the Court. 
  
  ### Exception - Charities Registration (Security Information) Act 
  
  (4.1) An appeal referred to in subsection (3) or (4) is suspended when an applicant or a registered charity is, under subsection 5(1) of the Charities Registration (Security Information) Act, served with a copy of a certificate that has been signed under that Act, whether the appeal was instituted before or after the certificate was so signed, and the appeal is  
  (a) discontinued on the determination, under subsection 7(1) of that Act, that the certificate is reasonable; or 
  (b) reinstated as of the date the certificate is, under subsection 7(2) of that Act, quashed. 
  
  ### Idem
  
  (5) For the purposes of subsection 172(3), the Minister shall be deemed to have refused 
  (a) to register for the purposes of this Act any pension plan or pooled pension plan, or 
  (b) to accept an amendment to a registered pension plan or a pooled registered pension plan where the Minister has not notified the applicant of the Minister’s disposition of the application within 1 year after the filing of the application with the Minister, and, in any such case, an appeal from the refusal to the Federal Court of Appeal pursuant to subsection 172(3) may, notwithstanding anything in subsection 180(1), be instituted under section 180 at any time by filing a notice of appeal in the Court. 
  
  ### Application of s. 149.1(1)
  
  (6) The definitions in subsection 149.1(1) apply to this section. 
  
  ### References to Tax Court of Canada
  
  173 (1) Where the Minister and a taxpayer agree in writing that a question of law, fact or mixed law and fact arising under this Act, in respect of any assessment, proposed assessment, determination or proposed determination, should be determined by the Tax Court of Canada, that question shall be determined by that Court. 
  
  ### Time during consideration not to count
  
  (2) The time between the day on which proceedings are instituted in the Tax Court of Canada to have a question determined pursuant to subsection 173(1) and the day on which the question is finally determined shall not be counted in the computation of 
  (a) the periods determined under subsection 152(4), 
  (b) the time for service of a notice of objection to an assessment under section 165, or 
  (c) the time within which an appeal may be instituted under section 169, for the purpose of making an assessment of the tax payable by the taxpayer who agreed in writing to the determination of the question, for the purpose of serving a notice of objection thereto or for the purpose of instituting an appeal therefrom, as the case may be. 
  
  ### Common questions
  
  174 (1) The Minister may apply to the Tax Court of Canada for a determination of a question if the Minister is of the opinion that the question is common to assessments or proposed assessments in respect of two or more taxpayers and is a question of law, fact or mixed law and fact arising out of 
  (a) one and the same transaction or occurrence or series of transactions or occurrences; or 
  (b) substantially similar transactions or occurrences or series of transactions or occurrences. 
  
  ### Application to Court
  
  (2) An application under subsection (1) 
  (a) shall set out 
  (i) the question in respect of which the Minister requests a determination, 
  (ii) the names of the taxpayers that the Minister seeks to have bound by the determination of the question, and 
  (iii) the facts and reasons on which the Minister relies and on which the Minister based or intends to base assessments of tax payable by each of the taxpayers named in the application; and 
  (b) shall be served by the Minister on each of the taxpayers named in the application and on any other persons who, in the opinion of the Tax Court of Canada, are likely to be affected by the determination of the question, 
  (i) by sending a copy to each taxpayer so named and each other person so likely to be affected, or 
  (ii) on ex parte application by the Minister, in accordance with the directions of the Court.  
  
  ### Determination of question by Tax Court
  
  (3) If the Tax Court of Canada is satisfied that a question set out in an application under this section is common to assessments or proposed assessments in respect of two or more taxpayers who have been served with a copy of the application, the Tax Court of Canada may 
  (a) make an order naming the taxpayers in respect of whom the question will be determined; 
  (b) if one or more of the taxpayers so served has or have appealed an assessment to the Tax Court of Canada in respect of which the question is relevant, make an order joining a party or parties to that or those appeals as it considers appropriate; and 
  (c) proceed to determine the question in such manner as it considers appropriate. 
  
  ### Determination final and conclusive
  
  (4) Subject to subsection (4.1), if a question set out in an application under this section is determined by the Tax Court of Canada, the determination is final and conclusive for the purposes of any assessments of tax payable by the taxpayers named in the order made under paragraph (3)(a). 
  
  ### Appeal
  
  (4.1) If a question set out in an application under this section is determined by the Tax Court of Canada, an appeal from the determination may, in accordance with the provisions of the Tax Court of Canada Act or the Federal Courts Act, as they relate to appeals from decisions of the Tax Court of Canada to the Federal Court of Appeal, be made by  
  (a) the Minister; or 
  (b) any taxpayer named in an order of the Court made under paragraph (3)(a) if 
  (i) the question arises out of one and the same transaction or occurrence or series of transactions or occurrences, 
  (ii) the taxpayer has appealed an assessment to the Tax Court of Canada in respect of which the question is relevant, or 
  (iii) the taxpayer has been granted leave by a judge of the Federal Court of Appeal. 
  
  ### Binding to appeal
  
  (4.2) Any taxpayer named in an order made under paragraph (3)(a) in respect of a question is bound by any determination in respect of the question under an appeal made to the Federal Court of Appeal or the Supreme Court of Canada. 
  
  ### Time during consideration of question not counted
  
  (5) The time between the day on which an application under this section is served on a taxpayer pursuant to subsection 174(2) and 
  (a) in the case of a taxpayer named in an order of the Tax Court of Canada pursuant to subsection 174(3), the day on which the determination becomes final and conclusive and not subject to any appeal, or 
  (b) in the case of any other taxpayer, the day on which the taxpayer is served with notice that the taxpayer has not been named in an order of the Tax Court of Canada pursuant to subsection 174(3), shall not be counted in the computation of 
  (c) the periods determined under subsection 152(4), 
  (d) the time for service of a notice of objection to an assessment under section 165, or 
  (e) the time within which an appeal may be instituted under section 169, for the purpose of making an assessment of the tax, interest or penalties payable by the taxpayer, serving a notice of objection thereto or instituting an appeal therefrom, as the case may be. 
  
  ### Institution of appeals
  
  175 An appeal to the Tax Court of Canada under this Act, other than one referred to in section 18 of the Tax Court of Canada Act, shall be instituted in the manner set out in that Act or in any rules made under that Act.  
  176  [Repealed, 2013, c. 34, s. 323]  
  
  ### Hearings in camera 
  
  179 Proceedings in the Federal Court of Appeal under this Division may, on the application of the taxpayer, be held in camera if the taxpayer establishes to the satisfaction of the Court that the circumstances of the case justify in camera proceedings.  
  
  ### No reasonable grounds for appeal
  
  179.1 Where the Tax Court of Canada disposes of an appeal by a taxpayer in respect of an amount payable under this Part or where such an appeal has been discontinued or dismissed without trial, the Court may, on the application of the Minister and whether or not it awards costs, order the taxpayer to pay to the Receiver General an amount not exceeding 10% of any part of the amount that was in controversy in respect of which the Court determines that there were no reasonable grounds for the appeal, if in the opinion of the Court one of the main purposes for instituting or maintaining any part of the appeal was to defer the payment of any amount payable under this Part. 
  
  ### Appeals to Federal Court of Appeal
  
  180 (1) An appeal to the Federal Court of Appeal pursuant to subsection 172(3) may be instituted by filing a notice of appeal in the Court within 30 days from 
  (a) the day on which the Minister notifies a person under subsection 165(3) of the Minister’s action in respect of a notice of objection filed under subsection 168(4), 
  (b)  [Repealed, 2011, c. 24, s. 55]  
  (c) the mailing of notice to the administrator of the registered pension plan under subsection 147.1(11), 
  (c.1) the sending of a notice to a promoter of a registered education savings plan under subsection 146.1(12.1), 
  (c.2) the mailing of notice to the administrator of the pooled registered pension plan under subsection 147.5(24), or 
  (d) the time the decision of the Minister to refuse the application for acceptance of the amendment to the registered pension plan or pooled registered pension plan was mailed, or otherwise communicated in writing, by the Minister to any person, as the case may be, or within such further time as the Court of Appeal or a judge thereof may, either before or after the expiration of those 30 days, fix or allow. 
  
  ### No jurisdiction in a Tax Court of Canada or Federal Court
  
  (2) Neither the Tax Court of Canada nor the Federal Court has jurisdiction to entertain any proceeding in respect of a decision of the Minister from which an appeal may be instituted under this section. 
  
  ### Summary disposition of appeal
  
  (3) An appeal to the Federal Court of Appeal instituted under this section shall be heard and determined in a summary way. 
  
  # PART I.01 
  
  ## Tax in Respect of Stock Option Benefit Deferral 
  
  ### Election — special tax and relief for deferral of stock option benefits
  
  180.01 (1) A taxpayer may make an election in prescribed form to have subsection (2) apply for a taxation year in respect of particular securities if 
  (a) the taxpayer elected to have subsection 7(8) apply, as that subsection applied before 4:00 p.m. Eastern Standard Time, March 4, 2010, in respect of the particular securities; and 
  (b) the taxpayer has, in the year and before 2015, disposed of the particular securities; and 
  (c) the election under this subsection is filed 
  (i) if the taxpayer has disposed of the particular securities before 2010, on or before the taxpayer’s filing-due date for 2010, and 
  (ii) in any other case, on or before the taxpayer’s filing-due date for the year of disposition of the particular securities. 
  
  ### Effect of election
  
  (2) If a taxpayer makes an election under subsection (1) for a taxation year in respect of particular securities, the following rules apply: 
  (a) paragraph 110(1)(d) shall be read without reference to the phrase “1/2 of” in respect of the amount of the benefit deemed by subsection 7(1) to have been received by the taxpayer in the year in respect of the particular securities; 
  (b) the taxpayer is deemed to have realized a capital gain for the year equal to the lesser of 
  (i) the amount that is deductible by the taxpayer under paragraph 110(1)(d), as modified by paragraph (a), and 
  (ii) the taxpayer’s capital loss in respect of the disposition of the particular securities; 
  (c) the taxpayer is liable to pay a tax for the year equal to 
  (i) in the case of a taxpayer resident in the Province of Quebec at the end of the year, 2/3 of the taxpayer’s proceeds of disposition (as defined in section 54, but determined without reference to subsection 73(1)) of the particular securities, and 
  (ii) in any other case, the taxpayer’s proceeds of disposition (as defined in section 54, but determined without reference to subsection 73(1)) of the particular securities; 
  (d) to the extent that the taxation year is outside the normal reassessment period (as defined in subsection 152(3.1)), the election is deemed to be an application for reassessment under subsection 152(4.2); 
  (e) notwithstanding subsection 152(4) and as the circumstances require, the Minister shall re-determine the taxpayer’s 
  *net capital loss* (as defined in subsection 111(8)) for the taxation year and reassess any taxation year in which an amount has been deducted under paragraph 111(1)(b).  
  (f) subparagraph 127.52(1)(h)(ii) is to be read as “the amount deducted under paragraph 110(1)(d)” for the year in respect of the particular securities; and 
  (g) notwithstanding subsection 152(4) and as the circumstances require, the Minister shall re-determine the taxpayer’s additional tax under subsection 120.2(3) for the taxation year and reassess any taxation year in which an amount has been deducted under subsection 120.2(1). 
  
  ### Non-application for employment insurance purposes
  
  (3) An amount included under subsection (2)(b) in computing a person’s income under Part I of this Act for a taxation year shall not be included in determining the income of the person for the year under Part VII of the Employment Insurance Act.  
  
  ### Provisions applicable to this Part
  
  (4) Subsection 150(3), sections 150.1 to 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require. 
  
  # PART I.1 
  
  ## Individual Surtax 
  180.1  [Repealed, 2001, c. 17, s. 161(1)]  
  
  # PART I.2 
  
  ## Tax on Old Age Security Benefits 
  
  ### Definitions
  
  180.2 (1) The definitions in this subsection apply in this Part.  
  *adjusted income* of an individual for a taxation year means the amount that would be the individual’s income under Part I for the year if in computing that income no amount were  
  (a) included 
  (i) under paragraph 56(1)(q.1) or subsection 56(6), 
  (ii) in respect of a gain from a disposition of property to which section 79 applies, or 
  (iii) in respect of a gain described in subsection 40(3.21), or 
  (b) deductible under paragraph 20(1)(ww) or 60(w), (y) or (z). ( revenu modifié)   
  *base taxation year* in relation to a month, means  
  (a) where the month is any of the first 6 months of a calendar year, the taxation year that ended on December 31 of the second preceding calendar year, and 
  (b) where the month is any of the last 6 months of a calendar year, the taxation year that ended on December 31 of the preceding calendar year. ( année de base)   
  *return of income* in respect of an individual for a taxation year means  
  (a) where the individual was resident in Canada throughout the year, the individual’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is filed or required to be filed under Part I for the year, and 
  (b) in any other case, a prescribed form containing prescribed information. ( déclaration de revenu)  
  
  ### Tax payable
  
  (2) Every individual shall pay a tax under this Part for each taxation year equal to the amount determined by the formula is the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is the amount of any pension, supplement or spouse’s or commmon-law partner’s allowance under the Old Age Security Act included in computing the individual’s income under Part I for the year  exceeds 
  (ii) the amount of any deduction allowed under subparagraph 60(n)(i) in computing the individual’s income under Part I for the year, and 
  (b) 15% of the amount, if any, by which the individual’s adjusted income for the year exceeds $50,000; and is the rate of tax payable by the individual under Part XIII on amounts described in paragraph (a) of the description of A. 
  
  ### Withholding
  
  (3) Where at any time Her Majesty pays an amount described in paragraph (a) of the description of A in subsection 180.2(2) in respect of a month to an individual, there shall be deducted or withheld from that amount on account of the individual’s tax payable under this Part for the year the amount determined under subsection 180.2(4) in respect of that amount. 
  
  ### Determination of amount to be withheld
  
  (4) The amount determined in respect of a particular amount described in subsection 180.2(3) is 
  (a) where the individual has filed a return of income for the base taxation year in relation to the month in which the particular amount is paid, the lesser of 
  (i) the amount by which the particular amount exceeds the amount of tax payable under Part XIII by the individual on the particular amount, and 
  (ii) the amount determined by the formula is the individual’s adjusted income for the base taxation year, and is the rate of tax payable under Part XIII by the individual on the particular amount; 
  (b) where the individual has not filed a return of income for the base taxation year in relation to the month and 
  (i) the Minister has demanded under subsection 150(2) that the individual file the return, or 
  (ii) the individual was non-resident at any time in the base taxation year, the amount by which the particular amount exceeds the amount of tax payable under Part XIII by the individual on the particular amount; and 
  (c) in any other case, nil. 
  
  ### Return
  
  (5) Every individual liable to pay tax under this Part for a taxation year shall 
  (a) file with the Minister, without notice or demand therefor, 
  (i) where the individual is resident in Canada throughout the taxation year, a return for the year under this Part in prescribed form and containing prescribed information on or before the individual’s filing-due date for the year, and 
  (ii) in any other case, a return of income for the year on or before the individual’s balance-due day for the year; and 
  (b) pay the individual’s tax payable under this Part for the year on or before the individual’s balance-due day for the year. 
  
  ### Provisions applicable to this Part
  
  (6) Subsection 150(3), sections 150.1, 151 and 152, subsections 153(1.1), 153(1.2) and 153(3), sections 155 to 156.1 and 158 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require. 
  
  # PART I.3 
  
  ## Tax on Large Corporations 
  
  ### Definitions
  
  181 (1) For the purposes of this Part,  
  *financial institution*, in respect of a taxation year, means a corporation that at any time in the year is  
  (a) a bank or credit union, 
  (b) an insurance corporation that carries on business in Canada, 
  (c) authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public, 
  (d) authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables, 
  (e) a registered securities dealer, 
  (f) a mortgage investment corporation, or 
  (g) a corporation 
  (i) listed in the schedule, or 
  (ii) all or substantially all of the assets of which are shares or indebtedness of financial institutions to which the corporation is related; ( institution financière)   
  *long-term debt* means  
  (a) in the case of a bank, its subordinated indebtedness (within the meaning assigned by section 2 of the Bank Act) evidenced by obligations issued for a term of not less than 5 years,  
  (b) in the case of an insurance corporation, its subordinated indebtedness (within the meaning assigned by section 2 of the Insurance Companies Act) evidenced by obligations issued for a term of not less than 5 years, and  
  (c) in the case of any other corporation, its subordinated indebtedness (within the meaning that would be assigned by section 2 of the Bank Act if the definition of that expression in that section were applied with such modifications as the circumstances require) evidenced by obligations issued for a term of not less than 5 years,  but does not include, where the corporation is a prescribed federal Crown corporation for the purpose of section 27, any indebtedness evidenced by obligations issued to and held by Her Majesty in right of Canada; ( passif à long terme)   
  *reserves*, in respect of a corporation for a taxation year, means the amount at the end of the year of all of the corporation’s reserves, provisions and allowances (other than allowances in respect of depreciation or depletion) and, for greater certainty, includes any provision in respect of deferred taxes. (réserves)  
  
  ### Prescribed expressions
  
  (2) For the purposes of this Part, the expressions 
  *attributed surplus*, 
  *Canadian assets*, 
  *Canadian premiums*, 
  *Canadian reserve liabilities*, 
  *contractual service margin*, 
  *group of insurance contracts*, 
  *group of reinsurance contracts*, 
  *permanent establishment*, 
  *policyholders’ liabilities*, 
  *reinsurance contract held amount*, 
  *total assets*, 
  *total premiums* and 
  *total reserve liabilities* have such meanings as may be prescribed.  
  
  ### Determining values and amounts
  
  (3) For the purposes of determining the carrying value of a corporation’s assets or any other amount under this Part in respect of a corporation’s capital, investment allowance, taxable capital or taxable capital employed in Canada for a taxation year or in respect of a partnership in which a corporation has an interest, 
  (a) the equity and consolidation methods of accounting shall not be used; and 
  (b) subject to paragraph 181(3)(a) and except as otherwise provided in this Part, the amounts reflected in the balance sheet 
  (i) presented to the shareholders of the corporation (in the case of a corporation that is neither an insurance corporation to which subparagraph 181(3)(b)(ii) applies nor a bank) or the members of the partnership, as the case may be, or, where such a balance sheet was not prepared in accordance with generally accepted accounting principles or no such balance sheet was prepared, the amounts that would be reflected if such a balance sheet had been prepared in accordance with generally accepted accounting principles, or 
  (ii) accepted by the Superintendent of Financial Institutions, in the case of a bank or an insurance corporation that is required by law to report to the Superintendent, or the superintendent of insurance or other similar officer or authority of the province under whose laws the corporation is incorporated, in the case of an insurance corporation that is required by law to report to that officer or authority, shall be used. 
  
  ### Limitations respecting inclusions and deductions
  
  (4) Unless a contrary intention is evident, no provision of this Part shall be read or construed to require the inclusion or to permit the deduction, in computing the amount of a corporation’s capital, investment allowance, taxable capital or taxable capital employed in Canada for a taxation year, of any amount to the extent that that amount has been included or deducted, as the case may be, in computing the first-mentioned amount under, in accordance with or by reason of any other provision of this Part. 
  
  ### Tax payable
  
  181.1 (1) Every corporation shall pay a tax under this Part for each taxation year equal to the amount obtained by multiplying the corporation’s specified percentage for the taxation year by the amount, if any, by which 
  (a) its taxable capital employed in Canada for the year exceeds 
  (b) its capital deduction for the year. 
  
  ### Specified percentage
  
  (1.1) For the purpose of subsection (1), the specified percentage of a corporation for a taxation year that ends after 2003 is the total of 
  (a) that proportion of 0.225% that the number of days in the taxation year that are before 2004 is of the number of days in the taxation year, 
  (b) that proportion of 0.200% that the number of days in the taxation year that are in 2004 is of the number of days in the taxation year, and 
  (c) that proportion of 0.175% that the number of days in the taxation year that are in 2005 is of the number of days in the taxation year. 
  (d) and (e)  [Repealed, 2006, c. 4, s. 82]  
  
  ### Exceptions
  
  (1.2) Notwithstanding subsection (1.1), for the purposes of applying subsection 125(5.1) and the definitions 
  *unused surtax credit* in subsections (6) and 190.1(5), the amount of tax in respect of a corporation under subsection (1) for a taxation year is to be determined as if the specified percentage of the corporation for the taxation year were 0.225%.  
  
  ### Short taxation years
  
  (2) Where a taxation year of a corporation is less than 51 weeks, the amount determined under subsection 181.1(1) for the year in respect of the corporation shall be reduced to that proportion of that amount that the number of days in the year is of 365. 
  
  ### Where tax not payable
  
  (3) No tax is payable under this Part for a taxation year by a corporation 
  (a) that was a non-resident-owned investment corporation throughout the year; 
  (b) that was a bankrupt at the end of the year; 
  (c) that was throughout the year exempt from tax under section 149 on all of its taxable income; 
  (d) that neither was resident in Canada nor carried on business through a permanent establishment in Canada at any time in the year; 
  (e) that was throughout the year a deposit insurance corporation (within the meaning assigned by subsection 137.1(5)) or a corporation deemed by subsection 137.1(5.1) to be a deposit insurance corporation; or 
  (f) that was throughout the year a corporation described in subsection 136(2) the principal business of which was marketing (including processing incidental to or connected therewith) natural products belonging to or acquired from its members or customers. 
  
  ### Deduction
  
  (4) There may be deducted from a corporation’s tax otherwise payable under this Part for a taxation year an amount equal to the total of 
  (a) its Canadian surtax payable for the year, and 
  (b) such part as the corporation claims of its unused surtax credits for its 7 immediately preceding and 3 immediately following taxation years, to the extent that that total does not exceed the amount by which 
  (c) the amount that would, but for this subsection, be its tax payable under this Part for the year exceeds 
  (d) the total of all amounts each of which is the amount deducted under subsection 125.3(1) in computing the corporation’s tax payable under Part I for a taxation year ending before 1992 in respect of its unused Part I.3 tax credit (within the meaning assigned by section 125.3) for the year. 
  
  ### Idem
  
  (5) For the purposes of this subsection and subsections 181.1(4), 181.1(6) and 181.1(7), 
  (a) an amount may not be claimed under subsection 181.1(4) in computing a corporation’s tax payable under this Part for a particular taxation year in respect of its unused surtax credit for another taxation year until its unused surtax credits, if any, for taxation years preceding the other year that may be claimed under this Part for the particular year have been claimed; and 
  (b) an amount in respect of a corporation’s unused surtax credit for a taxation year may be claimed under subsection 181.1(4) in computing its tax payable under this Part for another taxation year only to the extent that it exceeds the total of all amounts each of which is an amount claimed in respect of that unused surtax credit in computing its tax payable under this Part or Part VI for a taxation year preceding that other year. 
  
  ### Definitions
  
  (6) For the purposes of this subsection and subsections 181.1(4), 181.1(5) and 181.1(7),  
  *Canadian surtax payable* of a corporation for a taxation year has the meaning assigned by subsection 125.3(4); (surtaxe canadienne payable)   
  *unused surtax credit* for a taxation year ending after 1991  
  (a) of a corporation (other than a corporation that was throughout the year a financial institution, within the meaning assigned by section 190) means the amount, if any, by which 
  (i) its Canadian surtax payable for the year exceeds the total of 
  (ii) the amount that would, but for subsection 181.1(4), be its tax payable under this Part for the year, and 
  (iii) the amount, if any, deducted under section 125.3 in computing the corporation’s tax payable under Part I for the year, and 
  (b) of a corporation that was throughout the year a financial institution (within the meaning assigned by section 190) means the lesser of 
  (i) the amount, if any, by which 
  (A) its Canadian surtax payable for the year exceeds the total of 
  (B) the amount that would, but for subsection 181.1(4), be its tax payable under this Part for the year, and 
  (C) the amount, if any, deducted under section 125.3 in computing the corporation’s tax payable under Part I for the year, and 
  (ii) the amount, if any, by which its tax payable under Part I for the year exceeds the amount that would, but for subsection 181.1(4) and subsection 190.1(3), be the total of its taxes payable under Parts I.3 and VI for the year. ( crédit de surtaxe inutilisé)  
  
  ### Acquisition of control
  
  (7) Where at any time control of a corporation has been acquired by a person or group of persons, no amount in respect of its unused surtax credit for a taxation year ending before that time is deductible by the corporation for a taxation year ending after that time and no amount in respect of its unused surtax credit for a taxation year ending after that time is deductible by the corporation for a taxation year ending before that time, except that 
  (a) the corporation’s unused surtax credit for a particular taxation year that ended before that time is deductible by the corporation for a taxation year that ends after that time (in this paragraph referred to as the “subsequent year”) to the extent of that proportion of the corporation’s Canadian surtax payable for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is 
  (I) its income under Part I for the particular year from a business that was carried on by the corporation throughout the subsequent year for profit or with a reasonable expectation of profit, or 
  (II) where properties were sold, leased, rented or developed or services were rendered in the course of carrying on that business before that time, its income under Part I for the particular year from any other business all or substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or 111(1)(d) in computing its taxable income for the particular year in respect of a non-capital loss or a farm loss, as the case may be, for taxation year in respect of any business referred to in clause 181.1(7)(a)(i)(A) is of the greater of 
  (ii) the amount determined under subparagraph 181.1(7)(a)(i), and 
  (iii) the corporation’s taxable income for the particular year; and 
  (b) the corporation’s unused surtax credit for a particular taxation year that ends after that time is deductible by the corporation for a taxation year that ended before that time (in this paragraph referred to as the “preceding year”) to the extent of that proportion of the corporation’s Canadian surtax payable for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is 
  (I) its income under Part I for the particular year from a business that was carried on by the corporation in the preceding year and throughout the particular year for profit or with a reasonable expectation of profit, or 
  (II) where properties were sold, leased, rented or developed or services were rendered in the course of carrying on that business before that time, the corporation’s income under Part I for the particular year from any other business all or substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or 111(1)(d) in computing the corporation’s taxable income for the particular year in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of any business referred to in clause 181.1(7)(b)(i)(A) is of the greater of 
  (ii) the amount determined under subparagraph 181.1(7)(b)(i), and 
  (iii) the corporation’s taxable income for the particular year. 
  
  ### Taxable capital employed in Canada
  
  181.2 (1) The taxable capital employed in Canada of a corporation for a taxation year (other than a financial institution or a corporation that was throughout the year not resident in Canada) is the prescribed proportion of the corporation’s taxable capital for the year. 
  
  ### Taxable capital
  
  (2) The taxable capital of a corporation (other than a financial institution) for a taxation year is the amount, if any, by which its capital for the year exceeds its investment allowance for the year. 
  
  ### Capital
  
  (3) The capital of a corporation (other than a financial institution) for a taxation year is the amount, if any, by which the total of 
  (a) the amount of its capital stock (or, in the case of a corporation incorporated without share capital, the amount of its members’ contributions), retained earnings, contributed surplus and any other surpluses at the end of the year, 
  (b) the amount of its reserves for the year, except to the extent that they were deducted in computing its income for the year under Part I, 
  (b.1) the amount of its deferred unrealized foreign exchange gains at the end of the year, 
  (c) the amount of all loans and advances to the corporation at the end of the year, 
  (d) the amount of all indebtedness of the corporation at the end of the year represented by bonds, debentures, notes, mortgages, hypothecary claims, banker’s acceptances or similar obligations, 
  (e) the amount of any dividends declared but not paid by the corporation before the end of the year, 
  (f) the amount of all other indebtedness (other than any indebtedness in respect of a lease) of the corporation at the end of the year that has been outstanding for more than 365 days before the end of the year, and 
  (g) the total of all amounts, each of which is the amount, if any, in respect of a partnership in which the corporation held a membership interest at the end of the year, either directly or indirectly through another partnership, determined by the formula is the total of all amounts that would be determined under paragraphs (b) to (d) and (f) in respect of the partnership for its last fiscal period that ends at or before the end of the year if 
  (a) those paragraphs applied to partnerships in the same manner that they apply to corporations, and 
  (b) those amounts were computed without reference to amounts owing by the partnership 
  (i) to any corporation that held a membership interest in the partnership either directly or indirectly through another partnership, or 
  (ii) to any partnership in which a corporation described in subparagraph (i) held a membership interest either directly or indirectly through another partnership, is the partnership’s deferred unrealized foreign exchange losses at the end of the period, is the share of the partnership’s income or loss for the period to which the corporation is entitled either directly or indirectly through another partnership, and is the partnership’s income or loss for the period exceeds the total of 
  (h) the amount of its deferred tax debit balance at the end of the year, 
  (i) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year, 
  (j) any amount deducted under subsection 135(1) in computing its income under Part I for the year, to the extent that the amount can reasonably be regarded as being included in the amount determined under any of paragraphs 181.2(3)(a) to 181.2(3)(g) in respect of the corporation for the year, and 
  (k) the amount of its deferred unrealized foreign exchange losses at the end of the year. 
  
  ### Investment allowance
  
  (4) The investment allowance of a corporation (other than a financial institution) for a taxation year is the total of all amounts each of which is the carrying value at the end of the year of an asset of the corporation that is 
  (a) a share of another corporation, 
  (b) a loan or advance to another corporation (other than a financial institution), 
  (c) a bond, debenture, note, mortgage, hypothecary claim or similar obligation of another corporation (other than a financial institution), 
  (d) long-term debt of a financial institution, 
  (d.1) a loan or advance to, or a bond, debenture, note, mortgage, hypothecary claim or similar obligation of, a partnership each member of which was, throughout the year, 
  (i) another corporation (other than a financial institution) that was not exempt from tax under this Part (otherwise than because of paragraph 181.1(3)(d)), or 
  (ii) another partnership described in this paragraph, 
  (e) an interest in a partnership, or 
  (f) a dividend payable to the corporation at the end of the year on a share of the capital stock of another corporation, other than a share of the capital stock of, a dividend payable by, or indebtedness of, a corporation that is exempt from tax under this Part (otherwise than because of paragraph 181.1(3)(d)). 
  
  ### Value of interest in partnership
  
  (5) For the purposes of subsection (4) and this subsection, the carrying value at the end of a taxation year of an interest of a corporation or of a partnership (each of which is referred to in this subsection as the “member”) in a particular partnership is deemed to be the member’s specified proportion, for the particular partnership’s last fiscal period that ends at or before the end of the taxation year, of the amount that would, if the particular partnership were a corporation, be the particular partnership’s investment allowance at the end of that fiscal period. 
  
  ### Loan
  
  (6) For the purpose of subsection 181.2(4), where a corporation made a particular loan to a trust that neither 
  (a) made any loans or advances to nor received any loans or advances from, nor 
  (b) acquired any bond, debenture, note, mortgage, hypothecary claim or similar obligation of nor issued any bond, debenture, note, mortgage, hypothecary claim or similar obligation to a person not related to the corporation, as part of a series of transactions in which the trust made a loan to another corporation (other than a financial institution) to which the corporation is related, the least of 
  (c) the amount of the particular loan, 
  (d) the amount of the loan from the trust to the other corporation, and 
  (e) the amount, if any, by which 
  (i) the total of all amounts each of which is the amount of a loan from the trust to any corporation exceeds 
  (ii) the total of all amounts each of which is the amount of a loan (other than the particular loan) from any corporation to the trust at any time shall be deemed to be the amount of a loan from the corporation to the other corporation at that time. 
  
  ### Taxable capital employed in Canada of financial institution
  
  181.3 (1) The taxable capital employed in Canada of a financial institution for a taxation year is the total of 
  (a) the total of all amounts each of which is the carrying value at the end of the year of an asset of the financial institution (other than property held by the institution primarily for the purpose of resale that was acquired by the financial institution, in the year or the preceding taxation year, as a consequence of another person’s default, or anticipated default, in respect of a debt owed to the institution) that is tangible, or for civil law corporeal, property used in Canada and, in the case of a financial institution that is an insurance corporation, that is non-segregated property, within the meaning assigned by subsection 138(12), 
  (b) the total of all amounts each of which is an amount in respect of a partnership in which the financial institution has an interest at the end of the year equal to that proportion of 
  (i) the total of all amounts each of which is the carrying value of an asset of the partnership, at the end of its last fiscal period ending at or before the end of the year, that is tangible, or for civil law corporeal, property used in Canada that 
  (ii) the financial institution’s share of the partnership’s income or loss for that period is of 
  (iii) the partnership’s income or loss for that period, and 
  (c) an amount that is equal to 
  (i) in the case of a financial institution other than an insurance corporation, that proportion of its taxable capital for the year that its Canadian assets at the end of the year is of its total assets at the end of the year, 
  (ii) in the case of an insurance corporation that was resident in Canada at any time during the year and carried on a life insurance business at any time in the year, the total of 
  (A) that proportion of the amount, if any, by which the total of 
  (I) its taxable capital for the year, and 
  (II) the amount prescribed for the year in respect of the corporation exceeds 
  (III) the amount prescribed for the year in respect of the corporation that its Canadian reserve liabilities as at the end of the year is of the total of 
  (IV) its total reserve liabilities as at the end of the year, and 
  (V) the amount prescribed for the year in respect of the corporation, and 
  (B)  [Repealed, 2009, c. 2, s. 61]  
  (iii) in the case of an insurance corporation that was resident in Canada at any time in the year and throughout the year did not carry on a life insurance business, that proportion of its taxable capital for the year that the total amount of its Canadian premiums for the year is of its total premiums for the year, and 
  (iv) in the case of an insurance corporation that was throughout the year not resident in Canada and carried on an insurance business in Canada at any time in the year, its taxable capital for the year. 
  
  ### Taxable capital of financial institution
  
  (2) The taxable capital of a financial institution for a taxation year is the amount, if any, by which its capital for the year exceeds its investment allowance for the year. 
  
  ### Capital of financial institution
  
  (3) The capital of a financial institution for a taxation year is 
  (a) in the case of a financial institution, other than an authorized foreign bank or an insurance corporation, the amount, if any, by which the total at the end of the year of 
  (i) the amount of its long-term debt, 
  (ii) the amount of its capital stock (or, in the case of an institution incorporated without share capital, the amount of its members’ contributions), retained earnings, contributed surplus and any other surpluses, and 
  (iii) the amount of its reserves for the year, except to the extent that they were deducted in computing its income under Part I for the year, exceeds the total of 
  (iv) the amount of its deferred tax debit balance at the end of the year, 
  (v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year, and 
  (vi) any amount deducted under subsection 130.1(1) or 137(2) in computing its income under Part I for the year, to the extent that the amount can reasonably be regarded as being included in the amount determined under subparagraph 181.3(3)(a)(i), 181.3(3)(a)(ii) or 181.3(3)(a)(iii) in respect of the institution for the year; 
  (b) in the case of an insurance corporation that was resident in Canada at any time in the year and carried on a life insurance business at any time in the year, the amount determined by the formula is the amount of the corporation’s long-term debt at the end of the year, is the total amount, at the end of the year, of the corporation’s 
  (i) capital stock (or, in the case of an insurance corporation incorporated without share capital, the amount of its members’ contributions), 
  (ii) retained earnings, 
  (iii) accumulated other comprehensive income, 
  (iv) policyholders’ liabilities, 
  (v) contributed surplus, and 
  (vi) any other surpluses, is the total of all amounts each of which is the contractual service margin for a group of insurance contracts of the corporation at the end of the year other than a group of segregated fund policies, is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the corporation at the end of the year, that is 
  (i) if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, and 
  (ii) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion of the contractual service margin that is in respect of the reinsurance of risks under segregated fund policies, and is the amount of any deficit deducted in computing the shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year; 
  (c) in the case of an insurance corporation that was resident in Canada at any time in the year and throughout the year did not carry on a life insurance business, the amount determined by the formula is the amount of the corporation’s long-term debt at the end of the year, is the total amount, at the end of the year, of the corporation’s 
  (i) capital stock (or, in the case of an insurance corporation incorporated without share capital, the amount of its members’ contributions), 
  (ii) retained earnings, 
  (iii) accumulated other comprehensive income, 
  (iv) policyholders’ liabilities, 
  (v) contributed surplus, and 
  (vi) any other surpluses, is total of all amounts each of which is the contractual service margin for a group of insurance contracts of the corporation at the end of the year that is in respect of 
  (i)  non-cancellable or guaranteed renewable accident and sickness policies in respect of accident and sickness insurance (as defined in subsection 1408(1) of the Income Tax Regulations),  
  (ii)  mortgage insurance (as defined in subsection 1408(1) of the Income Tax Regulations), or  
  (iii)  title insurance (as defined in subsection 1408(1) of the Income Tax Regulations),  is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the corporation at the end of the year, that is 
  (i) the contractual service margin for the group, if no portion of the contractual service margin is in respect of a risk under an insurance policy other than an insurance policy that is in respect of 
  (A)  non-cancellable or guaranteed renewable accident and sickness policies in respect of accident and sickness insurance (as defined in subsection 1408(1) of the Income Tax Regulations),  
  (B)  mortgage insurance (as defined in subsection 1408(1) of the Income Tax Regulations), or  
  (C)  title insurance (as defined in subsection 1408(1) of the Income Tax Regulations), and  
  (ii) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion that is in respect of the reinsurance of risks under policies other than those described in any of clauses (i)(A) to (C), is the amount of the corporation’s reserves for the year, except to the extent that they 
  (i) were deducted in computing its income under Part I for the year, or 
  (ii) are reserves in respect of the contractual service margin for a group of insurance contracts of the corporation at the end of the year, is the total of all amounts each of which is the reinsurance contract held amount for a group of reinsurance contracts held by the corporation at the end of the year, to the extent the amount can be reasonably regarded as being included in the amount determined under the description of E, and is the amount of any deficit deducted in computing the shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year; 
  (d) in the case of an insurance corporation that was throughout the year not resident in Canada and carried on an insurance business in Canada at any time in the year, the total at the end of the year of 
  (i) the amount that is the greater of 
  (A) the amount, if any, by which 
  (I) the corporation’s surplus funds derived from operations (as defined in subsection 138(12)) as of the end of the year, computed as if no tax were payable under this Part or Part VI for the year exceeds the total of all amounts each of which is 
  (II) an amount on which the corporation was required to pay, or would but for subsection 219(5.2) have been required to pay, tax under Part XIV for a preceding taxation year, except the portion, if any, of the amount on which tax was payable, or would have been payable, because of subparagraph 219(4)(a)(i.1), and 
  (III) an amount on which the corporation was required to pay, or would but for subsection 219(5.2) have been required to pay, tax under subsection 219(5.1) for the year because of the transfer of an insurance business to which subsection 138(11.5) or 138(11.92) has applied, and 
  (B) the corporation’s attributed surplus for the year, 
  (ii) any other surpluses relating to its insurance businesses carried on in Canada, 
  (iii) the amount of its long-term debt that may reasonably be regarded as relating to its insurance businesses carried on in Canada, and 
  (iv) the amount, if any, by which 
  (A) the amount of its reserves for the year (other than its reserves in respect of amounts payable out of segregated funds) that may reasonably be regarded as having been established in respect of its insurance businesses carried on in Canada exceeds the total of 
  (B) the total of all amounts each of which is the amount of a reserve (other than a reserve described in subparagraph 138(3)(a)(i)) to the extent that it was included in the amount determined under clause 181.3(3)(d)(iv)(A) and was deducted in computing its income under Part I for the year, 
  (C) the total of all amounts each of which is the amount of a reserve described in subparagraph 138(3)(a)(i) to the extent that it was included in the amount determined under clause 181.3(3)(d)(iv)(A) and was deductible under subparagraph 138(3)(a)(i) in computing its income under Part I for the year, and 
  (D)  [Repealed, 2022, c. 19, s. 44]  
  (E)  [Repealed, 2022, c. 19, s. 44]  
  (F) the total of all amounts each of which is the reinsurance contract held amount for a group of reinsurance contracts held by the corporation at the end of the year, to the extent the amount can be reasonably regarded as being included in the amount determined under clause (A); and 
  (e) in the case of an authorized foreign bank, the total of 
  (i) 10% of the total of all amounts, each of which is the risk-weighted amount at the end of the year of an on-balance sheet asset or an off-balance sheet exposure of the bank in respect of its Canadian banking business that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, and 
  (ii) the total of all amounts, each of which is an amount at the end of the year in respect of the bank’s Canadian banking business that 
  (A) if the bank were a bank listed in Schedule II to the Bank Act, would be required under the risk-based capital adequacy guidelines issued by the Superintendent of Financial Institutions and applicable at that time to be deducted from the bank’s capital in determining the amount of capital available to satisfy the Superintendent’s requirement that capital equal a particular proportion of risk-weighted assets and exposures, and  
  (B) is not an amount in respect of a loss protection facility required to be deducted from capital under the Superintendent’s guidelines respecting asset securitization applicable at that time. 
  
  ### Investment allowance of financial institution
  
  (4) The investment allowance for a taxation year of a corporation that is a financial institution is 
  (a) in the case of a corporation that was resident in Canada at any time in the year, the total of all amounts each of which is the carrying value at the end of the year of an eligible investment of the corporation; 
  (b) in the case of an insurance corporation that was throughout the year not resident in Canada, the total of all amounts each of which is the carrying value at the end of the year of an eligible investment of the corporation that was used or held by it in the year in the course of carrying on an insurance business in Canada; 
  (c) in the case of an authorized foreign bank, the total of all amounts each of which is the amount at the end of the year, before the application of risk weights, that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, of an eligible investment used or held by the bank in the year in the course of carrying on its Canadian banking business; and 
  (d) in any other case, nil. 
  
  ### Interpretation
  
  (5) For the purpose of subsection (4), 
  (a) an eligible investment of a corporation is a share of the capital stock or long-term debt (and, where the corporation is an insurance corporation, is non-segregated property within the meaning assigned by subsection 138(12)) of a financial institution that at the end of the year 
  (i) is related to the corporation, 
  (ii) is not exempt from tax under this Part, and 
  (iii) is resident in Canada or can reasonably be regarded as using the proceeds of the share or debt in a business carried on by the institution through a permanent establishment (as defined by regulation) in Canada; and 
  (b) a credit union and another credit union of which the credit union is a shareholder or member are deemed to be related to each other. 
  
  ### Taxable capital employed in Canada of non-resident
  
  181.4 The taxable capital employed in Canada for a taxation year of a corporation (other than a financial institution) that was throughout the year not resident in Canada is the amount, if any, by which 
  (a) the total of all amounts each of which is the carrying value at the end of the year of an asset of the corporation used by it in the year in, or held by it in the year in the course of, carrying on any business carried on by it during the year through a permanent establishment in Canada exceeds the total of 
  (b) the amount of the corporation’s indebtedness at the end of the year (other than indebtedness described in any of paragraphs 181.2(3)(c) to 181.2(3)(f)) that may reasonably be regarded as relating to a business carried on by it during the year through a permanent establishment in Canada, 
  (c) the total of all amounts each of which is the carrying value at the end of the year of an asset described in subsection 181.2(4) of the corporation that was used by it in the year in, or held by it in the year in the course of, carrying on any business carried on by it during the year through a permanent establishment in Canada, and 
  (d) the total of all amounts each of which is the carrying value at the end of the year of an asset of the corporation that 
  (i) is a ship or aircraft operated by the corporation in international traffic or is personal or movable property used in its business of transporting passengers or goods by ship or aircraft in international traffic, and 
  (ii) was used by the corporation in the year in, or held by it in the year in the course of, carrying on any business during the year through a permanent establishment in Canada, if the country in which the corporation is resident imposed neither a capital tax for the year on similar assets nor a tax for the year on the income from the operation of a ship or aircraft in international traffic, of any corporation resident in Canada during the year. 
  
  ### Capital deduction
  
  181.5 (1) Subject to subsection (1.1), the capital deduction of a corporation for a taxation year is $50 million unless the corporation is related to another corporation at any time in the taxation year, in which case, subject to subsection (4), its capital deduction for the year is nil. 
  
  ### Exceptions
  
  (1.1) For the purposes of applying subsection 125(5.1), the definitions 
  *unused surtax credit* in subsections 181.1(6) and 190.1(5), and subsection 225.1(8), the amount of tax in respect of a corporation under subsection 181.1(1) for a taxation year is to be determined as if the reference to “$50 million” in subsection (1) were a reference to “$10 million”.  
  
  ### Related corporations
  
  (2) Subject to subsection (4.1), a corporation that is related to any other corporation at any time in a taxation year of the corporation that ends in a calendar year may file with the Minister in prescribed form an agreement on behalf of the related group of which the corporation is a member under which an amount that does not exceed $50 million is allocated among all corporations that are members of the related group for each taxation year of each such corporation ending in the calendar year and at a time when it was a member of the related group. 
  
  ### Allocation by Minister
  
  (3) Subject to subsection (4.1), the Minister may request a corporation that is related to any other corporation at the end of a taxation year to file with the Minister an agreement referred to in subsection (2) and, if the corporation does not file such an agreement within 30 days after receiving the request, the Minister may allocate an amount among the members of the related group of which the corporation is a member for the taxation year not exceeding $50 million. 
  
  ### Idem
  
  (4) The least amount allocated for a taxation year to a member of a related group under an agreement described in subsection 181.5(2) or by the Minister pursuant to subsection 181.5(3) is the capital deduction of that member for that taxation year. 
  
  ### Exceptions
  
  (4.1) For the purposes of applying subsection 125(5.1), the definitions 
  *unused surtax credit* in subsections 181.1(6) and 190.1(5), and subsection 225.1(8), subsections (2) to (4) are to be read as if the amount determined under subsection (2) or (3), as the case may be, in respect of the corporation for the taxation year were that proportion of $10 million that the amount otherwise determined in respect of the corporation for the taxation year under that subsection is of $50 million.  
  
  ### Idem
  
  (5) Where a corporation (in this subsection referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and is related in 2 or more of those taxation years to another corporation that has a taxation year ending in that calendar year, the capital deduction of the first corporation for each such taxation year at the end of which it is related to the other corporation is an amount equal to its capital deduction for the first such taxation year. 
  
  ### Idem
  
  (6) Two corporations that would, but for this subsection, be related to each other by reason only of 
  (a) the control of any corporation by Her Majesty in right of Canada or a province, or 
  (b) a right referred to in paragraph 251(5)(b), are, for the purposes of this section and subsection 181.3(4), deemed not to be related to each other except that, where at any time a taxpayer has a right referred to in paragraph 251(5)(b) with respect to shares and it can reasonably be considered that one of the main purposes for the acquisition of the right was to avoid any limitation on the amount of a corporation’s capital deduction for a taxation year, for the purpose of determining whether a corporation is related to any other corporation, the corporations are, for the purposes of this section, deemed to be in the same position in relation to each other as if the right were immediate and absolute and as if the taxpayer had exercised the right at that time. 
  
  ### Related corporations that are not associated
  
  (7) For the purposes of subsection 181.3(4) and this section, a Canadian-controlled private corporation and another corporation to which it would, but for this subsection, be related at any time shall be deemed not to be related to each other at that time where the corporations are not associated with each other at that time. 
  
  ### Return
  
  181.6 Every corporation that is or would, but for subsection 181.1(4), be liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which the corporation is required by section 150 to file its return of income for the year under Part I, a return of capital for the year in prescribed form containing an estimate of the tax payable under this Part by it for the year. 
  
  ### Provisions applicable to Part
  
  181.7 Sections 152, 158 and 159, subsection 161(11), sections 162 to 167 and Division J of Part I apply to this Part with such modifications as the circumstances require and, for the purpose of this section, paragraph 152(6)(a) shall be read as follows: 
  “(a) a deduction under section 181.1(4) in respect of any unused surtax credit (within the meaning assigned by subsection 181.1(6)) for a subsequent taxation year.” 
  
  ### Provisions applicable — Crown corporations
  
  181.71 Section 27 applies to this Part with any modifications that the circumstances require. 
  181.8  [Repealed, 1994, c. 7, Sch. VIII, s. 109(1)]  
  181.9  [Repealed, 1994, c. 7, Sch. VIII, s. 109(1)]  
  
  # PART II 
  
  ## [Repealed, 2017, c. 20, s. 27] 
  182  [Repealed, 2017, c. 20, s. 27]  
  183  [Repealed, 2017, c. 20, s. 27]  
  
  # PART II.1 
  
  ## Tax on Corporate Distributions 
  
  ### Application of Part
  
  183.1 (1) This Part applies to a corporation (other than a mutual fund corporation) for a taxation year in which the corporation, at any time in the year, 
  (a) was a public corporation; or 
  (b) was resident in Canada and had a class of shares outstanding that were purchased and sold in the manner in which such shares normally are purchased and sold by any member of the public in the open market. 
  
  ### Tax payable
  
  (2) Where, as a part of a transaction or series of transactions or events, 
  (a) a corporation, or any person with whom the corporation was not dealing at arm’s length, has, at any time, paid an amount, directly or indirectly, to any person as proceeds of disposition of any property, and 
  (b) all or any portion of the amount may reasonably be considered, having regard to all the circumstances, to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation, the corporation shall, on or before its balance-due day for its taxation year that includes that time, pay tax of 45% of that amount or portion of it, as the case may be. 
  
  ### Stock dividend
  
  (3) Where, as a part of a transaction or series of transactions or events, 
  (a) a share was issued by a corporation as a stock dividend and the amount of the stock dividend was less than the fair market value of the share at the time that it was issued, and 
  (b) the share or any other share of the capital stock of the corporation was purchased, directly or indirectly, by the corporation, or by a person with whom the corporation was not dealing at arm’s length, for an amount in excess of its paid-up capital, that excess shall, for the purposes of subsection 183.1(2), be deemed to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation. 
  
  ### Purchase of shares
  
  (4) Where, as a part of a transaction or series of transactions or events, 
  (a) a share of the capital stock of a corporation was purchased, directly or indirectly, by the corporation, or by any person with whom the corporation was not dealing at arm’s length, and 
  (b) any portion of the amount paid for the share may reasonably be considered, having regard to all the circumstances, as consideration for a dividend that had been declared, but not yet paid, on the share, that portion of the amount shall, for the purposes of subsection 183.1(2), be deemed to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation notwithstanding that the dividend was actually paid thereafter. 
  
  ### Indirect payment
  
  (5) Where, as a part of a transaction or series of transactions or events, a person received a payment from a corporation, or from any person with whom the corporation was not dealing at arm’s length, in consideration, in whole or in part, for paying an amount to any other person as proceeds of disposition of any property, the corporation shall, for the purposes of subsection 183.1(2), be deemed to have paid the amount indirectly to the other person. 
  
  ### Where s. (2) does not apply
  
  (6) Subsection 183.1(2) does not apply if none of the purposes of the transaction or series of transactions or events referred to therein may reasonably be considered, having regard to all the circumstances, to have been to enable shareholders of a corporation who are individuals or non-resident persons to receive an amount, directly or indirectly, as proceeds of disposition of property rather than as a dividend on a share that was of a class that was listed on a stock exchange or that was purchased and sold in the manner in which shares are normally purchased and sold by any member of the public in the open market. 
  
  ### Where s. 110.6(8) does not apply
  
  (7) Where this section has been applied in respect of an amount, subsection 110.6(8) does not apply to the capital gain in respect of which the amount formed all or a part of the proceeds of disposition. 
  
  ### Return
  
  183.2 (1) Every corporation liable to pay tax under this Part for a taxation year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file with the Minister a return for the year under this Part in prescribed form. 
  
  ### Provisions applicable to Part
  
  (2) Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 160.1(1) and 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART III 
  
  ## Additional Tax on Excessive Elections 
  
  ### Tax on excessive elections
  
  184 (2) If a corporation has elected in accordance with subsection 83(2), 130.1(4) or 131(1) in respect of the full amount of any dividend payable by it on shares of any class of its capital stock (in this section referred to as the “original dividend”) and the full amount of the original dividend exceeds the portion of the original dividend deemed by that subsection to be a capital dividend or capital gains dividend, as the case may be, the corporation shall, at the time of the election, pay a tax under this Part equal to 3/5 of the excess. 
  (2.1)  [Repealed, 2013, c. 34, s. 327]  
  
  ### Election to treat excess as separate dividend
  
  (3) If, in respect of an original dividend payable at a particular time, a corporation would, but for this subsection, be required to pay a tax under this Part in respect of an excess referred to in subsection (2), and the corporation elects in prescribed manner on or before the day that is 90 days after the day of sending of the notice of assessment in respect of the tax that would otherwise be payable under this Part, the following rules apply: 
  (a) the portion of the original dividend deemed by subsection 83(2), 130.1(4) or 131(1) to be a capital dividend or capital gains dividend, as the case may be, is deemed for the purposes of this Act to be the amount of a separate dividend that became payable at the particular time; 
  (b) if the corporation identifies in its election any part of the excess, that part is, for the purposes of any election under subsection 83(2), 130.1(4) or 131(1) in respect of that part, and, where the corporation has so elected, for all purposes of this Act, deemed to be the amount of a separate dividend that became payable immediately after the particular time; 
  (c) the amount by which the excess exceeds any portion deemed by paragraph (b) to be a separate dividend for all purposes of this Act is deemed to be a separate taxable dividend that became payable at the particular time; and 
  (d) each person who held any of the issued shares of the class of shares of the capital stock of the corporation in respect of which the original dividend was paid is deemed 
  (i) not to have received any portion of the original dividend, and 
  (ii) to have received, at the time that any separate dividend determined under any of paragraphs (a) to (c) became payable, the proportion of that dividend that the number of shares of that class held by the person at the particular time is of the number of shares of that class outstanding at the particular time except that, for the purpose of Part ​XIII, the separate dividend is deemed to be paid on the day that the election in respect of this subsection is made. 
  (3.1) and (3.2)  [Repealed, 2013, c. 34, s. 327]  
  
  ### Concurrence with election
  
  (4) An election under subsection (3) is valid only if 
  (a) it is made with the concurrence of the corporation and all its shareholders 
  (i) who received or were entitled to receive all or any portion of the original dividend, and 
  (ii) whose addresses were known to the corporation; and 
  (b) either 
  (i) it is made on or before the day that is 30 months after the day on which the original dividend became payable, or 
  (ii) each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account. 
  
  ### Exception for non-taxable shareholders
  
  (5) If each person who, in respect of an election made under subsection (3), is deemed by subsection (3) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I, 
  (a) subsection (4) does not apply to the election; and 
  (b) the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend became payable. 
  
  ### Assessment of tax
  
  185 (1) The Minister shall, with all due dispatch, examine each election made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1), assess the tax, if any, payable under this Part in respect of the election and send a notice of assessment to the corporation. 
  
  ### Payment of tax and interest
  
  (2) Where an election has been made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1) and the Minister mails a notice of assessment under this Part in respect of the election, that part of the amount assessed then remaining unpaid and interest thereon at the prescribed rate computed from the day of the election to the day of payment is payable forthwith by the corporation to the Receiver General. 
  
  ### Provisions applicable to Part
  
  (3) Subsections 152(3), 152(4), 152(5), 152(7) and 152(8) and 161(11), sections 163 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Joint and several, or solidary, liability from excessive elections
  
  (4) Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the election that 
  (a) the amount of the dividend received by the person is of 
  (b) the full amount of the dividend in respect of which the election was made, but nothing in this subsection limits the liability of any person under any other provision of this Act. 
  
  ### Assessment
  
  (5) The Minister may, at any time after the last day on which a corporation may make an election under subsection 184(3) in respect of a dividend, assess a person in respect of any amount payable under subsection 185(4) in respect of the dividend, and the provisions of Division I of Part I apply, with such modifications as the circumstances require, to an assessment made under this subsection as though it were made under section 152. 
  
  ### Rules applicable
  
  (6) If under subsection (4) a corporation and another person have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of a dividend described in that subsection, 
  (a) a payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge their liability after that time; and 
  (b) a payment at any time by the corporation on account of its liability shall discharge the other person’s liability only to the extent of the amount determined by the formula is the total of 
  (i) the amount of the corporation’s liability, immediately before that time, under this Part in respect of the full amount of the dividend, and 
  (ii) the amount of the payment, is the amount of the corporation’s liability, immediately before that time, under this Act, is the amount of the dividend received by the other person, and is the full amount of the dividend. 
  
  # PART III.1 
  
  ## Additional Tax on Excessive Eligible Dividend Designations 
  
  ### Tax on excessive eligible dividend designations
  
  185.1 (1) A corporation that has made an excessive eligible dividend designation in respect of an eligible dividend paid by it at any time in a taxation year shall, on or before the corporation’s balance-due day for the taxation year, pay a tax under this Part for the taxation year equal to the total of 
  (a) 20% of the excessive eligible dividend designation, and 
  (b) if the excessive eligible dividend designation arises because of the application of paragraph (c) of the definition 
  *excessive eligible dividend designation* in subsection 89(1), 10% of the excessive eligible dividend designation.  
  
  ### Election to treat excessive eligible dividend designation as an ordinary dividend
  
  (2) If, in respect of an excessive eligible dividend designation that is not described in paragraph (1)(b) and that is made by a corporation in respect of an eligible dividend (in this subsection and subsection (3) referred to as the “original dividend”) paid by it at a particular time, the corporation would, if this Act were read without reference to this subsection, be required to pay a tax under subsection (1), and it elects in prescribed manner on or before the day that is 90 days after the day of sending the notice of assessment in respect of that tax that would otherwise be payable under subsection (1), the following rules apply: 
  (a) notwithstanding the definition 
  *eligible dividend* in subsection 89(1), the amount of the original dividend paid by the corporation is deemed to be the amount, if any, by which  
  (i) the amount of the original dividend, determined without reference to this subsection exceeds 
  (ii) the amount claimed by the corporation in the election not exceeding the excessive eligible dividend designation, determined without reference to this subsection; 
  (b) an amount equal to the amount claimed by the corporation in the election is deemed to be a separate taxable dividend (other than an eligible dividend) that was paid by the corporation immediately before the particular time; 
  (c) each shareholder of the corporation who at the particular time held any of the issued shares of the class of shares in respect of which the original dividend was paid is deemed 
  (i) not to have received the original dividend, and 
  (ii) to have received at the particular time 
  (A) as an eligible dividend, the shareholder’s pro rata portion of the amount of any dividend determined under paragraph (a), and 
  (B) as a taxable dividend (other than an eligible dividend) the shareholder’s pro rata portion of the amount of any dividend determined under paragraph (b); and 
  (d) a shareholder’s pro rata portion of a dividend paid at any time on a class of the shares of the capital stock of a corporation is that proportion of the dividend that the number of shares of that class held by the shareholder at that time is of the number of shares of that class outstanding at that time. 
  
  ### Concurrence with election
  
  (3) An election under subsection (2) in respect of an original dividend is valid only if 
  (a) it is made with the concurrence of the corporation and all its shareholders 
  (i) who received or were entitled to receive all or any portion of the original dividend, and 
  (ii) whose addresses were known to the corporation; and 
  (b) either 
  (i) it is made on or before the day that is 30 months after the day on which the original dividend was paid, or 
  (ii) each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account. 
  
  ### Exception for non-taxable shareholders
  
  (4) If each shareholder who, in respect of an election made under subsection (2), is deemed by subsection (2) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I, 
  (a) subsection (3) does not apply to the election; and 
  (b) the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend was paid. 
  
  ### Return
  
  185.2 (1) Every corporation resident in Canada that pays a taxable dividend (other than a capital gains dividend within the meaning assigned by subsection 130.1(4) or 131(1)) in a taxation year shall file with the Minister, not later than the corporation’s filing-due date for the taxation year, a return for the year under this Part in prescribed form containing an estimate of the taxes payable by it under this Part for the taxation year. 
  
  ### Provisions applicable to Part
  
  (2) Subsections 150(2) and (3), sections 151, 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Joint and several liability from excessive eligible dividend designations
  
  (3) Without limiting the liability of any person under any other provision of this Act, if a Canadian-controlled private corporation or a deposit insurance corporation pays an eligible dividend in respect of which it has made an excessive eligible dividend designation to a shareholder with whom it does not deal at arm’s length, the shareholder is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the designation that the amount of the eligible dividend received by the shareholder is of the total of all amounts each of which is a dividend in respect of which the designation was made. 
  
  ### Assessment
  
  (4) The Minister may, at any time after the last day on which a corporation may make an election under subsection 185.1(2) in respect of an excessive eligible dividend designation, assess a person in respect of any amount payable under subsection (3) in respect of the designation, and the provisions of Division I of Part I (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, to an assessment made under this subsection as though it were made under section 152. 
  
  ### Rules applicable
  
  (5) If under subsection (3) a corporation and a shareholder have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of an excessive eligible dividend designation described in subsection (3), 
  (a) a payment at any time by the shareholder on account of the liability shall, to the extent of the payment, discharge their liability after that time; and 
  (b) a payment at any time by the corporation on account of its liability shall discharge the shareholder’s liability only to the extent of the amount determined by the formula is the total of 
  (i) the amount of the corporation’s liability, immediately before that time, under this Part in respect of the designation, and 
  (ii) the amount of the payment, is the amount of the corporation’s liability, immediately before that time, under this Act, is the amount of the eligible dividend received by the shareholder, and the total of all amounts each of which is a dividend in respect of which the designation was made. 
  
  # PART IV 
  
  ## Tax on Taxable Dividends Received by Private Corporations 
  
  ### Tax on assessable dividends
  
  186 (1) Every corporation (in this section referred to as the “particular corporation”) that is at any time in a taxation year a private corporation or a subject corporation shall, on or before its balance-due day for the year, pay a tax under this Part for the year equal to the amount, if any, by which the total of 
  (a) 38 1/3% of all assessable dividends received by the particular corporation in the year from corporations other than payer corporations connected with it, and 
  (b) all amounts, each of which is an amount in respect of an assessable dividend received by the particular corporation in the year from a private corporation or a subject corporation that was a payer corporation connected with the particular corporation, equal to that proportion of the payer corporation’s dividend refund (within the meaning assigned by paragraph 129(1)(a)) for its taxation year in which it paid the dividend that 
  (i) the amount of the dividend received by the particular corporation is of 
  (ii) the total of all taxable dividends paid by the payer corporation in its taxation year in which it paid the dividend and at a time when it was a private corporation or a subject corporation exceeds 38 1/3% of the total of 
  (c) such part of the particular corporation’s non-capital loss and farm loss for the year as it claims, and 
  (d) such part of the particular corporation’s 
  (i) non-capital loss for any of its 20 taxation years immediately preceding or 3 taxation years immediately following the year, and 
  (ii) farm loss for any of its 20 taxation years immediately preceding or 3 taxation years immediately following the year as it claims, not exceeding the portion thereof that would have been deductible under section 111 in computing its taxable income for the year if subparagraph 111(3)(a)(ii) were read without reference to the words “the particular taxation year and” and if the corporation had sufficient income for the year. 
  
  ### Reduction where Part IV.1 tax payable
  
  (1.1) Notwithstanding subsection 186(1), where an assessable dividend was received by a corporation in a taxation year and was included in an amount in respect of which tax under Part IV.1 was payable by the corporation for the year, the tax otherwise payable under this Part by the corporation for the year shall be reduced 
  (a) where the assessable dividend is described in paragraph 186(1)(a), by 10% of the assessable dividend, and 
  (b) where the assessable dividend is described in paragraph 186(1)(b), by 30% of the amount determined under that paragraph in respect of the assessable dividend. 
  
  ### When corporation controlled
  
  (2) For the purposes of this Part, other than for the purpose of determining whether a corporation is a subject corporation, one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length. 
  
  ### Definitions
  
  (3) The definitions in this subsection apply in this Part.  
  *assessable dividend* means an amount received by a corporation at a time when it is a private corporation or a subject corporation as, on account of, in lieu of payment of or in satisfaction of, a taxable dividend from a corporation, to the extent of the amount in respect of the dividend that is deductible under section 112, paragraph 113(1)(a), (a.1), (b) or (d) or subsection 113(2) in computing the recipient corporation’s taxable income for the year. (dividende imposable déterminé)   
  *subject corporation* means a corporation (other than a private corporation) resident in Canada and controlled, whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts). (société assujettie)  
  
  ### Corporations connected with particular corporation
  
  (4) For the purposes of this Part, a payer corporation is connected with a particular corporation at any time in a taxation year (in this subsection referred to as the “particular year”) of the particular corporation if 
  (a) the payer corporation is controlled (otherwise than by virtue of a right referred to in paragraph 251(5)(b)) by the particular corporation at that time; or 
  (b) the particular corporation owned, at that time, 
  (i) more than 10% of the issued share capital (having full voting rights under all circumstances) of the payer corporation, and 
  (ii) shares of the capital stock of the payer corporation having a fair market value of more than 10% of the fair market value of all of the issued shares of the capital stock of the payer corporation. 
  
  ### Deemed private corporation
  
  (5) A corporation that is at any time in a taxation year a subject corporation shall, for the purposes of paragraph 87(2)(aa) and section 129, be deemed to be a private corporation at that time, except that its non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) at the end of the year shall be determined without reference to paragraph (a) of that definition.  
  
  ### Partnerships
  
  (6) For the purposes of this Part, 
  (a) all amounts received in a fiscal period by a partnership as, on account or in lieu of payment of, or in satisfaction of, taxable dividends shall be deemed to have been received by each member of the partnership in the member’s fiscal period or taxation year in which the partnership’s fiscal period ends, to the extent of that member’s share thereof; and 
  (b) each member of a partnership shall be deemed to own at any time that proportion of the number of the shares of each class of the capital stock of a corporation that are property of the partnership at that time that the member’s share of all dividends received on those shares by the partnership in its fiscal period that includes that time is of the total of all those dividends. 
  
  ### Interpretation
  
  (7) For greater certainty, where a provision of this Act or the regulations indicates that the term 
  *connected* has the meaning assigned by subsection 186(4), that meaning shall be determined by taking into account the application of subsection 186(2) unless the provision expressly provides otherwise.  
  
  ### Exempt corporations
  
  186.1 No tax is payable under this Part for a taxation year by a corporation 
  (a) that was, at any time in the year, a bankrupt; or 
  (b) that was, throughout the year, 
  (i) a bank, 
  (ii) a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee, 
  (iii) an insurance corporation, 
  (iv) a prescribed labour-sponsored venture capital corporation, 
  (v) a prescribed investment contract corporation, 
  (vi) a non-resident-owned investment corporation, or 
  (vii) a registered securities dealer that was throughout the year a member, or a participating organization, of a designated stock exchange in Canada. 
  
  ### Exempt dividends
  
  186.2 For the purposes of subsection 186(1), dividends received in a taxation year by a corporation that was, throughout the year, a prescribed venture capital corporation from a corporation that was a prescribed qualifying corporation with respect to those dividends shall be deemed not to be taxable dividends. 
  
  ### Information return
  
  187 (1) Every corporation that is liable to pay tax under this Part for a taxation year in respect of a dividend received by it in the year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file a return for the year under this Part in prescribed form. 
  
  ### Interest
  
  (2) Where a corporation is liable to pay tax under this Part and has failed to pay all or any part thereof on or before the day on or before which the tax was required to be paid, it shall pay to the Receiver General interest at the prescribed rate on the amount that it failed to pay computed from the day on or before which the tax was required to be paid to the day of payment. 
  
  ### Provisions applicable to Part
  
  (3) Sections 151, 152, 158 and 159, subsections 161(7) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART IV.1 
  
  ## Taxes on Dividends on Certain Preferred Shares Received by Corporations 
  
  ### Definition of 
  *excepted dividend* 
  
  187.1 In this Part, 
  *excepted dividend* means a dividend  
  (a) received by a corporation on a share of the capital stock of a foreign affiliate of the corporation, other than a dividend received by a specified financial institution on a share acquired in the ordinary course of the business carried on by the institution; 
  (b) received by a corporation from another corporation (other than a corporation described in any of paragraphs (a) to (f) of the definition 
  *financial intermediary corporation* in subsection 191(1)) in which it has or would have, if the other corporation were a taxable Canadian corporation, a substantial interest (as determined under section 191) at the time the dividend was paid;  
  (c) received by a corporation that was, at the time the dividend was received, a private corporation or a financial intermediary corporation (within the meaning assigned by subsection 191(1)); 
  (d) received by a corporation on a short-term preferred share of the capital stock of a taxable Canadian corporation other than a dividend described in paragraph (b) or (c) of the definition 
  *excluded dividend* in subsection 191(1); or  
  (e) received by a corporation on a share (other than a taxable RFI share or a share that would be a taxable preferred share if the definition 
  *taxable preferred share* in subsection 248(1) were read without reference to paragraph (a) of that definition) of the capital stock of a mutual fund corporation.  
  
  ### Tax on dividends on taxable preferred shares
  
  187.2 Every corporation shall, on or before its balance-due day for a taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the corporation in the year on a taxable preferred share (other than a share of a class in respect of which an election under subsection 191.2(1) has been made) to the extent that an amount in respect of the dividend was deductible under section 112 or 113 or subsection 138(6) in computing its taxable income for the year or under subsection 115(1) in computing its taxable income earned in Canada for the year. 
  
  ### Tax on dividends on taxable RFI shares
  
  187.3 (1) Every restricted financial institution shall, on or before its balance-due day for a taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the institution at any time in the year on a share acquired by any person before that time and after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 that was, at the time the dividend was paid, a taxable RFI share to the extent that an amount in respect of the dividend was deductible under section 112 or 113 or subsection 138(6) in computing its taxable income for the year or under subsection 115(1) in computing its taxable income earned in Canada for the year. 
  
  ### Time of acquisition of share
  
  (2) For the purposes of subsection 187.3(1), 
  (a) a share of the capital stock of a corporation acquired by a person after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 pursuant to an agreement in writing entered into before that time shall be deemed to have been acquired by that person before that time; 
  (b) a share of the capital stock of a corporation acquired by a person after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 and before 1988 as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice filed before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 with a public authority pursuant to and in accordance with the securities legislation of the jurisdiction in which the shares are distributed shall be deemed to have been acquired by that person before that time; 
  (c) a share (in this paragraph referred to as the “new share”) of the capital stock of a corporation that is acquired by a person after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 in exchange for 
  (i) a share of a corporation that was issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 or is a grandfathered share, or 
  (ii) a debt obligation of a corporation that was issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, or issued after that time pursuant to an agreement in writing entered into before that time, where the right to the exchange for the new share and all or substantially all the terms and conditions of the new share were established in writing before that time shall be deemed to have been acquired by that person before that time; 
  (d) a share of a class of the capital stock of a Canadian corporation listed on a designated stock exchange in Canada that is acquired by a person after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 on the exercise of a right 
  (i) that was issued before that time and listed on a prescribed stock exchange in Canada, and 
  (ii) the terms of which at that time included the right to acquire the share, where all or substantially all the terms and conditions of the share were established in writing before that time shall be deemed to have been acquired by that person before that time; 
  (e) where a share that was owned by a particular restricted financial institution at 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 has, by one or more transactions between related restricted financial institutions, been transferred to another restricted financial institution, the share shall be deemed to have been acquired by the other restricted financial institution before that time unless at any particular time after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 and before the share was transferred to the other restricted financial institution the share was owned by a shareholder who, at that particular time, was a person other than a restricted financial institution related to the other restricted financial institution; and 
  (f) where, at any particular time, there has been an amalgamation within the meaning assigned by section 87, and 
  (i) each of the predecessor corporations was a restricted financial institution throughout the period from 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 to the particular time and the predecessor corporations were related to each other throughout that period, or 
  (ii) each of the predecessor corporations and the new corporation is a corporation described in any of paragraphs (a) to (d) of the definition 
  *restricted financial institution* in subsection 248(1),  a taxable RFI share acquired by the new corporation from a predecessor corporation on the amalgamation shall be deemed to have been acquired by the new corporation at the time it was acquired by the predecessor corporation. 
  
  ### Partnerships
  
  187.4 For the purposes of this Part, 
  (a) all amounts received in a fiscal period by a partnership as, on account or in lieu of payment of, or in satisfaction of, dividends shall be deemed to have been received by each member of the partnership in the member’s fiscal period or taxation year in which the partnership’s fiscal period ends, to the extent of that member’s share thereof; 
  (b) each member of a partnership shall be deemed to own at any time that proportion of the number of the shares of each class of the capital stock of a corporation that are property of the partnership at that time that the member’s share of all dividends received on those shares by the partnership in its fiscal period that includes that time is of the total of all those dividends; and 
  (c) a reference to a person includes a partnership. 
  
  ### Information return
  
  187.5 Every corporation liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which it is required by section 150 to file its return of income for the year under Part I, a return for the year under this Part in prescribed form containing an estimate of the taxes payable by it under sections 187.2 and 187.3 for the year. 
  
  ### Provisions applicable to Part
  
  187.6 Sections 152, 158 and 159, subsections 161(1), 161(2) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Provisions applicable — Crown corporations
  
  187.61 Section 27 applies to this Part with any modifications that the circumstances require. 
  
  # PART V 
  
  ## Tax and Penalties in Respect of Qualified Donees 
  
  ### Application of s. 149.1(1)
  
  187.7 The definitions in subsection 149.1(1) apply to this Part. 
  
  ### Deemed year-end on notice of revocation
  
  188 (1) If on a particular day the Minister issues a notice of intention to revoke the registration of a taxpayer as a registered charity under any of subsections 149.1(2) to (4.1) and 168(1), it becomes a listed terrorist entity or it is determined, under subsection 7(1) of the Charities Registration (Security Information) Act, that a certificate served in respect of the charity under subsection 5(1) of that Act is reasonable on the basis of information and evidence available,  
  (a) the taxation year of the charity that would otherwise have included that day is deemed to end at the end of that day; 
  (b) a new taxation year of the charity is deemed to begin immediately after that day; and 
  (c) for the purpose of determining the charity’s fiscal period after that day, the charity is deemed not to have established a fiscal period before that day. 
  
  ### Revocation tax
  
  (1.1) A charity referred to in subsection (1) is liable to a tax, for its taxation year that is deemed to have ended, equal to the amount determined by the formula is the total of all amounts, each of which is 
  (a) the fair market value of a property of the charity at the end of that taxation year, 
  (b) the amount of an appropriation (within the meaning assigned by subsection (2)) in respect of a property transferred to another person in the 120-day period that ended at the end of that taxation year, or 
  (c) the income of the charity for its winding-up period, including gifts received by the charity in that period from any source and any income that would be computed under section 3 as if that period were a taxation year; and is the total of all amounts (other than the amount of an expenditure in respect of which a deduction has been made in computing income for the winding-up period under paragraph (c) of the description of A), each of which is 
  (a) a debt of the charity that is outstanding at the end of that taxation year, 
  (b) an expenditure made by the charity during the winding-up period on charitable activities carried on by it, or 
  (c) an amount in respect of a property transferred by the charity during the winding-up period and not later than the latter of one year from the end of the taxation year and the day, if any, referred to in paragraph (1.2)(c), to a person that was at the time of the transfer an eligible donee in respect of the charity, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the consideration given by the person for the transfer. 
  
  ### Winding-up period
  
  (1.2) In this Part, the winding-up period of a charity is the period 
  (a) that begins immediately after the earliest of the days on which 
  (i) the Minister issues a notice of intention to revoke the registration of the charity under any of subsections 149.1(2) to (4.1) and 168(1), 
  (ii) the charity becomes a listed terrorist entity, and 
  (iii) it is determined, under subsection 7(1) of the Charities Registration (Security Information) Act, that a certificate served in respect of the charity under subsection 5(1) of that Act is reasonable on the basis of information and evidence available, and  
  (b) that ends on the day that is the latest of 
  (i) the day, if any, on which the charity files a return under subsection 189(6.1) for the taxation year deemed by subsection (1) to have ended, but not later than the day on which the charity is required to file that return, 
  (ii) the day on which the Minister last issues a notice of assessment of tax payable under subsection (1.1) for that taxation year by the charity, and 
  (iii) if the charity has filed a notice of objection or appeal in respect of that assessment, the day on which the Minister may take a collection action under section 225.1 in respect of that tax payable. 
  
  ### Eligible donee
  
  (1.3) In this Part, an eligible donee in respect of a particular charity is 
  (a) a registered charity 
  (i) of which more than 50% of the members of the board of directors or trustees of the registered charity deal at arm’s length with each member of the board of directors or trustees of the particular charity, 
  (ii) that is not the subject of a suspension under subsection 188.2(1), 
  (iii) that has no unpaid liabilities under this Act or under the Excise Tax Act,  
  (iv) that has filed all information returns required by subsection 149.1(14), and 
  (v) that is not the subject of a certificate under subsection 5(1) of the Charities Registration (Security Information) Act or, if it is the subject of such a certificate, the certificate has been determined under subsection 7(1) of that Act not to be reasonable; or  
  (b) a municipality in Canada that is approved by the Minister in respect of a transfer of property from the particular charity. 
  
  ### Eligible donee
  
  (1.4) In this Part, an eligible donee in respect of a particular Canadian amateur athletic association is a registered Canadian amateur athletic association 
  (a) of which more than 50% of the members of the board of directors or trustees of the registered Canadian amateur athletic association deal at arm’s length with each member of the board of directors or trustees of the particular Canadian amateur athletic association; 
  (b) that is not the subject of a suspension under subsection 188.2(1); 
  (c) that has no unpaid liabilities under this Act or under the Excise Tax Act ; and  
  (d) that has filed all information returns required by subsection 149.1(14). 
  
  ### Shared liability — revocation tax
  
  (2) A person who, after the time that is 120 days before the end of the taxation year of a charity that is deemed by subsection (1) to have ended, receives property from the charity, is jointly and severally, or solidarily, liable with the charity for the tax payable under subsection (1.1) by the charity for that taxation year for an amount not exceeding the total of all appropriations, each of which is the amount by which the fair market value of such a property at the time it was so received by the person exceeds the consideration given by the person in respect of the property. 
  
  ### Non-application of revocation tax
  
  (2.1) Subsections (1) and (1.1) do not apply to a charity in respect of a notice of intention to revoke given under any of subsections 149.1(2) to (4.1) and 168(1) if the Minister abandons the intention and so notifies the charity or if 
  (a) within the one-year period that begins immediately after the taxation year of the charity otherwise deemed by subsection (1) to have ended, the Minister has registered the charity as a charitable organization, private foundation or public foundation; and 
  (b) the charity has, before the time that the Minister has so registered the charity, 
  (i) paid all amounts, each of which is an amount for which the charity is liable under this Act (other than subsection (1.1)) or the Excise Tax Act in respect of taxes, penalties and interest, and  
  (ii) filed all information returns required by or under this Act to be filed on or before that time. 
  
  ### Transfer of property tax
  
  (3) Where, as a result of a transaction or series of transactions, property owned by a registered charity that is a charitable foundation and having a net value greater than 50% of the net asset amount of the charitable foundation immediately before the transaction or series of transactions, as the case may be, is transferred before the end of a taxation year, directly or indirectly, to one or more charitable organizations and it may reasonably be considered that the main purpose of the transfer is to effect a reduction in the disbursement quota of the foundation, the foundation shall pay a tax under this Part for the year equal to the amount by which 25% of the net value of that property determined as of the day of its transfer exceeds the total of all amounts each of which is its tax payable under this subsection for a preceding taxation year in respect of the transaction or series of transactions. 
  
  ### Non-application of subsection (3)
  
  (3.1) Subsection (3) does not apply to a transfer that is a gift to which subsection 188.1(11) or (12) applies. 
  
  ### Joint and several, or solidary, liability — tax transfer
  
  (4) If property has been transferred to a charitable organization in circumstances described in subsection (3) and it may reasonably be considered that the organization acted in concert with a charitable foundation for the purpose of reducing the disbursement quota of the foundation, the organization is jointly and severally, or solidarily, liable with the foundation for the tax imposed on the foundation by that subsection in an amount not exceeding the net value of the property. 
  
  ### Definitions
  
  (5) In this section,  
  *net asset amount* of a charitable foundation at any time means the amount determined by the formula  is the fair market value at that time of all the property owned by the foundation at that time, and is the total of all amounts each of which is the amount of a debt owing by or any other obligation of the foundation at that time; ( montant de l’actif net)   
  *net value* of property owned by a charitable foundation, as of the day of its transfer, means the amount determined by the formula  is the fair market value of the property on that day, and is the amount of any consideration given to the foundation for the transfer. ( valeur nette)  
  
  ### Penalty — carrying on business
  
  188.1 (1) Subject to subsection (2), a person is liable to a penalty under this Part equal to 5% of its gross revenue for a taxation year from any business that it carries on in the taxation year, if 
  (a) the person is a registered charity that is a private foundation; 
  (b) the person is a registered charity that is not a private foundation and the business is not a related business in relation to the charity; or 
  (c) the person is a registered Canadian amateur athletic association and the business is not a related business in relation to the association. 
  
  ### Increased penalty for subsequent assessment
  
  (2) A person that, less than five years before a particular time, was assessed a liability under subsection (1) or this subsection, for a taxation year, is liable to a penalty under this Part equal to its gross revenue for a subsequent taxation year from any business that, after that assessment and in the subsequent taxation year, it carries on at the particular time if 
  (a) the person is a registered charity that is a private foundation; 
  (b) the person is a registered charity that is not a private foundation and the business is not a related business in relation to the charity; or 
  (c) the person is a registered Canadian amateur athletic association and the business is not a related business in relation to the association. 
  
  ### Control of corporation by a charitable foundation
  
  (3) If at a particular time a charitable foundation has acquired control (within the meaning of subsection 149.1(12)) of a particular corporation, the foundation is liable to a penalty under this Part for a taxation year equal to 
  (a) 5% of the total of all amounts, each of which is a dividend received by the foundation from the particular corporation in the taxation year and at a time when the foundation so controlled the particular corporation, except if the foundation is liable under paragraph (b) for a penalty in respect of the dividend; or 
  (b) if the Minister has, less than five years before the particular time, assessed a liability under paragraph (a) or this paragraph for a preceding taxation year of the foundation in respect of a dividend received from any corporation, the total of all amounts, each of which is a dividend received, after the particular time, by the foundation, from the particular corporation, in the taxation year and at a time when the foundation so controlled the particular corporation. 
  
  ### Penalty for excess corporate holdings
  
  (3.1) A private foundation is liable to a penalty under this Part for a taxation year, in respect of a class of shares of the capital stock of a corporation, equal to 
  (a) 5% of the amount, if any, determined by multiplying the divestment obligation percentage of the private foundation for the taxation year in respect of the class by the total fair market value of all of the issued and outstanding shares of the class, except if the private foundation is liable for the taxation year under paragraph (b) for a penalty in respect of the class; or 
  (b) 10% of the amount, if any, determined by multiplying the divestment obligation percentage of the private foundation for the taxation year in respect of the class by the total fair market value of all of the issued and outstanding shares of the class, if 
  (i) the private foundation has failed to disclose, in its return required under subsection 149.1(14) for the taxation year, 
  (A) a material transaction, in the taxation year, of the private foundation in respect of the class, 
  (B) a material interest held at the end of the taxation year by a relevant person in respect of the private foundation, or 
  (C) the total corporate holdings percent-age of the private foundation in respect of the class at the end of the taxation year, unless at no time in the taxation year the private foundation held greater than an insignificant interest in respect of the class, or 
  (ii) the Minister has, less than five years before the end of the taxation year, assessed a liability under paragraph (a) or this paragraph for a preceding taxation year of the private foundation in respect of any divestment obligation percentage. 
  
  ### Avoidance of divestiture
  
  (3.2) If, at the end of a taxation year, a private foundation would — but for a transaction or series of transactions entered into by the private foundation or a relevant person in respect of the private foundation (in this subsection referred to as the “holder”) a result of which is that the holder holds, directly or indirectly, an interest (or for civil law, a right), in a corporation other than shares — have a divestment obligation percentage for that taxation year in respect of the private foundation’s holdings of a class of shares of the capital stock of the corporation, and it can reasonably be considered that a purpose of the transaction or series is to avoid that divestment obligation percentage by substituting shares of the class for that interest or right, for the purposes of applying this section, subsection 149.1(1) and section 149.2, 
  (a) each of those interests or rights is deemed to have been converted, immediately after the time it was first held, directly or indirectly by the holder, into that number of shares of that class that would, if those shares were shares of the class that were issued by the corporation, have a fair market value equal to the fair market value of the interest or right at that time; 
  (b) each such share is deemed to be a share that is issued by the corporation and outstanding and to continue to be held by the holder until such time as the holder no longer holds the interest or right; and 
  (c) each of those shares is deemed to have a fair market value, at the particular time, equal to the fair market value, at the particular time, of a share of the class issued by the corporation, determined without reference to this subsection. 
  
  ### Where subsection (3.5) applies
  
  (3.3) Subsection (3.5) applies to a private foundation at a particular time in a taxation year if 
  (a) at the particular time, a person (in this subsection and subsection (3.5) referred to as an “insider” of the private foundation) that is the private foundation, or is a relevant person in respect of the private foundation, is a beneficiary under a trust; 
  (b) at or before the particular time 
  (i) the insider acquired an interest in or under the trust, or 
  (ii) the trust acquired a property; 
  (c) it may reasonably be considered that a purpose of the acquisition described in paragraph (b) was to hold, directly or indirectly, shares of a class of the capital stock of a corporation (referred to in subsection (3.5) as the “subject corporation”); 
  (d) the shares described in paragraph (c) would, if they were held by the insider, cause the private foundation to have a divestment obligation percentage for the taxation year; and 
  (e) at the particular time, the insider holds the interest described in subparagraph (b)(i), or the trust holds the property described in subparagraph (b)(ii), as the case may be. 
  
  ### Rules applicable
  
  (3.4) For the purpose of subsections (3.3) and (3.5), 
  (a) interests (or, for civil law, rights), other than shares, of a trust in a corporation that entitle the trust to a right described in paragraph 251(5)(b) in respect of a class of the capital stock of the corporation, are deemed to be converted into shares of that class in the manner described by paragraph (3.2)(a); and 
  (b) if the amount of income or capital of the trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be. 
  
  ### Avoidance of divestiture
  
  (3.5) If this subsection applies to a private foundation at a particular time in respect of an interest of an insider of the private foundation in a trust, for the purposes of applying this section, subsection 149.1(1) and section 149.2, 
  (a) the insider is deemed to hold at the particular time, in addition to any shares of the capital stock of the subject corporation that it holds otherwise than because of this subsection, the number of shares, of the class of shares referred to in paragraph (3.3)(c), determined by the formula is the number of shares of that class that are held, directly or indirectly, by the trust at the particular time, is the total fair market value of all interests held by the insider in the trust at the particular time, and is the total fair market value of all property held by the trust at the particular time; 
  (b) each of those shares is deemed to be a share that is issued by the subject corporation and outstanding and to continue to be held by the holder until such time as the holder no longer holds the interest or right; and 
  (c) each of those shares is deemed to have a fair market value, at the particular time, equal to the fair market value, at the particular time, of a share of the class issued by the subject corporation, determined without reference to this subsection. 
  
  ### Undue benefits
  
  (4) A registered charity or registered Canadian amateur athletic association that, at a particular time in a taxation year, confers on a person an undue benefit is liable to a penalty under this Part for the taxation year equal to 
  (a) 105% of the amount of the benefit, except if the charity or association is liable under paragraph (b) for a penalty in respect of the benefit; or 
  (b) if the Minister has, less than five years before the particular time, assessed a liability under paragraph (a) or this paragraph for a preceding taxation year of the charity or association and the undue benefit was conferred after that assessment, 110% of the amount of the benefit. 
  
  ### Meaning of undue benefits
  
  (5) For the purposes of this Part, an undue benefit conferred on a person (referred to in this Part as the “beneficiary”) by a registered charity or registered Canadian amateur athletic association includes a disbursement by way of a gift or the amount of any part of the income, rights, property or resources of the charity or association that is paid, payable, assigned or otherwise made available for the personal benefit of any person who is a proprietor, member, shareholder, trustee or settlor of the charity or association, who has contributed or otherwise paid into the charity or association more than 50% of the capital of the charity or association, or who deals not at arm’s length with such a person or with the charity or association, as well as any benefit conferred on a beneficiary by another person, at the direction or with the consent of the charity or association, that would, if it were not conferred on the beneficiary, be an amount in respect of which the charity or association would have a right, but does not include a disbursement or benefit to the extent that it is 
  (a) an amount that is reasonable consideration or remuneration for property acquired by or services rendered to the charity or association; 
  (b) a gift made, or a benefit conferred, 
  (i) in the case of a registered charity, in the course of a charitable act in the ordinary course of the charitable activities carried on by the charity, unless it can reasonably be considered that the eligibility of the beneficiary for the benefit relates solely to the relationship of the beneficiary to the charity, and 
  (ii) in the case of a registered Canadian amateur athletic association, in the ordinary course of promoting amateur athletics in Canada on a nationwide basis; or 
  (c) a qualifying disbursement. 
  
  ### Failure to file information returns
  
  (6) Every registered charity, registered Canadian amateur athletic association and registered journalism organization that fails to file a return for a taxation year as and when required by subsection 149.1(14) or (14.1) is liable to a penalty equal to $500. 
  
  ### Incorrect information
  
  (7) Except where subsection (8) or (9) applies, every registered charity, registered Canadian amateur athletic association and registered journalism organization that issues, in a taxation year, a receipt for a gift otherwise than in accordance with this Act and the regulations is liable for the taxation year to a penalty equal to 5% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3). 
  
  ### Increased penalty for subsequent assessment
  
  (8) Except where subsection (9) applies, if the Minister has, less than five years before a particular time, assessed a penalty under subsection (7) or this subsection for a taxation year of a registered charity, registered Canadian amateur athletic association or registered journalism organization and, after that assessment and in a subsequent taxation year, it issues, at the particular time, a receipt for a gift otherwise than in accordance with this Act and the regulations, it is liable for the subsequent taxation year to a penalty equal to 10% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3). 
  
  ### False information
  
  (9) If at any time a person makes or furnishes, participates in the making of or causes another person to make or furnish a statement that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct (as defined in subsection 163.2(1)), is a false statement (as defined in subsection 163.2(1)) on a receipt issued by, on behalf of or in the name of another person for the purposes of subsection 110.1(2) or 118.1(2), the person (or, where the person is an officer, employee, official or agent of a registered charity, registered Canadian amateur athletic association or registered journalism organization, the charity, association or organization) is liable for their taxation year that includes that time to a penalty equal to 125% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3).  
  
  ### Maximum amount
  
  (10) A person who is liable at any time to penalties under both section 163.2 and subsection (9) in respect of the same false statement is liable to pay only the greater of those penalties. 
  
  ### Delay of expenditure
  
  (11) If, in a taxation year, a registered charity has entered into a transaction (including a gift to another registered charity) and it may reasonably be considered that a purpose of the transaction was to avoid or unduly delay the expenditure of amounts on charitable activities, the registered charity is liable to a penalty under this Act for its taxation year equal to 110% of the amount of expenditure avoided or delayed, and in the case of a gift to another registered charity, both charities are jointly and severally, or solidarily, liable to the penalty. 
  
  ### Gifts not at arm’s length
  
  (12) If a registered charity has in a taxation year received a gift of property (other than a designated gift) from another registered charity with which it does not deal at arm’s length and it has expended, before the end of the next taxation year — in addition to its disbursement quota for each of those taxation years — an amount that is less than the fair market value of the property on charitable activities carried on by it or by way of gifts made by it that are qualifying disbursements to qualified donees or grantee organizations, with which it deals at arm’s length, the registered charity is liable to a penalty under this Act for that subsequent taxation year equal to 110% of the difference between the fair market value of the property and the additional amount expended. 
  
  ### Notice of suspension with assessment
  
  188.2 (1) The Minister shall, with an assessment referred to in this subsection, give notice by registered mail to a registered charity, registered Canadian amateur athletic association or registered journalism organization that its authority to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed, if the Minister has assessed the charity, association or organization for a taxation year for  
  (a) a penalty under subsection 188.1(2); 
  (b) a penalty under paragraph 188.1(4)(b) in respect of an undue benefit, other than an undue benefit conferred by the charity or association by way of a gift; or 
  (c) a penalty under subsection 188.1(9) if the total of all such penalties for the taxation year exceeds $25,000. 
  
  ### Notice of suspension — general
  
  (2) The Minister may give notice by registered mail to a person referred to in any of paragraphs (a) to (c) of the definition 
  *qualified donee* in subsection 149.1(1) that the authority of the person to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed  
  (a) if the person contravenes any of sections 230 to 231.5; 
  (b) if it may reasonably be considered that the person has acted, in concert with another person that is the subject of a suspension under this section, to accept a gift or transfer of property on behalf of that other person; 
  (c) in the case of a person referred to in paragraph (a) of the definition 
  *qualified donee* in subsection 149.1(1), if the person has issued a receipt for a gift otherwise than in accordance with this Act and the regulations;  
  (d) in the case of a person that is a registered charity or registered Canadian amateur athletic association, if an ineligible individual is a director, trustee, officer or like official of the person, or controls or manages the person, directly or indirectly, in any manner whatever; 
  (e) in the case of a person that is a registered charity or registered Canadian amateur athletic association, if the person devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office; or 
  (f) in the case of a person that is a registered charity, if a false statement (as defined in subsection 163.2(1)) was made in circumstances amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of information for the purpose of maintaining its registration.  
  (g)  [Repealed, 2018, c. 27, s. 20]  
  
  ### Suspension – failure to report
  
  (2.1) If a registered charity, a registered Canadian amateur athletic association or a registered journalism organization fails to report information that is required to be included in a return filed under subsection 149.1(14) or (14.1), the Minister may give notice by registered mail to the charity, association or organization that its authority to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended from the day that is seven days after the day on which the notice is mailed until such time as the Minister notifies the charity, association or organization that the Minister has received the required information in prescribed form.  
  
  ### Effect of suspension
  
  (3) If the Minister has issued a notice to a qualified donee under any of subsections (1) to (2.1), subject to subsection (4), 
  (a) the qualified donee is deemed, in respect of gifts made and property transferred to the qualified donee within the one-year period that begins on the day that is seven days after the day on which the notice is mailed, not to be a qualified donee for the purposes of subsections 110.1(1) and 118.1(1) and Part XXXV of the Income Tax Regulations ; and  
  (b) if the qualified donee is, during that period, offered a gift from any person, the qualified donee shall, before accepting the gift, inform that person that 
  (i) it has received the notice, 
  (ii) no deduction under subsection 110.1(1) or credit under subsection 118.1(3) may be claimed in respect of a gift made to it in the period, and 
  (iii) a gift made to it in the period is not a gift to a qualified donee. 
  
  ### Application for postponement
  
  (4) If a notice of objection to a suspension under any of subsections (1) to (2.1) has been filed by a qualified donee, the qualified donee may file an application to the Tax Court of Canada for a postponement of that portion of the period of suspension that has not elapsed until the time determined by the Court. 
  
  ### Grounds for postponement
  
  (5) The Tax Court of Canada may grant an application for postponement only if it would be just and equitable to do so. 
  
  ### Tax regarding non-qualified investment
  
  189 (1) Where at any particular time in a taxation year a debt (other than a debt in respect of which subsection 80.4(1) applies or would apply but for subsection 80.4(3)) is owing by a taxpayer to a registered charity that is a private foundation and at that time the debt was a non-qualified investment of the foundation, the taxpayer shall pay a tax under this Part for the year equal to the amount, if any, by which 
  (a) the amount that would be payable as interest on that debt for the period in the year during which it was outstanding and was a non-qualified investment of the foundation if the interest were payable at such prescribed rates as are in effect from time to time during the period exceeds 
  (b) the amount of interest for the year paid on that debt by the taxpayer not later than 30 days after the end of the year. 
  
  ### Computation of interest on debt
  
  (2) For the purpose of paragraph 189(1)(a), where a debt in respect of which subsection 189(1) applies (other than a share or right that is deemed by subsection 189(3) to be a debt) is owing by a taxpayer to a private foundation, interest on that debt for the period referred to in that paragraph shall be computed at the least of 
  (a) such prescribed rates as are in effect from time to time during the period, 
  (b) the rate per annum of interest on that debt that, having regard to all the circumstances (including the terms and conditions of the debt), would have been agreed on, at the time the debt was incurred, had the taxpayer and the foundation been dealing with each other at arm’s length and had the ordinary business of the foundation been the lending of money, and 
  (c) where that debt was incurred before April 22, 1982, a rate per annum equal to 6% plus 2% for each calendar year after 1982 and before the taxation year referred to in subsection 189(1). 
  
  ### Share deemed to be debt
  
  (3) For the purpose of subsection 189(1), where a share, or a right to acquire a share, of the capital stock of a corporation held by a private foundation at any particular time during the corporation’s taxation year was at that time a non-qualified investment of the foundation, the share or right shall be deemed to be a debt owing at that time by the corporation to the foundation 
  (a) the amount of which was equal to, 
  (i) in the case of a share or right last acquired before April 22, 1982, the greater of its fair market value on April 21, 1982 and its cost amount to the foundation at the particular time, or 
  (ii) in any other case, its cost amount to the foundation at the particular time, 
  (b) that was outstanding throughout the period for which the share or right was held by the foundation during the year, and 
  (c) in respect of which the amount of interest paid in the year is equal to the total of all amounts each of which is the amount of a dividend received on the share by the foundation in the year, and the reference in paragraph 189(1)(a) to “such prescribed rates as are in effect from time to time during the period” shall be read as a reference to “2/3 of such prescribed rates as are in effect from time to time during the period”. 
  
  ### Computation of interest with respect to a share
  
  (4) For the purposes of subsection 189(3), where a share or right in respect of which that subsection applies was last acquired before April 22, 1982, the reference therein to “2/3 of such prescribed rates as are in effect from time to time during the period” shall be read as a reference to “the lesser of 
  (a) a rate per annum equal to 4% plus 1% for each 5 calendar years contained in the period commencing after 1982 and ending before the particular time, and 
  (b) a rate per annum equal to 2/3 of such prescribed rates as are in effect from time to time during the year”. 
  
  ### Share substitution
  
  (5) For the purpose of subsection 189(3), where a share or right is acquired by a charity in exchange for another share or right in a transaction after April 21, 1982 to which section 51, 85, 85.1, 86 or 87 applies, it shall be deemed to be the same share or right as the one for which it was substituted. 
  
  ### Taxpayer to file return and pay tax
  
  (6) Every taxpayer who is liable to pay tax under this Part (except a charity that is liable to pay tax under section 188(1)) for a taxation year shall, on or before the day on or before which the taxpayer is, or would be if tax were payable by the taxpayer under Part I for the year, required to file a return of income or an information return under Part I for the year, 
  (a) file with the Minister a return for the year in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax payable by the taxpayer under this Part for the year; and 
  (c) pay to the Receiver General the amount of tax payable by the taxpayer under this Part for the year. 
  
  ### Revoked charity to file returns
  
  (6.1) If the registration of a taxpayer as a registered charity has been revoked (and subsection 188(2.1) does not apply to the taxpayer), the taxpayer shall, on or before the day that is one year from the end of the taxation year referred to in paragraph 188(1)(a), and without notice or demand, 
  (a) file with the Minister 
  (i) a return for the taxation year, in prescribed form and containing prescribed information, and 
  (ii) both an information return and a public information return for the taxation year, each in the form prescribed for the purpose of subsection 149.1(14); and 
  (b) estimate in the return referred to in subparagraph (a)(i) the amount of tax payable by the taxpayer under subsection 188(1.1) for the taxation year; and 
  (c) pay to the Receiver General the amount of tax payable by the taxpayer under subsection 188(1.1) for the taxation year. 
  
  ### Reduction of revocation tax liability
  
  (6.2) If the Minister has, during the one-year period beginning immediately after the end of a taxation year of a person, assessed the person in respect of the person’s liability for tax under subsection 188(1.1) for that taxation year, has not after that period reassessed the tax liability of the person, and that liability exceeds $1,000, that liability is, at any particular time, reduced by the total of 
  (a) the amount, if any, by which 
  (i) the total of all amounts, each of which is an expenditure made by the charity, on charitable activities carried on by it, before the particular time and during the period (referred to in this subsection as the “post-assessment period”) that begins immediately after a notice of the latest such assessment was sent and ends at the end of the one-year period exceeds 
  (ii) the income of the charity for the post-assessment period, including gifts received by the charity in that period from any source and any income that would be computed under section 3 if that period were a taxation year, and 
  (b) all amounts, each of which is an amount, in respect of a property transferred by the charity before the particular time and during the post-assessment period to a person that was at the time of the transfer an eligible donee in respect of the charity, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the consideration given by the person for the transfer. 
  
  ### Reduction of liability for penalties
  
  (6.3) If the Minister has assessed a particular person in respect of the particular person’s liability for penalties under section 188.1 for a taxation year, and that liability exceeds $1,000, that liability is, at any particular time, reduced by the total of all amounts, each of which is an amount, in respect of a property transferred by the particular person after the day on which the Minister first assessed that liability and before the particular time to another person that was at the time of the transfer an eligible donee described in paragraph 188(1.3)(a) in respect of the particular person, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the total of 
  (a) the consideration given by the other person for the transfer, and 
  (b) the part of the amount in respect of the transfer that has resulted in a reduction of an amount otherwise payable under subsection 188(1.1). 
  
  ### Minister may assess
  
  (7) Without limiting the authority of the Minister to revoke the registration of a registered charity or registered Canadian amateur athletic association, the Minister may also at any time assess a taxpayer in respect of any amount that a taxpayer is liable to pay under this Part. 
  
  ### Provisions applicable to Part
  
  (8) Subsections 150(2) and (3), sections 152 and 158, subsection 161(11), sections 162 to 167 and Division J of Part I apply in respect of an amount assessed under this Part and of a notice of suspension under subsection 188.2(1), (2) or (2.1) as if the notice were a notice of assessment made under section 152, with any modifications that the circumstances require including, for greater certainty, that a notice of suspension that is reconsidered or reassessed may be confirmed or vacated, but not varied, except that 
  (a) section 162 does not apply in respect of a return required to be filed under paragraph (6.1)(a); and 
  (b) the reference in each of subsections 165(2) and 166.1(3) to the expression “Chief of Appeals in a District Office or a Taxation Centre” is to be read as a reference to the expression “Assistant Commissioner, Appeals Branch”. 
  
  ### Clarification re objections under subsection 168(4)
  
  (8.1) For greater certainty, in applying the provisions referred to in subsection (8), with any modifications that the circumstances require, 
  (a) a notice of objection referred to in subsection 168(4) does not constitute a notice of objection to a tax assessed under subsection 188(1.1); and 
  (b) an issue that could have been the subject of a notice of objection referred to in subsection 168(4) may not be appealed to the Tax Court of Canada under subsection 169(1). 
  
  ### Interest
  
  (9) Subsection 161(11) does not apply to a liability of a taxpayer for a taxation year 
  (a) under subsection 188(1.1) to the extent that the liability is reduced by subsection (6.2), or paid, before the end of the one-year period that begins immediately after the end of the taxation year deemed to have ended by paragraph 188(1)(a); or 
  (b) under section 188.1 to the extent that the liability is reduced by subsection (6.3), or paid, before the end of the one-year period that begins immediately after the liability was first assessed. 
  
  # PART VI 
  
  ## Tax on Capital of Financial Institutions 
  
  ### Definitions
  
  190 (1) For the purposes of this Part,  
  *contractual service margin* for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by the insurer, at the end of a taxation year, has the same meaning as in subsection 138(12); (marge sur services contractuels)   
  *financial institution* means a corporation that  
  (a) is a bank, 
  (b) is authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public, 
  (c) is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables, 
  (d) is a life insurance corporation that carries on business in Canada, or 
  (e) is a corporation all or substantially all of the assets of which are shares or indebtedness of corporations described in any of paragraphs (a) to (d) or this paragraph to which the corporation is related; ( institution financière)   
  *group of insurance contracts* of an insurer has the same meaning as in subsection 138(12); (groupe de contrats d’assurance)   
  *group of reinsurance contracts* held by an insurer has the same meaning as in subsection 138(12); (groupe de contrats de réassurance)   
  *group of segregated fund policies* of an insurer has the same meaning as in subsection 138(12); (groupe de polices à fonds réservé)   
  *long-term debt* means  
  (a) in the case of a bank, its subordinated indebtedness (within the meaning assigned by section 2 of the Bank Act) evidenced by obligations issued for a term of not less than 5 years,  
  (b) in the case of an insurance corporation, its subordinated indebtedness (within the meaning assigned by section 2 of the Insurance Companies Act) evidenced by obligations issued for a term of not less than 5 years, and  
  (c) in the case of any other corporation, its subordinated indebtedness (within the meaning that would be assigned by section 2 of the Bank Act if the definition of that expression in that section were applied with such modifications as the circumstances require) evidenced by obligations issued for a term of not less than 5 years; (passif à long terme)   
  *policyholders’ liabilities* of an insurer at the end of a taxation year has the same meaning as in subsection 138(12); (obligation envers les titulaires de polices)   
  *reserves*, in respect of a financial institution for a taxation year, means the amount at the end of the year of all of the institution’s reserves, provisions and allowances (other than allowances in respect of depreciation or depletion) and, for greater certainty, includes any provision in respect of deferred taxes. (réserves)  
  
  ### Prescribed meanings
  
  (1.1) For the purposes of this Part, the expressions 
  *attributed surplus*, 
  *Canadian assets*, 
  *Canadian reserve liabilities*, 
  *total assets* and 
  *total reserve liabilities* have the meanings that are prescribed.  
  
  ### Application of ss. 181(3) and (4)
  
  (2) Subsections 181(3) and 181(4) apply to this Part with such modifications as the circumstances require. 
  
  ## Calculation of Capital Tax 
  
  ### Tax payable
  
  190.1 (1) Every corporation that is a financial institution at any time during a taxation year shall pay a tax under this Part for the year equal to 1.25% of the amount, if any, by which its taxable capital employed in Canada for the year exceeds its capital deduction for the year. 
  (1.1) and (1.2) [Repealed, 2007, c. 2, s. 40]  
  
  ### Short taxation years
  
  (2) Where a taxation year of a corporation is less than 51 weeks, the amount determined under subsection 190.1(1) for the year in respect of the corporation shall be reduced to that proportion of that amount that the number of days in the year is of 365. 
  
  ### Deduction
  
  (3) There may be deducted in computing a corporation’s tax payable under this Part for a taxation year an amount equal to the total of 
  (a) the corporation’s tax payable under Parts I and VI.2 (determined in accordance with subsection 191.5(9)) for the year; and 
  (b) such part as the corporation claims of its unused Part I tax credits and unused surtax credits for its 7 taxation years immediately before and its 3 taxation years immediately after the year. 
  (c) and (d) [Repealed, 2007, c. 2, s. 40]  
  
  ### Idem
  
  (4) For the purposes of this subsection and subsections 190.1(3), 190.1(5) and 190.1(6), 
  (a) an amount may not be claimed under subsection 190.1(3) in computing a corporation’s tax payable under this Part for a particular taxation year 
  (i) in respect of its unused Part I tax credit for another taxation year, until its unused Part I tax credits for taxation years preceding the other year that may be claimed under this Part for the particular year have been claimed, and 
  (ii) in respect of its unused surtax credit for another taxation year, until its unused surtax credits for taxation years preceding the other year that may be claimed under Part I.3 or this Part for the particular year have been claimed; 
  (b) an amount may be claimed under subsection 190.1(3) in computing a corporation’s tax payable under this Part for a particular taxation year 
  (i) in respect of its unused Part I tax credit for another taxation year, only to the extent that it exceeds the total of all amounts each of which is the amount claimed in respect of that unused Part I tax credit in computing its tax payable under this Part for a taxation year preceding the particular year, and 
  (ii) in respect of its unused surtax credit for another taxation year, only to the extent that it exceeds the total of all amounts each of which is the amount claimed in respect of the unused surtax credit 
  (A) in computing its tax payable under this Part for a taxation year preceding the particular year, or 
  (B) in computing its tax payable under Part I.3 for the particular year or a taxation year preceding the particular year; and 
  (c) an amount may be claimed under paragraph (3)(b) in computing a corporation’s tax payable under this Part for a taxation year that ends before July 1, 2006 in respect of its unused Part I tax credit for a taxation year that ends after July 1, 2006 (referred to in this paragraph as the “credit taxation year”) only to the extent that the unused Part I tax credit exceeds the amount, if any, by which 
  (i) the amount that would, if this Part were read as it applied to the 2005 taxation year, be the corporation’s tax payable under this Part for the credit taxation year exceeds 
  (ii) the corporation’s tax payable under this Part for the credit taxation year. 
  
  ### Definitions
  
  (5) For the purposes of subsections 190.1(3), 190.1(4) and 190.1(6),  
  *unused Part I tax credit*, of a corporation for a taxation year, means the amount, if any, by which  
  (a) the corporation’s tax payable under Part I for the year exceeds 
  (b) the amount that would, but for subsection (3), be its tax payable under this Part for the year; ( crédit d’impôt de la partie I inutilisé)   
  *unused surtax credit* of a corporation for a taxation year has the meaning assigned by subsection 181.1(6). (crédit de surtaxe inutilisé)  
  
  ### Acquisition of control
  
  (6) Where at any time control of a corporation was acquired by a person or group of persons, no amount in respect of its unused Part I tax credit or unused surtax credit for a taxation year ending before that time is deductible by the corporation for a taxation year ending after the time and no amount in respect of its unused Part I tax credit or unused surtax credit for a taxation year ending after that time is deductible by the corporation for a taxation year ending before that time, except that 
  (a) the corporation’s unused Part I tax credit and unused surtax credit for a particular taxation year that ended before that time is deductible by the corporation for a taxation year that ends after that time (in this paragraph referred to as the “subsequent year”) to the extent of that proportion of the corporation’s tax payable under Part I for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is 
  (I) its income under Part I for the particular year from a business that was carried on by the corporation for profit or with a reasonable expectation of profit throughout the subsequent year, or 
  (II) where properties were sold, leased, rented or developed or services were rendered in the course of carrying on that business before that time, its income under Part I for the particular year from any other business all or substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or 111(1)(d) in computing its taxable income for the particular year in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of any business referred to in clause 190.1(6)(a)(i)(A) is of the greater of 
  (ii) the amount determined under subparagraph 190.1(6)(a)(i), and 
  (iii) the corporation’s taxable income for the particular year; and 
  (b) the corporation’s unused Part I tax credit and unused surtax credit for a particular taxation year that ends after that time is deductible by the corporation for a taxation year (in this paragraph referred to as the“preceding year”) that ended before that time to the extent of that proportion of the corporation’s tax payable under Part I for the particular year that 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is 
  (I) its income under Part I for the particular year from a business that was carried on by the corporation in the preceding year and throughout the particular year for profit or with a reasonable expectation of profit, or 
  (II) where properties were sold, leased, rented or developed or services were rendered in the course of carrying on that business before that time, its income under Part I for the particular year from any other business all or substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services exceeds 
  (B) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or 111(1)(d) in computing its taxable income for the particular year in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of any business referred to in clause 190.1(6)(b)(i)(A) is of the greater of 
  (ii) the amount determined under subparagraph 190.1(6)(b)(i), and 
  (iii) the corporation’s taxable income for the particular year. 
  
  ### Taxable capital employed in Canada
  
  190.11 For the purposes of this Part, the taxable capital employed in Canada of a financial institution for a taxation year is, 
  (a) in the case of a financial institution other than a life insurance corporation, that proportion of its taxable capital for the year that its Canadian assets at the end of the year is of its total assets at the end of the year; 
  (b) in the case of a life insurance corporation that was resident in Canada at any time in the year, the total of 
  (i) that proportion of the amount, if any, by which the total of 
  (A) its taxable capital for the year, and 
  (B) the amount prescribed for the year in respect of the corporation exceeds 
  (C) the amount prescribed for the year in respect of the corporation that its Canadian reserve liabilities as at the end of the year is of the total of 
  (D) its total reserve liabilities as at the end of the year, and 
  (E) the amount prescribed for the year in respect of the corporation; and 
  (ii)  [Repealed, 2009, c. 2, s. 63]  
  (c) in the case of a life insurance corporation that was non-resident throughout the year, its taxable capital for the year. 
  
  ### Taxable capital
  
  190.12 For the purposes of this Part, the taxable capital of a corporation for a taxation year is the amount, if any, by which its capital for the year exceeds the total determined under section 190.14 in respect of its investments for the year in financial institutions related to it. 
  
  ### Capital
  
  190.13 For the purposes of this Part, the capital of a financial institution for a taxation year is, 
  (a) in the case of a financial institution, other than an authorized foreign bank or a life insurance corporation, the amount, if any, by which the total at the end of the year of 
  (i) the amount of its long-term debt, 
  (ii) the amount of its capital stock (or, in the case of an institution incorporated without share capital, the amount of its members’ contributions), retained earnings, contributed surplus and any other surpluses, and 
  (iii) the amount of its reserves, except to the extent that they were deducted in computing its income under Part I for the year, exceeds the total at the end of the year of 
  (iv) the amount of its deferred tax debit balance, and 
  (v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares); 
  (b) in the case of a life insurance corporation that was resident in Canada at any time in the year, the amount determined by the formula is the amount of the corporation’s long-term debt at the end of the year, is the total amount, at the end of the year, of the corporation’s 
  (i) capital stock (or, in the case of an insurance corporation incorporated without share capital, the amount of its members’ contributions), 
  (ii) retained earnings, 
  (iii) accumulated other comprehensive income, 
  (iv) policyholders’ liabilities, 
  (v) contributed surplus, and 
  (vi) any other surpluses, is the total of all amounts each of which is the contractual service margin for a group of insurance contracts of the corporation at the end of the year other than a group of segregated fund policies, is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the corporation at the end of the year, that is 
  (i) if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, and 
  (ii) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion that is in respect of the reinsurance of risk under a segregated fund policy, and is the amount of any deficit deducted in computing the shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year; 
  (c) in the case of a life insurance corporation that was non-resident throughout the year, the total at the end of the year of 
  (i) the amount that is the greater of 
  (A) the amount, if any, by which 
  (I) its surplus funds derived from operations (as defined in subsection 138(12)) as of the end of the year, computed as if no tax were payable under Part I.3 or this Part for the year exceeds the total of all amounts each of which is 
  (II) an amount on which it was required to pay, or would but for subsection 219(5.2) have been required to pay, tax under Part XIV for a preceding taxation year, except the portion, if any, of the amount on which tax was payable, or would have been payable, because of subparagraph 219(4)(a)(i.1), and 
  (III) an amount on which it was required to pay, or would but for subsection 219(5.2) have been required to pay, tax under subsection 219(5.1) for the year because of the transfer of an insurance business to which subsection 138(11.5) or 138(11.92) has applied, and 
  (B) its attributed surplus for the year, 
  (ii) any other surpluses relating to its insurance businesses carried on in Canada, 
  (iii) the amount of its long-term debt that can reasonably be regarded as relating to its insurance businesses carried on in Canada; and 
  (iv)  [Repealed, 2009, c. 2, s. 64]  
  (d) in the case of an authorized foreign bank, the total of 
  (i) 10% of the total of all amounts, each of which is the risk-weighted amount at the end of the year of an on-balance sheet asset or an off-balance sheet exposure of the bank in respect of its Canadian banking business that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, and 
  (ii) the total of all amounts, each of which is an amount at the end of the year in respect of the bank’s Canadian banking business that 
  (A) if the bank were a bank listed in Schedule II to the Bank Act, would be required under the risk-based capital adequacy guidelines issued by the Superintendent of Financial Institutions and applicable at that time to be deducted from the bank’s capital in determining the amount of capital available to satisfy the Superintendent’s requirement that capital equal a particular proportion of risk-weighted assets and exposures, and  
  (B) is not an amount in respect of a loss protection facility required to be deducted from capital under the Superintendent’s guidelines respecting asset securitization applicable at that time. 
  
  ### Investment in related institutions
  
  190.14 (1) A corporation’s investment for a taxation year in a financial institution related to it is 
  (a) in the case of a corporation that was resident in Canada at any time in the year, the total of all amounts each of which is the carrying value (or in the case of contributed surplus, the amount) at the end of the year of an eligible investment of the corporation in the financial institution; 
  (b) in the case of a life insurance corporation that was non-resident throughout the year, the total of all amounts each of which is the carrying value (or is, in the case of contributed surplus, the amount) at the end of the year of an eligible investment of the corporation in the financial institution that was used or held by the corporation in the year in the course of carrying on an insurance business in Canada (or that, in the case of contributed surplus, was contributed by the corporation in the course of carrying on that business); and 
  (c) in the case of a corporation that is an authorized foreign bank, the total of all amounts each of which is the amount at the end of the year, before the application of risk weights, that would be required to be reported under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, of an eligible investment of the corporation in the financial institution that was used or held by the corporation in the year in the course of carrying on its Canadian banking business or, in the case of an eligible investment that is contributed surplus of the financial institution at the end of the year, the amount of the surplus contributed by the corporation in the course of carrying on that business. 
  
  ### Interpretation
  
  (2) For the purpose of subsection (1), an eligible investment of a corporation in a financial institution is a share of the capital stock or long-term debt (and, where the corporation is an insurance corporation, is non-segregated property within the meaning assigned by subsection 138(12)) of the financial institution or any surplus of the financial institution contributed by the corporation (other than an amount otherwise included as a share or debt) if the financial institution at the end of the year is 
  (a) related to the corporation; and 
  (b) resident in Canada or can reasonably be regarded as using the surplus or the proceeds of the share or debt in a business carried on by the financial institution through a permanent establishment (as defined by regulation) in Canada. 
  
  ### Capital deduction
  
  190.15 (1) For the purposes of this Part, the capital deduction of a corporation for a taxation year during which it was at any time a financial institution is $1 billion unless the corporation was related to another financial institution at the end of the year, in which case, subject to subsection (4), its capital deduction for the year is nil. 
  
  ### Related financial institution
  
  (2) A corporation that is a financial institution at any time during a taxation year and that was related to another financial institution at the end of the year may file with the Minister an agreement in prescribed form on behalf of the related group of which the corporation is a member under which an amount that does not exceed $1 billion is allocated among the members of the related group for the taxation year. 
  
  ### Allocation by Minister
  
  (3) The Minister may request a corporation that is a financial institution at any time during a taxation year and that was related to any other financial institution at the end of the year to file with the Minister an agreement referred to in subsection (2) and, if the corporation does not file such an agreement within 30 days after receiving the request, the Minister may allocate an amount among the members of the related group of which the corporation is a member for the year not exceeding $1 billion. 
  
  ### Idem
  
  (4) For the purposes of this Part, the least amount allocated for a taxation year to each member of a related group under an agreement described in subsection 190.15(2) or by the Minister pursuant to subsection 190.15(3) is the capital deduction for the taxation year of that member, but, if no such allocation is made, the capital deduction of each member of the related group for that year is nil. 
  
  ### Idem
  
  (5) Where a corporation (in this subsection referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and is related in 2 or more of those taxation years to another corporation that has a taxation year ending in that calendar year, the capital deduction of the first corporation for each such taxation year at the end of which it is related to the other corporation is, for the purposes of this Part, an amount equal to its capital deduction for the first such taxation year. 
  
  ### Idem
  
  (6) Two corporations that would, but for this subsection, be related to each other solely because of 
  (a) the control of any corporation by Her Majesty in right of Canada or a province, or 
  (b) a right referred to in paragraph 251(5)(b), are, for the purposes of this section and section 190.14, deemed not to be related to each other except that, where at any time a taxpayer has a right referred to in paragraph 251(5)(b) with respect to shares and it can reasonably be considered that one of the main purposes for the acquisition of the right was to avoid any limitation on the amount of a corporation’s capital deduction for a taxation year, for the purpose of determining whether a corporation is related to any other corporation, the corporations are, for the purpose of this section, deemed to be in the same position in relation to each other as if the right were immediate and absolute and as if the taxpayer had exercised the right at that time. 
  190.16  [Repealed, 2013, c. 34, s. 331]  
  190.17  [Repealed, 2007, c. 2, s. 42]  
  
  ## Administrative Provisions 
  
  ### Return
  
  190.2 A corporation that is or would, but for subsection 190.1(3), be liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which the corporation is required by section 150 to file its return of income for the year under Part I, a return of capital for the year in prescribed form containing an estimate of the tax payable under this Part by it for the year. 
  
  ### Provisions applicable to Part
  
  190.21 Sections 152, 158 and 159, subsection 161(11), sections 162 to 167 and Division J of Part I apply to this Part with such modifications as the circumstances require and, for the purpose of this section, paragraph 152(6)(a) shall be read as follows: 
  “(a) a deduction under subsection 190.1(3) in respect of any unused surtax credit or unused Part I tax credit (within the meanings assigned by subsection 190.1(5)) for a subsequent taxation year,” 
  
  ### Provisions applicable -- Crown corporations
  
  190.211 Section 27 applies to this Part with any modifications that the circumstances require. 
  190.22  [Repealed, 1994, c. 7, s. 114(1)]  
  190.23  [Repealed, 1994, c. 7, Sch. VIII, s. 114(1)]  
  190.24  [Repealed, 1994, c. 7, Sch. VIII, s. 114(1)]  
  
  # PART VI.1 
  
  ## Tax on Corporations Paying Dividends on Taxable Preferred Shares 
  
  ### Definitions
  
  191 (1) In this Part,  
  *excluded dividend* means a dividend  
  (a) paid by a corporation to a shareholder that had a substantial interest in the corporation at the time the dividend was paid, 
  (b) paid by a corporation that was a financial intermediary corporation or a private holding corporation at the time the dividend was paid, 
  (c) paid by a particular corporation that would, but for paragraphs (h) and (i) of the definition 
  *financial intermediary corporation* in this subsection, have been a financial intermediary corporation at the time the dividend was paid, except where the dividend was paid to a controlling corporation in respect of the particular corporation or to a specified person (within the meaning assigned by paragraph (h) of the definition 
  *taxable preferred share* in subsection 248(1)) in relation to such a controlling corporation,  
  (d) paid by a mortgage investment corporation, or 
  (e) that is a capital gains dividend within the meaning assigned by subsection 131(1); ( dividende exclu)   
  *financial intermediary corporation* means a corporation that is  
  (a) a corporation described in subparagraph (b)(ii) of the definition 
  *retirement savings plan* in subsection 146(1),  
  (b) an investment corporation, 
  (c) a mortgage investment corporation, 
  (d) a mutual fund corporation, 
  (e) a prescribed venture capital corporation, or 
  (f) a prescribed labour-sponsored venture capital corporation, but does not include 
  (g) a prescribed corporation, 
  (h) a corporation that is controlled by or for the benefit of one or more corporations (each of which is referred to in this subsection as a “controlling corporation”) other than financial intermediary corporations or private holding corporations unless the controlling corporations and specified persons (within the meaning assigned by paragraph (h) of the definition 
  *taxable preferred share* in subsection 248(1)) in relation to the controlling corporations do not own in the aggregate shares of the capital stock of the corporation having a fair market value of more than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation (those fair market values being determined without regard to any voting rights attaching to those shares), or  
  (i) any particular corporation in which another corporation (other than a financial intermediary corporation or a private holding corporation) has a substantial interest unless the other corporation and specified persons (within the meaning assigned by paragraph (h) of the definition 
  *taxable preferred share* in subsection 248(1)) in relation to the other corporation do not own in the aggregate shares of the capital stock of the particular corporation having a fair market value of more than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the particular corporation (those fair market values being determined without regard to any voting rights attaching to those shares); (intermédiaire financier constitué en société)   
  *private holding corporation* means a private corporation the only undertaking of which is the investing of its funds, but does not include  
  (a) a specified financial institution, 
  (b) any particular corporation that owns shares of another corporation in which it has a substantial interest, except where the other corporation would, but for that substantial interest, be a financial intermediary corporation or a private holding corporation, or 
  (c) any particular corporation in which another corporation owns shares and has a substantial interest, except where the other corporation would, but for that substantial interest, be a private holding corporation. ( société de portefeuille privée)  
  
  ### Substantial interest
  
  (2) For the purposes of this Part, a shareholder has a substantial interest in a corporation at any time if the corporation is a taxable Canadian corporation and 
  (a) the shareholder is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)) to the corporation at that time; or 
  (b) the shareholder owned, at that time, 
  (i) shares of the capital stock of the corporation that would give the shareholder 25% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, 
  (ii) shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all the issued shares of the capital stock of the corporation, and either 
  (iii) shares (other than shares that would be taxable preferred shares if the definition 
  *taxable preferred share* in subsection 248(1) were read without reference to subparagraph (b)(iv) thereof and if they were issued after June 18, 1987 and were not grandfathered shares) of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all those shares of the capital stock of the corporation, or  
  (iv) in respect of each class of shares of the capital stock of the corporation, shares of that class having a fair market value of 25% or more of the fair market value of all the issued shares of that class, and for the purposes of this paragraph, a shareholder shall be deemed to own at any time each share of the capital stock of a corporation that is owned, otherwise than by reason of this paragraph, at that time by a person to whom the shareholder is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)). 
  
  ### Idem
  
  (3) Notwithstanding subsection 191(2), 
  (a) where it can reasonably be considered that the principal purpose for a person acquiring an interest that would, but for this subsection, be a substantial interest in a corporation is to avoid or limit the application of Part I or IV.1 or this Part, the person shall be deemed not to have a substantial interest in the corporation; 
  (b) where it can reasonably be considered that the principal purpose for an acquisition of a share of the capital stock of a corporation (in this paragraph referred to as the “issuer”) by any person (in this paragraph referred to as the “acquirer”) who had, immediately after the time of the acquisition, a substantial interest in the issuer from another person who did not, immediately before that time, have a substantial interest in the issuer, was to avoid or limit the application of Part I or IV.1 or this Part with respect to a dividend on the share, the acquirer and specified persons (within the meaning assigned by paragraph (h) of the definition 
  *taxable preferred share* in subsection 248(1)) in relation to the acquirer shall be deemed not to have a substantial interest in the issuer with respect to any dividend paid on the share;  
  (c) a corporation described in paragraphs (a) to (f) of the definition 
  *financial intermediary corporation* in subsection 191(1) shall be deemed not to have a substantial interest in another corporation unless it is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)) to the other corporation;  
  (d) any partnership or trust, other than 
  (i) a partnership all the members of which are related to each other otherwise than by reason of a right referred to in paragraph 251(5)(b), 
  (ii) a trust in which each person who is beneficially interested is 
  (A) related (otherwise than because of a right referred to in paragraph 251(5)(b)) to each other person who is beneficially interested in the trust and who is not a registered charity, or 
  (B) a registered charity and for the purpose of this subparagraph, where a particular person who is beneficially interested in the trust is an aunt, uncle, niece or nephew of another person, the particular person and any person who is a child or descendant of the particular person shall be deemed to be related to the other person and to any person who is the child or descendant of the other person, or 
  (iii) a trust in which only one person (other than a registered charity) is beneficially interested, shall be deemed not to have a substantial interest in a corporation; and 
  (e) where at any time a shareholder holds a share of the capital stock of a corporation to which paragraph (g) of the definition 
  *taxable preferred share* in subsection 248(1) or paragraph (e) of the definition 
  *taxable RFI share* in that subsection applies to deem the share to be a taxable preferred share or a taxable RFI share, the shareholder shall be deemed not to have a substantial interest in the corporation at that time.  
  
  ### Deemed dividends
  
  (4) Where at any particular time 
  (a) a share of the capital stock of a corporation is issued, 
  (b) the terms or conditions of a share of the capital stock of a corporation are changed, or 
  (c) an agreement in respect of a share of the capital stock of a corporation is changed or entered into, and the terms or conditions of the share or the agreement in respect of the share specify an amount in respect of the share, including an amount for which the share is to be redeemed, acquired or cancelled (together with, where so provided, any accrued and unpaid dividends thereon) and where paragraph 191(4)(a) applies, the specified amount does not exceed the fair market value of the consideration for which the share was issued, and where paragraph 191(4)(b) or 191(4)(c) applies, the specified amount does not exceed the fair market value of the share immediately before the particular time, the amount of any dividend deemed to have been paid on a redemption, acquisition or cancellation of the share to which subsection 84(2) or 84(3) applies shall 
  (d) for the purposes of this Part and section 187.2, be deemed to be an excluded dividend and an excepted dividend, respectively, unless 
  (i) where paragraph 191(4)(a) applies, the share was issued for consideration that included a taxable preferred share, or 
  (ii) where paragraph 191(4)(b) or 191(4)(c) applies, the share was, immediately before the particular time, a taxable preferred share, and 
  (e) be deemed not to be a dividend to which subsection 112(2.1) or 138(6) applies to deny a deduction with respect to the dividend in computing the taxable income of a corporation under subsection 112(1) or 112(2) or 138(6), unless 
  (i) where paragraph 191(4)(a) applies, the share was issued for consideration that included a term preferred share or for the purpose of raising capital or as part of a series of transactions or events the purpose of which was to raise capital, and 
  (ii) where paragraph 191(4)(b) or 191(4)(c) applies, the share was, immediately before the particular time, a term preferred share, or the terms or conditions of the share were changed, or the agreement in respect of the share was changed or entered into for the purpose of raising capital or as part of a series of transactions or events the purpose of which was to raise capital. 
  
  ### Where s. (4) does not apply
  
  (5) Subsection (4) does not apply to the extent that the total of 
  (a) the amount paid on the redemption, acquisition or cancellation of the share, and 
  (b) all amounts each of which is an amount (other than an amount deemed by subsection 84(4) to be a dividend) paid, after the particular time and before the redemption, acquisition or cancellation of the share, on a reduction of the paid-up capital of the corporation in respect of the share exceeds the specified amount referred to in subsection (4). 
  
  ### Excluded dividend — partner
  
  (6) If at any time a corporation pays a dividend to a partnership, the corporation is, for the purposes of this subsection and paragraph (a) of the definition 
  *excluded dividend* in subsection (1), deemed to have paid at that time to each member of the partnership a dividend equal to the amount determined by the formula  is the amount of the dividend paid to the partnership; and is the member’s specified proportion for the last fiscal period of the partnership that ended before that time (or, if the partnership’s first fiscal period includes that time, for that first fiscal period). 
  
  ### Tax on taxable dividends
  
  191.1 (1) Every taxable Canadian corporation shall pay a tax under this Part for each taxation year equal to the amount, if any, by which 
  (a) the total of 
  (i) the amount determined by multiplying the amount by which the total of all taxable dividends (other than excluded dividends) paid by the corporation in the year and after 1987 on short-term preferred shares exceeds the corporation’s dividend allowance for the year, by 
  (A) 50% for dividends paid in a taxation year that ends before 2010, 
  (B) 45% for dividends paid in a taxation year that ends after 2009 and before 2012, 
  (C) 40% for dividends paid in a taxation year that ends after 2011, 
  (ii) 40% of the amount, if any, by which the total of all taxable dividends (other than excluded dividends) paid by the corporation in the year and after 1987 on taxable preferred shares (other than short-term preferred shares) of all classes in respect of which an election under subsection 191.2(1) has been made exceeds the amount, if any, by which the corporation’s dividend allowance for the year exceeds the total of the dividends referred to in subparagraph 191.1(1)(a)(i), 
  (iii) 25% of the amount, if any, by which the total of all taxable dividends (other than excluded dividends) paid by the corporation in the year and after 1987 on taxable preferred shares (other than short-term preferred shares) of all classes in respect of which an election under subsection 191.2(1) has not been made exceeds the amount, if any, by which the corporation’s dividend allowance for the year exceeds the total of the dividends referred to in subparagraphs 191.1(1)(a)(i) and 191.1(1)(a)(ii), and 
  (iv) the total of all amounts each of which is an amount determined for the year in respect of the corporation under paragraph 191.3(1)(d) exceeds 
  (b) the total of all amounts each of which is an amount determined for the year in respect of the corporation under paragraph 191.3(1)(c). 
  
  ### Dividend allowance
  
  (2) For the purposes of this section, a taxable Canadian corporation’s 
  *dividend allowance* for a taxation year is the amount, if any, by which  
  (a) $500,000 exceeds 
  (b) the amount, if any, by which the total of taxable dividends (other than excluded dividends) paid by it on taxable preferred shares, or shares that would be taxable preferred shares if they were issued after June 18, 1987 and were not grandfathered shares, in the calendar year immediately preceding the calendar year in which the taxation year ended exceeds $1,000,000, unless the corporation is associated in the taxation year with one or more other taxable Canadian corporations, in which case, except as otherwise provided in this section, its dividend allowance for the year is nil. 
  
  ### Associated corporations
  
  (3) If all of the taxable Canadian corporations that are associated with each other in a taxation year and that have paid taxable dividends (other than excluded dividends) on taxable preferred shares in the year have filed with the Minister in prescribed form an agreement whereby, for the purposes of this section, they allocate an amount to one or more of them for the taxation year, and the amount so allocated or the total of the amounts so allocated, as the case may be, is equal to the total dividend allowance for the year of those corporations and all other taxable Canadian corporations with which each such corporation is associated in the year, the dividend allowance for the year for each of the corporations is the amount so allocated to it. 
  
  ### Total dividend allowance
  
  (4) For the purposes of this section, the 
  *total dividend allowance* of a group of taxable Canadian corporations that are associated with each other in a taxation year is the amount, if any, by which  
  (a) $500,000 exceeds 
  (b) the amount, if any, by which the total of taxable dividends (other than excluded dividends) paid by those corporations on taxable preferred shares, or shares that would be taxable preferred shares if they were issued after June 18, 1987 and were not grandfathered shares, in the calendar year immediately preceding the calendar year in which the taxation year ended exceeds $1,000,000. 
  
  ### Failure to file agreement
  
  (5) If any of the taxable Canadian corporations that are associated with each other in a taxation year and that have paid taxable dividends (other than excluded dividends) on taxable preferred shares in the year has failed to file with the Minister an agreement as contemplated by subsection 191.1(3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year, which amount or the total of which amounts, as the case may be, shall equal the total dividend allowance for the year for those corporations and all other taxable Canadian corporations with which each such corporation is associated in the year, and the dividend allowance for the year of each of the corporations is the amount so allocated to it. 
  
  ### Dividend allowance in short years
  
  (6) Notwithstanding any other provision of this section, 
  (a) where a corporation has a taxation year that is less than 51 weeks, its dividend allowance for the year is that proportion of its dividend allowance for the year determined without reference to this paragraph that the number of days in the year is of 365; and 
  (b) where a taxable Canadian corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in a calendar year and is associated in two or more of those taxation years with another taxable Canadian corporation that has a taxation year ending in that calendar year, the dividend allowance of the first corporation for each taxation year in which it is associated with the other corporation ending in that calendar year is, subject to the application of paragraph 191.1(6)(a), an amount equal to the amount that would be its dividend allowance for the first such taxation year if the allowance were determined without reference to paragraph 191.1(6)(a). 
  
  ### Election
  
  191.2 (1) For the purposes of determining the tax payable by reason of subparagraphs 191.1(1)(a)(ii) and 191.1(1)(a)(iii), a taxable Canadian corporation (other than a financial intermediary corporation or a private holding corporation) may make an election with respect to a class of its taxable preferred shares the terms and conditions of which require an election to be made under this subsection by filing a prescribed form with the Minister 
  (a) not later than the day on or before which its return of income under Part I is required by section 150 to be filed for the taxation year in which shares of that class are first issued or first become taxable preferred shares; or 
  (b) within the 6 month period commencing on any of the following days, namely, 
  (i) the day of sending of any notice of assessment of tax payable under this Part or Part I by the corporation for that year, 
  (ii) where the corporation has served a notice of objection to an assessment described in subparagraph (i), the day of sending of a notice that the Minister has confirmed or varied the assessment, 
  (iii) where the corporation has instituted an appeal in respect of an assessment described in subparagraph 191.2(1)(b)(i) to the Tax Court of Canada, the day of mailing of a copy of the decision of the Court to the taxpayer, and 
  (iv) where the corporation has instituted an appeal in respect of an assessment described in subparagraph 191.2(1)(b)(i) to the Federal Court of Appeal or the Supreme Court of Canada, the day on which the judgment of the Court is pronounced or delivered or the day on which the corporation discontinues the appeal. 
  
  ### Time of election
  
  (2) An election with respect to a class of taxable preferred shares filed in accordance with subsection 191.2(1) shall be deemed to have been filed before any dividend on a share of that class is paid. 
  
  ### Assessment
  
  (3) Where an election has been filed under subsection 191.2(1), the Minister shall, notwithstanding subsections 152(4) and 152(5), assess or reassess the tax, interest or penalties payable under this Act by any corporation for any relevant taxation year in order to take into account the election. 
  
  ### Agreement respecting liability for tax
  
  191.3 (1) Where a corporation (in this section referred to as the “transferor corporation”) and a taxable Canadian corporation (in this section referred to as the “transferee corporation”) that was related (otherwise than because of a right referred to in paragraph 251(5)(b) or because of the control of any corporation by Her Majesty in right of Canada or a province) to the transferor corporation 
  (a) throughout a particular taxation year of the transferor corporation (or, where the transferee corporation came into existence in that year, throughout the part of that year in which the transferee corporation was in existence), and 
  (b) throughout the last taxation year of the transferee corporation ending at or before the end of the particular taxation year (or, where the transferor corporation came into existence in that last taxation year of the transferee corporation, throughout that part of that last year in which the transferor corporation was in existence) file as provided in subsection 191.3(2) an agreement or amended agreement with the Minister under which the transferee corporation agrees to pay all or any portion, as is specified in the agreement, of the tax for that taxation year of the transferor corporation that would, but for the agreement, be payable under this Part by the transferor corporation (other than any tax payable by the transferor corporation by reason of another agreement made under this section), the following rules apply, namely, 
  (c) the amount of tax specified in the agreement is an amount determined for that taxation year of the transferor corporation in respect of the transferor corporation for the purpose of paragraph 191.1(1)(b), 
  (d) the amount of tax specified in the agreement is an amount determined in respect of the transferee corporation for its last taxation year ending at or before the end of that taxation year of the transferor corporation for the purpose of subparagraph 191.1(1)(a)(iv), and 
  (e) the transferor corporation and the transferee corporation are jointly and severally, or solidarily, liable to pay the amount of tax specified in the agreement and any interest or penalty in respect thereof. 
  
  ### Consideration for agreement
  
  (1.1) For the purposes of Part I of this Act, where property is acquired at any time by a transferee corporation as consideration for entering into an agreement with a transferor corporation that is filed under this section, 
  (a) where the property was owned by the transferor corporation immediately before that time, 
  (i) the transferor corporation shall be deemed to have disposed of the property at that time for proceeds equal to the fair market value of the property at that time, and 
  (ii) the transferor corporation shall not be entitled to deduct any amount in computing its income as a consequence of the transfer of the property, except any amount arising as a consequence of subparagraph 191.3(1.1)(a)(i); 
  (b) the cost at which the property was acquired by the transferee corporation at that time shall be deemed to be equal to the fair market value of the property at that time; 
  (c) the transferee corporation shall not be required to add an amount in computing its income solely because of the acquisition at that time of the property; and 
  (d) no benefit shall be deemed to have been conferred on the transferor corporation as a consequence of the transferor corporation entering into an agreement filed under this section. 
  
  ### Manner of filing agreement
  
  (2) An agreement or amended agreement referred to in subsection 191.3(1) between a transferor corporation and a transferee corporation shall be deemed not to have been filed with the Minister unless 
  (a) it is in prescribed form; 
  (b) it is filed on or before the day on or before which the transferor corporation’s return for the year in respect of which the agreement is filed is required to be filed under this Part or within the 90-day period beginning on the day of sending of a notice of assessment of tax payable under this Part or Part I by the transferor corporation for the year or by the transferee corporation for its taxation year ending in the calendar year in which the taxation year of the transferor corporation ends or the sending of a notification that no tax is payable under this Part or Part I for that taxation year; 
  (c) it is accompanied by, 
  (i) where the directors of the transferor corporation are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, 
  (ii) where the directors of the transferor corporation are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer the corporation’s affairs authorized the agreement to be made, 
  (iii) where the directors of the transferee corporation are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and 
  (iv) where the directors of the transferee corporation are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer the corporation’s affairs authorized the agreement to be made; and 
  (d) where the agreement is not an agreement to which subsection 191.3(4) applies, an agreement amending the agreement has not been filed in accordance with this section. 
  (e)  [Repealed, 1994, c. 7, Sch. II, s. 163(1)]  
  
  ### Assessment
  
  (3) Where an agreement or amended agreement between a transferor corporation and a transferee corporation has been filed under this section with the Minister, the Minister shall, notwithstanding subsections 152(4) and 152(5), assess or reassess the tax, interest and penalties payable under this Act by the transferor corporation and the transferee corporation for any relevant taxation year in order to take into account the agreement or amended agreement. 
  
  ### Related corporations
  
  (4) Where, at any time, a corporation has become related to another corporation and it may reasonably be considered, having regard to all the circumstances, that the main purpose of the corporation becoming related to the other corporation was to transfer, by filing an agreement or an amended agreement under this section, the benefit of a deduction under paragraph 110(1)(k) to a transferee corporation, the amount of the tax specified in the agreement shall, for the purposes of paragraph 191.3(1)(c), be deemed to be nil. 
  
  ### Assessment of transferor corporation
  
  (5) The Minister may at any time assess a transferor corporation in respect of any amount for which it is jointly and severally, or solidarily, liable by reason of paragraph (1)(e) and the provisions of Division I of Part I are applicable in respect of the assessment as though it had been made under section 152. 
  
  ### Payment by transferor corporation
  
  (6) If a transferor corporation and a transferee corporation are by reason of paragraph (1)(e) jointly and severally, or solidarily, liable in respect of tax payable by the transferee corporation under subparagraph 191.1(1)(a)(iv) and any interest or penalty in respect thereof, the following rules apply: 
  (a) a payment by the transferor corporation on account of the liability shall, to the extent thereof, discharge their liability; and 
  (b) a payment by the transferee corporation on account of its liability discharges the transferor corporation’s liability only to the extent that the payment operates to reduce the transferee corporation’s liability under this Act to an amount less than the amount in respect of which the transferor corporation was, by paragraph (1)(e), made jointly and severally, or solidarily, liable. 
  
  ### Information return
  
  191.4 (1) Every corporation that is or would, but for section 191.3, be liable to pay tax under this Part for a taxation year shall, not later than the day on or before which it is required by section 150 to file its return of income for the year under Part I, file with the Minister a return for the year under this Part in prescribed form containing an estimate of the tax payable by it under this Part for the year. 
  
  ### Provisions applicable to Part
  
  (2) Sections 152, 158 and 159, subsection 161(11), sections 162 to 167 and Division J of Part I apply to this Part with such modifications as the circumstances require. 
  
  ### Provisions applicable -- Crown corporations
  
  (3) Section 27 applies to this Part with any modifications that the circumstances require. 
  
  # PART VI.2 
  
  ## Canada Recovery Dividend 
  
  ### Definition
  
  191.5 (1) The following definition applies in this Part.  
  *bank or life insurer group member* means a corporation that is  
  (a) a bank; 
  (b) a life insurance corporation that carries on business in Canada; or 
  (c) a financial institution (as defined in subsection 190(1)) that is related to any corporation described in paragraph (a) or (b). (membre d’un groupe de banques ou d’assureurs-vie)  
  
  ### Tax payable
  
  (2) Every corporation that is a bank or life insurer group member at any time during a 2021 taxation year shall pay a tax under this Part for its 2022 taxation year equal to the amount determined by the formula is the corporation’s total taxable income (or taxable income earned in Canada if the corporation is non-resident) for 
  (a) 2020 taxation years of the corporation, determined under Part I, without regard to paragraphs 111(1)(a) and (b), and 
  (b) 2021 taxation years of the corporation, determined under Part I, without regard to paragraphs 111(1)(a) and (b); and is 
  (a) if the corporation is not related to another bank or life insurer group member at the end of each 2021 taxation year of the corporation, $1 billion, and 
  (b) in any other case, the amount determined under subsection (7). 
  
  ### Multiple 2022 taxation years
  
  (3) If a corporation has more than one 2022 taxation year, the latest 2022 taxation year is the 2022 taxation year for the purposes of subsection (2). 
  
  ### Multiple 2020 and 2021 taxation years
  
  (4) For the purposes of subsection (2), 
  (a) if a corporation has more than one 2020 taxation year and the aggregate number of days in all its 2020 taxation years is greater than 365 days, the amount determined for the corporation under paragraph (a) of the description of A in subsection (2) shall be reduced to that proportion of that amount that 365 is of the aggregate number of days in all 2020 taxation years; and 
  (b) if a corporation has more than one 2021 taxation year and the aggregate number of days in all its 2021 taxation years is greater than 365 days, the amount determined for the corporation under paragraph (b) of the description of A in subsection (2) shall be reduced to that proportion of that amount that 365 is of the aggregate number of days in all 2021 taxation years. 
  
  ### Related group
  
  (5) A corporation that is described in paragraph (a) or (b) of the definition bank or life insurer group member in subsection (1) at any time during a 2021 taxation year and that was related to any other bank or life insurer group member at the end of the year (in this section, the corporation and each such bank or life insurer group member are referred to together as a “related group”) may file with the Minister an agreement in prescribed form, with the prescribed form referred to in subsection (8), on behalf of the related group under which an amount that does not exceed $1 billion is allocated among the members of the related group for the taxation year.  
  
  ### Allocation by Minister
  
  (6) The Minister may request a corporation that is member of a related group at any time during the 2021 taxation year to file with the Minister an agreement referred to in subsection (5) and, if the corporation does not file the agreement within 30 days after receiving the request, the Minister may allocate the amount referred to in subsection (5) among the members of the related group for the taxation year. 
  
  ### Allocation
  
  (7) For the purposes of this Part, the least amount allocated for the taxation year to each bank or life insurer group member under an agreement described in subsection (5) or by the Minister under subsection (6) is the amount determined for B in subsection (2) for the taxation year of that member, but, if no such allocation is made, the amount determined for B in subsection (2) of each bank and life insurer group member for the year is nil. 
  
  ### Return
  
  (8) A corporation that is a bank or life insurer group member shall file with the Minister, no later than the day on or before which the corporation is required by section 150 to file its return of income for the 2022 taxation year under Part I, a prescribed form containing prescribed information. 
  
  ### Instalments
  
  (9) A corporation liable to pay tax for the 2022 taxation year under this Part shall pay 1/5 of the tax to the Receiver General on or before its balance-due day for the 2022 and each of the four subsequent taxation years. 
  
  ### Administrative provisions — Part VI.2
  
  191.6 Sections 152, 158 and 159, subsection 161(11), sections 162 to 167 and Division J of Part I apply to this Part with such modifications as the circumstances require. 
  
  # PART VII 
  
  ## Refundable Tax on Corporations Issuing Qualifying Shares 
  
  ### Corporation to pay tax
  
  192 (1) Every corporation shall pay a tax under this Part for a taxation year equal to the total of all amounts each of which is an amount designated under subsection 192(4) in respect of a share issued by it in the year. 
  
  ### Definition of 
  *Part VII refund* 
  
  (2) In this Part, the 
  *Part VII refund* of a corporation for a taxation year means an amount equal to the lesser of  
  (a) the total of 
  (i) the amount, if any, by which the share-purchase tax credit of the corporation for the year exceeds the amount, if any, deducted in respect thereof by it for the year under subsection 127.2(1) from its tax otherwise payable under Part I for the year or the amount deemed by subsection 127.2(2) to have been paid on account of its tax payable under Part I for the year, as the case may be, and 
  (ii) such amount as the corporation may claim, not exceeding the amount that would, if paragraph (i) of the definition 
  *investment tax credit* in subsection 127(9) were read without reference to the words “the year or”, be its investment tax credit at the end of the year in respect of property acquired, or an expenditure made, after April 19, 1983 and on or before the last day of the year, and  
  (b) the refundable Part VII tax on hand of the corporation at the end of the year. 
  
  ### Definition of 
  *refundable Part VII tax on hand* 
  
  (3) In this Part, 
  *refundable Part VII tax on hand* of a corporation at the end of a taxation year means the amount, if any, by which  
  (a) the total of the taxes payable by it under this Part for the year and all preceding taxation years exceeds the total of 
  (b) the total of its Part VII refunds for all preceding taxation years, and 
  (c) the total of all amounts each of which is an amount of tax included in the total described in paragraph 192(3)(a) in respect of a share that was issued by the corporation and that, at the time it was issued, was not a qualifying share. 
  
  ### Corporation may designate amount
  
  (4) Every taxable Canadian corporation may, by filing a prescribed form with the Minister at any time on or before the last day of the month immediately following the month in which it issued a qualifying share of its capital stock (other than a share issued before July, 1983 or after 1986, or a share in respect of which the corporation has, on or before that day, designated an amount under subsection 194(4)), designate, for the purposes of this Part and Part I, an amount in respect of that share not exceeding 25% of the amount by which 
  (a) the amount of the consideration for which the share was issued exceeds 
  (b) the amount of any assistance (other than an amount included in computing the share-purchase tax credit of a taxpayer in respect of that share) provided or to be provided by a government, municipality or any other public authority in respect of, or for the acquisition of, the share. 
  
  ### Computing paid-up capital after designation
  
  (4.1) Where a corporation has designated an amount under subsection 192(4) in respect of shares issued at any time after May 23, 1985, in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that includes those shares 
  (a) there shall be deducted the amount, if any, by which 
  (i) the increase as a result of the issue of those shares in the paid-up capital in respect of all shares of that class, determined without reference to this subsection as it applies to those shares, exceeds 
  (ii) the amount, if any, by which the total amount of consideration for which those shares were issued exceeds the total amount designated by the corporation under subsection 192(4) in respect of those shares; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid by the corporation after May 23, 1985 and before the particular time exceeds 
  (B) the total that would be determined under clause 192(4.1)(b)(i)(A) if this Act were read without reference to paragraph 192(4.1)(a), and 
  (ii) the total of all amounts each of which is an amount required by paragraph 192(4.1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after May 23, 1985 and before the particular time. 
  
  ### Presumption
  
  (5) For the purposes of this Act, the Part VII refund of a corporation for a taxation year shall be deemed to be an amount paid on account of its tax under this Part for the year on the last day of the second month following the end of the year. 
  
  ### Definition of 
  *qualifying share* 
  
  (6) In this Part, 
  *qualifying share*, at any time, means a prescribed share of the capital stock of a taxable Canadian corporation issued after May 22, 1985 and before 1987.  
  
  ### Effect of obligation to acquire shares
  
  (7) When determining under section 251 whether a corporation and any other person do not deal with each other at arm’s length for the purposes of any regulations made for the purposes of subsection 192(6), a person who has an obligation in equity, under a contract or otherwise, either immediately or in the future and either absolutely or contingently, to acquire shares in a corporation, shall be deemed to be in the same position in relation to the control of the corporation as if that person owned the shares. 
  
  ### Late designation
  
  (8) Where a taxable Canadian corporation that issued a share does not designate an amount under subsection 192(4) in respect of the share on or before the day on or before which the designation was required by that subsection, the corporation shall be deemed to have made the designation on that day if 
  (a) the corporation has filed with the Minister a prescribed information return relating to the share-purchase tax credit in respect of the share within the time that it would have been so required to file the return had the designation been made on that day, and 
  (b) within 3 years after that day, the corporation has 
  (i) designated an amount in respect of the share by filing a prescribed form with the Minister, and 
  (ii) paid to the Receiver General, at the time the prescribed form referred to in subparagraph 192(8)(b)(i) is filed, an amount that is a reasonable estimate of the penalty payable by the corporation for the late designation in respect of the share, except that, where the Minister has mailed a notice to the corporation that a designation has not been made in respect of the share under subsection 192(4), the designation and payment described in paragraph 192(8)(b) must be made by the corporation on or before the day that is 90 days after the day of the mailing. 
  
  ### Penalty for late designation
  
  (9) Where, pursuant to subsection 192(8), a corporation made a late designation in respect of a share issued in a month, the corporation shall pay, for each month or part of a month that elapsed during the period beginning on the last day on or before which an amount could have been designated by the corporation under subsection 192(4) in respect of the share and ending on the day that the late designation is made, a penalty for the late designation in respect of the share in an amount equal to 1% of the amount designated in respect of the share, except that the maximum penalty payable under this subsection by the corporation for a month shall not exceed $500. 
  
  ### Deemed deduction
  
  (10) For the purposes of this Act, other than the definition 
  *investment tax credit* in subsection 127(9), the amount, if any, claimed under subparagraph 192(2)(a)(ii) by a taxpayer for a taxation year shall be deemed to have been deducted by the taxpayer under subsection 127(5) for the year.  
  
  ### Restriction
  
  (11) Where at any time a corporation has designated an amount under subsection 192(4) in respect of a share, no amount may be designated by the corporation at any subsequent time in respect of that share. 
  
  ### Corporation to file return
  
  193 (1) Every corporation that is liable to pay tax under this Part for a taxation year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file with the Minister a return for the year under this Part in prescribed form. 
  
  ### Corporation to make payment on account of tax
  
  (2) Where, in a particular month in a taxation year, a corporation issues a share in respect of which it designates an amount under section 192, the corporation shall, on or before the last day of the month following the particular month, pay to the Receiver General on account of its tax payable under this Part for the year an amount equal to the total of all amounts so designated. 
  
  ### Interest
  
  (3) Where a corporation is liable to pay tax under this Part and has failed to pay all or any part or instalment thereof on or before the day on or before which the tax or instalment, as the case may be, was required to be paid, it shall pay to the Receiver General interest at the prescribed rate on the amount that it failed to pay computed from the day on or before which the amount was required to be paid to the day of payment. 
  
  ### Idem
  
  (4) For the purposes of computing interest payable by a corporation under subsection 193(3) for any month or months in the period commencing on the first day of a taxation year and ending two months after the last day of the year in which period the corporation has designated an amount under section 192 in respect of a share issued by it in a particular month in the year, the corporation shall be deemed to have been liable to pay, on or before the last day of the month immediately following the particular month, a part or an instalment of tax for the year equal to that proportion of the amount, if any, by which its tax payable under this Part for the year exceeds its Part VII refund for the year that 
  (a) the total of all amounts so designated by it under section 192 in respect of shares issued by it in the particular month is of 
  (b) the total of all amounts so designated by it under section 192 in respect of shares issued by it in the year. 
  
  ### Evasion of tax
  
  (5) Where a corporation that is liable to pay tax under this Part in respect of a share issued by it wilfully, in any manner whatever, evades or attempts to evade payment of the tax and a purchaser of the share or, where the purchaser is a partnership, a member of the partnership knew or ought to have known, at the time the share was acquired, that the corporation would wilfully evade or attempt to evade the tax, for the purposes of section 127.2, the share shall be deemed not to have been acquired. 
  
  ### Undue deferral
  
  (6) Where, in a transaction or as part of a series of transactions, a taxpayer acquires a share of a corporation that the taxpayer controls (within the meaning assigned by subsection 186(2)) and it may reasonably be considered that one of the main purposes of the acquisition was to reduce for a period interest on the taxpayer’s liability for tax under this Part, the share shall, for the purposes of section 127.2 and this Part (other than this subsection), be deemed not to have been acquired by the taxpayer and not to have been issued by the corporation until the end of that period. 
  
  ### Avoidance of tax
  
  (7) Where, as part of a series of transactions or events one of the main purposes of which may reasonably be considered to be the avoidance of tax that might otherwise have been or become payable under Part II by any corporation, a particular corporation has issued a share in a taxation year in respect of which it has designated an amount under subsection 192(4), the particular corporation shall, on or before the last day of the second month after the end of the year, pay a tax under this Part for the year equal to 125% of the amount of tax under Part II that is or may be avoided by reason of the series of transactions or events. 
  
  ### Tax on excess
  
  (7.1) Where a corporation has in a taxation year made an election under subsection 127.2(10) in respect of any share that was part of a distribution of shares referred to in that subsection and, at the end of that year or any subsequent taxation year, 
  (a) the total of the amounts designated under subsection 192(4) in respect of those shares as evidenced by the prescribed information returns required by regulation to be filed with the Minister by a taxpayer other than the corporation exceeds 
  (b) the total of the amounts designated under subsection 192(4) in respect of those shares acquired by the taxpayer and in respect of which another taxpayer was required by regulation to provide the taxpayer with a prescribed information return relating to the designation under that subsection, the taxpayer is liable to pay a tax under this Part for the taxation year at the end of which there is such an excess equal to the amount of the excess, which tax is to be paid to the Receiver General within 60 days after the end of the taxation year, and the excess shall be included in determining the total under paragraph 193(7.1)(b) for any taxation year of the taxpayer subsequent to that year. 
  
  ### Provisions applicable to Part
  
  (8) Sections 151, 152, 158 and 159, subsection 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART VIII 
  
  ## Refundable Tax on Corporations in Respect of Scientific Research and Experimental Development Tax Credit 
  
  ### Corporation to pay tax
  
  194 (1) Every corporation shall pay a tax under this Part for a taxation year equal to 50% of the total of all amounts each of which is an amount designated under subsection 194(4) in respect of a share or debt obligation issued by it in the year or a right granted by it in the year. 
  
  ### Definition of 
  *Part VIII refund* 
  
  (2) In this Part, the 
  *Part VIII refund* of a corporation for a taxation year means an amount equal to the lesser of  
  (a) the total of 
  (i) the amount, if any, by which the scientific research and experimental development tax credit of the corporation for the year exceeds the amount, if any, deducted by it under subsection 127.3(1) from its tax otherwise payable under Part I for the year, and 
  (ii) such amount as the corporation may claim, not exceeding 50% of the amount, if any, by which 
  (A) the total of all expenditures made by it after April 19, 1983 and in the year or the immediately preceding taxation year each of which is an expenditure (other than an expenditure prescribed for the purposes of the definition 
  *qualified expenditure* in subsection 127(9)) claimed under paragraph 37(1)(a) or 37(1)(b) to the extent that the expenditure is specified by the corporation in its return of income under Part I for the year  exceeds the total of 
  (B) the total of all expenditures each of which is an expenditure made by it in the immediately preceding taxation year, to the extent that the expenditure was included in determining the total under clause 194(2)(a)(ii)(A) and resulted in 
  (I) a refund to it under this Part for the immediately preceding taxation year, 
  (II) a deduction by it under subsection 37(1) for the immediately preceding taxation year, or 
  (III) a deduction by it under subsection 127(5) for any taxation year, and 
  (C) twice the portion of the total of amounts each of which is an amount deducted by it in computing its income for the year or the immediately preceding taxation year under section 37.1 that can reasonably be considered to relate to expenditures that were included in determining the total under clause 194(2)(a)(ii)(A), and 
  (b) the refundable Part VIII tax on hand of the corporation at the end of the year. 
  
  ### Definitions
  
  (3) In this Part,  
  *debt obligation* has the meaning assigned by paragraph (d) of the description of A in the formula found in the definition 
  *scientific research and experimental development tax credit* in subsection 127.3(2); (créance)   
  *refundable Part VIII tax on hand* of a corporation at the end of a taxation year means the amount, if any, by which  
  (a) the total of the taxes payable by it under this Part for the year and all preceding taxation years exceeds 
  (b) the total of its Part VIII refunds for all preceding taxation years. ( impôt de la partie VIII en main remboursable)  
  
  ### Corporation may designate amount
  
  (4) Every taxable Canadian corporation may, by filing a prescribed form with the Minister at any time on or before the last day of the month immediately following a month in which it issued a share or debt obligation or granted a right under a scientific research and experimental development financing contract (other than a share or debt obligation issued or a right granted before October, 1983, or a share in respect of which the corporation has, on or before that day, designated an amount under subsection 192(4)) designate, for the purposes of this Part and Part I, an amount in respect of that share, debt obligation or right not exceeding the amount by which 
  (a) the amount of the consideration for which it was issued or granted, as the case may be, exceeds 
  (b) in the case of a share, the amount of any assistance (other than an amount included in computing the scientific research and experimental development tax credit of a taxpayer in respect of that share) provided, or to be provided by a government, municipality or any other public authority in respect of, or for the acquisition of, that share. 
  
  ### Computing paid-up capital after designation
  
  (4.1) Where a corporation has designated an amount under subsection 194(4) in respect of shares issued at any time after May 23, 1985, in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that includes those shares 
  (a) there shall be deducted the amount, if any, by which 
  (i) the increase as a result of the issue of those shares in the paid-up capital in respect of all shares of that class, determined without reference to this subsection as it applies to those shares, exceeds 
  (ii) the amount, if any, by which the total amount of consideration for which those shares were issued exceeds 50% of the amount designated by the corporation under subsection 194(4) in respect of those shares; and 
  (b) there shall be added an amount equal to the lesser of 
  (i) the amount, if any, by which 
  (A) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of that class paid by the corporation after May 23, 1985 and before the particular time exceeds 
  (B) the total that would be determined under clause 194(4.1)(b)(i)(A) if this Act were read without reference to paragraph 194(4.1)(a), and 
  (ii) the total of all amounts each of which is an amount required by paragraph 194(4.1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after May 23, 1985 and before the particular time. 
  
  ### Where amount may not be designated
  
  (4.2) Notwithstanding subsection 194(4), no amount may be designated by a corporation in respect of 
  (a) a share issued by the corporation after October 10, 1984, other than 
  (i) a qualifying share issued before May 23, 1985, or 
  (ii) a qualifying share issued after May 22, 1985 and before 1986 
  (A) under the terms of an agreement in writing entered into by the corporation before May 23, 1985, other than pursuant to an option to acquire the share if the option was not exercised before May 23, 1985, or 
  (B) as part of a lawful distribution to the public in accordance with a prospectus, preliminary prospectus or registration statement filed before May 24, 1985 with a public authority in Canada pursuant to and in accordance with the securities legislation of Canada or of any province and, where required by law, accepted for filing by that public authority; 
  (b) a share or debt obligation issued or a right granted by the corporation after October 10, 1984, other than a share or debt obligation issued or a right granted before 1986 
  (i) under the terms of an agreement in writing entered into by the corporation before October 11, 1984, other than pursuant to an option to acquire the share, debt obligation or right if the option was not exercised before October 11, 1984, or 
  (ii) where arrangements, evidenced in writing, for the issue of the share or debt obligation or the granting of the right were substantially advanced before October 10, 1984; or 
  (c) a share or debt obligation issued, or a right granted, at any time after June 15, 1984, by a corporation that was an excluded corporation (within the meaning assigned by subsection 127.1(2)) at that time. 
  
  ### Presumption
  
  (5) For the purposes of this Act, the Part VIII refund of a corporation for a taxation year shall be deemed to be an amount paid on account of its tax under this Part for the year on the last day of the second month following the end of the year. 
  
  ### Definition of 
  *scientific research and experimental development financing contract* 
  
  (6) In this Part, 
  *scientific research and experimental development financing contract* means a contract in writing pursuant to which an amount is paid by a person to a corporation as consideration for the granting by the corporation to that person of any right, either absolute or contingent, to receive income, other than interest or dividends.  
  
  ### Late designation
  
  (7) Where a taxable Canadian corporation that issued a share or debt obligation or granted a right under a scientific research and experimental development financing contract does not designate an amount under subsection 194(4) in respect of the share, debt obligation or right on or before the day on or before which the designation was required by that subsection, the corporation shall be deemed to have made the designation on that day if 
  (a) the corporation has filed with the Minister a prescribed information return relating to the scientific research and experimental development tax credit in respect of the share, debt obligation or right within the time that it would have been so required to file the return had the designation been filed on that day, and 
  (b) within 3 years after that day, the corporation has 
  (i) designated an amount in respect of the share, debt obligation or right by filing a prescribed form with the Minister, and 
  (ii) paid to the Receiver General, at the time the prescribed form referred to in subparagraph 194(7)(b)(i) is filed, an amount that is a reasonable estimate of the penalty payable by the corporation for the late designation in respect of the share, debt obligation or right, except that, where the Minister has mailed a notice to the corporation that a designation has not been made in respect of the share, debt obligation or right under subsection 194(4), the designation and payment described in paragraph 194(7)(b) must be made by the corporation on or before the day that is 90 days after the day of the mailing. 
  
  ### Penalty for late designation
  
  (8) Where, pursuant to subsection 194(7), a corporation made a late designation in respect of a share or debt obligation issued, or a right granted, in a month, the corporation shall pay, for each month or part of a month that elapsed during the period beginning on the last day on or before which an amount could have been designated by the corporation under subsection 194(4) in respect of the share, debt obligation or right and ending on the day that the late designation is made, a penalty for the late designation in respect of the share, debt obligation or right in an amount equal to 1% of the amount designated in respect of the share, debt obligation or right, except that the maximum penalty payable under this subsection by the corporation for a month shall not exceed $500. 
  
  ### Restriction
  
  (9) Where at any time a corporation has designated an amount under subsection 194(4) in respect of a share, debt obligation or right, no amount may be designated by the corporation at any subsequent time in respect of that share, debt obligation or right. 
  
  ### Corporation to file return
  
  195 (1) Every corporation that is liable to pay tax under this Part for a taxation year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file with the Minister a return for the year under this Part in prescribed form. 
  
  ### Corporation to make payment on account of tax
  
  (2) Where, in a particular month in a taxation year, a corporation issues a share or debt obligation, or grants a right, in respect of which it designates an amount under section 194, the corporation shall, on or before the last day of the month following the particular month, pay to the Receiver General on account of its tax payable under this Part for the year an amount equal to 50% of the total of all amounts so designated. 
  
  ### Interest
  
  (3) Where a corporation is liable to pay tax under this Part and has failed to pay all or any part or instalment thereof on or before the day on or before which the tax or instalment, as the case may be, was required to be paid, it shall pay to the Receiver General interest at the prescribed rate on the amount that it failed to pay computed from the day on or before which the amount was required to be paid to the day of payment. 
  
  ### Idem
  
  (4) For the purposes of computing interest payable by a corporation under subsection 195(3) for any month or months in the period commencing on the first day of a taxation year and ending two months after the last day of the year in which period the corporation has designated an amount under section 194 in respect of a share or debt obligation issued, or right granted, by it in a particular month in the year, the corporation shall be deemed to have been liable to pay, on or before the last day of the month immediately following the particular month, a part or an instalment of tax for the year equal to that proportion of the amount, if any, by which its tax payable under this Part for the year exceeds its Part VIII refund for the year that 
  (a) the total of all amounts so designated by it under section 194 in respect of shares or debt obligations issued, or rights granted, by it in the particular month is of 
  (b) the total of all amounts so designated by it under section 194 in respect of shares or debt obligations issued, or rights granted, by it in the year. 
  
  ### Evasion of tax
  
  (5) Where a corporation that is liable to pay tax under this Part in respect of a share or debt obligation issued or a right granted by it wilfully, in any manner whatever, evades or attempts to evade payment of the tax and a purchaser of the share, debt obligation or right or, where the purchaser is a partnership, a member of the partnership knew or ought to have known, at the time the share, debt obligation or right was acquired, that the corporation would wilfully evade or attempt to evade the tax, for the purposes of section 127.3, the share, debt obligation or right shall be deemed not to have been acquired. 
  
  ### Undue deferral
  
  (6) Where, in a transaction or as part of a series of transactions, a taxpayer acquires a share or debt obligation of a corporation or a right granted by a corporation and the corporation is controlled (within the meaning assigned by subsection 186(2)) by the taxpayer and it may reasonably be considered that one of the main purposes of the acquisition was to reduce for a period interest on the taxpayer’s liability for tax under this Part, the share, debt obligation or right shall, for the purposes of this Part (other than this subsection) and section 127.3, be deemed not to have been acquired by the taxpayer and not to have been issued or granted, as the case may be, by the corporation until the end of that period. 
  
  ### Avoidance of tax
  
  (7) Where, as part of a series of transactions or events one of the main purposes of which may reasonably be considered to be the avoidance of tax that might otherwise have been or become payable under Part II of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, by any corporation, a particular corporation has issued a share or debt obligation or granted a right in a taxation year in respect of which it has designated an amount under subsection 194(4), the particular corporation shall, on or before the last day of the second month after the end of the year, pay a tax under this Part for the year equal to 125% of the amount of tax under Part II of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, that is or may be avoided by reason of the series of transactions or events.  
  
  ### Tax on excess
  
  (7.1) Where a corporation has in a taxation year made an election under subsection 127.3(9) in respect of any share or debt obligation that was part of a distribution of shares or debt obligations referred to in that subsection and, at the end of that year or any subsequent taxation year, 
  (a) the total of the amounts designated under subsection 194(4) in respect of those shares or debt obligations as evidenced by the prescribed information returns required by regulation to be filed with the Minister by a taxpayer other than the corporation exceeds 
  (b) the total of the amounts designated under subsection 194(4) in respect of those shares or debt obligations acquired by the taxpayer and in respect of which another taxpayer was required by regulation to provide the taxpayer with a prescribed information return relating to the designation under that subsection, the taxpayer is liable to pay a tax under this Part, for the taxation year at the end of which there is such an excess, equal to 50% of the excess, which tax is to be paid to the Receiver General within 60 days after the end of the taxation year, and the excess shall be included in determining the total under paragraph 195(7.1)(b) for any taxation year of the taxpayer subsequent to that year. 
  
  ### Provisions applicable to Part
  
  (8) Sections 151, 152, 158 and 159, subsection 161(11), sections 162 to 167 (except subsections 164(1.1) to 164(1.3)) and Division J of Part I are applicable to this Part with such modifications as the circumstances require and, for greater certainty, the Minister may assess, before the end of a taxation year, an amount payable under this Part for the year. 
  
  # PART IX 
  
  ## Tax on Deduction Under Section 66.5 
  
  ### Tax in respect of cumulative offset account
  
  196 (1) Every corporation shall pay a tax under this Part for each taxation year equal to 30% of the amount deducted under subsection 66.5(1) in computing its income for the year. 
  
  ### Return
  
  (2) Every corporation that is liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which it is required under section 150 to file a return of its income for the year under Part I, a return for the year under this Part in prescribed form containing an estimate of the amount of tax payable by it under this Part for the year. 
  
  ### Instalments
  
  (3) Where a corporation is liable to pay tax for a taxation year under this Part, the corporation shall pay in respect of the year, to the Receiver General 
  (a) on or before the last day of each month in the year, an amount equal to 1/12 of the amount of tax payable by it under this Part for the year; and 
  (b) the remainder, if any, of the tax payable by it under this Part for the year, on or before its balance-due day for the year. 
  
  ### Provisions applicable to Part
  
  (4) Sections 152, 158 and 159, subsections 161(1) and 161(2), sections 162 to 167 and Division J of Part I are applicable to this Part, with such modifications as the circumstances require. 
  
  # PART IX.1 
  
  ## Tax on Sift Partnerships 
  
  ### Definitions
  
  197 (1) The following definitions apply in this Part and in section 96.  
  *non-portfolio earnings*, of a SIFT partnership for a taxation year, means the total of  
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is the SIFT partnership’s income for the taxation year from a business carried on by it in Canada or from a non-portfolio property, other than income that is a taxable dividend received by the SIFT partnership, exceeds 
  (ii) the total of all amounts each of which is the SIFT partnership’s loss for the taxation year from a business carried on by it in Canada or from a non-portfolio property, and 
  (b) the amount, if any, by which all taxable capital gains of the SIFT partnership from dispositions of non-portfolio properties during the taxation year exceeds the total of the allowable capital losses of the SIFT partnership for the taxation year from dispositions of non-portfolio properties during the taxation year. ( gains hors portefeuille)   
  *SIFT partnership*, being a specified investment flow-through partnership, for any taxation year, means a partnership other than an excluded subsidiary entity (as defined in subsection 122.1(1)) for the taxation year that meets the following conditions at any time during the taxation year:  
  (a) the partnership is a Canadian resident partnership; 
  (b) investments (as defined in subsection 122.1(1)) in the partnership are listed or traded on a stock exchange or other public market; and 
  (c) the partnership holds one or more non-portfolio properties. ( société de personnes intermédiaire de placement déterminée)   
  *taxable non-portfolio earnings* of a SIFT partnership, for a taxation year, means the lesser of  
  (a) the amount that would, if the SIFT partnership were a taxpayer for the purposes of Part I and if subsection 96(1) were read without reference to its paragraph (d), be its income for the taxation year as determined under section 3; and 
  (b) its non-portfolio earnings for the taxation year. ( gains hors portefeuille imposables)  
  
  ### Tax on partnership income
  
  (2) Every partnership that is a SIFT partnership for a taxation year is liable to a tax under this Part equal to the amount determined by the formula is the taxable non-portfolio earnings of the SIFT partnership for the taxation year; is the net corporate income tax rate in respect of the SIFT partnership for the taxation year; and is the provincial SIFT tax rate of the SIFT partnership for the taxation year. 
  
  ### Ordering
  
  (3) This Part and section 122.1 are to be applied as if this Act were read without reference to subsection 96(1.11). 
  
  ### Partnership to file return
  
  (4) Every member of a partnership that is liable to pay tax under this Part for a taxation year shall — on or before the day on or before which the partnership return is required to be filed for the year under section 229 of the Income Tax Regulations — file with the Minister a return for the taxation year under this Part in prescribed form containing an estimate of the tax payable by the partnership under this Part for the taxation year.  
  
  ### Authority to file return
  
  (5) For the purposes of subsection (4), if, in respect of a taxation year of a partnership, a particular member of the partnership has authority to act for the partnership, 
  (a) if the particular member has filed a return as required by this Part for a taxation year, each other person who was a member of the partnership during the taxation year is deemed to have filed the return; and 
  (b) a return that has been filed by any other member of the partnership for the taxation year is not valid and is deemed not to have been filed by any member of the partnership. 
  
  ### Provisions applicable to Part
  
  (6) Subsection 150(2), section 152, subsections 157(1), (2.1) and (4), sections 158, 159 and 161 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require, and for greater certainty, 
  (a) a notice of assessment referred to in subsection 152(2) in respect of tax payable under this Part is valid notwithstanding that a partnership is not a person; and 
  (b) notwithstanding subsection 152(4), the Minister may at any time make an assessment or reassessment of tax payable under this Part or Part I to give effect to a determination made by the Minister under subsection 152(1.4), including the assessment or reassessment of Part I tax payable in respect of the disposition of an interest in a SIFT partnership by a member of the partnership. 
  
  ### Payment
  
  (7) Every SIFT partnership shall pay to the Receiver General, on or before its SIFT partnership balance-due day for each taxation year, its tax payable under this Part for the taxation year. 
  
  ### Application of definition 
  *SIFT partnership* 
  
  (8) The definition 
  *SIFT partnership* applies to a partnership for a taxation year of the partnership that ends after 2006, except that if the partnership would have been a SIFT partnership on October 31, 2006 had that definition been in force and applied to the partnership as of that date, that definition does not apply to the partnership for a taxation year of the partnership that ends before the earlier of  
  (a) 2011, and 
  (b) the first day after December 15, 2006 on which the partnership exceeds normal growth as determined by reference to the normal growth guidelines issued by the Department of Finance on December 15, 2006, as amended from time to time, unless that excess arose as a result of a prescribed transaction. 
  
  # PART X 
  
  ## Taxes on Deferred Profit Sharing Plans and Revoked Plans 
  
  ### Tax on non-qualified investments and use of assets as security
  
  198 (1) Every trust governed by a deferred profit sharing plan or revoked plan that 
  (a) acquires a non-qualified investment, or 
  (b) uses or permits to be used any property of the trust as security for a loan, shall pay a tax equal to the fair market value of 
  (c) the non-qualified investment at the time it was acquired by the trust, or 
  (d) the property used as security at the time it commenced to be so used. 
  
  ### Payment of tax
  
  (2) A trustee of a trust liable to pay tax under subsection 198(1) shall remit the amount of the tax to the Receiver General within 10 days of the day on which the non-qualified investment is acquired or the property is used as security for a loan, as the case may be. 
  
  ### Trustee liable for tax
  
  (3) Where a trustee of a trust liable to pay tax under subsection 198(1) does not remit to the Receiver General the amount of the tax within the time specified in subsection 198(2), the trustee is personally liable to pay on behalf of the trust the full amount of the tax and is entitled to recover from the trust any amount paid by the trustee as tax under this section. 
  
  ### Refund of tax on disposition of non-qualified investment
  
  (4) Where a trust disposes of a property that, when acquired, was a non-qualified investment, the trust is, on application in accordance with section 202, entitled to a refund of an amount equal to the lesser of 
  (a) the amount of the tax imposed under this section as a result of the acquisition of the property, and 
  (b) the proceeds of disposition of the property. 
  
  ### Refund of tax on recovery of property given as security
  
  (5) Where a loan, for which a trust has used or permitted to be used trust property as security, ceases to be extant, the trust is, on application in accordance with section 202, entitled to a refund of an amount equal to the amount remaining, if any, when 
  (a) the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using or permitting to be used the property as security for the loan and not as a result of a change in the fair market value of the property is deducted from 
  (b) the tax imposed under this section in consequence of the trust’s using or permitting to be used the property as security for the loan. 
  
  ### Special rules relating to life insurance policies
  
  (6) For the purposes of this section, 
  (a) the acquisition of an interest in or the payment of an amount under a life insurance policy shall be deemed not to be the acquisition of a non-qualified investment, and 
  (b) the disposition of an interest in a life insurance policy shall be deemed not to be the disposition of a non-qualified investment, except that where a trust governed by a deferred profit sharing plan or revoked plan makes a payment under or to acquire an interest in a life insurance policy, other than a life insurance policy under which 
  (c) the trust is, or by virtue of the payment about to become, the only person entitled to any rights or benefits under the policy (other than the rights or benefits of the insurer), 
  (d) the cash surrender value of the policy (exclusive of accumulated dividends) is or will be, at or before the end of the year in which the insured person attains 71 years of age, if all premiums under the policy are paid, not less than the maximum total amount (exclusive of accumulated dividends) payable by the insurer under the policy, and 
  (e) the total of the premiums payable in any year under the policy is not greater than the total of the amounts that, if the annual premiums had been payable in monthly instalments, would have been payable as such instalments in the 12 months commencing with the date the policy was issued, the making of the payment shall be deemed to be the acquisition of a non-qualified investment at a cost equal to the amount of the payment. 
  
  ### Idem
  
  (6.1) A life insurance policy giving an option to the policyholder to receive annuity payments that otherwise complies with paragraph 198(6)(d) shall be deemed, 
  (a) where the option has not been exercised, to comply with that paragraph; and 
  (b) where at a particular time the option is exercised, to have been disposed of at that time for an amount equal to the cash surrender value of the policy immediately before that time, and an annuity contract shall be deemed to have been acquired at that time at a cost equal to that amount. 
  
  ### Idem
  
  (7) Notwithstanding subsection 198(6), where the total of all payments made in a year by a trust governed by a deferred profit sharing plan or revoked plan under or to acquire interests in life insurance policies in respect of which the trust is the only person entitled to any rights or benefits (other than the rights or benefits of the insurer) does not exceed an amount equal to 25% of the total of all amounts paid by employers to the trust in the year under the plan for the benefit of beneficiaries thereunder, the making of the payments under or to acquire interests in such policies shall be deemed, for the purposes of this section, not to be the acquisition of non-qualified investments. 
  
  ### Idem
  
  (8) Where a trust surrenders, cancels, assigns or otherwise disposes of its interest in a life insurance policy, 
  (a) the trust shall be deemed, for the purposes of subsection 198(4), to have disposed of each non-qualified investment that, by virtue of payments under the policy, it was deemed by subsection 198(6) to have acquired; and 
  (b) the proceeds of the disposition shall be deemed to be the amount, if any, by which 
  (i) the amount received by the trust in consequence of the surrender, cancellation, assignment or other disposition of its interest in the policy exceeds the total of 
  (ii) each amount paid by the trust under or to acquire an interest in the policy, the payment of which is deemed by this section not to be the acquisition of a non-qualified investment, and 
  (iii) the cash surrender value on December 21, 1966 of the interest of the trust in the policy on that date. 
  
  ### Tax on initial non-qualified investments not disposed of
  
  199 (1) Every trust governed by a deferred profit sharing plan or revoked plan shall pay a tax 
  (a) for 1967, equal to the amount, if any, by which 20% of the initial base of the trust exceeds the proceeds of disposition of its initial non-qualified investments disposed of after December 21, 1966 and before 1968; 
  (b) for 1968, equal to the amount, if any, by which 40% of the initial base of the trust exceeds the total of 
  (i) the proceeds of disposition of its initial non-qualified investments disposed of after December 21, 1966 and before 1969, and 
  (ii) the tax payable by the trust determined under paragraph 199(1)(a); 
  (c) for 1969, equal to the amount, if any, by which 60% of the initial base of the trust exceeds the total of 
  (i) the proceeds of disposition of its initial non-qualified investments disposed of after December 21, 1966 and before 1970, and 
  (ii) the tax payable by the trust determined under paragraphs 199(1)(a) and 199(1)(b); and 
  (d) for 1970, equal to the amount, if any, by which 100% of the initial base of the trust exceeds the total of 
  (i) the proceeds of disposition of its initial non-qualified investments disposed of after December 21, 1966 and before 1971, and 
  (ii) the tax payable by the trust determined under paragraphs 199(1)(a), 199(1)(b) and 199(1)(c). 
  
  ### Refund
  
  (2) Where at the end of a year, 
  (a) the total of all taxes paid by a trust under subsection 199(1) exceeds 
  (b) the total of 
  (i) all refunds made to the trust under this subsection, and 
  (ii) the amount, if any, by which the initial base of the trust exceeds the proceeds of disposition of its initial non-qualified investments disposed of after December 21, 1966 and before the end of the year, the trust is, on application in accordance with section 202, entitled to a refund equal to the amount by which the total described in paragraph 199(2)(a) exceeds the total described in paragraph 199(2)(b). 
  
  ### Distribution deemed disposition
  
  200 For the purposes of this Part, a distribution by a trust of a non-qualified investment to a beneficiary of the trust shall be deemed to be a disposition of that non-qualified investment and the proceeds of disposition of that non-qualified investment shall be deemed to be its fair market value at the time of the distribution. 
  
  ### Tax where inadequate consideration on purchase or sale
  
  201 Every trust governed by a deferred profit sharing plan or a revoked plan shall, for each calendar year after 1990, pay a tax equal to 50% of the total of all amounts each of which is, by reason of subsection 147(18), an amount taxable under this section for the year. 
  
  ### Returns and payment of estimated tax
  
  202 (1) Within 90 days from the end of each year after 1965, a trustee of every trust governed by a deferred profit sharing plan or revoked plan shall 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax payable by the trust under this Part for the year; 
  (c) estimate in the return the amount of any refund to which the trust is entitled under this Part for the year; and 
  (d) pay to the Receiver General the unpaid balance of the trust’s tax for the year minus any refund to which it is entitled under this Part, or apply in the return for any amount owing to it. 
  
  ### Consideration of application for refund
  
  (2) Where a trustee of a trust has made application for an amount owing to it pursuant to subsection 202(1), the Minister shall 
  (a) consider the application; 
  (b) determine the amount of any refund; and 
  (c) send to the trustee a notice of refund and any amount owing to the trust, or a notice that no refund is payable. 
  
  ### Provisions applicable to Part
  
  (3) Subsection 150(2), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require and, for the purposes of the application of those provisions to this Part, a notice of refund under this section shall be deemed to be a notice of assessment. 
  
  ### Provisions applicable to refunds
  
  (4) Subsections 164(3) to 164(4) are applicable, with such modifications as the circumstances require, to refunds of tax under subsection 198(4) or 198(5) or 199(2). 
  
  ### Interest
  
  (5) In addition to the interest payable under subsection 161(1), where a taxpayer is required by section 198 to pay a tax and has failed to pay all or any part thereof on or before the day on or before which the tax was required to be paid, the taxpayer shall pay to the Receiver General interest at the prescribed rate on the amount that the taxpayer failed to pay computed from the day on or before which the amount was required to be paid to the day of payment or to the beginning of the period in respect of which the taxpayer is required by subsection 161(1) to pay interest thereon, whichever is earlier. 
  
  ### Deemed payment of tax
  
  (6) For the purposes of subsections 161(1) and 202(5), where a trust is liable to pay tax under this Part on the acquisition by it of a non-qualified investment or on the use of its property as security for a loan, it shall, except to the extent that the tax has previously been paid, be deemed to have paid tax on the date on which the property is disposed ofor on which the loan ceases to be extant, as the case may be, in an amount equal to the refund referred to in subsection 198(4) in respect of that property or subsection 198(5) in respect of the loan, as the case may be. 
  
  ### Application to other taxes
  
  203 Instead of making a refund to which a trust is entitled under subsection 198(4) or 198(5) or 199(2), the Minister may, where the trust is liable or about to become liable to make another payment under this Act, apply the amount of the refund or any part thereof to that other liability and notify a trustee of the trust of that action. 
  
  ### Definitions
  
  204 In this Part,  
  *debt obligation* means a bond, debenture, note or similar obligation; (titre de créance)   
  *equity share* means  
  (a) a share, other than an excluded share or a non-participating share, the owner of which has, as owner thereof, a right 
  (i) to a dividend, and 
  (ii) to a part of the surplus of the corporation after repayment of capital and payment of dividend arrears on the redemption of the share, a reduction of the capital of the corporation or the winding-up of the corporation, at least as great, in any event, as the right of the owner of any other share, other than a non-participating share, of the corporation, when the magnitude of the right in each case is expressed as a rate based on the paid-up capital value of the share to which the right relates, or 
  (b) a share, other than an excluded share or a non-participating share, the owner of which has, as owner thereof, a right 
  (i) to a dividend, after a dividend at a rate not in excess of 12% per annum of the paid-up capital value of each share has been paid to the owners of shares of a class other than the class to which that share belongs, and 
  (ii) to a part of the surplus of the corporation after repayment of capital and payment of dividend arrears on the redemption of the share, a reduction of the capital of the corporation or the winding-up of the corporation, after a payment of a part of the surplus at a rate not in excess of 10% of the paid-up capital value of each share has been made to the owners of shares of a class other than the class to which that share belongs, at least as great, in any event, as the right of the owner of any other share, other than a non-participating share, of the corporation, when the magnitude of the right in each case is expressed as a rate based on the paid-up capital value of the share to which the right relates; ( action à revenu variable)   
  *excluded property*, in relation to a trust governed by a deferred profit sharing plan or revoked plan, means a debt obligation or bankers’ acceptance issued by  
  (a) an employer by whom payments are made in trust to a trustee under the plan for the benefit of beneficiaries under the plan, or 
  (b) a corporation with whom that employer does not deal at arm’s length; ( bien exclu)   
  *excluded share* means each share of the capital stock of a private corporation where  
  (a) the paid-up capital of the corporation that is represented by all its issued and outstanding shares that would, but for this definition, be equity shares is less than 50% of the paid-up capital of the corporation that is represented by all its issued and outstanding shares other than non-participating shares, or 
  (b) a non-participating share of the corporation is issued and outstanding and the owner of which has, as owner thereof, a right to a dividend 
  (i) at a fixed annual rate in excess of 12%, or 
  (ii) at an annual rate not in excess of a fixed maximum annual rate, if the fixed maximum annual rate is in excess of 12%, when the right to the dividend is expressed as a rate based on the paid-up capital value of the share to which the right relates; ( action exclue)   
  *initial base* of a trust means the total of the values of all initial non-qualified investments held by the trust on December 21, 1966 when each such investment is valued at the lower of  
  (a) its cost to the trust, and 
  (b) its fair market value on December 21, 1966; ( base initiale)   
  *initial non-qualified investment* of a trust means an investment held by the trust on December 21, 1966 that was, on that date, a non-qualified investment but does not include  
  (a) any interest in a life insurance policy, or 
  (b) an equity share that would be a qualified investment if the date of acquisition of the share were December 21, 1966; ( placement initial non admissible)   
  *non-participating share* means  
  (a) in the case of a private corporation, a share the owner of which is not entitled to receive, as owner thereof, any dividend, other than a dividend, whether cumulative or not, 
  (i) at a fixed annual rate or amount, or 
  (ii) at an annual rate or amount not in excess of a fixed annual rate or amount, and 
  (b) in the case of a corporation other than a private corporation, any share other than a common share; ( action non participante)   
  *non-qualified investment* means property that is not a qualified investment for a trust governed by a deferred profit sharing plan or revoked plan within the meaning of the definition 
  *qualified investment* in this subsection; (placement non admissible)   
  *paid-up capital value* of a share means the amount determined by the formula  is the paid-up capital of the corporation that is represented by the shares of the class to which that share belongs, and is the number of shares of that class that are in fact issued and outstanding; ( valeur en capital versé)   
  *qualified investment* for a trust governed by a deferred profit sharing plan or revoked plan means, with the exception of excluded property in relation to the trust,  
  (a) money (other than money the fair market value of which exceeds its stated value as legal tender in the country of issuance or money that is held for its numismatic value) and deposits (within the meaning assigned by the Canada Deposit Insurance Corporation Act or with a branch in Canada of a bank) of such money standing to the credit of the trust,  
  (b) debt obligations described in paragraph (a) of the definition 
  *fully exempt interest* in subsection 212(3),  
  (c) debt obligations issued by 
  (i) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a designated stock exchange in Canada, 
  (ii) a corporation the shares of which are listed on a designated stock exchange outside Canada, or 
  (iii) an authorized foreign bank and payable at a branch in Canada of the bank, 
  (c.1) debt obligations that meet the following criteria, namely, 
  (i) any of 
  (A) the debt obligations had, at the time of acquisition by the trust, an investment grade rating with a prescribed credit rating agency, 
  (B) the debt obligations have an investment grade rating with a prescribed credit rating agency, or 
  (C) the debt obligations were acquired by the trust in exchange for debt obligations that satisfied the condition in clause (A) and as part of a proposal to, or an arrangement with, the creditors of the issuer of the debt obligations that has been approved by a court under the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act, and  
  (ii) either 
  (A) the debt obligations were issued as part of a single issue of debt of at least $25 million, or 
  (B) in the case of debt obligations that are issued on a continuous basis under a debt issuance program, the issuer of the debt obligations had issued and outstanding debt under the program of at least $25 million, 
  (d) securities (other than futures contracts or other derivative instruments in respect of which the holder’s risk of loss may exceed the holder’s cost) that are listed on a designated stock exchange, 
  (e) equity shares of a corporation by which, before the date of acquisition by the trust of the shares, payments have been made in trust to a trustee under the plan for the benefit of beneficiaries thereunder, if the shares are of a class in respect of which 
  (i) there is no restriction on their transferability, and 
  (ii) in each of 4 taxation years of the corporation in the period of the corporation’s 5 consecutive taxation years that ended less than 12 months before the date of acquisition of the shares by the trust, and in the corporation’s last taxation year in that period, the corporation 
  (A) paid a dividend on each share of the class of an amount not less than 4% of the cost per share of the shares to the trust, or 
  (B) had earnings attributable to the shares of the class of an amount not less than the amount obtained when 4% of the cost per share to the trust of the shares is multiplied by the total number of shares of the class that were outstanding immediately after the acquisition, 
  (f) guaranteed investment certificates issued by a trust company incorporated under the laws of Canada or of a province, 
  (g) investment contracts described in subparagraph (b)(ii) of the definition 
  *retirement savings plan* in subsection 146(1) and issued by a corporation approved by the Governor in Council for the purposes of that subparagraph, and  
  (h) prescribed investments; 
  (i)  [Repealed, 2007, c. 29, s. 26] (placement admissible)   
  *revoked plan* means a deferred profit sharing plan the registration of which has been revoked by the Minister pursuant to subsection 147(14) or 147(14.1). (régime dont l’agrément est retiré)  
  
  # PART X.1 
  
  ## Tax in Respect of Over-contributions to Deferred Income Plans 
  
  ### Tax payable by individuals
  
  204.1 (1) Where, at the end of any month after May, 1976, an individual has an excess amount for a year in respect of registered retirement savings plans, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that portion of the total of all those excess amounts that has not been paid by those plans to the individual before the end of that month. 
  
  ### Amount deemed repaid
  
  (2) For the purposes of subsection 204.1(1), where an amount in respect of a plan has been included in computing an individual’s income pursuant to paragraph 146(12)(b), that amount shall be deemed to have been paid to the individual by the plan at the time referred to in that paragraph. 
  
  ### Tax payable by individuals -- contributions after 1990
  
  (2.1) Where, at the end of any month after December, 1990, an individual has a cumulative excess amount in respect of registered retirement savings plans, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that cumulative excess amount. 
  
  ### Tax payable by deferred profit sharing plan
  
  (3) Where, at the end of any month after May, 1976, a trust governed by a deferred profit sharing plan has an excess amount, the trust shall, in respect of that month, pay a tax under this Part equal to 1% of the excess amount. 
  
  ### Waiver of tax
  
  (4) Where an individual would, but for this subsection, be required to pay a tax under subsection 204.1(1) or 204.1(2.1) in respect of a month and the individual establishes to the satisfaction of the Minister that 
  (a) the excess amount or cumulative excess amount on which the tax is based arose as a consequence of reasonable error, and 
  (b) reasonable steps are being taken to eliminate the excess, the Minister may waive the tax. 
  
  ### Definition of excess amount for a year in respect of registered retirement savings plans 
  
  204.2 (1)  
  *Excess amount for a year in respect of registered retirement savings plans* of an individual at a particular time means,  
  (a) where the excess amount is for a year after 1990, nil; and 
  (b) where the excess amount is for a year before 1991, the amount, if any, by which the total of 
  (i) all amounts paid by the individual to such plans under which the individual or the individual’s spouse or common-law partner is the annuitant, other than amounts 
  (A) to which paragraph 60(j), 60(j.01), 60(j.1), 60(j.2) or 60(l) applies or would, if the individual were resident in Canada throughout the year, apply, or 
  (B) transferred to the plan in accordance with any of subsections 146(16), 147(19) and 147.3(1) and 147.3(4) to 147.3(7), and 
  (ii) all gifts made to such a plan under which the individual is the annuitant, other than gifts made thereto by the individual’s spouse or common-law partner, in the year and before the particular time, exceeds the total of 
  (iii) all amounts that may be deducted in computing the individual’s income for the immediately preceding year in respect of those payments, and 
  (iv) the greater of $5,500 and the amount that may be deducted in computing the individual’s income for the year in respect of those payments. 
  
  ### Cumulative excess amount in respect of RRSPs
  
  (1.1) The cumulative excess amount of an individual in respect of registered retirement savings plans at any time in a taxation year is the amount, if any, by which 
  (a) the amount of the individual’s undeducted RRSP premiums at that time exceeds 
  (b) the amount determined by the formula is the individual’s unused RRSP deduction room at the end of the preceding taxation year, is the amount, if any, by which 
  (i) the lesser of the RRSP dollar limit for the year and 18% of the individual’s earned income (as defined in subsection 146(1)) for the preceding taxation year exceeds the total of all amounts each of which is 
  (ii) the individual’s pension adjustment for the preceding taxation year in respect of an employer, or 
  (iii) a prescribed amount in respect of the individual for the year, is, where the individual attained 18 years of age in a preceding taxation year, $2,000, and in any other case, nil, is the group plan amount in respect of the individual at that time, is, where the individual attained 18 years of age before 1995, the individual’s transitional amount at that time, and in any other case, nil, and is the individual’s total pension adjustment reversal for the year. 
  
  ### Undeducted RRSP premiums
  
  (1.2) For the purposes of subsection 204.2(1.1) and the description of K in paragraph 204.2(1.3)(a), the amount of undeducted RRSP premiums of an individual at any time in a taxation year is the amount determined by the formula is for taxation years ending before 1992, nil, and for taxation years ending after 1991, the amount, if any, by which 
  (a) the amount of the individual’s undeducted RRSP premiums at the end of the immediately preceding taxation year exceeds 
  (b) the total of the amounts deducted under subsections 146(5) and 146(5.1) in computing the individual’s income for the immediately preceding taxation year, to the extent that each amount was deducted in respect of premiums paid under registered retirement savings plans in or before that preceding year, is the total of all amounts each of which is 
  (a) a premium (within the meaning assigned by subsection 146(1)) paid by the individual in the year and before that time under a registered retirement savings plan under which the individual or the individual’s spouse or common-law partner was the annuitant (within the meaning assigned by subsection 146(1)) at the time the premium was paid, other than 
  (i) an amount paid to the plan in the first 60 days of the year and deducted in computing the individual’s income for the immediately preceding taxation year, 
  (ii) an amount paid to the plan in the year and deducted under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year, 
  (iii) an amount transferred to the plan on behalf of the individual in accordance with any of subsections 146(16), 147(19), 147.3(1) and (4) to (7) and 147.5(21) or in circumstances to which subsection 146(21) applies, 
  (iv) an amount deductible under subsection 146(6.1) in computing the individual’s income for the year or a preceding taxation year, 
  (v) where the individual is a non-resident person, an amount that would, if the individual were resident in Canada throughout the year and the immediately preceding taxation year, be deductible under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year, or 
  (vi) an amount paid to the plan in the year that is not deductible in computing the individual’s income for the year because of subparagraph 146(5)(a)(iv.1) or 146(5.1)(a)(iv), 
  (b) a gift made in the year and before that time to a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), other than a gift made thereto by the individual’s spouse or common-law partner, or 
  (c) an amount contributed in the year and before that time by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan, and is the amount, if any, by which 
  (a) the total of all amounts each of which is 
  (i) an amount received by the individual in the year and before that time out of or under a pooled registered pension plan, a registered retirement savings plan, a registered retirement income fund or a specified pension plan and included in computing the individual’s income for the year, or 
  (ii) an amount included in computing the individual’s income for the year under any of subsections 146.01(4) to (6) and 146.02(4) to (6) exceeds 
  (b) the amount deducted under paragraph 60(l) in computing the individual’s income for the year. 
  
  ### Group plan amount
  
  (1.3) For the purposes of this section, the group plan amount in respect of an individual at any time in a taxation year is the lesser of 
  (a) the lesser of the value of F and the amount determined by the formula is the lesser of 
  (i) the total of all amounts each of which is a qualifying group plan amount in respect of the individual, to the extent that the amount is included in determining the value of I in subsection (1.2) in respect of the individual at that time, and 
  (ii) the RRSP dollar limit for the following taxation year, is the amount that would be determined under paragraph 204.2(1.1)(b) in respect of the individual at that time if the values of C, D and E in that paragraph were nil, and is 
  (i) where the year is the 1996 taxation year, the amount, if any, by which the amount of the individual’s undeducted RRSP premiums at the beginning of the year exceeds the individual’s cumulative excess amount in respect of registered retirement savings plans at the end of the 1995 taxation year, and 
  (ii) in any other case, the group plan amount in respect of the individual at the end of the preceding taxation year, and 
  (b) the amount that would be the individual’s cumulative excess amount in respect of registered retirement savings plans at that time if the value of D in paragraph 204.2(1.1)(b) were nil. 
  
  ### Qualifying group plan amount
  
  (1.31) For the purposes of the description of F in paragraph (1.3)(a), a qualifying group plan amount in respect of an individual is a premium paid under a registered retirement savings plan or an amount contributed by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan if 
  (a) the plan is part of a qualifying arrangement or is a pooled registered pension plan, 
  (b) the premium or contribution is an amount to which the individual is entitled for services rendered by the individual (whether or not as an employee), and 
  (c) the premium or contribution was remitted to the plan on behalf of the individual by the person or body of persons that is required to remunerate the individual for the services, or by an agent for that person or body, but does not include the part, if any, of a premium or contribution that, by making (or failing to make) an election or exercising (or failing to exercise) any other right under the plan after beginning to participate in the plan and within 12 months before the time the premium was paid or the contribution was made, the individual could have prevented the premium or contribution and that would not as a consequence have been required to be remitted on behalf of the individual to another registered retirement savings plan or pooled registered pension plan or to a money purchase provision of a registered pension plan. 
  
  ### Qualifying arrangement
  
  (1.32) For the purpose of paragraph 204.2(1.31)(a), a qualifying arrangement is an arrangement under which premiums that satisfy the conditions in paragraphs 204.2(1.31)(b) and 204.2(1.31)(c) are remitted to registered retirement savings plans on behalf of two or more individuals, but does not include an arrangement where it is reasonable to consider that one of the main purposes of the arrangement is to reduce tax payable under this Part. 
  
  ### Deemed receipt where RRSP or RRIF amended
  
  (1.4) For the purposes of subsection 204.2(1.2), 
  (a) where an amount in respect of a registered retirement savings plan has been included in computing an individual’s income pursuant to paragraph 146(12)(b), that amount shall be deemed to have been received by the individual out of the plan at the time referred to in that paragraph; and 
  (b) where an amount in respect of a registered retirement income fund has been included in computing an individual’s income pursuant to paragraph 146.3(11)(b), that amount shall be deemed to have been received by the individual out of the fund at the time referred to in that paragraph. 
  
  ### Transitional amount
  
  (1.5) For the purpose of the description of E in paragraph 204.2(1.1)(b), an individual’s transitional amount at any time in a taxation year is the lesser of 
  (a) $6,000, and 
  (b) where the value of L is nil, nil, and in any other case, the amount determined by the formula is the amount, if any, by which 
  (i) the amount that would be determined under subsection 204.2(1.2) to be the amount of the individual’s undeducted RRSP premiums at that time if 
  (A) the value of I in that subsection were determined for the 1995 taxation year without including premiums paid after February 26, 1995, 
  (B) the value of I in that subsection were nil for the 1996 and subsequent taxation years, and 
  (C) the value of J in that subsection were determined for the 1995 and subsequent taxation years without including the part, if any, of an amount received by the individual out of or under a registered retirement savings plan or registered retirement income fund that can reasonably be considered to be in respect of premiums paid after February 26, 1995 by the individual under a registered retirement savings plan exceeds 
  (ii) the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the individual’s income for a preceding taxation year, to the extent that the amount was deducted in respect of premiums paid after that year (other than premiums paid before February 27, 1995), and is the amount that would be determined by the formula in paragraph 204.2(1.1)(b) in respect of the individual at that time if the values of D and E in that paragraph were nil and section 257 did not apply to that formula. 
  
  ### Where terminated plan deemed to continue to exist
  
  (2) Notwithstanding paragraph 146(12)(a), for the purposes of this Part, where a registered retirement savings plan ceases to exist and a payment or transfer of funds out of that plan has been made to which subsection 146(16) applied, if an individual’s excess amount for a year in respect of registered retirement savings plans would have been greater had that plan not ceased to exist, for the purpose of computing the excess amount for a year in respect of registered retirement savings plans for so long as the individual or the individual’s spouse or common-law partner is the annuitant under any registered retirement savings plan under which an annuity has not commenced to be paid to the annuitant, the plan that ceased to exist shall be deemed to remain in existence and the individual or the individual’s spouse or common-law partner, as the case may be, shall be deemed to continue to be the annuitant thereunder. 
  
  ### When retirement savings plan deemed to be a registered plan
  
  (3) Where a retirement savings plan under which an individual or the individual’s spouse or common-law partner is the annuitant (within the meaning assigned by subsection 146(1)) is accepted by the Minister for registration, for the purpose of determining 
  (a) the amount of undeducted RRSP premiums of the individual at any time, and 
  (b) the excess amount for a year in respect of registered retirement savings plans of the individual at any time, the retirement savings plan shall be deemed to have become a registered retirement savings plan on the later of the day on which the plan came into existence and May 25, 1976. 
  
  ### Definition of 
  *excess amount* for a DPSP 
  
  (4)  
  *Excess amount* at any time for a trust governed by a deferred profit sharing plan means the total of all amounts each of which is  
  (a) such portion of the total of all contributions made to the trust before that time and after May 25, 1976 by a beneficiary under the plan, other than 
  (i) contributions that have been deducted by the beneficiary under paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,  
  (ii) amounts transferred to the plan on behalf of the beneficiary in accordance with subsection 147(19), or 
  (iii) the portion of the contributions (other than contributions referred to in subparagraphs 204.2(4)(a)(i) and 204.2(4)(a)(ii)) made by the beneficiary in each calendar year before 1991 not in excess of $5,500, as has not been returned to the beneficiary before that time; or 
  (b) a gift received by the trust before that time and after May 25, 1976. 
  
  ### PRPP withdrawals
  
  (5) Notwithstanding the Pooled Registered Pension Plans Act or any similar law of a province, a member of a PRPP may withdraw an amount from the member’s account under the PRPP to reduce the amount of tax that would otherwise be payable by the member under this Part, to the extent that the reduction cannot be achieved by withdrawals from plans other than PRPPs.  
  
  ### Return and payment of tax
  
  204.3 (1) Within 90 days after the end of each year after 1975, a taxpayer to whom this Part applies shall 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable by the taxpayer under this Part in respect of each month in the year; and 
  (c) pay to the Receiver General the amount of tax, if any, payable by the taxpayer under this Part in respect of each month in the year. 
  
  ### Provisions applicable to Part
  
  (2) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART X.2 
  
  ## Tax in Respect of Registered Investments 
  
  ### Definition of 
  *registered investment* 
  
  204.4 (1) In this Part, 
  *registered investment* means a trust or a corporation that has applied in prescribed form as of a particular date in the year of application and has been accepted by the Minister as of that date as a registered investment for one or more of the following:  
  (a) registered retirement savings plans, 
  (c) registered retirement income funds, and 
  (d) deferred profit sharing plans and that has not been notified by the Minister that it is no longer registered under this Part. 
  
  ### Acceptance of applicant for registration
  
  (2) The Minister may accept for registration for the purposes of this Part any applicant that is 
  (a) a trust that has as its sole trustee a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee if, on the particular date referred to in subsection 204.4(1), 
  (i) all the property of the applicant is held in trust for the benefit of not fewer than 20 beneficiaries and 
  (A) not fewer than 20 beneficiaries are taxpayers described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s), or 
  (B) not fewer than 100 beneficiaries are taxpayers described in paragraph 149(1)(r) or (x), 
  (ii) the total of 
  (A) the fair market value at the time of acquisition of its 
  (I) shares, marketable securities and cash, and 
  (II) bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations, and 
  (B) the amount by which the fair market value at the time of acquisition of its real or immovable property that may reasonably be regarded as being held for the purpose of producing income from property exceeds the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property is not less than 80% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property, 
  (iii) the fair market value at the time of acquisition of its shares, bonds, mortgages, hypothecary claims and other securities of any one corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality) is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is an amount owing by it on account of its acquisition of real or immovable property, 
  (iv) the amount by which 
  (A) the fair market value at the time of acquisition of any one of its real or immovable properties exceeds 
  (B) the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property, 
  (v) not less than 95% of the income of the applicant for its most recently completed fiscal period, or where no such period exists, that part of its current fiscal period before the particular date, was derived from investments described in subparagraph 204.4(2)(a)(ii), 
  (vi) the total value of all interests in the applicant owned by all trusts or corporations described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s) to which any one employer, either alone or together with persons with whom the employer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property, 
  (vii) the total value of all interests in the applicant owned by all trusts described in paragraph 149(1)(r) or (x) to which any one taxpayer, either alone or together with persons with whom the taxpayer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property, and 
  (viii) the applicant does not hold property acquired by it after May 26, 1975 that is 
  (A) a mortgage or hypothecary claim (other than a mortgage or hypothecary claim insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages or hypothecary claims and that is approved as a private insurer of mortgages or hypothecary claims by the Superintendent of Financial Institutions pursuant to the powers assigned to the Superintendent under subsection 6(1) of the Office of the Superintendent of Financial Institutions Act), or an interest therein, or for civil law a right therein, in respect of which the mortgagor or hypothecary debtor is the annuitant under a registered retirement savings plan or registered retirement income fund, or a person with whom the annuitant is not dealing at arm’s length, if any of the funds of a trust governed by such a plan or fund have been used to acquire an interest in the applicant, or  
  (B) a bond, debenture, note or similar obligation issued by a cooperative corporation (within the meaning assigned by subsection 136(2)) or a credit union that has granted any benefit or privilege to any annuitant or beneficiary under a plan or fund referred to in subsection 204.4(1) that is dependent on or related to 
  (I) ownership by a trust governed by any such plan or fund of shares, bonds, debentures, notes or similar obligations of the cooperative corporation or credit union, or 
  (II) ownership by the applicant of shares, bonds, debentures, notes or similar obligations of the cooperative corporation or credit union if the trust governed by any such plan or fund has used any of its funds to acquire an interest in the applicant; 
  (b) a trust that 
  (i) would be a trust described in paragraph 204.4(2)(a) if that paragraph were read without reference to subparagraphs 204.4(2)(a)(i), 204.4(2)(a)(vi) and 204.4(2)(a)(vii), and 
  (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration; 
  (c) a mutual fund trust; 
  (d) a trust that 
  (i) would be a mutual fund trust if paragraph 132(6)(c) were not applicable, and 
  (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration; 
  (e) a mutual fund corporation or investment corporation; or 
  (f) a corporation that 
  (i) would be a mutual fund corporation or investment corporation if it could have elected to be a public corporation under paragraph (b) of the definition 
  *public corporation* in subsection 89(1) had the conditions prescribed therefor required only that a class of shares of its capital stock be qualified for distribution to the public, and  
  (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration. 
  
  ### Revocation of registration
  
  (3) The Minister shall notify a registered investment that it is no longer registered 
  (a) on being satisfied that, at a date subsequent to its registration date, it no longer satisfies one or more of the conditions necessary for it to be acceptable for registration under this Part, other than a condition the failure of which to satisfy would make it liable for tax under section 204.6; or 
  (b) within 30 days after receipt of a request in prescribed form from the registered investment for termination of its registration. 
  
  ### Suspension of revocation
  
  (4) Notwithstanding a notification to a taxpayer under subsection (3), for the purposes of sections 204.6 and 204.7, the taxpayer is deemed to be a registered investment for each month or part of a month after the notification during which an interest in, or a share of the capital stock of, the taxpayer continues, by virtue of having been a registered investment, to be a qualified investment for a plan or fund referred to in subsection (1). 
  
  ### Cancellation of revocation
  
  (5) Where a registered investment has been notified pursuant to paragraph 204.4(3)(a) and within 3 months from the date of notification it satisfies the Minister that it is acceptable for registration under this Part, the Minister may declare the notification to be a nullity. 
  
  ### Successor trust
  
  (6) Where at any time in a year a particular trust described in paragraph 204.4(2)(a) or 204.4(2)(b) has substantially the same beneficiaries and can reasonably be regarded as being a continuation of another trust that was a registered investment in the year or the immediately preceding year, for the purposes of this Part, the particular trust shall be deemed to be the same trust as the other trust. 
  
  ### Deemed registration of registered investment
  
  (7) Where at the end of any month a registered investment could qualify for acceptance at that time under subsection 204.4(2), it shall be deemed for the purposes of section 204.6 to have been registered under the first of the following paragraphs under which it is registrable regardless of the paragraph under which it was accepted for registration by the Minister: 
  (a) paragraph 204.4(2)(c) or 204.4(2)(e), as the case may be; 
  (b) paragraph 204.4(2)(a); 
  (c) paragraph 204.4(2)(d) or 204.4(2)(f), as the case may be; and 
  (d) paragraph 204.4(2)(b). 
  
  ### Publication
  
  204.5 Each year the Minister shall make available to the public, in such a manner as the Minister deems appropriate, the names of all registered investments as of December 31 of the preceding year. 
  
  ### Tax payable
  
  204.6 (1) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(b), (d) or (f) holds property that is not a prescribed investment for that taxpayer, it shall, in respect of that month, pay a tax under this Part equal to the total of all amounts each of which is an amount determined in respect of such a property by the formula is the fair market value of the property at the time of its acquisition by the taxpayer; is the total number of units or shares of the capital stock of the registered investment held at the end of the month by one or more 
  (a) trusts that are governed by any of a FHSA, RDSP, RESP, RRIF, RRSP, TFSA or deferred profit sharing plan, or 
  (b) registered investments described in paragraph 204.4(2)(b), (d) or (f); and is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment at the end of the month. 
  
  ### Tax payable
  
  (2) Where at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) or (b) holds property that is a share, bond, mortgage, hypothecary claim or other security of a corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality), it shall, in respect of that month, pay a tax under this Part equal to 1% of the amount, if any, by which 
  (a) the total of all amounts each of which is the fair market value of such a property at the time of its acquisition exceeds 
  (b) 10% of the amount by which 
  (i) the total of all amounts each of which is the fair market value, at the time of acquisition, of one of its properties exceeds 
  (ii) the total of all amounts each of which is an amount owing by the trust at the end of the month in respect of the acquisition of real property or immovables. 
  
  ### Tax payable — real property or immovables
  
  (3) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) holds real or immovable property, it shall, in respect of that month, pay a tax under this Part equal to 1% of the total of all amounts each of which is the amount by which the excess of 
  (a) the fair market value at the time of its acquisition of any one real or immovable property of the taxpayer over 
  (b) the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of the real or immovable property was greater than 10% of the amount by which the total of all amounts each of which is the fair market value at the time of its acquisition of a property held by it at the end of the month exceeds the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of real or immovable property. 
  
  ### Return and payment of tax
  
  204.7 (1) Within 90 days from the end of each taxation year commencing after 1980, a registered investment shall 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable by it under this Part for the year; and 
  (c) pay to the Receiver General the amount of tax, if any, payable by it under this Part for the year. 
  
  ### Liability of trustee
  
  (2) Where the trustee of a registered investment that is liable to pay tax under this Part does not remit to the Receiver General the amount of the tax within the time specified in subsection 204.7(1), the trustee is personally liable to pay on behalf of the registered investment the full amount of the tax and is entitled to recover from the registered investment any amount paid by the trustee as tax under this section. 
  
  ### Provisions applicable to Part
  
  (3) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART X.3 
  
  ## Labour-sponsored Venture Capital Corporations 
  
  ### Definitions
  
  204.8 (1) In this Part,  
  *annuitant* has the meaning assigned by subsection 146(1); (rentier)   
  *eligible business entity*, at any time, means a particular entity that is  
  (a) a prescribed corporation, or 
  (b) a Canadian partnership or a taxable Canadian corporation, all or substantially all of the fair market value of the property of which is, at that time, attributable to 
  (i) property used in a specified active business carried on by the particular entity or by a corporation controlled by the particular entity, 
  (ii) shares of the capital stock or debt obligations of one or more entities that, at that time, are eligible business entities related to the particular entity, or 
  (iii) any combination of properties described in subparagraph (i) or (ii); ( entreprise admissible)   
  *eligible investment* of a particular corporation means  
  (a) a share that was issued to the particular corporation and that is a share of the capital stock of a corporation that was an eligible business entity at the time the share was issued, 
  (b) a particular debt obligation that was issued to the particular corporation by an entity that was an eligible business entity at the time the particular debt obligation was issued where 
  (i) the entity is not restricted by the terms of the particular debt obligation or by the terms of any agreement related to that obligation from incurring other debts, 
  (ii) the particular debt obligation, if secured, is secured solely by a floating charge on the assets of the entity or by a guarantee referred to in paragraph (c), and 
  (iii) the particular debt obligation, by its terms or any agreement relating to that obligation, is subordinate to all other debt obligations of the entity, except that, where the entity is a corporation, the particular debt obligation need not be subordinate to 
  (A) a debt obligation, issued by the entity, that is prescribed to be a small business security, or 
  (B) a debt obligation owing to a shareholder of the entity or to a person related to any such shareholder, 
  (c) a guarantee provided by the particular corporation in respect of a debt obligation that would, if the debt obligation had been issued to the particular corporation at the time the guarantee was provided, have been at that time an eligible investment because of paragraph (b), or 
  (d) an option or a right granted by an eligible business entity that is a corporation, in conjunction with the issue of a share or debt obligation that is an eligible investment, to acquire a share of the capital stock of the eligible business entity that would be an eligible investment if that share were issued at the time that the option or right was granted, if the following conditions are satisfied: 
  (e) immediately after the time the share or debt obligation was issued, the guarantee was provided or the option or right was granted, as the case may be, the total of the costs to the particular corporation of all shares, options, rights and debt obligations of the eligible business entity and all corporations related to it and 25% of the amount of all guarantees provided by the particular corporation in respect of debt obligations of the eligible business entity and the related corporations does not exceed the lesser of $15,000,000 and 10% of the shareholders’ equity in the particular corporation, determined in accordance with generally accepted accounting principles, on a cost basis and without taking into account any unrealized gains or losses on the investments of the particular corporation, and 
  (f) immediately before the time the share or debt obligation was issued, the guarantee was provided or the option or right was granted, as the case may be, 
  (i) the carrying value of the total assets of the eligible business entity and all corporations (other than prescribed labour-sponsored venture capital corporations) related to it (determined in accordance with generally accepted accounting principles on a consolidated or combined basis, where applicable) did not exceed $50,000,000, and 
  (ii) the total of 
  (A) the number of employees of the eligible business entity and all corporations related to it who normally work at least 20 hours per week for the entity and the related corporations, and 
  (B) 1/2 of the number of other employees of the entity and the related corporations, did not exceed 500; 
  (g)  [Repealed, 1998, c. 19, s. 51(1)] (placement admissible)   
  *eligible labour body* means a trade union, as defined in the Canada Labour Code, that represents employees in more than one province, or an organization that is composed of 2 or more such unions; (organisme syndical admissible)   
  *labour-sponsored funds tax credit* [Repealed, 1997, c. 25, s. 55(1)]   
  *national central labour body* [Repealed, 1994, c. 7, Sch. VIII, s. 118(2)]   
  *original acquisition* of a share has the meaning assigned by subsection 127.4(1); (acquisition initiale)   
  *original purchaser* [Repealed, 1997, c. 25, s. 55(2)]   
  *registered labour-sponsored venture capital corporation* [Repealed, 1997, c. 25, s. 55(1)]   
  *reserve* means  
  (a) property described in any of paragraphs (a), (b), (c), (f) and (g) of the definition 
  *qualified investment* in section 204, and  
  (b) deposits with a credit union that is a 
  *member institution* in relation to a deposit insurance corporation (within the meaning assigned by subsection 137.1(5)); (réserve)   
  *revoked corporation* means a corporation the registration of which has been revoked under subsection 204.81(6); (Version anglaise seulement)   
  *specified active business*, at any time, means an active business that is carried on in Canada where  
  (a) at least 50% of the full-time employees employed at that time in respect of the business are employed in Canada, and 
  (b) at least 50% of the salaries and wages paid to employees employed at that time in respect of the business are reasonably attributable to services rendered in Canada by the employees; ( entreprise déterminée exploitée activement)   
  *specified individual*, in respect of a share, means an individual (other than a trust) whose labour-sponsored funds tax credit (as defined by subsection 127.4(6)) in respect of the original acquisition of the share is not nil or would not be nil if this Act were read without reference to paragraphs 127.4(6)(b) and 127.4(6)(d). (particulier déterminé)   
  *start-up period* of a corporation means  
  (a) subject to paragraph (c), in the case of a corporation that first issued Class A shares before February 17, 1999, the corporation’s taxation year in which it first issued those shares and the four following taxation years, 
  (b) subject to paragraph (c), in the case of a corporation that first issues Class A shares after February 16, 1999, the corporation’s taxation year in which it first issues those shares and the following taxation year, or 
  (c) where a corporation files an election with its return under this Part for a particular taxation year of the corporation that ends after 1998 and that is referred to in paragraph (a) or (b), the period, if any, consisting of the taxation years referred to in paragraph (a) or (b), as the case may be, other than the particular year and all taxation years following the particular year. ( période de démarrage)   
  *terminating corporation* in respect of a particular corporation means a predecessor corporation in circumstances where  
  (a) subsection 204.85(3) applies to a merger of the particular corporation and the predecessor corporation, 
  (b) Class A shares of the particular corporation have been issued to the predecessor corporation in exchange for property of the predecessor corporation, and 
  (c) within a reasonable period of time after the exchange, Class A shareholders of the predecessor corporation receive all of the Class A shares of the particular corporation issued to the predecessor corporation in the course of a wind-up of the predecessor corporation. ( société sortante)  
  
  ### When venture capital business discontinued
  
  (2) For the purposes of section 127.4, this Part and Part XII.5, a corporation discontinues its venture capital business 
  (a) at the time its articles cease to comply with paragraph 204.81(1)(c) and would so cease to comply if it had been incorporated after December 5, 1996; 
  (b) at the time it begins to wind-up, and for the purpose of this paragraph a corporation is not to be considered to have begun to wind up solely because it discontinues its venture capital business under prescribed wind-up rules; 
  (c) immediately before the time it amalgamates or merges with one or more other corporations to form one corporate entity (other than an entity deemed by paragraph 204.85(3)(d) to have been registered under this Part); 
  (d) at the time it becomes a revoked corporation, if one of the grounds on which the Minister could revoke its registration for the purposes of this Part is set out in paragraph 204.81(6)(a.1); or 
  (e) at the first time after the revocation of its registration for the purposes of this Part that it fails to comply with any of the provisions of its articles governing its authorized capital, the management of its business and affairs, the reduction of paid-up capital or the redemption or transfer of its Class A shares. 
  
  ### Date of issue of Class A shares
  
  (3) For the purposes of this Part and subsection 211.8(1), in determining the time of the issue or the original acquisition of Class A shares, identical Class A shares held by a person are deemed to be disposed of by the person in the order in which the shares were issued. 
  
  ### Conditions for registration
  
  204.81 (1) The Minister may register a corporation for the purposes of this Part if the corporation’s application for registration was received before March 21, 2013 and if, in the opinion of the Minister, it complies with the following conditions: 
  (a) the corporation has applied in prescribed form to the Minister for registration; 
  (b) the corporation was caused to be incorporated under the Canada Business Corporations Act by an eligible labour body; and  
  (c) the articles of the corporation provide that 
  (i) the business of the corporation is restricted to assisting the development of eligible business entities and to creating, maintaining and protecting jobs by providing financial and managerial advice to such entities and by investing funds of the corporation in eligible investments and reserves, 
  (ii) the authorized capital of the corporation shall consist only of 
  (A) Class A shares that are issuable only to individuals (other than trusts), terminating corporations in respect of the corporation and trusts governed by registered retirement savings plans or by TFSAs and that entitle their holders 
  (I) to receive notice of and, subject to the Canada Business Corporations Act, to attend and vote at all meetings of the shareholders of the corporation,  
  (II) to receive dividends at the discretion of the board of directors of the corporation, and 
  (III) to receive, on dissolution of the corporation, all the assets of the corporation that remain after payment of all amounts payable to the holders of all other classes of shares of the corporation, 
  (B) Class B shares that are issuable only to and may be held only by eligible labour bodies, that entitle each of those shareholders 
  (I) to receive notice of and, subject to the Canada Business Corporations Act, to attend and vote at all meetings of the shareholders of the corporation, and  
  (II) to receive, on dissolution of the corporation, an amount equal to the amount of the consideration received by the corporation on the issue of the Class B shares, but that do not entitle them to receive dividends, and 
  (C) any additional classes of shares that are authorized, if the rights, privileges, restrictions and conditions attached to the shares are approved by the Minister of Finance, 
  (iii) the business and affairs of the corporation shall be managed by a board of directors, at least 1/2 of whom are appointed by the Class B shareholders, 
  (iv) the corporation shall not reduce its paid-up capital in respect of a class of shares (other than Class B shares) otherwise than by way of 
  (A) a redemption of shares of the corporation, or 
  (B) a reduction in its paid-up capital attributable to a class of shares for which no shares have been issued in the eight-year period ending at the time of the reduction, 
  (v) the corporation shall not redeem a Class A share in respect of which an information return described in paragraph 204.81(6)(c) has been issued unless 
  (A) if the share is held by the specified individual in respect of the share, a spouse or common-law partner or former spouse or common-law partner of that individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which that individual, spouse or common-law partner is the annuitant, 
  (I) a request in writing to redeem the share is made by the holder to the corporation and the information return referred to in paragraph 204.81(6)(c) has been returned to the corporation, or 
  (II)  [Repealed, 1997, c. 25, s. 56(4)]  
  (III) the corporation is notified in writing that the specified individual in respect of the share became disabled and permanently unfit for work or terminally ill after the share was issued, 
  (B) there is no specified individual in respect of the share, 
  (C)  [Repealed, 1997, c. 25, s. 56(5)]  
  (D) the corporation is notified in writing that the share is held by a person on whom the share has devolved as a consequence of the death of 
  (I) a holder of the share, or 
  (II) an annuitant under a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund that was a holder of the share, 
  (E) the redemption occurs 
  (I) more than eight years after the day on which the share was issued, or 
  (II) if the day that is eight years after that issuance is in February or March of a calendar year, in February or on March 1st of that calendar year but not more than 31 days before that day, or 
  (F) the holder of the share has satisfied such other conditions as are prescribed, 
  (vi)  [Repealed, 1997, c. 25, s. 56(7)]  
  (vii) the corporation shall not register a transfer of a Class A share by the specified individual in respect of the share, a spouse or common-law partner of the specified individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which the specified individual or spouse or common-law partner is the annuitant, unless 
  (A) no information return has been issued under paragraph 204.81(6)(c) in respect of the share, 
  (B) the transfer occurs more than eight years after the day on which the share was issued, 
  (C) the transfer is to the specified individual, a spouse or common-law partner or former spouse or common-law partner of the specified individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which the specified individual or the spouse or common-law partner or former spouse or common-law partner of the specified individual is the annuitant, 
  (D) the corporation is notified in writing that the transfer occurs as a consequence of the death of the specified individual or a spouse or common-law partner of the specified individual, 
  (E) the corporation is notified in writing that the transfer occurs after the specified individual dies, 
  (F)  [Repealed, 1997, c. 25, s. 56(9)]  
  (G) the corporation is notified in writing that the specified individual became disabled and permanently unfit for work or terminally ill after the share was issued and before the transfer, or 
  (H) such other conditions as are prescribed are satisfied. 
  (viii) the corporation shall not pay any fee or remuneration to a shareholder, director or officer of the corporation unless the payment was approved by a resolution of the directors of the corporation, and 
  (ix) the corporation shall not make any investment in an eligible business entity with which the corporation or any of the directors of the corporation does not deal at arm’s length unless 
  (A) the corporation would deal at arm’s length with the eligible business entity but for the corporation’s interest as the holder of eligible investments in such entity, or 
  (B) the investment was approved by special resolution of the shareholders of the corporation before the investment was made. 
  
  ### Corporations incorporated before March 6, 1996
  
  (1.1) In applying clause (1)(c)(v)(E) in relation to any time before 2004 in respect of a corporation incorporated before March 6, 1996, the references in that clause to “eight” are replaced with references to “five” if, at that time, the relevant statements in the corporation’s articles refer to “five”. 
  
  ### Deemed provisions in articles
  
  (1.2) In applying subsection (1) in relation to any time before 2004, to a corporation incorporated before February 7, 2000, if the articles of the corporation comply with subclause (1)(c)(v)(E)(I) (as modified, where relevant, by subsection (1.1)), those articles are deemed to provide the statement required by subclause (1)(c)(v)(E)(II). 
  
  ### Registration number
  
  (2) On registering a corporation under subsection 204.81(1), the Minister shall assign to it a registration number. 
  
  ### Successive registrations
  
  (3) Where an eligible labour body causes more than one corporation to be registered under this Part, for the purposes of paragraph 204.81(6)(h) and section 204.82, each of those corporations shall be deemed 
  (a) to have issued a Class A share at the earliest time any such corporation issued a Class A share, and, where the corporation did not exist at the time referred to in paragraph 204.81(3)(a), 
  (b) to have been in existence during the particular period beginning immediately before that time and ending immediately after the corporation was incorporated, and 
  (c) to have had, throughout the particular period, fiscal periods ending on the same calendar day in each year in the particular period as the calendar day on which its first fiscal period after it was incorporated ended. 
  
  ### Determination of cost
  
  (4) For the purposes of this Part, the cost at any time to a corporation of an eligible investment that is a guarantee shall be deemed to be 25% of the amount of the debt obligation subject to the guarantee at that time. 
  
  ### Registration date
  
  (5) Where the Minister registers a corporation for the purposes of this Part, the corporation shall be deemed to have become so registered on the later of 
  (a) the day the application for registration of the plan is received by the Minister, and 
  (b) where in the application for registration a day is specified as the day on which the registration is to take effect, that day. 
  
  ### Revocation of registration
  
  (6) The Minister may revoke the registration of a corporation for the purposes of this Part where 
  (a) the articles of the corporation do not comply with paragraph 204.81(1)(c) and would not comply with that paragraph if the corporation had been incorporated after December 5, 1996; 
  (a.1) the corporation does not comply with any of the provisions of its articles described in paragraph 204.81(1)(c), except where there would be no failure to comply if the provisions of its articles were consistent with the articles of a corporation that would be permitted to be registered under this Part if it had been incorporated after December 5, 1996; 
  (b) an individual acquires or irrevocably subscribes and pays for a Class A share of the capital stock of the corporation in the period beginning on the 61st day of a calendar year and ending on the 60th day of the following calendar year and the corporation fails to file with the Minister an information return in prescribed form containing prescribed information before April of that following calendar year; 
  (c) an individual acquires or irrevocably subscribes and pays for a Class A share of the capital stock of the corporation in the period beginning on the 61st day of a calendar year and ending on the 60th day of the following calendar year and the corporation fails to issue to the individual before April of that following calendar year an information return in prescribed form stating the amount of the consideration paid for the share in that period; 
  (d) the corporation issues more than one information return described in paragraph 204.81(6)(c) in respect of the same acquisition of or subscription for a Class A share; 
  (e) the financial statements of the corporation presented to its shareholders are not prepared in accordance with generally accepted accounting principles; 
  (f) the corporation fails within 6 months after the end of any taxation year to have an independent valuation of its shares made as of the end of that year; 
  (g)  [Repealed, 2000, c. 19, s. 55(1)]  
  (h) the corporation does not pay the tax or penalty payable under section 204.82 by it on or before the day on or before which that tax or penalty is required to be paid; 
  (i) tax was payable under subsection 204.82(3) by the corporation for 3 or more taxation years; 
  (j) the corporation provides a guarantee that is an eligible investment and fails to maintain, at any time during the term of the guarantee, a reserve equal to the cost to the corporation of the guarantee at that time; 
  (k) the corporation pays a fee or commission in excess of a reasonable amount in respect of the offering for sale, or the sale, of its shares; or 
  (l) the corporation has a monthly deficiency in 18 or more months in any 36-month period. 
  
  ### Notice of intent to revoke registration
  
  (7) Where the Minister proposes to revoke the registration of a corporation under subsection 204.81(6), the Minister shall, by registered mail, give notice to the corporation of the proposal. 
  
  ### Idem
  
  (8) Where the Minister gives notice under subsection 204.81(7) to a registered labour-sponsored venture capital corporation, the Minister may, after the expiration of 30 days after the day of mailing of the notice, or after the expiration of such extended period after the day of mailing as the Federal Court of Appeal or a judge thereof, on application made at any time before the determination of any appeal under subsection 204.81(9) from the giving of the notice, may fix or allow, publish a copy of the notice in the Canada Gazette and, on the publication of a copy of the notice, the registration of the corporation is revoked.  
  
  ### Voluntary de-registration
  
  (8.1) Where at any time the Minister receives a certified copy of a resolution of the directors of a corporation seeking the revocation of the corporation’s registration under this Part, 
  (a) the registration is revoked at that time; and 
  (b) the Minister shall, with all due dispatch, give notice in the Canada Gazette of the revocation.  
  
  ### Application of subsection 248(7)
  
  (8.2) Subsection 248(7) does not apply for the purpose of subsection (8.1). 
  
  ### Transitional rules
  
  (8.3) If a registered labour-sponsored venture capital corporation notifies the Minister in writing of its intent to revoke its registration under this Part, the following rules apply: 
  (a) the corporation shall not, on or after the day the notice is provided to the Minister (referred to in this subsection and subsection (8.4) as the “notification date”), issue any tax credit certificates, other than duplicate certificates to replace certificates issued before that day; 
  (b) section 204.841 does not apply on the discontinuance of its venture capital business; 
  (c) subsections 204.82(1) to (4) do not apply to taxation years of the corporation that begin on or after the notification date; and 
  (d) subsection 204.83(1) does not apply in respect of a period, referred to in that subsection as the “second period”, that ends after the notification date. 
  
  ### Discontinuance of provincial program
  
  (8.4) Subsection (8.3) applies to a corporation only if, 
  (a) on the notification date, the percentage determined in respect of the corporation by the following formula is less than 20 per cent: is the amount of equity capital received by the corporation on the issue of Class A shares that were issued in the 24 months immediately preceding the notification date and are still outstanding on that date, is the total amount of equity capital received by the corporation on the issue of Class A shares that are still outstanding on the notification date, and is the amount of equity capital received by the corporation on the issue of Class A shares that, as of the notification date, have been outstanding for at least eight years. 
  (b) the corporation has revoked its registration before the third anniversary of the notification date. 
  
  ### Right of appeal
  
  (9) Where the Minister refuses to accept a corporation for registration under subsection 204.81(1) or gives notice of a proposal to revoke the registration of a corporation under subsection 204.81(7), the corporation may appeal to the Federal Court of Appeal from the decision or from the giving of the notice. 
  
  ### Recovery of credit
  
  204.82 (1) Where, at any time that is both in a taxation year included in the start-up period of a corporation that was registered under this Part and before its venture capital business is first discontinued, 
  (a) 80% of the amount, if any, by which the total consideration received by it for Class A shares issued by it before that time exceeds the total of all amounts paid by it before that time to its shareholders as a return of capital on such shares exceeds 
  (b) the total of all amounts each of which is the cost to the corporation of an eligible investment or reserve of the corporation at that time, the corporation shall pay a tax under this Part for the year equal to the amount determined by the formula is the greatest amount by which the amount determined under paragraph 204.82(1)(a) exceeds the amount determined under paragraph 204.82(1)(b) for the year, and is the total of all taxes payable under this subsection by the corporation for preceding taxation years. 
  
  ### Liability for tax
  
  (2) Each corporation that has been registered under this Part shall, in respect of each month that ends before its venture capital business is first discontinued and in a particular taxation year of the corporation that begins after the end of the corporation’s start-up period (or, where the corporation has no start-up period, that begins after the time the corporation first issues a Class A share), pay a tax under this Part equal to the amount obtained when the greatest investment shortfall at any time that is in the month and in the particular year (in this section and sections 204.81 and 204.83 referred to as the “monthly deficiency”) is multiplied by 1/60 of the prescribed rate of interest in effect during the month. 
  
  ### Determination of investment shortfall
  
  (2.1) Subject to subsection 204.82(2.2), a corporation’s investment shortfall at any time in a particular taxation year is the amount determined by the formula is 60% of the lesser of 
  (a) the amount, if any, by which the amount of the shareholders’ equity in the corporation at the end of the preceding taxation year exceeds the specified adjustment in respect of the shareholders’ equity in the corporation at the end of that year, and 
  (b) the amount, if any, by which the amount of the shareholders’ equity in the corporation at the end of the particular taxation year exceeds the specified adjustment in respect of the shareholders’ equity in the corporation at the end of the particular year; is the greater of 
  (a) the total of all amounts each of which is the adjusted cost to the corporation of an eligible investment of the corporation at that time, and 
  (b) 50% of the total of all amounts each of which is 
  (i) the adjusted cost to the corporation of an eligible investment of the corporation at the beginning of the particular year, or 
  (ii) the adjusted cost to the corporation of an eligible investment of the corporation at the end of the particular year; and is 60% of the amount, if any, by which 
  (a) the total of all amounts each of which is a tax or penalty under subsection (3) or (4), or a prescribed tax or penalty, paid before that time by the corporation (other than the portion, if any, of that tax or penalty the liability for which resulted in a reduction in the amount of the shareholders’ equity at the end of any preceding taxation year) exceeds 
  (b) the total of all amounts each of which is a refund before that time of any portion of the total described in paragraph (a). 
  
  ### Investment shortfall
  
  (2.2) For the purpose of this subsection and for the purpose of computing a corporation’s investment shortfall under subsection (2.1) at any time in a taxation year (in this subsection referred to as the “relevant year”), 
  (a) unrealized gains and losses in respect of its eligible investments shall not be taken into account in computing the amount of the shareholders’ equity in the corporation; 
  (b) where 
  (i) the relevant year ends after 1998, and 
  (ii) it is expected that a redemption of its Class A shares will occur after the end of a particular taxation year and, as a consequence, the amount of the shareholders’ equity in the corporation at the end of the particular year would otherwise be reduced to take into account the expected redemption, subject to paragraph 204.82(2.2)(c), the amount (or, where the relevant year ends in 1999, 2000, 2001 or 2002, 20%, 40%, 60% or 80%, respectively of the amount) expected to be redeemed shall not be taken into account in determining the amount of the shareholders’ equity in the corporation at the end of the particular year; 
  (c) paragraph 204.82(2.2)(b) does not apply to a redemption expected to be made after the end of a taxation year where 
  (i) the redemption is made within 60 days after the end of the year, and 
  (ii) either 
  (A) tax under Part XII.5 became payable as a consequence of the redemption, or 
  (B) tax under Part XII.5 would not have become payable as a consequence of the redemption if the redemption had occurred at the end of the year; 
  (c.1) the specified adjustment in respect of shareholders’ equity in the corporation at the end of a taxation year is the amount determined by the formula is the shareholders’ equity at the end of the year, is the total of 
  (i) the fair market value at the end of the year of all Class A shares issued by it before March 6, 1996 and more than five years before the end of the year, 
  (ii) the fair market value at the end of the year of all Class A shares issued by it after March 5, 1996 and more than eight years before the end of the year, 
  (iii) the fair market value at the end of the year of all Class A shares issued by it in the last 60 days of the year, and 
  (iv) if the corporation so elects in writing filed with the Minister not more than six months after the end of the year and is not a revoked corporation at the end of the year, the fair market value at the end of the year of all shares of classes, of the capital stock of the corporation, to which clause 204.81(1)(c)(ii)(C) applies, is the fair market value at the end of the year of all shares issued by it, and is the amount by which the shareholders’ equity in the corporation at the end of the year has been reduced to take into account the expected subsequent redemption of shares of the capital stock of the corporation; and 
  (d) the adjusted cost to the corporation of an eligible investment of the corporation at any time is 
  (i) 150% of the cost to the corporation of the eligible investment at that time where the eligible investment is 
  (A) a property acquired by the corporation after February 18, 1997 (other than a property to which subparagraph (i.1) applies) that would be an eligible investment of the corporation if the reference to “$50,000,000” in paragraph (f) of the definition 
  *eligible investment* in subsection 204.8(1) were read as “$10,000,000”, or  
  (B) a share of the capital stock of a prescribed corporation, 
  (i.1) 200% of the cost to the corporation of the eligible investment at that time where the eligible investment is a property acquired by the corporation after February 16, 1999 (other than a property described in clause (i)(B)) that would be an eligible investment of the corporation if the reference to “$50,000,000” in paragraph (f) of the definition 
  *eligible investment* in subsection 204.8(1) were read as “$2,500,000”, and  
  (ii) in any other case, the cost to the corporation of the eligible investment of the corporation at that time. 
  
  ### Recovery of credit
  
  (3) Where a corporation is liable under subsection 204.82(2) to pay a tax in respect of 12 consecutive months (in this subsection referred to as the “particular period”), the corporation shall pay a tax under this Part for a taxation year in respect of each particular period that ends in the year equal to the total of the amounts determined by the formula is the total of the monthly deficiencies for each month in the particular period; is the total of all taxes payable by the corporation under subsection 204.82(1) for preceding taxation years and taxes payable by it under this subsection in respect of a period ending before the end of the particular period; and is the total of all amounts refunded under section 204.83 in respect of the tax paid under this subsection by the corporation for preceding taxation years. 
  
  ### Penalty
  
  (4) Where a corporation is liable under subsection 204.82(3) to pay a tax for a taxation year, the corporation shall pay, in addition to the tax payable under that subsection, a penalty for the year equal to that tax. 
  
  ### Provincially registered LSVCCs
  
  (5) Where 
  (a) an amount (other than interest on an amount to which this subsection applies or an amount payable under or as a consequence of a prescribed provision of a law of a province) is payable to the government of a province by a corporation, 
  (b) the amount is payable as a consequence of a failure to acquire sufficient properties of a character described in the law of the province, 
  (c) the corporation has been prescribed for the purpose of the definition 
  *approved share* in subsection 127.4(1), and  
  (d) the corporation is not a registered labour-sponsored venture capital corporation or a revoked corporation, the corporation shall pay a tax under this Part for the taxation year in which the amount became payable equal to that amount. 
  
  ### Further matching of amounts payable to a province
  
  (6) Where 
  (a) a particular amount is payable (other than interest on an amount to which this subsection applies) by a registered labour-sponsored venture capital corporation or a revoked corporation to the government of a province as a consequence of a failure of a prescribed corporation to acquire sufficient properties of a character described in a law of the province, and 
  (b) the particular amount became payable before the corporation first discontinued its venture capital business, the corporation shall pay a tax under this Part for the taxation year in which the particular amount became payable equal to that amount. 
  
  ### Refunds for federally registered LSVCCs
  
  204.83 (1) If a corporation is required, under subsections 204.82(3) and (4), to pay a tax and a penalty under this Part for a taxation year, it has no monthly deficiency throughout any period of 12 consecutive months (in this section referred to as the “second period”) that begins after the 12-month period in respect of which the tax became payable (in this section referred to as the “first period”) and it so requests in an application filed with the Minister in prescribed form, the Minister shall refund to it an amount equal to the total of the amount that was paid under subsection 204.82(3) and 80% of the amount that was paid under subsection 204.82(4) in respect of the first period on or before the later of 
  (a) the 30th day after receiving the application, and 
  (b) the 60th day after the end of the second period. 
  
  ### Refunds of amounts payable to provinces
  
  (2) Where 
  (a) the government of a province refunds, at any time, an amount to a corporation, 
  (b) the refund is of an amount that had been paid in satisfaction of a particular amount payable in a taxation year of the corporation, and 
  (c) tax was payable under subsection 204.82(5) or (6) by the corporation for a taxation year because the particular amount became payable, the corporation is deemed to have paid at that time an amount equal to the refund on account of its tax payable under this Part for the year. 
  
  ### Penalty
  
  204.84 Every corporation that for a taxation year issues an information return described in paragraph 204.81(6)(c) in respect of 
  (a) the issuance of a share when the corporation was a revoked corporation, or 
  (b) a subscription in respect of a share if the share is not issued on or before the day that is 180 days after the day the information return was issued, is liable to a penalty for the year equal to the amount of the consideration for which the share was or was to be issued. 
  
  ### Penalty tax where venture capital business discontinued
  
  204.841 Where, at a particular time in a taxation year, a particular corporation that is a registered labour-sponsored venture capital corporation or a revoked corporation first discontinues its venture capital business, the particular corporation shall pay a tax under this Part for the year equal to the total of all amounts each of which is the amount in respect of a Class A share of the capital stock of the particular corporation outstanding immediately before the particular time that is determined by the formula is 
  (a) if the original acquisition of the share was before March 6, 1996 and less than five years before the particular time, 4% of the consideration received by the particular corporation for the issue of the share, 
  (b) if the original acquisition of the share was after March 5, 1996 and less than eight years before the particular time, 1.875% of the consideration received by the particular corporation for the issue of the share, and 
  (c) in any other case, nil; and is 
  (a) if the original acquisition of the share was before March 6, 1996, the number obtained when the number of whole years throughout which the share was outstanding before the particular time is subtracted from five, and 
  (b) in any other case, the number obtained when the number of whole years throughout which the share was outstanding is subtracted from eight. 
  
  ### Dissolution of federally registered LSVCCs
  
  204.85 (1) A registered labour-sponsored venture capital corporation or a revoked corporation that has issued any Class A shares shall send written notification of any proposed amalgamation, merger, liquidation or dissolution of the corporation to the Minister at least 30 days before the amalgamation, merger, liquidation or dissolution, as the case may be. 
  
  ### Dissolution of other LSVCCs
  
  (2) Where 
  (a) an amount (other than interest on an amount to which this subsection applies or an amount payable under or as a consequence of a prescribed provision of a law of a province) is payable to the government of a province by a corporation, 
  (b) the amount is payable as a consequence of the amalgamation or merger of the corporation with another corporation, the winding-up or dissolution of the corporation or the corporation ceasing to be registered under a law of the province, 
  (c) the corporation has been prescribed for the purpose of the definition 
  *approved share* in subsection 127.4(1), and  
  (d) the corporation is not a registered labour-sponsored venture capital corporation or a revoked corporation, the corporation shall pay a tax under this Part for the taxation year in which the amount became payable equal to that amount. 
  
  ### Amalgamations and mergers
  
  (3) For the purposes of section 127.4, this Part and Part XII.5, where two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) amalgamate or merge to form one corporate entity (in this subsection referred to as the “new corporation”) and at least one of the predecessor corporations was, immediately before the amalgamation or merger, a registered labour-sponsored venture capital corporation or a revoked corporation, 
  (a) subject to paragraphs (d) and (e), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; 
  (b) where a predecessor corporation was authorized to issue a class of shares to which clause 204.81(1)(c)(ii)(C) applies, the new corporation is deemed to have received approval from the Minister of Finance to issue substantially similar shares at the time of the amalgamation or merger; 
  (c) where a share of a predecessor corporation (in this paragraph referred to as the “predecessor share”) is replaced on the amalgamation or merger by a new share of the new corporation, 
  (i) the new share 
  (A) is deemed not to have been issued on the amalgamation or merger, and 
  (B) is deemed to have been issued by the new corporation at the time the predecessor corporation issued the predecessor share, and 
  (ii) if the new share was issued to a person who acquired the predecessor share as a consequence of a transfer the registration of which by the predecessor corporation was permitted under paragraph 204.81(1)(c), the issuance of the new share is deemed to be in compliance with the conditions described in paragraph 204.81(1)(c); 
  (d) the Minister is deemed to have registered the new corporation for the purposes of this Part unless 
  (i) the new corporation is not governed by the Canada Business Corporations Act,  
  (ii) one or more of the predecessor corporations was a registered labour-sponsored venture capital corporation the venture capital business of which was discontinued before the amalgamation or merger, 
  (iii) one or more of the predecessor corporations was, immediately before the amalgamation or merger, a revoked corporation, 
  (iv) immediately after the amalgamation or merger, the articles of the new corporation do not comply with paragraph 204.81(1)(c), 
  (v) shares other than Class A shares of the capital stock of the new corporation were issued to any shareholder of the new corporation in satisfaction of any share (other than a share to which clause 204.81(1)(c)(ii)(B) or (C) applied) of a predecessor corporation, 
  (vi) immediately before the amalgamation or merger, one or more of the predecessor corporations is a corporation that has given notification under subsection 204.81(8.3) and one or more of the predecessor corporations is a registered labour-sponsored venture capital corporation that has not given notification under that subsection; 
  (e) where paragraph (d) does not apply, the new corporation is deemed to be a revoked corporation; 
  (f) subsection 204.82(1) does not apply to the new corporation; and 
  (g) subsection 204.82(2) shall, in its application to the new corporation, be read without reference to the words “that begins after the end of the corporation’s start-up period (or, where the corporation has no start-up period, that begins after the time the corporation first issues a Class A share)”. 
  
  ### Return and payment of tax for federally-registered LSVCCs
  
  204.86 (1) Every registered labour-sponsored venture capital corporation and every revoked corporation shall 
  (a) on or before its filing-due date for a taxation year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax and penalties, if any, payable under this Part by it for the year; and 
  (c) on or before its balance-due day for the year, pay to the Receiver General the amount of tax and penalties, if any, payable under this Part by it for the year. 
  
  ### Return and payment of tax for other LSVCCs
  
  (2) Where tax is payable under this Part for a taxation year by a corporation because of subsection 204.82(5) or 204.85(2), the corporation shall 
  (a) on or before its filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax payable under this Part by it for the year; and 
  (c) on or before its balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by it for the year. 
  
  ### Provisions applicable to Part
  
  204.87 Subsection 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 164 and 165 to 167, Division J of Part I and section 227.1 apply to this Part, with such modifications as the circumstances require. 
  
  # PART X.4 
  
  ## Tax in Respect of Overpayments to Registered Education Savings Plans 
  
  ### Definitions
  
  204.9 (1) The definitions in this subsection apply in this Part.  
  *excess amount* for a year at any time in respect of an individual means  
  (a) for years before 2007, the amount, if any, by which the total of all contributions made after February 20, 1990 in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the lesser of 
  (i) the RESP annual limit for the year, and 
  (ii) the amount, if any, by which the RESP lifetime limit for the year exceeds the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years; and 
  (b) for years after 2006, the amount, if any, by which the total of all contributions made in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the amount, if any, by which 
  (i) the RESP lifetime limit for the year exceeds 
  (ii) the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years. ( excédent)   
  *RESP lifetime limit* for a year means  
  (a) for 1990 to 1995, $31,500; 
  (b) for 1996 to 2006, $42,000; and 
  (c) for 2007 and subsequent years, $50,000. ( plafond cumulatif de REEE)   
  *subscriber’s gross cumulative excess* at any time in respect of an individual means the total of all amounts each of which is the subscriber’s share of the excess amount for a relevant year at that time in respect of the individual and, for the purpose of this definition, a relevant year at any time is a year that began before that time. (excédent cumulatif brut du souscripteur)   
  *subscriber’s share of the excess amount* for a year at any time in respect of an individual means the amount determined by the formula  is the total of all contributions made after February 20, 1990, in the year and before that time into all registered education savings plans by or on behalf of the subscriber in respect of the individual; is the total of all contributions made after February 20, 1990, in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual; and is the excess amount for the year at that time in respect of the individual. ( part du souscripteur sur l’excédent)  
  
  ### Application of s. 146.1(1)
  
  (1.1) The definitions in subsection 146.1(1) apply to this Part. 
  
  ### Agreements before February 21, 1990
  
  (2) Where a subscriber is required, pursuant to an agreement in writing entered into before February 21, 1990, to make payments of specified amounts on a periodic basis into a registered education savings plan in respect of a beneficiary, and the subscriber makes at least one payment under the agreement before that day, 
  (a) the excess amount for a year in respect of the beneficiary shall be deemed not to exceed the excess amount for the year that would be determined under subsection 204.9(1) if the total of all such payments made in the year and, where the agreement so provides, amounts paid in the year in satisfaction of the requirement to make such payments under all such agreements by all such subscribers in respect of the beneficiary were equal to the lesser of the amounts described in paragraphs (a) and (b) of the definition 
  *excess amount* in subsection 204.9(1); and  
  (b) in determining a subscriber’s share of an excess amount for a year, any payment included in the total described in paragraph 204.9(2)(a) in respect of the year shall be excluded in determining the values for A and B in the definition 
  *subscriber’s share of the excess amount* in subsection 204.9(1).  
  
  ### Refunds from unregistered plans
  
  (3) For the purposes of subsection 204.9(1) and section 146.1, where an individual entered into an education savings plan before February 21, 1990, pursuant to a preliminary prospectus issued by a promoter, and the promoter refunds all payments made into the plan and all income accrued thereon to the individual, each payment made by the individual into a registered education savings plan before December 31, 1990 shall be deemed to be a payment made before February 21, 1990, to the extent that the total of all such payments does not exceed the amount so refunded to the individual. 
  
  ### New beneficiary
  
  (4) For the purposes of this Part, if at any particular time an individual (in this subsection referred to as the “new beneficiary”) becomes a beneficiary under a registered education savings plan in place of another individual (in this subsection referred to as the “former beneficiary”) who ceased at or before the particular time to be a beneficiary under the plan, 
  (a) except as provided by paragraph 204.9(4)(b), each contribution made at an earlier time by or on behalf of a subscriber into the plan in respect of the former beneficiary is deemed also to have been made at that earlier time in respect of the new beneficiary; 
  (b) except for the purpose of applying this subsection to a replacement of a beneficiary after the particular time, applying subsection (5) to a distribution after the particular time and applying subsection 204.91(3) to events after the particular time, paragraph (a) does not apply as a consequence of the replacement at the particular time of the former beneficiary if 
  (i) the new beneficiary had not attained 21 years of age before the particular time and a parent of the new beneficiary was a parent of the former beneficiary, or 
  (ii) both beneficiaries were connected by blood relationship or adoption to an original subscriber under the plan and neither had attained 21 years of age before the particular time; and 
  (c) except where paragraph 204.9(4)(b) applies, each contribution made by or on behalf of a subscriber under the plan in respect of the former beneficiary under the plan is, without affecting the determination of the amount withdrawn from the plan in respect of the new beneficiary, deemed to have been withdrawn at the particular time from the plan to the extent that it was not withdrawn before the particular time. 
  
  ### Transfers between plans
  
  (5) For the purposes of this Part, if property held by a trust governed by a registered education savings plan (in this subsection referred to as the “transferor plan”) is distributed at a particular time to a trust governed by another registered education savings plan (in this subsection referred to as the “transferee plan”), 
  (a) except as provided by paragraphs 204.9(5)(b) and 204.9(5)(c), the amount of the distribution is deemed not to have been contributed into the transferee plan; 
  (b) subject to paragraph 204.9(5)(c), each contribution made at any earlier time by or on behalf of a subscriber into the transferor plan in respect of a beneficiary under the transferor plan is deemed also to have been made at that earlier time by the subscriber in respect of each beneficiary under the transferee plan; 
  (c) except for the purpose of applying this subsection to a distribution after the particular time, applying subsection 204.9(4) to a replacement of a beneficiary after the particular time and applying subsection 204.91(3) to events after the particular time, paragraph 204.9(5)(b) does not apply as a consequence of the distribution where 
  (i) any beneficiary under the transferee plan was, immediately before the particular time, a beneficiary under the transferor plan, or 
  (ii) a parent of a beneficiary under the transferee plan was a parent of an individual who was, immediately before the particular time, a beneficiary under the transferor plan and 
  (A) the transferee plan is a plan that allows more than one beneficiary under the plan at any one time, or 
  (B) in any other case, the beneficiary under the transferee plan had not attained 21 years of age at the time the transferee plan was entered into; 
  (d) where subparagraph 204.9(5)(c)(i) or 204.9(5)(c)(ii) applies in respect of the distribution, the amount of the distribution is deemed not to have been withdrawn from the transferor plan; and 
  (e) each subscriber under the transferor plan is deemed to be a subscriber under the transferee plan. 
  
  ### Tax payable by subscribers
  
  204.91 (1) Every subscriber under a registered education savings plan shall pay a tax under this Part in respect of each month equal to 1% of the amount, if any, by which 
  (a) the total of all amounts each of which is the subscriber’s gross cumulative excess at the end of the month in respect of an individual exceeds 
  (b) the total of all amounts each of which is the portion of such an excess that has been withdrawn from a registered education savings plan before the end of the month. 
  
  ### Waiver of tax
  
  (2) If a subscriber under a registered education savings plan would, but for this subsection, be required to pay a tax in respect of a month under subsection 204.91(1) in respect of an individual, the Minister may waive or cancel all or part of the tax where it is just and equitable to do so having regard to all the circumstances, including 
  (a) whether the tax arose as a consequence of reasonable error; 
  (b) whether, as a consequence of one or more transactions or events to which subsection 204.9(4) or 204.9(5) applies, the tax is excessive; and 
  (c) the extent to which further contributions could be made into registered education savings plans in respect of the individual before the end of the month without causing additional tax to be payable under this Part if this Part were read without reference to this subsection. 
  
  ### Marriage or common-law partnership breakdown
  
  (3) If at any time an individual (in this subsection referred to as the “former subscriber”) ceases to be a subscriber under a registered education savings plan as a consequence of the settlement of rights arising out of, or on the breakdown of, the marriage or common-law partnership of the former subscriber and another individual (in this subsection referred to as the “current subscriber”) who is a subscriber under the plan immediately after that time, for the purpose of determining tax payable under this Part in respect of a month that ends after that time, each contribution made before that time into the plan by or on behalf of the former subscriber is deemed to have been made into the plan by the current subscriber and not by or on behalf of the former subscriber. 
  
  ### Deceased subscribers
  
  (4) For the purpose of applying this section where a subscriber has died, the subscriber’s estate is deemed to be the same person as, and a continuation of, the subscriber for each month that ends after the death. 
  
  ### Return and payment of tax
  
  204.92 Every person who is liable to pay tax under this Part in respect of a month in a year shall, within 90 days after the end of the year, 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable under this Part by the person in respect of each month in the year; and 
  (c) pay to the Receiver General the amount of tax, if any, payable by the person under this Part in respect of each month in the year. 
  
  ### Provisions applicable to Part
  
  204.93 Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part, with such modifications as the circumstances require. 
  
  # PART X.5 
  
  ## Payments Under Registered Education Savings Plans 
  
  ### Definitions
  
  204.94 (1) The definitions in subsection 146.1(1) apply for the purposes of this Part, except that the definition 
  *subscriber* in that subsection shall be read without reference to paragraph (c).  
  
  ### Charging provision
  
  (2) Every person (other than a public primary caregiver that is exempt from tax under Part I) shall pay a tax under this Part for each taxation year equal to the amount determined by the formula is the total of all amounts each of which is an accumulated income payment made at any time that is 
  (a) either 
  (i) under a registered education savings plan under which the person is a subscriber at that time, or 
  (ii) under a registered education savings plan under which there is no subscriber at that time, where the person has been a spouse or common-law partner of an individual who was a subscriber under the plan, and 
  (b) included in computing the person’s income under Part I for the year; is the total of all amounts each of which is an accumulated income payment that is 
  (a) not included in the value of A in respect of the person for the year, and 
  (b) included in computing the person’s income under Part I for the year; is the lesser of 
  (a) the lesser of the value of A in respect of the person for the year and the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the person’s income under Part I for the year, and 
  (b) the amount, if any, by which $50,000 exceeds the total of all amounts each of which is an amount determined under paragraph (a) in respect of the person for a preceding taxation year; and is 
  (a) where a tax, similar to the tax provided under this Part, is payable by the person for the year under a law of the province of Quebec, 12%, and 
  (b) in any other case, 20%. 
  
  ### Return and payment of tax
  
  (3) Every person who is liable to pay tax under this Part for a taxation year shall, on or before the person’s filing-due date for the year, 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax payable under this Part by the person for the year; and 
  (c) pay to the Receiver General the amount of tax payable under this Part by the person for the year. 
  
  ### Administrative rules
  
  (4) Subsections 150(2) and 150(3), sections 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require. 
  
  # PART XI 
  
  ## Tax in Respect of Advanced Life Deferred Annuity 
  
  ### Definitions
  
  205 (1) The following definitions apply in this section.  
  *ALDA dollar limit*, for a calendar year, means  
  (a) for 2020, $150,000; and 
  (b) for each year after 2020, the amount (rounded to the nearest multiple of $10,000, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $150,000 adjusted for each year after 2020 in the manner set out in section 117.1. ( plafond de la RVDAA)   
  *cumulative excess amount*, of an individual at any particular time in a calendar year, means the amount determined by the formula  is the greater of 
  (a) the total of all amounts each of which is an excess ALDA transfer of the individual at or before the particular time, and 
  (b) the amount determined by the formula is the total of all amounts each of which is the amount of a transfer at or before the particular time to acquire an advanced life deferred annuity on behalf of the individual, and is the ALDA dollar limit for the calendar year; and is the total of all amounts each of which is the amount of a refund described in paragraph (g) of the definition advanced life deferred annuity in subsection 146.5(1) made at or before the particular time on behalf of the individual. (excédent cumulatif)   
  *excess ALDA transfer*, of an individual, means the portion of the amount of a transfer, made from a transferor plan under any of subsections 146(16) and 146.3(14.1) and paragraphs 147(19)(d), 147.3(1)(c) and 147.5(21)(c) to acquire an advanced life deferred annuity on behalf of the individual, determined by the formula  is the amount of the transfer; and is the amount determined by the formula is the total value of the property held for the benefit of the individual under the transferor plan at the end of the calendar year preceding the calendar year in which the transfer is made, other than 
  (a) if the transferor plan is a registered pension plan, property held in connection with 
  (i) a defined benefit provision (as defined in subsection 147.1(1)) of the transferor plan, or  
  (ii) a VPLA fund, as described in subsection 8506(13) of the Income Tax Regulations,  
  (b) if the transferor plan is a pooled registered pension plan, property held in connection with benefits that would be described in paragraph 147.5(5)(a) if the reference in that paragraph to “8506(1)(e.1) or (e.2)” were read as a reference to “8506(1)(e.2)”, 
  (c) if the transferor plan is a registered retirement income fund, contracts for annuities held in connection with the fund other than annuities described in paragraph (b.1) of the definition qualified investment in subsection 146.3(1), and  
  (d) if the transferor plan is a registered retirement savings plan, contracts for annuities held in connection with the plan other than annuities described in paragraph (c.1) of the definition qualified investment in subsection 146(1),  is the total of all amounts each of which is the amount transferred from the transferor plan, in a calendar year preceding the calendar year in which the transfer is made, to acquire an advanced life deferred annuity on behalf of the individual, and is the total of all amounts each of which is the amount of a previous transfer from the transferor plan to acquire an advanced life deferred annuity on behalf of the individual. ( excédent de transfert au titre de la RVDAA)  
  
  ### Tax payable by individuals
  
  (2) If at the end of any month an individual has a cumulative excess amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that cumulative excess amount. 
  
  ### Waiver of tax
  
  (3) If an individual would, but for this subsection, be required to pay a tax under subsection (2) in respect of a month, the Minister may waive or cancel all or part of the tax if the individual establishes to the satisfaction of the Minister that 
  (a) the cumulative excess amount on which the tax is based arose as a consequence of reasonable error; and 
  (b) reasonable steps are being taken to eliminate the cumulative excess amount. 
  
  ### Return and payment of tax
  
  206 (1) Every person who is liable to pay tax under this Part for all or part of a calendar year shall, 
  (a) on or before the person’s filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand; and 
  (b) on or before the person’s balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by the person for the year. 
  
  ### Provisions applicable to Part
  
  (2) Subsections 150(2) and (3), sections 152 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require. 
  206.1  [Repealed, 2017, c. 33, s. 66]  
  206.2  [Repealed, 2017, c. 33, s. 66]  
  206.3  [Repealed, 2017, c. 33, s. 66]  
  206.4  [Repealed, 2017, c. 33, s. 66]  
  207  [Repealed, 2017, c. 33, s. 66]  
  
  # PART XI.01 
  
  ## Taxes in Respect of Registered Plans 
  
  ### Definitions
  
  207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition benefit), 146.1(1), 146.2(1), 146.3(1), 146.4(1) and 146.6(1) apply in this Part and Part XLIX of the Income Tax Regulations.   
  *advantage*, in relation to a registered plan, means  
  (a) any benefit, loan or indebtedness that is conditional in any way on the existence of the registered plan, other than 
  (i) a benefit derived from the provision of administrative or investment services in respect of the registered plan, 
  (ii) a loan or an indebtedness (including, in the case of a TFSA, a loan or an indebtedness in respect of which the conditions in subsection 146.2(4) or (4.1) are met) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into, 
  (iii) a payment out of or under the registered plan in satisfaction of all or part of a beneficiary’s or controlling individual’s interest in the registered plan, 
  (iv) the payment or allocation of any amount to the registered plan by the issuer, carrier or promoter, 
  (iv.1) an amount paid under or because of the Canada Disability Savings Act, the Canada Education Savings Act or under a designated provincial program, and  
  (v) a benefit provided under an incentive program that is — in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly — offered to a broad class of persons, if it is reasonable to conclude that none of the main purposes of the program is to enable a person or partnership to benefit from the exemption from tax under Part I of any amount in respect of the plan; 
  (b) a benefit that is an increase in the total fair market value of the property held in connection with the registered plan if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to 
  (i) a transaction or event or a series of transactions or events (other than a payment, not exceeding a reasonable amount, by the controlling individual of the registered plan where the payment would be described by paragraph 20(1)(bb) if the reference to “the taxpayer” in subparagraph (i) of that paragraph were read as a reference to “a controlling individual of a registered plan” and if the references to “the taxpayer” in subparagraph (ii) of that paragraph were read as references to “the registered plan”) that 
  (A) would not have occurred in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and 
  (B) had as one of its main purposes to enable a person or a partnership to benefit from the exemption from tax under Part I of any amount in respect of the registered plan, 
  (ii) a payment received as, on account or in lieu of, or in satisfaction of, a payment 
  (A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or 
  (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than property held in connection with the registered plan) held by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, 
  (iii) a swap transaction, or 
  (iv) specified non-qualified investment income that has not been paid from the registered plan to its controlling individual within 90 days of receipt by the controlling individual of a notice issued by the Minister under subsection 207.06(4); 
  (c) a benefit that is income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to 
  (i) a prohibited investment in respect of the registered plan or any other registered plan of the controlling individual, 
  (ii) in the case of a registered plan that is not a TFSA, an amount received by the controlling individual of the registered plan, or by a person who does not deal at arm’s length with the controlling individual (if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, property held in connection with the registered plan) and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment 
  (A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or 
  (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, or 
  (iii) a deliberate over-contribution; 
  (d) a registered plan strip in respect of the registered plan; and 
  (e) a prescribed benefit. ( avantage)   
  *allowable refund* of a person for a calendar year means the total of all amounts each of which is a refund, for the year, to which the person is entitled under subsection 207.04(4). (remboursement admissible)   
  *controlling individual*, of a registered plan, means  
  (a) the holder of a TFSA; 
  (b) a holder of a RDSP; 
  (c) a subscriber of a RESP; 
  (d) the annuitant of a RRIF or RRSP; or 
  (e) the holder of a FHSA. ( particulier contrôlant)   
  *deliberate over-contribution* of an individual means a contribution made under a TFSA by the individual that results in, or increases, an excess TFSA amount, unless it is reasonable to conclude that the individual neither knew nor ought to have known that the contribution could result in liability for a penalty, tax or similar consequence under this Act. (cotisation excédentaire intentionnelle)   
  *designated amount* of an individual means an amount, not exceeding the excess FHSA amount of the individual, designated by the individual in the prescribed form and manner that is  
  (a) a transfer in accordance with subparagraph 146.6(7)(b)(ii) to a FHSA under which the individual is the holder, to the extent that it does not exceed the total of all amounts transferred under paragraph 146(16)(a.2) on or before the date of the designation less the total of all amounts previously designated under this paragraph; or 
  (b) a withdrawal from a FHSA under which the individual is the holder, to the extent that it does not exceed the total of all amounts contributed to a FHSA under which the individual is the holder on or before the date of the designation less the total of all amounts previously designated under this paragraph. ( montant désigné)   
  *equity*, of a corporation, trust or partnership, means  
  (a) in the case of a corporation, a share of the capital stock of the corporation; 
  (b) in the case of a trust, an income or capital interest in the trust; and 
  (c) in the case of a partnership, an interest as a member of the partnership. ( droit sur l’actif)   
  *excess FHSA amount* of an individual at a particular time in a taxation year means the amount determined by the formula  is the total of all amounts each of which is a contribution made to a FHSA by the individual at or before the particular time; is the total of all amounts transferred under paragraph 146(16)(a.2), at or before the particular time, to a FHSA under which the individual is the holder; is the lesser of 
  (a) $40,000, and 
  (b) the amount determined by the formula is the amount of the FHSA carryforward for the taxation year, is the total of all amounts each of which is a contribution made to a FHSA by the individual at or before the end of the immediately preceding taxation year, is the total of all amounts transferred under paragraph 146(16)(a.2), at or before the end of the immediately preceding taxation year, to a FHSA under which the individual is the holder, and is the excess FHSA amount determined at the end of the immediately preceding taxation year; is the total of all amounts each of which is a designated amount in respect of a transfer or withdrawal made by the individual in the taxation year but before the particular time; and is the total of all amounts required to be included in computing the income of the individual in the taxation year under subsection 146.6(6) or (17) at or before the particular time. ( excédent de CELIAPP)   
  *excess TFSA amount* of an individual at a particular time in a calendar year means the amount, if any, determined by the formula  is the total of all amounts each of which is a contribution made under a TFSA by the individual in the calendar year and at or before the particular time, other than a contribution that is 
  (a) a qualifying transfer, or 
  (b) an exempt contribution; is the individual’s unused TFSA contribution room at the end of the preceding calendar year; is the total of all amounts each of which was a distribution made in the preceding calendar year under a TFSA of which the individual was the holder at the time of the distribution, other than a distribution that is 
  (a) a qualifying transfer, or 
  (b) a specified distribution; is 
  (a) the TFSA dollar limit for the calendar year if, at any time in the calendar year, the individual is resident in Canada, and 
  (b) nil, in any other case; and is the total of all amounts each of which is the qualifying portion of a distribution made in the calendar year and at or before the particular time under a TFSA of which the individual was the holder at the time of the distribution and, for this purpose, the qualifying portion of a distribution is 
  (a) nil, if the distribution is a qualifying transfer or a specified distribution, and 
  (b) in any other case, the lesser of 
  (i) the amount of the distribution, and 
  (ii) the amount that would be the individual’s excess TFSA amount at the time of the distribution if the amount of the distribution were nil. ( excédent CÉLI)   
  *excluded property*, at any time for a trust governed by a registered plan, means  
  (a) property described in paragraph 4900(1)(j.1) of the Income Tax Regulations;  
  (b) an equity of a mutual fund corporation, mutual fund trust or registered investment if 
  (i) either 
  (A) the equity is equity of a mutual fund corporation or mutual fund trust that derives all or substantially all its value from one or more mutual funds that are subject to, and substantially comply with, the requirements of National Instrument 81–102 Mutual Funds, as amended from time to time, of the Canadian Securities Administrators, or  
  (B) the corporation, trust or registered investment follows a reasonable policy of investment diversification, 
  (ii) the time is 
  (A) during the 24-month period that begins on the day on which the first taxation year of the corporation, trust or registered investment begins, 
  (B) during the 24-month period that ends on the day on which the last taxation year of the corporation, trust or registered investment ends, or 
  (C) where the equity is a share of the capital stock of a mutual fund corporation and the share derives all or substantially all its value from a particular mutual fund, 
  (I) during the 24-month period that begins on the day on which the particular mutual fund is established, or 
  (II) during the 24-month period that ends on the day on which the particular mutual fund is terminated, 
  (iii) it is reasonable to conclude that none of the main purposes of the structure of the corporation, trust or registered investment, or of the terms and conditions of the equity, is to accommodate transactions or events that could affect the fair market value of the property held by the trust governed by the registered plan in a manner that would not occur in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and 
  (iv) it is reasonable to conclude that none of the main purposes of the incorporation, establishment or operation of the corporation, trust or registered investment, or of the particular mutual fund, is to benefit from this paragraph; or 
  (c) equity of a corporation, partnership or trust (in this paragraph referred to as the “investment entity”) if at that time 
  (i) the fair market value of the equity (in this paragraph referred to as the “arm’s length equity”) of the investment entity that is owned by persons who deal at arm’s length with the controlling individual of the registered plan is at least 90% of the fair market value of all the equity of the investment entity, 
  (ii) the total fair market value of the arm’s length equity and the debt of the investment entity that is owned by persons who deal at arm’s length with the controlling individual is at least 90% of the total fair market value of all the equity and debt of the investment entity, 
  (iii) the controlling individual, either alone or together with persons with whom the controlling individual does not deal at arm’s length, does not have the right to cast at least 10% of the votes, if any, that could be cast regarding the governance of the investment entity, 
  (iv) the specific terms and conditions of each share or unit of equity of the investment entity held by the trust governed by the registered plan are the same as, or substantially similar to, the terms and conditions of particular equity that is included in the arm’s length equity, 
  (v) the fair market value of the particular equity referred to in subparagraph (iv) is equal to at least 10% of the total fair market value of all equity of the investment entity having the specific terms and conditions referred to in subparagraph (iv) or terms and conditions that are substantially similar to those terms and conditions, 
  (vi) the controlling individual deals at arm’s length with the investment entity, and 
  (vii) it is reasonable to conclude that none of the main purposes of the structure of the investment entity, or of the terms and conditions of the equity, is to accommodate transactions or events that could affect the fair market value of the property held by the trust governed by the registered plan in a manner that would not occur in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly. ( bien exclu)   
  *exempt contribution* means a contribution made in a calendar year under a TFSA by the survivor of an individual if  
  (a) the contribution is made during the period (in this definition referred to as the “rollover period”) that begins when the individual dies and that ends at the end of the first calendar year that begins after the individual dies (or at any later time that is acceptable to the Minister); 
  (b) a payment (in this definition referred to as the “survivor payment”) was made to the survivor during the rollover period, as a consequence of the individual’s death, directly or indirectly out of or under an arrangement that ceased, because of the individual’s death, to be a TFSA; 
  (c) the survivor designates, in prescribed form filed in prescribed manner within 30 days after the day on which the contribution is made (or at any later time that is acceptable to the Minister), the contribution in relation to the survivor payment; and 
  (d) the amount of the contribution does not exceed the least of 
  (i) the amount, if any, by which 
  (A) the amount of the survivor payment exceeds 
  (B) the total of all other contributions designated by the survivor in relation to the survivor payment, 
  (ii) the amount, if any, by which 
  (A) the total proceeds of disposition that would, if section 146.2 were read without reference to subsection 146.2(9), be determined in respect of the arrangement under paragraph 146.2(8)(a), (10)(a) or (11)(a), as the case may be, exceeds 
  (B) the total of all other exempt contributions in respect of the arrangement made by the survivor at or before the time of the contribution, and 
  (iii) if the individual had, immediately before the individual’s death, an excess TFSA amount or if payments described in paragraph (b) are made to more than one survivor of the individual, nil or the greater amount, if any, allowed by the Minister in respect of the contribution. ( cotisation exclue)   
  *non-qualified investment* for a trust governed by a registered plan means property that is not a qualified investment for the trust. (placement non admissible)   
  *prohibited investment*, at any time for a trust governed by a registered plan, means property (other than excluded property for the trust) that is at that time  
  (a) a debt of the controlling individual of the registered plan; 
  (b) a share of the capital stock of, an interest in, or a debt of 
  (i) a corporation, partnership or trust in which the controlling individual has a significant interest, or 
  (ii) a person or partnership that does not deal at arm’s length with the controlling individual; 
  (c) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b); or 
  (d) prescribed property. ( placement interdit)   
  *qualified investment* for a trust governed by a FHSA or TFSA means  
  (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition qualified investment in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a FHSA or TFSA” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;  
  (b) a contract for an annuity issued by a licensed annuities provider if 
  (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and 
  (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract; and 
  (c) a prescribed investment. ( placement admissible)   
  *qualifying transfer* means the transfer of an amount from a TFSA of which a particular individual is the holder if  
  (a) the amount is transferred directly to another TFSA, the holder of which is the particular individual; or 
  (b) the amount is transferred directly to another TFSA, the holder of which is a spouse or common-law partner or former spouse or common-law partner of the particular individual, and the following conditions are satisfied: 
  (i) the individuals are living separate and apart at the time of the transfer, and 
  (ii) the transfer is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the individuals in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership. ( transfert admissible)   
  *registered plan* means a FHSA, RDSP, RESP, RRIF, RRSP or TFSA. (régime enregistré)   
  *registered plan strip*, in respect of a registered plan that is not a TFSA, means the amount of a reduction in the fair market value of property held in connection with the registered plan, if the value is reduced as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable the controlling individual of the registered plan, or a person who does not deal at arm’s length with the controlling individual, to obtain a benefit in respect of property held in connection with the registered plan or to obtain a benefit as a result of the reduction, but does not include an amount that is  
  (a) included in the income of a person under section 146, 146.1, 146.3, 146.4 or 146.6; 
  (b) an excluded withdrawal under section 146.01 or 146.02; 
  (b.1) a qualifying withdrawal under section 146.6; 
  (b.2) a designated amount; 
  (c) described in subsection 146(16), 146.3(14.2) or 146.4(8); 
  (d) a distribution to a trust governed by a RESP under circumstances to which subparagraph 204.9(5)(c)(i) or (ii) applies; 
  (e) an accumulated income payment made to a RDSP under circumstances to which subsection 146.1(1.2) applies; 
  (f) a refund of payments under a RESP; or 
  (g) the non-taxable portion of a disability assistance payment made from a RDSP. ( somme découlant d’un dépouillement de régime enregistré)   
  *restricted property* [Repealed, 2009, c. 2, s. 68]   
  *RRSP strip* [Repealed, 2017, c. 33, s. 68]   
  *specified distribution* means  
  (a) a distribution made under a TFSA to the extent that it is, or is reasonably attributable to, an amount that is 
  (i) an advantage in respect of the TFSA or any other TFSA of the holder, 
  (ii) specified non-qualified investment income, 
  (iii) an amount in respect of which tax was payable under Part I by a trust governed by the TFSA or any other TFSA of the holder, or 
  (iv) an amount described in subparagraph 207.06(1)(b)(ii); or 
  (b) a prescribed distribution. ( distribution déterminée)   
  *specified non-qualified investment income*, in respect of a registered plan and its controlling individual, means income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the registered plan or by any other registered plan of the controlling individual. (revenu de placement non admissible déterminé)   
  *swap transaction*, in respect of a registered plan, means a transfer of property between the registered plan and its controlling individual or a person with whom the controlling individual does not deal at arm’s length, but does not include  
  (a) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan; 
  (b) a payment into the registered plan that is 
  (i) a contribution, a premium or an amount transferred in accordance with paragraph 146.3(2)(f), 
  (ii) described in paragraph (a) or (b) of the definition contribution in subsection 146.1(1), or  
  (iii) described in any of paragraphs (a) to (d) of the definition contribution in subsection 146.4(1);  
  (c) a transfer of a prohibited investment or a non-qualified investment from the registered plan for consideration, in circumstances where the controlling individual is entitled to a refund under subsection 207.04(4) on the transfer; 
  (d) a transfer of property from one registered plan of a controlling individual to another registered plan of the controlling individual if 
  (i) both registered plans are RRIFs, RRSPs or FHSAs, 
  (ii) both registered plans are TFSAs, 
  (iii) both registered plans are RDSPs, or 
  (iv) both registered plans are RESPs; 
  (e) a transfer of a prohibited investment from the registered plan for consideration, if subsection (13) applies in respect of all or part of the consideration received by the registered plan; 
  (f) a transfer of property from the registered plan in consideration for the issuance of a debt obligation that is an excluded property for the trust governed by the registered plan; or 
  (g) a payment into the registered plan that is a payment of, or in satisfaction of, the principal amount of, or interest on, a debt obligation that is an excluded property for the trust governed by the registered plan. ( opération de swap)   
  *TFSA dollar limit* for a calendar year means,  
  (a) for 2009 to 2012, $5,000; 
  (b) for 2013 and 2014, $5,500; 
  (c) for 2015, $10,000; and 
  (d) for each year after 2015, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1. ( plafond CÉLI)   
  *transitional prohibited investment benefit*, of a controlling individual for a taxation year, means the amount determined by the formula  is the total of all amounts each of which is income (determined without reference to paragraph 82(1)(b)) earned, or a capital gain realized, in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that 
  (a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and 
  (b) in the case of income, is earned after March 22, 2011 and, in the case of a capital gain, accrues after March 22, 2011; and is the total of all amounts each of which is a capital loss (determined without reference to subparagraph 40(2)(g)(i) and subsection 40(3.4)) realized in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that 
  (a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and 
  (b) accrues after March 22, 2011. ( bénéfice transitoire provenant d’un placement interdit)   
  *transitional prohibited property*, at any time for a particular trust governed by a registered plan (other than a TFSA) of a controlling individual, means a property that is held by the particular trust at that time, that was held  
  (a) on March 22, 2011 by a trust governed by a RRIF or RRSP of the controlling individual and that was a prohibited investment for that trust on March 23, 2011; or 
  (b) on March 22, 2017 by a trust governed by a RDSP or RESP of the controlling individual and that was a prohibited investment for that trust on March 23, 2017. ( bien interdit transitoire)   
  *unused TFSA contribution room* of an individual at the end of a calendar year means,  
  (a) if the year is before 2009, nil; 
  (a.1) in circumstances where the Minister has, in accordance with section 207.06, waived or cancelled all or part of the liability imposed on the individual, the amount determined by the Minister; and 
  (b) in any other case, the positive or negative amount determined by the formula is the individual’s unused TFSA contribution room at the end of the preceding calendar year, is the total of all amounts each of which was a distribution made in the preceding calendar year under a TFSA of which the individual was the holder at the time of the distribution, other than a distribution that is 
  (i) a qualifying transfer, or 
  (ii) a specified distribution, is 
  (i) the TFSA dollar limit for the calendar year, if at any time in the calendar year the individual is 18 years of age or older and resident in Canada, and 
  (ii) nil, in any other case, and is the total of all amounts each of which is a contribution made under a TFSA by the individual in the calendar year, other than a contribution that is 
  (i) a qualifying transfer, or 
  (ii) an exempt contribution. ( droits inutilisés de cotisation à un CÉLI)  
  
  ### Interpretation
  
  (2) For the purposes of this section, income includes dividends described in section 83. 
  
  ### Survivor as successor holder
  
  (3) If an individual’s survivor becomes the holder of a TFSA as a consequence of the individual’s death and, immediately before the individual’s death, the individual had an excess TFSA amount, the survivor is deemed (other than for the purposes of the definition 
  *exempt contribution*) to have made, at the beginning of the month following the individual’s death, a contribution under a TFSA equal to the amount, if any, by which  
  (a) that excess TFSA amount exceeds 
  (b) the total fair market value immediately before the individual’s death of all property held in connection with arrangements that ceased, because of the individual’s death, to be TFSAs. 
  
  ### Significant interest
  
  (4) An individual has a significant interest in a corporation, partnership or trust at any time if 
  (a) in the case of a corporation, the individual would, at that time, be a specified shareholder of the corporation if the references in the portion of the definition 
  *specified shareholder* in subsection 248(1) before paragraph (a) to “in a taxation year” and “at any time in the year” were read as “at any time” and “at that time”, respectively;  
  (b) in the case of a partnership, the individual, or the individual together with persons and partnerships with which the individual does not deal at arm’s length, holds at that time interests as a member of the partnership that have a fair market value of 10% or more of the fair market value of the interests of all members in the partnership; and 
  (c) in the case of a trust, the individual, or the individual together with persons and partnerships with which the individual does not deal at arm’s length, holds at that time interests as a beneficiary (in this paragraph, as defined in subsection 108(1)) under the trust that have a fair market value of 10% or more of the fair market value of the interests of all beneficiaries under the trust. 
  
  ### Obligation of issuer
  
  (5) The issuer, carrier or promoter of a registered plan shall exercise the care, diligence and skill of a reasonably prudent person to minimize the possibility that a trust governed by the registered plan holds a non-qualified investment. 
  
  ### Deemed disposition and reacquisition of investments
  
  (6) If, at any time, a property held by a trust governed by a registered plan becomes, or ceases to be, a prohibited investment or non-qualified investment for the trust, the trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value. 
  
  ### Adjusted cost base
  
  (7) For the purpose of computing the adjusted cost base to a trust governed by a registered plan (other than a TFSA) of a property that is a transitional prohibited property for the trust, the cost to the trust of the property until the property is disposed of by the trust is deemed to be equal to the fair market value of the property, 
  (a) in the case of a RRIF or RRSP, at the end of March 22, 2011; and 
  (b) in the case of a RDSP or RESP, at the end of March 22, 2017. 
  
  ### Prohibited investment status
  
  (8) Subsection (9) applies in respect of a property if 
  (a) the property would, in the absence of subsection (9), have ceased at any time (in this subsection and subsection (9) referred to as the “relevant time”) to be a prohibited investment for a trust governed by a registered plan (other than a TFSA) of a controlling individual; 
  (b) the property is a transitional prohibited property for the trust immediately before the relevant time; 
  (c) in the case of a property held under a RRIF or RRSP, the controlling individual elected under subsection 207.05(4); and 
  (d) the controlling individual elects in prescribed form that subsection (9) apply in respect of the property and the election is filed with the Minister on or before the day that is 90 days after the end of the taxation year of the controlling individual that includes the relevant time. 
  
  ### Prohibited investment status
  
  (9) If this subsection applies in respect of a property, the property is deemed to be a prohibited investment at and after the relevant time for every trust governed by a registered plan (other than a TFSA) of the controlling individual referred to in paragraph (8)(a). 
  
  ### Breakdown of marriage or common-law partnership
  
  (10) Subsection (11) applies in respect of a property if 
  (a) the property is transferred at any time (in this subsection and subsection (11) referred to as the “transfer time”) by a trust (in this subsection and subsection (11) referred to as the “transferor trust”) governed by a RRIF or RRSP of a controlling individual (in this subsection and subsection (11) referred to as the “transferor”) under paragraph 146(16)(b) or subsection 146.3(14) to a trust (in subsection (11) referred to as the “recipient trust”) governed by a RRIF or RRSP of which the spouse or common-law partner or former spouse or common-law partner (in this subsection and subsection (11) referred to as the “recipient”) of the transferor is the controlling individual; 
  (b) the property is a prohibited investment, and a transitional prohibited property, for the transferor trust immediately before the transfer time; 
  (c) the transferor elected under subsection 207.05(4); and 
  (d) the transferor and the recipient jointly elect in prescribed form that subsection (11) apply in respect of the property and the election 
  (i) is filed with the Minister on or before the day that is 90 days after the end of the taxation year of the transferor that includes the transfer time; and 
  (ii) designates an amount (in subsection (11) referred to as the “designated amount”) in respect of the property that 
  (A) is not less than the adjusted cost base to the transferor trust of the property immediately before the transfer time, and 
  (B) does not exceed the greater of the amount determined under clause (A) and the fair market value of the property at the transfer time. 
  
  ### Breakdown of marriage or common-law partnership
  
  (11) If this subsection applies in respect of a property, 
  (a) the property is deemed to be, at and after the transfer time, a property that was held on March 22, 2011 by a trust governed by a RRIF or RRSP of the recipient and that was a prohibited investment for the trust on March 23, 2011; 
  (b) where the property would, in the absence of this paragraph, not be a prohibited investment for the recipient trust immediately after the transfer time, the property is deemed to be a prohibited investment at and after the transfer time for every trust governed by a RRIF or RRSP of the recipient; 
  (c) the recipient is deemed to have elected under subsection 207.05(4); and 
  (d) notwithstanding any other provision of this Act, the designated amount is deemed to be 
  (i) the proceeds of disposition to the transferor trust from the transfer described in paragraph (10)(a), and 
  (ii) the cost of the property to a trust governed by a RRIF or RRSP of the recipient until the property is disposed of by the trust. 
  
  ### Exchange of property
  
  (12) Subsection (13) applies in respect of a property other than money if 
  (a) the property is acquired at any time (in this subsection and subsection (13) referred to as the “exchange time”) by a trust (in this section and subsection (13) referred to as the “exchanging trust”) governed by a registered plan (other than a TFSA) of a controlling individual in exchange for another property (in this subsection referred to as the “exchanged property”) in a transaction to which any of section 51, subsection 85(1) and sections 85.1, 86 and 87 apply; 
  (b) the exchanged property is a prohibited investment, and a transitional prohibited property, for the exchanging trust immediately before the exchange time; 
  (c) the property is, or would be, if subsection 4900(14) of the Income Tax Regulations were read without reference to its paragraph (b), a qualified investment for the exchanging trust immediately after the exchange time; and  
  (d) in the case of a property held under a RRIF or RRSP, the controlling individual elected under subsection 207.05(4). 
  
  ### Exchange of property
  
  (13) If this subsection applies in respect of a property, 
  (a) other than for the purposes of subsection (7), the property is deemed to be, at and after the exchange time, a property, 
  (i) in the case of a trust governed by a RRIF or RRSP, that was 
  (A) held on March 22, 2011 by a trust governed by a RRIF or RRSP of the controlling individual referred to in subsection (12), and 
  (B) a prohibited investment for the trust on March 23, 2011, and 
  (ii) in the case of a trust governed by a RDSP or RESP, that was 
  (A) held on March 22, 2017 by a trust governed by a RDSP or RESP of the controlling individual referred to in subsection (12), and 
  (B) a prohibited investment for the trust on March 23, 2017; and 
  (b) if the property would, in the absence of this paragraph, not be a prohibited investment for the exchanging trust immediately after the exchange time, the property is deemed to be a prohibited investment at and after the exchange time for every trust governed by a registered plan (other than a TFSA) of the controlling individual. 
  
  ### Tax payable on excess TFSA amount
  
  207.02 If, at any time in a calendar month, an individual has an excess TFSA amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of the highest such amount in that month. 
  
  ### Tax payable on excess FHSA amount
  
  207.021 If, at any time in a calendar month, an individual has an excess FHSA amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of the highest such amount in that month. 
  
  ### Survivor as successor holder
  
  207.022 If an individual’s survivor becomes the holder of a FHSA as a consequence of the individual’s death and, immediately before the individual’s death, the individual had an excess FHSA amount, the survivor is deemed to have made, at the beginning of the month following the individual’s death, a contribution under a FHSA equal to the amount, if any, by which 
  (a) that excess FHSA amount exceeds 
  (b) the total fair market value immediately before the individual’s death of all property held under the FHSAs of the individual (other than a FHSA in respect of which the survivor became the successor holder as a consequence of the individual’s death). 
  
  ### Tax payable on non-resident contributions
  
  207.03 If, at a particular time, a non-resident individual makes a contribution under a TFSA (other than a contribution that is a qualifying transfer or an exempt contribution), the individual shall pay a tax under this Part equal to 1% of the amount of the contribution in respect of each month that ends after the particular time and before the earlier of 
  (a) the first time after the particular time at which the amount of the contribution is equalled or exceeded by the total of all amounts each of which is a distribution 
  (i) that is made after the particular time under a TFSA of which the individual is the holder, and 
  (ii) that the individual designates in prescribed manner to be a distribution in connection with the contribution and not in connection with any other contribution, and 
  (b) the time at which the individual becomes resident in Canada. 
  
  ### Tax payable on prohibited or non-qualified investment
  
  207.04 (1) The controlling individual of a registered plan that governs a trust shall pay a tax under this Part for a calendar year if, at any time in the year, the trust acquires property that is a prohibited investment, or a non-qualified investment, for the trust. 
  
  ### Amount of tax payable
  
  (2) The amount of tax payable in respect of each property described in subsection (1) is 50% of the fair market value of the property at the time referred to in that subsection. 
  
  ### Both prohibited and non-qualified investment
  
  (3) For the purposes of this section and subsections 146(10.1), 146.1(5), 146.2(6), 146.3(9), 146.4(5) and 207.01(6), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust. 
  
  ### Refund of tax on disposition of investment
  
  (4) If in a calendar year a trust governed by a registered plan disposes of a property in respect of which a tax is imposed under subsection (1) on the controlling individual of the registered plan, the controlling individual is entitled to a refund for the year of an amount equal to 
  (a) except where paragraph (b) applies, the amount of the tax so imposed; or 
  (b) nil, 
  (i) if it is reasonable to consider that the controlling individual knew, or ought to have known, at the time the property was acquired by the trust, that it was, or would become, a property described in subsection (1), or 
  (ii) if the property is not disposed of by the trust before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances. 
  
  ### Apportionment of refund
  
  (5) If more than one person is entitled to a refund under subsection (4) for a calendar year in respect of the disposition of a property, the total of all amounts so refundable shall not exceed the amount that would be so refundable for the year to any one of those persons in respect of that disposition if that person were the only person entitled to a refund for the year under that subsection in respect of the disposition. If the persons cannot agree as to what portion of the refund each can so claim, the Minister may fix the portions. 
  
  ### Liability for tax
  
  (6) Each person who is a holder of a RDSP or a subscriber of a RESP at the time that a tax is imposed under subsection (1) in connection with the plan is jointly and severally, or solidarily, liable to pay the tax. 
  (7)  [Repealed, 2010, c. 25, s. 58]  
  
  ### Tax payable in respect of advantage
  
  207.05 (1) A tax is payable under this Part for a calendar year if, in the year, an advantage in relation to a registered plan is extended to, or is received or receivable by, the controlling individual of the registered plan, a trust governed by the registered plan, or any other person who does not deal at arm’s length with the controlling individual. 
  
  ### Amount of tax payable
  
  (2) The amount of tax payable in respect of an advantage described in subsection (1) is 
  (a) in the case of a benefit, the fair market value of the benefit; 
  (b) in the case of a loan or an indebtedness, the amount of the loan or indebtedness; and 
  (c) in the case of a registered plan strip, the amount of the registered plan strip. 
  
  ### Liability for tax
  
  (3) Each controlling individual of a registered plan in connection with which a tax is imposed under subsection (1) is jointly and severally, or solidarily, liable to pay the tax except that, if the advantage is extended by the issuer, carrier or promoter of the registered plan or by a person with whom the issuer, carrier or promoter is not dealing at arm’s length, the issuer, carrier or promoter, and not the controlling individual, is liable to pay the tax. 
  
  ### Transitional rule
  
  (4) If an individual so elects before March 2, 2013 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit 
  (a) is paid to the individual, from a RRIF or RRSP of the individual, on or before the later of April 2, 2013 and the day that is 90 days after the end of the taxation year; and 
  (b) is not paid by way of transfer to another RRIF or RRSP of the individual. 
  
  ### Waiver of tax payable
  
  207.06 (1) If an individual would otherwise be liable to pay a tax under this Part because of section 207.02 or 207.03, the Minister may waive or cancel all or part of the liability if 
  (a) the individual establishes to the satisfaction of the Minister that the liability arose as a consequence of a reasonable error; and 
  (b) one or more distributions are made without delay under a TFSA of which the individual is the holder, the total amount of which is not less than the total of 
  (i) the amount in respect of which the individual would otherwise be liable to pay the tax, and 
  (ii) income (including a capital gain) that is reasonably attributable, directly or indirectly, to the amount described in subparagraph (i). 
  
  ### Waiver of tax payable
  
  (2) If a person would otherwise be liable to pay a tax under this Part because of subsection 207.04(1) or section 207.05, the Minister may waive or cancel all or part of the liability where the Minister considers it just and equitable to do so having regard to all the circumstances, including 
  (a) whether the tax arose as a consequence of reasonable error; 
  (b) the extent to which the transaction or series of transactions that gave rise to the tax also gave rise to another tax under this Act; and 
  (c) the extent to which payments have been made from the person’s registered plan. 
  
  ### Waiver of tax payable
  
  (3) If an individual would otherwise be liable to pay a tax under section 207.021, the Minister may waive or cancel all or part of the liability if 
  (a) the individual establishes to the satisfaction of the Minister that the liability arose as a consequence of a reasonable error; and 
  (b) one or more distributions are made without delay under a FHSA of which the individual is the holder, the total amount of which is not less than the total of 
  (i) the amount in respect of which the individual would otherwise be liable to pay tax, and 
  (ii) the income (including any capital gain) that is reasonably attributable, directly or indirectly, to the amount described in subparagraph (i). 
  
  ### Other powers of Minister
  
  (4) The Minister may notify the controlling individual of a registered plan that the controlling individual must cause a payment to be made from the registered plan to the controlling individual within 90 days of receipt of the notice, the amount of which is not less than the amount of specified non-qualified investment income in respect of the registered plan. 
  
  ### Income inclusion
  
  207.061 A holder of a TFSA shall include in computing the holder’s income for a taxation year under Part I any portion of a distribution made in the year that is described in subparagraph (a)(ii) of the definition 
  *specified distribution* in subsection 207.01(1) or subparagraph 207.06(1)(b)(ii) or that is specified by the Minister as part of an agreement to waive or cancel a liability for tax under this Part.  
  
  ### Special limit on tax payable
  
  207.062 If an individual is liable to pay an amount of tax under section 207.05 and under sections 207.02 or 207.03 in respect of the same contribution for the same calendar year, the tax payable under section 207.05 for the year shall be reduced by the amount of the tax payable under section 207.02 or 207.03, as the case may be, for the year. 
  
  ### Return and payment of tax
  
  207.07 (1) A person who is liable to pay tax under this Part for all or any part of a calendar year shall before July of the following calendar year 
  (a) file with the Minister a return for the year under this subsection in prescribed form and containing prescribed information including 
  (i) an estimate of the amount of tax payable under this Part by the person in respect of the year, and 
  (ii) an estimate of the amount of the person’s allowable refund, if any, for the year; and 
  (b) pay to the Receiver General the amount, if any, by which the amount of the person’s tax payable under this Part in respect of the year exceeds the person’s allowable refund, if any, for the year. 
  
  ### Multiple holders or subscribers
  
  (1.1) If two or more holders of a RDSP, or two or more subscribers of a RESP, are jointly and severally, or solidarily, liable with each other to pay a tax under this Part for a calendar year in connection with the plan, 
  (a) a payment by any of the holders, or any of the subscribers, on account of that tax liability shall to the extent of the payment discharge the joint liability; and 
  (b) a return filed by one of the holders, or one of the subscribers, as required by this Part for the year is deemed to have been filed by each other holder, or each other subscriber, in respect of the joint liability to which the return relates. 
  
  ### Refund
  
  (2) If a person has filed a return under this Part for a calendar year within three years after the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year, refund without application any allowable refund of the person for the year, to the extent that it was not applied against the person’s tax payable under paragraph (1)(b); and 
  (b) shall, with all due dispatch, make the refund referred to in paragraph (a) after sending the notice of assessment if an application for it has been made in writing by the person within three years after the sending of an original notice of assessment for the year. 
  
  ### Provisions applicable to Part
  
  (3) Subsections 150(2) and (3), sections 152 and 158 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require. 
  
  # PART XI.1 
  
  ## Tax in Respect of Deferred Income Plans and Other Tax Exempt Persons 
  207.1 (1)  [Repealed, 2011, c. 24, s. 68]  
  
  ### Tax payable by trust under deferred profit sharing plan
  
  (2) Where, at the end of any month, a trust governed by a deferred profit sharing plan holds property that is neither a qualified investment (within the meaning assigned by section 204) nor a life insurance policy (referred to in paragraphs 198(6)(c) to 198(6)(e) or subsection 198(6.1)), the trust shall, in respect of that month, pay a tax under this Part equal to 1% of the fair market value of the property at the time it was acquired by the trust of all such property held by it at the end of the month, other than 
  (a) property in respect of the acquisition of which the trust has paid or is liable to pay a tax under subsection 198(1); and 
  (b) property acquired by the trust before August 25, 1972. 
  (3)  [Repealed, 2017, c. 33, s. 72]  
  (4)  [Repealed, 2011, c. 24, s. 68]  
  
  ### Tax payable in respect of agreement to acquire shares
  
  (5) Where at any time a taxpayer whose taxable income is exempt from tax under Part I makes an agreement (otherwise than as a consequence of the acquisition or writing by it of an option listed on a designated stock exchange) to acquire a share of the capital stock of a corporation (otherwise than from the corporation) at a price that may differ from the fair market value of the share at the time the share may be acquired, the taxpayer shall, in respect of each month during which the taxpayer is a party to the agreement, pay a tax under this Part equal to the total of all amounts each of which is the amount, if any, by which the amount of a dividend paid on the share at a time in the month at which the taxpayer is a party to the agreement exceeds the amount, if any, of the dividend that is received by the taxpayer. 
  
  ### Return and payment of tax
  
  207.2 (1) Within 90 days after the end of each year, a taxpayer to whom this Part applies shall 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable by it under this Part in respect of each month in the year; and 
  (c) pay to the Receiver General the amount of tax, if any, payable by it under this Part in respect of each month in the year. 
  
  ### Liability of trustee
  
  (2) Where the trustee of a trust that is liable to pay tax under this Part does not remit to the Receiver General the amount of the tax within the time specified in subsection 207.2(1), the trustee is personally liable to pay on behalf of the trust the full amount of the tax and is entitled to recover from the trust any amount paid by the trustee as tax under this section. 
  
  ### Provisions applicable to Part
  
  (3) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART XI.2 
  
  ## Tax in Respect of Dispositions of Certain Properties 
  
  ### Tax Payable by institution or public authority
  
  207.3 Every institution or public authority that, at any time in a year, disposes of an object within 10 years after the object became an object described in subparagraph 39(1)(a)(i.1) shall pay a tax under this Part, in respect of the year, equal to 30% of the object’s fair market value at that time, unless the disposition was made to another institution or public authority that was, at that time, designated under subsection 32(2) of the Cultural Property Export and Import Act either generally or for a specified purpose related to that object.  
  
  ### Ecological gift — tax payable
  
  207.31 (1) A charity, municipality in Canada or municipal or public body performing a function of government in Canada (each of which is referred to in this section as the “recipient”) shall, in respect of a property, pay a tax under this Part in respect of a taxation year if 
  (a) at any time in the year, the recipient 
  (i) disposes of the property, or 
  (ii) in the opinion of the Minister of the Environment, or a person designated by that Minister, changes the use of the property; 
  (b) the property is described in paragraph 110.1(1)(d) or in the definition total ecological gifts in subsection 118.1(1); and  
  (c) the disposition or change is made without the authorization of the Minister of the Environment or a person designated by that Minister. 
  
  ### Ecological gift — amount of tax
  
  (2) The amount of tax to be paid under subsection (1) is equal to 50% of the amount that would be determined for the purposes of section 110.1 or 118.1, if this Act were read without reference to subsections 110.1(3) and 118.1(6), to be the fair market value of the property referred to in subsection (1) if the property were given to the recipient immediately before the disposition or change referred to in paragraph (1)(a). 
  
  ### Return and payment of tax
  
  207.4 (1) Any institution, public authority, charity or municipality that is liable to pay a tax under subsection 207.3 or 207.31 in respect of a year shall, within 90 days after the end of the year, 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information without notice or demand therefor; 
  (b) estimate in the return the amount of tax payable by it under this Part in respect of the year; and 
  (c) pay to the Receiver General the amount of tax payable by it under this Part in respect of the year. 
  
  ### Provisions applicable to Part
  
  (2) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART XI.3 
  
  ## Tax in Respect of Retirement Compensation Arrangements 
  
  ### Definitions
  
  207.5 (1) In this Part,  
  *advantage*, in relation to a retirement compensation arrangement, means  
  (a) any benefit, loan or indebtedness that is conditional in any way on the existence of the arrangement, other than 
  (i) a benefit derived from the provision of administrative or investment services in respect of the arrangement, 
  (ii) a loan or an indebtedness the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into, and 
  (iii) a payment out of or under the arrangement that is included in computing a taxpayer’s income under Part I, and 
  (b) a benefit that is an increase in the total fair market value of the subject property of the arrangement if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to a transaction or event or a series of transactions or events one of the main purposes of which was to enable a person or a partnership to benefit from a provision of this Part, or from the exemption from tax under paragraph 149(1)(q.1), if the transaction, event or series 
  (i) would not have occurred in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, or 
  (ii) included a payment received as, on account or in lieu of, or in satisfaction of, a payment 
  (A) for services provided by a person who is, or does not deal at arm’s length with, a specified beneficiary of the arrangement, or 
  (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than subject property of the arrangement) held by a person who is, or does not deal at arm’s length with, a specified beneficiary of the arrangement, 
  (c) a benefit that is income or a capital gain that is reasonably attributable, directly or indirectly, to 
  (i) a prohibited investment in respect of the arrangement, 
  (ii) an amount received by a specified beneficiary of the arrangement, or by a person who does not deal at arm’s length with the specified beneficiary, if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, subject property of the arrangement and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment 
  (A) for services provided by a person who is, or who does not deal at arm’s length with, the specified beneficiary, or 
  (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, 
  (d) an RCA strip in respect of the arrangement, and 
  (e) a prescribed benefit; ( avantage)   
  *prohibited investment*, for a retirement compensation arrangement at any time, means property (other than prescribed excluded property) that is at that time  
  (a) a debt of a specified beneficiary of the arrangement, 
  (b) a share of the capital stock of, an interest in, or a debt of 
  (i) a corporation, partnership or trust in which the specified beneficiary has a significant interest, or 
  (ii) a person or partnership that does not deal at arm’s length with, or is affiliated with, the specified beneficiary, 
  (c) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b), or 
  (d) prescribed property; ( placement interdit)   
  *RCA strip*, in respect of a retirement compensation arrangement, means the amount of a reduction in the fair market value of subject property of the arrangement, if the value is reduced as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable a specified beneficiary of the arrangement, or a person or a partnership who does not deal at arm’s length with the specified beneficiary, to benefit from a provision of this Part or to obtain a benefit in respect of subject property of the arrangement or as a result of the reduction, but does not include an amount that is included in computing the income of the specified beneficiary or of an employer or former employer of the specified beneficiary; (somme découlant d’un dépouillement de CR)   
  *RCA trust* under a retirement compensation arrangement means  
  (a) any trust deemed by subsection 207.6(1) to be created in respect of subject property of the arrangement, and 
  (b) any trust governed by the arrangement; ( fiducie de convention de retraite)   
  *refundable tax* of a retirement compensation arrangement at the end of a taxation year of an RCA trust under the arrangement means the amount, if any, by which the total of  
  (a) 50% of all contributions made under the arrangement while it was a retirement compensation arrangement and before the end of the year, and 
  (b) 50% of the amount, if any, by which 
  (i) the total of all amounts each of which is the income (determined as if this Act were read without reference to paragraph 82(1)(b)) of an RCA trust under the arrangement from a business or property for the year or a preceding taxation year or a capital gain of the trust for the year or a preceding taxation year, exceeds 
  (ii) the total of all amounts each of which is a loss of an RCA trust under the arrangement from a business or property for the year or a preceding taxation year or a capital loss of the trust for the year or a preceding taxation year, exceeds 
  (c) 50% of all amounts paid as distributions to one or more persons (including amounts that are required by paragraph 12(1)(n.3) to be included in computing the recipient’s income) under the arrangement while it was a retirement compensation arrangement and before the end of the year, other than a distribution paid where it is established, by subsequent events or otherwise, that the distribution was paid as part of a series of payments and refunds of contributions under the arrangement; ( impôt remboursable)   
  *significant interest* has the same meaning as in subsection 207.01(4); (participation notable)   
  *specified beneficiary*, of a retirement compensation arrangement, means an individual who has an interest or a right in respect of the arrangement and who has or had a significant interest in an employer or former employer in respect of the arrangement; (bénéficiaire déterminé)   
  *subject property of a retirement compensation arrangement* means property that is held in connection with the arrangement. (bien déterminé d’une convention de retraite)  
  
  ### Election
  
  (2) Notwithstanding the definition 
  *refundable tax* in subsection 207.5(1), where the custodian of a retirement compensation arrangement so elects in the return under this Part for a taxation year of an RCA trust under the arrangement and all the subject property, if any, of the arrangement (other than a right to claim a refund under subsection 164(1) or 207.7(2)) at the end of the year consists only of cash, debt obligations, shares listed on a designated stock exchange, or any combination thereof, an amount equal to the total of  
  (a) the amount of that cash at the end of the year, 
  (b) the total of all amounts each of which is the greater of the principal amount of such a debt obligation outstanding at the end of the year and the fair market value of the obligation at the end of the year, and 
  (c) the fair market value of those shares at the end of the year shall be deemed for the purposes of this Part to be the refundable tax of the arrangement at the end of the year. 
  
  ### Limitation on election
  
  (3) Subsection (2) does not apply in respect of an RCA trust if any part of a decline in the fair market value of subject property of the retirement compensation arrangement is reasonably attributable to a prohibited investment for, or an advantage in relation to, the RCA trust unless the Minister is satisfied that it is just and equitable to allow the election to be made, having regard to all the circumstances, in which case, the Minister may adjust the amount deemed by subsection (2) to be the refundable tax of the arrangement to take into account all or part of the decline in the fair market value of the subject property. 
  
  ### Creation of trust
  
  207.6 (1) In respect of the subject property of a retirement compensation arrangement, other than subject property of the arrangement held by a trust governed by a retirement compensation arrangement, for the purposes of this Part and Part I, the following rules apply: 
  (a) a trust is deemed to be created on the day that the arrangement is established; 
  (b) the subject property of the arrangement is deemed to be property of the trust and not to be property of any other person; and 
  (c) the custodian of the arrangement is deemed to be the trustee having ownership or control of the trust property. 
  
  ### Life insurance policies
  
  (2) For the purposes of this Part and Part I, where by virtue of a plan or arrangement an employer is obliged to provide benefits that are to be received or enjoyed by any person on, after or in contemplation of any substantial change in the services rendered by a taxpayer, the retirement of a taxpayer or the loss of an office or employment of a taxpayer, and where the employer, former employer or a person or partnership with whom or which the employer or former employer does not deal at arm’s length acquires an interest in a life insurance policy that may reasonably be considered to be acquired to fund, in whole or in part, those benefits, the following rules apply in respect of the plan or arrangement if it is not otherwise a retirement compensation arrangement and is not excluded from the definition 
  *retirement compensation arrangement*, in subsection 248(1), by any of paragraphs (a) to (l) and (n) thereof:  
  (a) the person or partnership that acquired the interest is deemed to be the custodian of a retirement compensation arrangement; 
  (b) the interest is deemed to be subject property of the retirement compensation arrangement; 
  (c) an amount equal to twice the amount of any premium paid in respect of the interest or any repayment of a policy loan thereunder is deemed to be a contribution under the retirement compensation arrangement; and 
  (d) any payment received in respect of the interest, including a policy loan, and any amount received as a refund of refundable tax is deemed to be an amount received out of or under the retirement compensation arrangement by the recipient and not to be a payment of any other amount. 
  
  ### Incorporated employee
  
  (3) For the purpose of the provisions of this Act relating to retirement compensation arrangements, where 
  (a) a corporation that at any time carried on a personal services business, or an employee of the corporation, enters into a plan or arrangement with a person or partnership (referred to in this subsection as the “employer”) to whom or which the corporation renders services, and 
  (b) the plan or arrangement provides for benefits to be received or enjoyed by any person on, after or in contemplation of the cessation of, or any substantial change in, the services rendered by the corporation, or an employee of the corporation, to the employer, the following rules apply: 
  (c) the employer and the corporation are deemed to be an employer and employee, respectively, in relation to each other, and 
  (d) any benefits to be received or enjoyed by any person under the plan or arrangement are deemed to be benefits to be received or enjoyed by the person on, after or in contemplation of a substantial change in the services rendered by the corporation. 
  
  ### Deemed contribution
  
  (4) Where at any time an employee benefit plan becomes a retirement compensation arrangement as a consequence of a change of the custodian of the plan or as a consequence of the custodian ceasing either to carry on business through a fixed place of business in Canada or to be licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (a) for the purposes of this Part and Part I, the custodian of the plan is deemed to have made a contribution to the arrangement immediately after that time, in an amount equal to the fair market value at that time of all the properties of the plan; and 
  (b) for the purposes of section 32.1, that amount is deemed to be a payment made at that time out of or under the plan to or for the benefit of employees or former employees of the employers who contributed to the plan. 
  
  ### Residents’ arrangement
  
  (5) For the purposes of this Act, where a resident’s contribution has been made under a plan or arrangement (in this subsection referred to as the “plan”), 
  (a) the plan is deemed, in respect of its application to all resident’s contributions made under the plan and all property that can reasonably be considered to be derived from those contributions, to be a separate arrangement (in this subsection referred to as the “residents’ arrangement”) independent of the plan in respect of its application to all other contributions and property that can reasonably be considered to derive from those other contributions; 
  (b) the residents’ arrangement is deemed to be a retirement compensation arrangement; and 
  (c) each person and partnership to whom a contribution is made under the residents’ arrangement is deemed to be a custodian of the residents’ arrangement. 
  
  ### Resident’s contribution
  
  (5.1) For the purpose of subsection 207.6(5), 
  *resident’s contribution* means such part of a contribution made under a plan or arrangement (in this subsection referred to as the “plan”) at a time when the plan would, but for paragraph (l) of the definition 
  *retirement compensation arrangement* in subsection 248(1), be a retirement compensation arrangement as  
  (a) is not a prescribed contribution; and 
  (b) can reasonably be considered to have been made in respect of services rendered by an individual to an employer in a period 
  (i) throughout which the individual was resident in Canada and rendered services to the employer that were primarily services rendered in Canada or services rendered in connection with a business carried on by the employer in Canada (or a combination of such services), and 
  (ii) at the beginning of which the individual had been resident in Canada throughout at least 60 of the 72 preceding calendar months, where the individual was non-resident at any time before the period and became a member of the plan before the end of the month after the month in which the individual became resident in Canada, and, for the purpose of this paragraph, where benefits provided to an individual under a particular plan or arrangement are replaced by benefits under another plan or arrangement, the other plan or arrangement shall be deemed, in respect of the individual, to be the same plan or arrangement as the particular plan or arrangement. 
  
  ### Prescribed plan or arrangement
  
  (6) For the purposes of the provisions of this Act relating to retirement compensation arrangements, the following rules apply in respect of a prescribed plan or arrangement: 
  (a) the plan or arrangement shall be deemed to be a retirement compensation arrangement; 
  (b) an amount credited at any time to the account established in the accounts of Canada or a province in connection with the plan or arrangement shall be, except to the extent that it is in respect of a refund determined under subsection 207.7(2), deemed to be a contribution under the plan or arrangement at that time; 
  (c) the custodian of the plan or arrangement shall be deemed to be 
  (i) where the account is established in the accounts of Canada, Her Majesty in right of Canada, and 
  (ii) where the account is established in the accounts of a province, Her Majesty in right of that province; and 
  (d) the subject property of the plan or arrangement, at any time, shall be deemed to include an amount of cash equal to the balance at that time in the account. 
  
  ### Transfers
  
  (7) Where an amount (other than an amount that is part of a series of periodic payments) is transferred directly to a retirement compensation arrangement (other than an arrangement the custodian of which is non-resident or which is deemed by subsection 207.6(5) to be a retirement compensation arrangement) from another retirement compensation arrangement, 
  (a) the amount shall not, solely because of the transfer, be included in computing a taxpayer’s income under Part I; 
  (b) no deduction may be made in respect of the amount in computing a taxpayer’s income under Part I; and 
  (c) the amount is considered, for the purpose of the definition 
  *refundable tax* in subsection 207.5(1), to be paid as a distribution to one or more persons under the arrangement from which the amount is transferred and to be a contribution made under the arrangement to which the amount is transferred.  
  
  ### Tax payable on prohibited investment
  
  207.61 (1) A custodian of a retirement compensation arrangement shall pay a tax under this Part for a calendar year if, at any time in the year, 
  (a) the arrangement acquires property that is a prohibited investment for the arrangement; or 
  (b) subject property of the arrangement becomes a prohibited investment for the arrangement after March 29, 2012. 
  
  ### Amount of tax payable
  
  (2) The amount of tax payable in respect of each property described in subsection (1) is 50% of the fair market value of the property at the time referred to in that subsection. 
  
  ### Refund
  
  (3) If in a calendar year an RCA trust disposes of a property in respect of which a tax is imposed under subsection (1) on the custodian of the retirement compensation arrangement, the custodian is entitled to a refund for the year of an amount equal to 
  (a) the amount of the tax so imposed, unless paragraph (b) applies; or 
  (b) nil, 
  (i) if it is reasonable to consider that the custodian, or a specified beneficiary of the arrangement, knew, or ought to have known, at the time the property was acquired by the arrangement, that it was, or would become, a property described in subsection (1), or 
  (ii) if the property is not disposed of by the arrangement before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances. 
  
  ### Deemed disposition and reacquisition
  
  (4) If, at any time, a property held by an RCA trust ceases to be, or becomes, a prohibited investment for the RCA trust, the RCA trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value. 
  
  ### Tax payable in respect of advantage
  
  207.62 (1) A custodian of a retirement compensation arrangement shall pay a tax under this Part for a calendar year if, in the year, an advantage in relation to the arrangement is extended to, or is received or receivable by, an RCA trust under the arrangement, a specified beneficiary of the arrangement or any person who does not deal at arm’s length with the specified beneficiary. 
  
  ### Amount of tax payable
  
  (2) The amount of tax payable in respect of an advantage described in subsection (1) is 
  (a) in the case of a benefit, the fair market value of the benefit; 
  (b) in the case of a loan or an indebtedness, the amount of the loan or indebtedness; and 
  (c) in the case of an RCA strip, the amount of the RCA strip. 
  
  ### Joint liability
  
  207.63 If a custodian of a retirement compensation arrangement is liable to pay a tax under section 207.61 or 207.62, a specified beneficiary of the arrangement is jointly and severally, or solidarily, liable for that tax to the extent that the specified beneficiary participated in, assented to or acquiesced in the making of, the transaction or event or series of transactions or events that resulted in the liability. 
  
  ### Waiver of tax payable
  
  207.64 If a person would otherwise be liable to pay a tax under this Part because of any of sections 207.61 to 207.63, the Minister may waive or cancel all or part of the liability if the Minister considers it just and equitable to do so having regard to all the circumstances, including 
  (a) whether the tax arose as a consequence of reasonable error; and 
  (b) the extent to which the transaction or event or series of transactions or events that gave rise to the tax also gave rise to another tax under this Act. 
  
  ### Deemed distribution
  
  207.65 For the purposes of the definition 
  *refundable tax* in subsection 207.5(1), tax paid under section 207.61 or 207.62 by a custodian of a retirement compensation arrangement out of property held in connection with the arrangement is deemed to be a distribution under the arrangement for the taxation year in which the tax is paid to the extent that the tax has not been refunded, waived or cancelled.  
  
  ### Tax payable
  
  207.7 (1) Every custodian of a retirement compensation arrangement shall pay a tax under this Part for each taxation year of an RCA trust under the arrangement equal to the amount, if any, by which the refundable tax of the arrangement at the end of the year exceeds the refundable tax of the arrangement at the end of the immediately preceding taxation year, if any. 
  
  ### Refund
  
  (2) Where the custodian of a retirement compensation arrangement has filed a return under this Part for a taxation year within three years after the end of the year, the Minister 
  (a) may, on sending the notice of assessment for the year or a notification that no tax is payable for the year, refund without application an amount equal to the amount, if any, by which the refundable tax of the arrangement at the end of the immediately preceding year exceeds the refundable tax of the arrangement at the end of the year; and 
  (b) shall, with all due dispatch, make such a refund after sending the notice of assessment if application for it has been made in writing by the custodian within three years after the day of sending of a notice of an original assessment for the year or of a notification that no tax is payable for the year. 
  
  ### Payment of tax
  
  (3) Every custodian of a retirement compensation arrangement shall, within 90 days after the end of each taxation year of an RCA trust under the arrangement, 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable by the custodian under this Part for the year; and 
  (c) pay to the Receiver General the amount of tax, if any, payable by the custodian under this Part for the year. 
  
  ### Provisions applicable to Part
  
  (4) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  # PART XI.4 
  
  ## Tax on Excess EPSP Amounts 
  
  ### Excess EPSP amount
  
  207.8 (1) In this Part, 
  *excess EPSP amount*, of a specified employee for a taxation year in respect of an employer, means the amount determined by the formula  is the portion of the total of all amounts paid by the employer of the specified employee (or by a corporation with which the employer does not deal at arm’s length) to a trust governed by an employees profit sharing plan that is allocated for the year to the specified employee; and is the specified employee’s total income for the year from an office or employment with the employer computed without reference to paragraph 6(1)(d) and sections 7 and 8. 
  
  ### Tax payable
  
  (2) If a specified employee has an excess EPSP amount for a taxation year, the specified employee shall pay a tax for the year equal to the amount determined by the formula is the highest individual percentage for the year; is 
  (a) if the specified employee is resident in Quebec at the end of the year, 0%, 
  (b) if the specified employee is resident in a province other than Quebec at the end of the year, the highest percentage rate of tax, including surtaxes but not taxes that are limited to a maximum amount, imposed by the province for the year on the income of an individual who is a resident of the province, or 
  (c) in any other case, the percentage (rounded to the nearest half percentage, or where it is equidistant from two such consecutive half percentages, to the higher of the two) determined by the formula is the highest individual percentage for the year, and is the percentage referred to in subsection 120(1); and is the total of all excess EPSP amounts of the specified employee for the year. 
  
  ### Waiver or cancellation
  
  (3) If a specified employee would otherwise be liable to pay a tax under subsection (2), the Minister may waive or cancel all or part of the liability if the Minister considers it just and equitable to do so having regard to all the circumstances. 
  
  ### Return and payment of tax
  
  (4) Every person who is liable to pay tax under this Part for a taxation year shall 
  (a) on or before the person’s filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information; and 
  (b) on or before the person’s balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by the person for the year. 
  
  ### Provisions applicable to this Part
  
  (5) Subsections 150(2) and (3), sections 152, 155 to 156.1, 158 to 160.1, 161 and 161.2 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require. 
  
  # PART XI.5 
  
  ## Tax in Respect of Employee Life and Health Trust 
  
  ### Definitions
  
  207.9 (1) The following definitions apply in this Part.  
  *participating employer* of an employee life and health trust means an employer that provides designated employee benefits for its employees through a trust that meets the conditions described in subsection 144.1(2). (employeur participant)   
  *prohibited investment*, at any time for an employee life and health trust, means property that is at that time  
  (a) a share of the capital stock of, an interest in or a debt of 
  (i) a participating employer of the employee life and health trust, or 
  (ii) a person or partnership that does not deal at arm’s length with a participating employer of the employee life and health trust; or 
  (b) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a). ( placement interdit)  
  
  ### Tax payable on prohibited investment
  
  (2) A trust shall pay a tax under this Part for a calendar year if, at any time in the year while the trust is an employee life and health trust, 
  (a) the trust acquires property that is a prohibited investment for the trust; or 
  (b) income is received or becomes receivable by the trust from, or the trust has a taxable capital gain from the disposition of, a prohibited investment for the trust. 
  
  ### Amount of tax payable
  
  (3) The amount of tax payable under subsection (2) is 
  (a) if paragraph (2)(a) applies, 50% of the fair market value of the property at the time it is acquired; and 
  (b) if paragraph (2)(b) applies, 50% of the income or the taxable capital gain. 
  
  ### Refund
  
  (4) If in a calendar year a trust disposes of a property in respect of which a tax is imposed on the trust under subsection (2), the trust is entitled to a refund for the year of an amount equal to 
  (a) the amount of the tax so imposed, unless paragraph (b) applies; or 
  (b) nil, if 
  (i) it is reasonable to consider that the trustees knew, or ought to have known, at the time the property was acquired that it was, or would become, a property described in subsection (2), or 
  (ii) the property is not disposed of by the trust before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances. 
  
  ### Deemed disposition and reacquisition
  
  (5) If, at any time, a property held by an employee life and health trust ceases to be, or becomes, a prohibited investment for the employee life and health trust, the employee life and health trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value. 
  
  # PART XII 
  
  ## Tax in Respect of Certain Royalties, Taxes, Lease Rentals, Etc., Paid to a Government by a Tax Exempt Person 
  208  [Repealed, 2003, c. 28, s. 15(1)]  
  
  # PART XII.1 
  
  ## Tax on Carved-out Income 
  
  ### Definitions
  
  209 (1) For the purposes of this Part,  
  *carved-out income* of a person for a taxation year from a carved-out property means the amount, if any, by which  
  (a) the person’s income for the year attributable to the property computed under Part I on the assumption that in computing income no deduction was allowed under section 20, Subdivision E of Division B of Part I or section 104, exceeds the total of 
  (b) the amount deducted under subsection 66.4(2) in computing the person’s income for the year to the extent that it may reasonably be considered to be attributable to the property, and 
  (c) to the extent that the property is an interest in a bituminous sands deposit or oil shale deposit, the amount deducted under subsection 66.2(2) in computing the person’s income for the year to the extent that it can reasonably be considered to be attributable to the cost of that interest; ( revenus miniers et pétroliers)   
  *carved-out property* of a person means  
  (a) a Canadian resource property where 
  (i) all or substantially all of the amount that the person is or may become entitled to receive in respect of the property may reasonably be considered to be limited to a maximum amount or to an amount determinable by reference to a stated quantity of production from a mineral resource or an accumulation of petroleum, natural gas or related hydrocarbons, 
  (ii) the period of time during which the person’s interest in the income attributable to the property may reasonably be expected to continue is 
  (A) where the property is a head lease or may reasonably be considered to derive from a head lease, less than the lesser of 10 years and the remainder of the term of the head lease, and 
  (B) in any other case, less than 10 years, 
  (iii) the person’s interest in the income attributable to the property, expressed as a percentage of production for any period, may reasonably be expected to be reduced substantially, 
  (A) where the property is a head lease or may reasonably be considered to derive from a head lease, at any time before 
  (I) the expiration of a period of 10 years commencing when the property was acquired, or 
  (II) the expiration of the term of the head lease, whichever occurs first, and 
  (B) in any other case, at any time before the expiration of a period of 10 years commencing when the property was acquired, or 
  (iv) another person has a right under an arrangement to acquire, at any time, the property or a portion thereof or a similar property from the person and it is reasonable to consider that one of the main reasons for the arrangement, or any series of transactions or events that includes the arrangement, was to reduce or postpone tax that would, but for this subparagraph, be payable under this Part, or 
  (b) an interest in a partnership or trust that holds a Canadian resource property where it is reasonable to consider that one of the main reasons for the existence of the interest is to reduce or postpone the tax that would, but for this paragraph, be payable under this Part, but does not include 
  (c) an interest, or for civil law a right, in respect of a property that was acquired by the person solely in consideration of the person’s undertaking under an agreement to incur Canadian exploration expense or Canadian development expense in respect of the property and, where the agreement so provides, to acquire gas or oil well equipment (as defined in subsection 1104(2) of the Income Tax Regulations) in respect of the property,  
  (c.1) an interest, or for civil law a right, in respect of a property that was retained by the person under an agreement under which another person obtained an absolute or conditional right to acquire another interest, or for civil law another right, in respect of the property, if the other interest or right is not carved-out property of the other person because of paragraph (c), 
  (d) a particular property acquired by the person under an arrangement solely as consideration for the sale of a Canadian resource property (other than a property that, immediately before the sale was a carved-out property of the person) that relates to the particular property except where it is reasonable to consider that one of the main reasons for the arrangement, or any series of transactions or events that includes the arrangement, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act, 
  (e) a property retained or reserved by the person out of a Canadian resource property (other than a property that, immediately before the transaction by which the retention or reservation is made, was a carved-out property of the person) that was disposed of by the person except where it is reasonable to consider that one of the main reasons for the retention or reservation, or any series of transactions or events in which the property or interest was retained or reserved, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act, 
  (f) a property acquired by the person from a taxpayer with whom the person did not deal at arm’s length at the time of the acquisition and the property was acquired by the taxpayer or a person with whom the taxpayer did not deal at arm’s length 
  (i) pursuant to an agreement in writing to do so entered into before July 20, 1985, or 
  (ii) under the circumstances described in this paragraph or paragraph (d) or (e), except where it is reasonable to consider that one of the main reasons for the acquisition of the property, or any series of transactions or events in which the property was acquired, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act, 
  (f.1) where the taxable income of the person is exempt from tax under Part I, a property of the person that 
  (i) does not relate to property of a person whose taxable income is not exempt from tax under Part I, and 
  (ii) is not, and does not relate to, property that was at any time a carved-out property of any other person, or 
  (g) a prescribed property; ( bien restreint)   
  *head lease* means a contract under which  
  (a) Her Majesty in right of Canada or a province grants, or 
  (b) an owner in fee simple, other than Her Majesty in right of Canada or a province, grants for a period of not less than 10 years any right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in Canada or to prospect, explore, drill or mine for minerals in a mineral resource in Canada; ( bail initial)   
  *term* of a head lease includes all renewal periods in respect of the head lease. (durée)  
  
  ### Tax
  
  (2) Every person shall pay a tax under this Part for each taxation year equal to 45% of the total of the person’s carved-out incomes for the year from carved-out properties. 
  
  ### Return
  
  (3) Every person liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which the person is or would be, if the person were liable to pay tax under Part I for the year, required under section 150 to file a return of the person’s income for the year under Part I, a return for the year under this Part in prescribed form containing an estimate of the amount of tax payable by the person under this Part for the year. 
  
  ### Payment of tax
  
  (4) Where a person is liable to pay tax for a taxation year under this Part, the person shall pay in respect of the year, to the Receiver General 
  (a) on or before the last day of each month in the year, an amount equal to 1/12 of the amount of tax payable by the person under this Part for the year; and 
  (b) the remainder, if any, of the tax payable by the person under this Part for the year, on or before the person’s balance-due day for the year. 
  
  ### Provisions applicable to Part
  
  (5) Subsections 150(2) and 150(3) and sections 152, 158 and 159, subsections 161(1), 161(2) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Partnerships
  
  (6) For the purposes of subsection 209(1), a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period. 
  
  # PART XII.2 
  
  ## Tax on Designated Income of Certain Trusts 
  
  ### Definitions
  
  210 (1) The following definitions apply in this Part.  
  *designated beneficiary*, under a particular trust at any time, means a beneficiary, under the particular trust, who is at that time  
  (a) a non-resident person; 
  (b)  [Repealed, 2014, c. 39, s. 63]  
  (c) a person who is, because of subsection 149(1), exempt from tax under Part I on all or part of their taxable income and who acquired an interest as a beneficiary under the particular trust after October 1, 1987 directly or indirectly from a beneficiary under the particular trust except if 
  (i) the interest was, at all times after the later of October 1, 1987 and the day on which the interest was created, held by persons who were exempt from tax under Part I on all of their taxable income because of subsection 149(1), or 
  (ii) the person is a trust, governed by a registered retirement savings plan or a registered retirement income fund, who acquired the interest, directly or indirectly, from an individual or the spouse or common-law partner, or former spouse or common-law partner, of the individual who was, immediately after the interest was acquired, a beneficiary under the trust governed by the fund or plan; 
  (d) another trust (in this paragraph referred to as the “other trust”) that is not a graduated rate estate, a mutual fund trust or a trust that is exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income, if any beneficiary under the other trust is at that time 
  (i) a non-resident person, 
  (ii)  [Repealed, 2014, c. 39, s. 63]  
  (iii) a trust that is not 
  (A) a graduated rate estate, 
  (B) a mutual fund trust, 
  (C) a trust that is exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income, or 
  (D) a trust 
  (I) whose interest, at that time, in the other trust was held, at all times after the day on which the interest was created, either by it or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, and 
  (II) none of the beneficiaries under which is, at that time, a designated beneficiary under it, or 
  (iv) a person or partnership that 
  (A) is a designated beneficiary under the other trust because of paragraph (c) or (e), or 
  (B) would be a designated beneficiary under the particular trust because of paragraph (c) or (e) if, instead of being a beneficiary under the other trust, the person or partnership were at that time a beneficiary, under the particular trust, whose interest as a beneficiary under the particular trust were 
  (I) identical to its interest (referred to in this clause as the “particular interest”) as a beneficiary under the other trust, 
  (II) acquired from each person or partnership from whom it acquired the particular interest, and 
  (III) held, at all times after the later of October 1, 1987 and the day on which the particular interest was created, by the same persons or partnerships that held the particular interest at those times; or 
  (e) a particular partnership any of the members of which is at that time 
  (i) another partnership, except if 
  (A) each such other partnership is a Canadian partnership, 
  (B) the interest of each such other partnership in the particular partnership is held, at all times after the day on which the interest was created, by the other partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, 
  (C) the interest of each member, of each such other partnership, that is a person exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income was held, at all times after the day on which the interest was created, by that member or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, and 
  (D) the interest of the particular partnership in the particular trust was held, at all times after the day on which the interest was created, by the particular partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, 
  (ii) a non-resident person, 
  (iii)  [Repealed, 2014, c. 39, s. 63]  
  (iv) another trust that is, under paragraph (d), a designated beneficiary of the particular trust or that would, under paragraph (d), be a designated beneficiary of the particular trust if the other trust were at that time a beneficiary under the particular trust whose interest as a beneficiary under the particular trust were 
  (A) acquired from each person or partnership from whom the particular partnership acquired its interest as a beneficiary under the particular trust, and 
  (B) held, at all times after the later of October 1, 1987 and the day on which the particular partnership’s interest as a beneficiary under the particular trust was created, by the same persons or partnerships that held that interest of the particular partnership at those times, or 
  (v) a person exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income except if the interest of the particular partnership in the particular trust was held, at all times after the day on which the interest was created, by the particular partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income. ( bénéficiaire étranger ou assimilé)   
  *designated income*, of a trust for a taxation year, means the amount that would be the income of the trust for the year determined under section 3 if  
  (a) this Act were read without reference to subsections 104(6), (12) and (30); 
  (b) the trust had no income other than taxable capital gains from dispositions described in paragraph (c) and incomes from 
  (i) real or immovable properties in Canada (other than Canadian resource properties), 
  (ii) timber resource properties, 
  (iii) Canadian resource properties (other than properties acquired by the trust before 1972), and 
  (iv) businesses carried on in Canada; 
  (c) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from 
  (i) dispositions of taxable Canadian property, and 
  (ii) dispositions of particular property (other than property described in any of subparagraphs 128.1(4)(b)(i) to (iii)), or property for which the particular property is substituted, that was transferred at any particular time to a particular trust in circumstances in which subsection 73(1) or 107.4(3) applied, if 
  (A) it is reasonable to conclude that the property was so transferred in anticipation that a person beneficially interested at the particular time in the particular trust would subsequently cease to reside in Canada, and a person beneficially interested at the particular time in the particular trust did subsequently cease to reside in Canada, or 
  (B) when the property was so transferred, the terms of the particular trust satisfied the conditions in subparagraph 73(1.01)(c)(i) or (iii), and it is reasonable to conclude that the transfer was made in connection with the cessation of residence, on or before the transfer, of a person who was, at the time of the transfer, beneficially interested in the particular trust and a spouse or common-law partner, as the case may be, of the transferor of the property to the particular trust; and 
  (d) the only losses referred to in paragraph 3(d) were losses from sources described in any of subparagraphs (b)(i) to (iv). ( revenu de distribution)  
  
  ### Tax not payable
  
  (2) No tax is payable under this Part for a taxation year by a trust that was throughout the year 
  (a) a graduated rate estate; 
  (b) a mutual fund trust; 
  (c) exempt from tax under Part I because of subsection 149(1); 
  (d) a trust to which paragraph (a), (a.1) or (c) of the definition 
  *trust* in subsection 108(1) applies; or  
  (e) non-resident. 
  210.1  [Repealed, 2013, c. 34, s. 341]  
  
  ### Tax on income of trust
  
  210.2 (1) Subject to section 210.3, if a trust deducts an amount under paragraph 104(6)(b) in computing its income under Part I for a taxation year, the trust shall pay a tax under this Part in respect of the year equal to 40% of the least of 
  (a) the designated income of the trust for the year, 
  (b) the amount that, but for subsections 104(6) and 104(30), would be the income of the trust for the year, and 
  (c) 100/60 of the amount deducted. 
  (1.1)  [Repealed, 2013, c. 34, s. 342]  
  
  ### Amateur athlete trusts
  
  (2) Notwithstanding subsection 210(2), a trust shall pay a tax under this Part in respect of a particular taxation year of the trust equal to 2/3 of the amount that is required by subsection 143.1(2) to be included in computing the income under Part I for a taxation year of a beneficiary under the trust, if 
  (a) the beneficiary is at any time in the particular taxation year a designated beneficiary under the trust; and 
  (b) the particular taxation year ends in that taxation year of the beneficiary. 
  
  ### Tax deemed paid by beneficiary
  
  (3) Where an amount (in this subsection and subsection 210.3(2) referred to as the “income amount”) in respect of the income of a trust for a taxation year is, by reason of subsection 104(13) or 105(2), included in computing 
  (a) the income under Part I of a person who was not at any time in the year a designated beneficiary under the trust, or 
  (b) the income of a non-resident person (other than a person who, at any time in the year, would be a designated beneficiary under the trust if section 210 were read without reference to paragraph (a) of the definition 
  *designated beneficiary* in that section) that is subject to tax under Part I by reason of subsection 2(3) and is not exempt from tax under Part I by reason of a provision contained in a tax treaty,  an amount determined by the formula is the tax paid under this Part by the trust for the year, is the income amount in respect of the person, and is the total of all amounts each of which is an amount that is or would be, if all beneficiaries under the trust were persons resident in Canada to whom Part I was applicable, included in computing the income under Part I of a beneficiary under the trust by reason of subsection 104(13) or 105(2) in respect of the year, shall, if designated by the trust in respect of the person in its return for the year under this Part, be deemed to be an amount paid on account of the person’s tax payable under Part I for the person’s taxation year in which the taxation year of the trust ends, on the day that is 90 days after the end of the taxation year of the trust. 
  
  ### Designations in respect of partnerships
  
  (4) Where a taxpayer is a member of a partnership in respect of which an amount is designated by a trust for a taxation year of the trust (in this subsection referred to as the “particular year”) under subsection 210.2(3), 
  (a) no amount shall be deemed to be paid on account of the partnership’s tax payable under Part I by reason of subsection 210.2(3) except in the application of that subsection for the purposes of subsection 104(31), and 
  (b) an amount determined by the formula is the amount so designated, is the amount that may reasonably be regarded as the share of the taxpayer in the designated income of the trust received by the partnership in the fiscal period of the partnership in which the particular year ends (that fiscal period being referred to in this subsection as the “partnership’s period”), and is the designated income received by the partnership from the trust in the partnership’s period, shall be deemed to be an amount paid on account of the taxpayer’s tax payable under Part I for the person’s taxation year in which the partnership’s period ends, on the last day of that year. 
  
  ### Returns
  
  (5) A trust shall, within 90 days after the end of each taxation year, 
  (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor; 
  (b) estimate in the return the amount of tax, if any, payable by it under this Part for the year; and 
  (c) pay to the Receiver General the tax, if any, payable by it under this Part for the year. 
  
  ### Liability of trustee
  
  (6) A trustee of a trust is personally liable to pay to the Receiver General on behalf of the trust the full amount of any tax payable by the trust under this Part to the extent that the amount is not paid to the Receiver General within the time specified in subsection 210.2(5), and the trustee is entitled to recover from the trust any such amount paid by the trustee. 
  
  ### Provisions applicable to Part
  
  (7) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Where no designated beneficiaries
  
  210.3 (1) No tax is payable under this Part by a trust for a taxation year in respect of which the trustee has certified in the trust’s return under this Part for the year that no beneficiary under the trust was a designated beneficiary in the year. 
  
  ### Where beneficiary deemed not designated
  
  (2) Where a trust would, if the trust paid tax under this Part for a taxation year, be entitled to designate an amount under subsection 210.2(3) in respect of a non-resident beneficiary and the income amount in respect of the beneficiary is included in computing the income of the beneficiary which is subject to tax under Part I by reason of subsection 2(3) and is not exempt from tax under Part I by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada, for the purposes of subsection 210.3(1), the beneficiary shall be deemed not to be a designated beneficiary of the trust at any time in the year. 
  
  # PART XII.3 
  
  ## Tax on Investment Income of Life Insurers 
  
  ### Definitions
  
  211 (1) For the purposes of this Part,  
  *existing guaranteed life insurance policy*, at any time, means a non-participating life insurance policy in Canada in respect of which  
  (a) the amount of every premium that became payable before that time and after December 31, 1989, 
  (b) the number of premium payments under the policy, and 
  (c) the amount of each benefit under the policy at that time were fixed and determined on or before December 31, 1989; ( police d’assurance-vie garantie existante)   
  *life insurance policy* includes a benefit under  
  (a) a group life insurance policy, and 
  (b) a group annuity contract but does not include 
  (c) that part of a policy in respect of which the policyholder is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust, or 
  (d) a reinsurance arrangement; ( police d’assurance-vie)   
  *life insurance policy in Canada* means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected; (police d’assurance-vie au Canada)   
  *net interest rate*, in respect of a liability, benefit, risk or guarantee under a life insurance policy of an insurer for a taxation year, is the positive amount, if any, determined by the formula  is the simple arithmetic average determined as of the first day of the year of the average yield (expressed as a percentage per year rounded to 2 decimal points) in each of the 60 immediately preceding months prevailing on all domestic Canadian-dollar Government of Canada bonds outstanding on the last Wednesday of that month that have a remaining term to maturity of more than 10 years, is 
  (a) in the case of a guaranteed benefit provided under the terms and conditions of the policy as they existed on March 2, 1988, other than a policy where, at any time after March 2, 1988, its terms and conditions relating to premiums and benefits were changed (otherwise than to give effect to the terms and conditions that were determined before March 3, 1988), the greater of 
  (i) the rate of interest (expressed as a percentage per year) used by the insurer in determining the amount of the guaranteed benefit, and 
  (ii) 4%, and 
  (b) in any other case, nil, and is 
  (a) in the case of a guaranteed benefit to which paragraph (a) of the description of B applies, 65%, and 
  (b) in any other case, 55%; ( taux d’intérêt net)   
  *non-participating life insurance policy* means a life insurance policy that is not a participating life insurance policy; (police d’assurance-vie sans participation)   
  *participating life insurance policy* has the meaning assigned by subsection 138(12); (police d’assurance-vie avec participation)   
  *policy loan* has the meaning assigned by subsection 138(12); (avance sur police)   
  *registered life insurance policy* means a life insurance policy issued or effected as or under a pooled registered pension plan, a registered retirement savings plan, a deferred profit sharing plan or a registered pension plan; (police d’assurance-vie agréée)   
  *reinsurance arrangement* does not include an arrangement under which an insurer has assumed the obligations of the issuer of a life insurance policy to the policyholder; (mécanisme de réassurance)   
  *segregated fund* has the meaning given that expression in subsection 138.1(1); (fonds réservé)   
  *specified transaction or event*, in respect of a life insurance policy, means  
  (a) a change in underwriting class, 
  (b) a change in premium because of a change in frequency of premium payments within a year that does not alter the present value, at the beginning of the year, of the total premiums to be paid under the policy in the year, 
  (c) an addition under the terms of the policy as they existed on 
  (i) in the case of an existing guaranteed life insurance policy, December 31, 1989, 
  (ii) in any other case, March 2, 1988, of accidental death, dismemberment, disability or guaranteed purchase option benefits, 
  (d) the deletion of a rider, 
  (e) redating lapsed policies within the reinstatement period referred to in paragraph (g) of the definition 
  *disposition* in subsection 148(9) or redating for policy loan indebtedness,  
  (f) a change in premium because of a correction of erroneous information, 
  (g) the payment of a premium after its due date, or no more than 30 days before its due date, as established on or before 
  (i) in the case of an existing guaranteed life insurance policy, December 31, 1989, and 
  (ii) in any other case, March 2, 1988, and 
  (h) the payment of an amount described in paragraph (a) of the definition 
  *premium* in subsection 148(9); (opération ou événement déterminé)   
  *taxable life insurance policy* of an insurer at any time means a life insurance policy in Canada issued by the insurer (or in respect of which the insurer has assumed the obligations of the issuer of the policy to the policyholder), other than a policy that is at that time  
  (a) an existing guaranteed life insurance policy, 
  (b) an annuity contract (including a settlement annuity), 
  (c) a registered life insurance policy, 
  (d) a registered pension plan, or 
  (e) a retirement compensation arrangement. ( police d’assurance-vie imposable)  
  
  ### Riders and changes in terms
  
  (2) For the purposes of this Part, 
  (a) any rider added at any time after March 2, 1988 to a life insurance policy shall be deemed to be a separate life insurance policy issued and effected at that time; and 
  (b) a change in the terms or conditions of a life insurance policy resulting from a specified transaction or event shall be deemed not to have occurred and not to be a change. 
  
  ### Tax payable
  
  211.1 (1) Every life insurer shall pay a tax under this Part for each taxation year equal to 15% of its taxable Canadian life investment income for the year. 
  
  ### Taxable Canadian life investment income
  
  (2) For the purposes of this Part, the taxable Canadian life investment income of a life insurer for a taxation year is the amount, if any, by which its Canadian life investment income for the year exceeds the total of its Canadian life investment losses for the 20 taxation years immediately preceding the year, to the extent that those losses were not deducted in computing its taxable Canadian life investment income for any preceding taxation year. 
  
  ### Canadian life investment income
  
  (3) For the purposes of this Part, the Canadian life investment income or loss of a life insurer for a taxation year is the positive or negative amount determined by the formula is subject to subsection 211.1(4), the total of all amounts, each of which is in respect of a liability, benefit, risk or guarantee under a life insurance policy that was at any time in the year a taxable life insurance policy of the insurer, determined by multiplying the net interest rate in respect of the liability, benefit, risk or guarantee for the year by 1/2 of the total of 
  (a) the maximum amount that would be determined under paragraph 1401(1)(a), (c) or (d) of the Income Tax Regulations (other than an amount that would be determined under subparagraph 1401(1)(d)(ii) of those Regulations in respect of a disabled life) in respect of the insurer for the year in respect of the liability, benefit, risk or guarantee if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement, and  
  (b) the maximum amount that would be determined under paragraph 1401(1)(a), (c) or (d) of the Income Tax Regulations (other than an amount that would be determined under subparagraph 1401(1)(d)(ii) of those Regulations in respect of a disabled life) in respect of the insurer for the preceding taxation year in respect of the liability, benefit, risk or guarantee if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement;  is the total of all amounts, each of which is the positive or negative amount in respect of a life insurance policy that was at any time in the year a taxable life insurance policy of the insurer, determined by the formula is, subject to subsection 211.1(4), the amount determined by multiplying the percentage determined in the description of A in the definition 
  *net interest rate* in subsection 211(1) in respect of the year by 1/2 of the total of  
  (a) the maximum amount that would be determined under paragraph 1401(1)(c.1) of the Income Tax Regulations in respect of the insurer for the year in respect of the policy if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement, and  
  (b) the maximum amount that would be determined under paragraph 1401(1)(c.1) of the Income Tax Regulations in respect of the insurer for the preceding taxation year in respect of the policy if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement, and  is the amount, if any, by which 
  (a) the total of all amounts determined in respect of the insurer under the description of in respect of the policy for the year and any preceding taxation years ending after 1989 exceeds the total of 
  (b) all amounts determined in respect of the insurer under the description of E in respect of the policy for taxation years ending before the year, and 
  (c) the amount, if any, by which 
  (i) the maximum amount that would be determined under paragraph 1401(1)(c.1) of the Income Tax Regulations in respect of the insurer for the year in respect of the policy if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement  exceeds 
  (ii) the maximum amount that would be determined under paragraph 1401(1)(c.1) of the Income Tax Regulations in respect of the insurer for its last 1989 taxation year in respect of the policy if subsection 1401(1) of those Regulations applied to all life insurance policies and if that amount were determined without reference to any policy loan or reinsurance arrangement; and  is the total of all amounts each of which is 100% of the amount required to be included in computing the income of a policyholder under section 12.2 or paragraph 56(1)(j) for which the insurer is required by regulation to prepare an information return in respect of the calendar year ending in the taxation year, in respect of a taxable life insurance policy of the insurer, except that the reference in this description to 100% shall be read as a reference to, 
  (a) where paragraph (a) of the description of B in the definition 
  *net interest rate* in subsection 211(1) applies for any taxation year in respect of a guaranteed benefit under the policy,  
  0% for calendar years before 1991, 
  5% for 1991, 
  10% for 1992, 
  15% for 1993, 
  20% for 1994, 
  25% for 1995, 
  30% for 1996, 
  35% for 1997, 
  40% for 1998, 
  45% for 1999, and 
  50% for calendar years after 1999, and 
  (b) where the policy was at any time after 1989 an existing guaranteed life insurance policy, 
  0% for the calendar year in which it became a taxable life insurance policy of the insurer, 
  0% for the first following calendar year, 
  0% for the second following calendar year, 
  5% for the third following calendar year, 
  10% for the fourth following calendar year, 
  15% for the fifth following calendar year, 
  20% for the sixth following calendar year, 
  25% for the seventh following calendar year, 
  30% for the eighth following calendar year, 
  35% for the ninth following calendar year, 
  40% for the tenth following calendar year, 
  45% for the eleventh following calendar year, and 
  50% for the twelfth following and subsequent calendar years. 
  
  ### Short taxation year
  
  (4) Where a taxation year of a life insurer is less than 51 weeks, the values of A and D in subsection 211.1(3) for the year are that proportion of those values otherwise so determined that the number of days in the year (other than February 29) is of 365. 
  
  ### Return
  
  211.2 Every life insurer shall file with the Minister, not later than the day on or before which it is required by section 150 to file its return of income for a taxation year under Part I, a return of taxable Canadian life investment income for that year in prescribed form containing an estimate of the tax payable by it under this Part for the year. 
  
  ### Instalments
  
  211.3 (1) Every life insurer shall, in respect of each of its taxation years, pay to the Receiver General on or before the last day of each month in the year, an amount equal to 1/12 of the lesser of 
  (a) the amount estimated by the insurer to be the annualized tax payable under this Part by it for the year, and 
  (b) the annualized tax payable under this Part by the insurer for the immediately preceding taxation year. 
  
  ### Annualized tax payable
  
  (2) For the purposes of subsections 211.3(1) and 211.5(2), the annualized tax payable under this Part by a life insurer for a taxation year is the amount determined by the formula is 
  (a) if the year is less than 357 days, the number of days in the year (other than February 29), and 
  (b) otherwise, 365; and is the tax payable under this Part by the insurer for the year. 
  
  ### Payment of remainder of tax
  
  211.4 Every life insurer shall pay, on or before its balance-due day for a taxation year, the remainder, if any, of the tax payable under this Part by the insurer for the year. 
  
  ### Provisions applicable to Part
  
  211.5 (1) Section 152, subsection 157(2.1), sections 158 and 159, subsections 161(1), 161(2), 161(2.1), 161(2.2) and 161(11), sections 162 to 167 and Division J of Part I apply to this Part, with such modifications as the circumstances require. 
  
  ### Interest on instalments
  
  (2) For the purposes of subsection 161(2) and section 163.1 as they apply to this Part, a life insurer is, in respect of a taxation year, deemed to have been liable to pay, on or before the last day of each month in the year, an instalment equal to 1/12 of the lesser of 
  (a) the annualized tax payable under this Part by the insurer for the year, and 
  (b) the annualized tax payable under this Part by the insurer for the immediately preceding taxation year. 
  
  # PART XII.4 
  
  ## Tax on Qualifying Environmental Trusts 
  
  ### Definitions
  
  211.6 (1) The definitions in this section apply for the purposes of this Part.  
  *excluded trust*, at any time, means a trust that  
  (a) relates at that time to the reclamation of a well; 
  (b) is not maintained at that time to secure the reclamation obligations of one or more persons or partnerships that are beneficiaries under the trust; 
  (c) borrows money at that time; 
  (d) if the trust is not a trust to which paragraph (e) applies, acquires at that time any property that is not described by any of paragraphs (a), (b) and (f) of the definition 
  *qualified investment* in section 204;  
  (e) if the trust is created after 2011 (or if the trust was created before 2012, it elects in writing filed with the Minister on or before its filing-due date for a particular taxation year to have subparagraphs (i) and (ii) apply to it for the particular taxation year and all subsequent taxation years, and that election is made jointly with Her Majesty in right of Canada or a particular province, depending upon the qualifying law or qualifying contract in respect of the trust), 
  (i) acquires at that time any property that is not described by any of paragraphs (a), (b), (c), (c.1), (d) and (f) of the definition 
  *qualified investment* in section 204, or  
  (ii) holds at that time a prohibited investment; 
  (f) elected in writing filed with the Minister, before 1998 or before April of the year following the year in which the first contribution to the trust was made, never to have been a qualifying environmental trust; or 
  (g) was at any previous time during its existence not a qualifying environmental trust (as determined under the definition 
  *qualifying environmental trust* in subsection 248(1) as it applied at that previous time). (fiducie exclue)   
  *prohibited investment*, of a trust at any time, means a property that  
  (a) at the time it was acquired by the trust, was described by any of paragraphs (c), (c.1) or (d) of the definition 
  *qualified investment* in section 204; and  
  (b) was issued by 
  (i) a person or partnership that has contributed property to, or that is a beneficiary under, the trust, 
  (ii) a person that is related to, or a partnership that is affiliated with, a person or partnership that has contributed property to, or that is a beneficiary under, the trust, or 
  (iii) a particular person or partnership if 
  (A) another person or partnership holds a significant interest (within the meaning assigned by subsection 207.01(4) with any modifications that the circumstances require) in the particular person or partnership, and 
  (B) the holder of that significant interest has contributed property to, or is a beneficiary under, the trust. ( placement interdit)   
  *QET income tax rate*, for a trust’s taxation year, means the amount, expressed as a decimal fraction, by which  
  (a) the percentage rate of tax provided under paragraph 123(1)(a) for the taxation year exceeds 
  (b) the total of 
  (i) the percentage that would, if the trust were a corporation, be its general rate reduction percentage, within the meaning assigned by subsection 123.4(1), for the taxation year, and 
  (ii) the percentage deduction from tax provided under subsection 124(1) for the taxation year. ( taux d’impôt sur le revenu des FEA)   
  *qualifying contract*, in respect of a trust, means a contract entered into with Her Majesty in right of Canada or a province on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created. (contrat admissible)   
  *qualifying environmental trust* means a trust  
  (a) each trustee of which is 
  (i) Her Majesty in right of Canada or a province, or 
  (ii) a corporation resident in Canada that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee; 
  (b) that is maintained for the sole purpose of funding the reclamation of a qualifying site; 
  (c) that is, or may become, required to be maintained under 
  (i) the terms of a qualifying contract, or 
  (ii) a qualifying law; and 
  (d) that is not an excluded trust. ( fiducie pour l’environnement admissible)   
  *qualifying law*, in respect of a trust, means  
  (a) a law of Canada or a province that was enacted on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created; and 
  (b) if the trust was created after 2011, an order made 
  (i) by a tribunal constituted under a law described by paragraph (a), and 
  (ii) on or before the day that is one year after the day on which the trust was created. ( loi admissible)   
  *qualifying site*, in respect of a trust, means a site in Canada that is or has been used primarily for, or for any combination of,  
  (a) the operation of a mine, 
  (b) the extraction of clay, peat, sand, shale or aggregates (including dimension stone and gravel), 
  (c) the deposit of waste, or 
  (d) if the trust was created after 2011, the operation of a pipeline. ( site admissible)  
  
  ### Charging provision
  
  (2) Every trust that is a qualifying environmental trust at the end of a taxation year (other than a trust that is at that time described by paragraph 149(1)(z.1) or (z.2)) shall pay a tax under this Part for the year equal to the amount determined by the formula is the trust’s income (computed as if this Act were read without reference to subsections 104(4) to (31) and sections 105 to 107) under Part I for the year; and is the QET income tax rate for the year. 
  
  ### Return
  
  (3) Every trust that is a qualifying environmental trust at the end of a taxation year shall file with the Minister on or before its filing-due date for the year a return for the year under this Part in prescribed form containing an estimate of the amount of its tax payable under this Part for the year. 
  
  ### Payment of tax
  
  (4) Every trust shall pay to the Receiver General its tax payable under this Part for each taxation year on or before its balance-due day for the year. 
  
  ### Provisions applicable to Part
  
  (5) Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I apply to this Part, with such modifications as the circumstances require. 
  
  # PART XII.5 
  
  ## Recovery of Labour-sponsored Funds Tax Credit 
  
  ### Definitions
  
  211.7 (1) The definitions in this section apply for the purposes of this Part.  
  *approved share* has the meaning assigned by subsection 127.4(1). (action approuvée)   
  *labour-sponsored funds tax credit* in respect of a share is  
  (a) where the original acquisition of the share occurred before 1996, 20% of the net cost of the share on that acquisition; 
  (b) in any other case, the amount that would be determined under subsection 127.4(6) in respect of the share if this Act were read without reference to its paragraphs (b) and (d). ( crédit d’impôt relatif à un fonds de travailleurs)  
  (c)  [Repealed, 2016, c. 7, s. 44]   
  *net cost* has the meaning assigned by subsection 127.4(1). (coût net)   
  *original acquisition* has the meaning assigned by subsection 127.4(1). (acquisition initiale)   
  *qualifying exchange* means an exchange by a taxpayer of an approved share, that is part of a series of Class A shares of the capital stock of a corporation, for another approved share, that is part of another series of Class A shares of the capital stock of the corporation, if  
  (a) the only consideration received by the taxpayer on the exchange is the other share; and 
  (b) the rights in respect of the series are identical except for the portion of the reserve (within the meaning assigned by subsection 204.8(1)) of the corporation that is attributable to each series. ( échange admissible)   
  *qualifying trust* has the meaning assigned by subsection 127.4(1). (fiducie admissible)   
  *revoked corporation* means a corporation the registration of which has been revoked under subsection 204.81(6). (société radiée)  
  
  ### Amalgamations and mergers
  
  (2) For the purposes of this Part, where two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) amalgamate or merge to form a corporate entity deemed by paragraph 204.85(3)(d) to have been registered under Part X.3, the shares of each predecessor corporation are deemed not to be redeemed, acquired or cancelled by the predecessor corporation on the amalgamation or merger. 
  
  ### Exchangeable shares
  
  (3) For the purposes of this Part and Part X.3, if an approved share of the capital stock of a corporation (referred to in this subsection as the “new share”) has been issued in exchange for another approved share (referred to in this subsection as the “original share”) in a qualifying exchange, the new share is deemed not to have been issued on the exchange and is deemed to have been issued at the time the corporation issued the original share. 
  
  ### Disposition of approved share
  
  211.8 (1) If an approved share of the capital stock of a registered labour-sponsored venture capital corporation or a revoked corporation is, before the first discontinuation of its venture capital business, redeemed, acquired or cancelled by the corporation less than eight years after the day on which the share was issued (other than in circumstances described in subclause 204.81(1)(c)(v)(A)(I) or (III) or clause 204.81(1)(c)(v)(B) or (D) or other than if the share is a Class A share of the capital stock of the corporation that is exchanged for another Class A share of the capital stock of the corporation as part of a qualifying exchange) or any other share that was issued by any other labour-sponsored venture capital corporation is disposed of, the person who was the shareholder immediately before the redemption, acquisition, cancellation or disposition shall pay a tax under this Part equal to the lesser of 
  (a) the amount determined by the formula is 
  (i) where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, the labour-sponsored funds tax credit in respect of the share, and 
  (ii) where the share was issued by any other labour-sponsored venture capital corporation and was at any time an approved share, the amount, if any, required to be remitted to the government of a province as a consequence of the redemption, acquisition, cancellation or disposition (otherwise than as a consequence of an increase in the corporation’s liability for a penalty under a law of the province), and is 
  (i) nil, where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, the original acquisition of the share was before March 6, 1996 and the redemption, acquisition, cancellation or disposition is 
  (A) more than 2 years after the day on which it was issued, where the redemption, acquisition, cancellation or disposition is permitted under the articles of the corporation because an individual attains 65 years of age, retires from the workforce or ceases to be resident in Canada, 
  (B) more than five years after its issuance, or 
  (C) if the day that is five years after its issuance is in February or March of a calendar year, in February or on March 1st of that calendar year but not more than 31 days before that day, 
  (i.1) nil, where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, the original acquisition of the share was after March 5, 1996 and the redemption, acquisition or cancellation is in February or on March 1st of a calendar year but is not more than 31 days before the day that is eight years after the day on which the share was issued, 
  (ii) one, in any other case where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, and 
  (iii) in any other case, the quotient obtained when the labour-sponsored fund tax credit in respect of the share is divided by the tax credit provided under a law of a province in respect of any previous acquisition of the share, and 
  (b) the amount that would, but for subsection 211.8(2), be payable to the shareholder because of the redemption, acquisition, cancellation or disposition (determined after taking into account the amount determined under subparagraph (ii) of the description of A in paragraph 211.8(1)(a)). 
  
  ### Rules of application
  
  (1.1) Subsections 204.8(2) and (3) and 204.85(3) apply for the purpose of subsection (1). 
  
  ### Withholding and remittance of tax
  
  (2) Where a person or partnership (in this section referred to as the “transferee”) redeems, acquires or cancels a share and, as a consequence, tax is payable under this Part by the person who was the shareholder immediately before the redemption, acquisition or cancellation, the transferee shall 
  (a) withhold from the amount otherwise payable on the redemption, acquisition or cancellation to the shareholder the amount of the tax; 
  (b) within 30 days after the redemption, acquisition or cancellation, remit the amount of the tax to the Receiver General on behalf of the shareholder; and 
  (c) submit with the remitted amount a statement in prescribed form. 
  
  ### Liability for tax
  
  (3) Where a transferee has failed to withhold any amount as required by subsection 211.8(2) from an amount paid or credited to a shareholder, the transferee is liable to pay as tax under this Part on behalf of the shareholder the amount the transferee failed to withhold, and is entitled to recover that amount from the shareholder. 
  
  ### Tax for failure to reacquire certain shares
  
  211.81 If a particular amount is payable under a prescribed provision of a provincial law for a taxation year of an individual as determined for the purposes of that provincial law (referred to in this section as the “relevant provincial year”), and an amount has been included in the computation of the labour-sponsored funds tax credit of the individual under subsection 127.4(6) in respect of an approved share that has been disposed of by a qualifying trust in respect of the individual, the individual shall pay a tax for the taxation year in which the relevant provincial year ends equal to the amount deducted by the individual under subsection 127.4(2) in respect of the share. 
  
  ### Return
  
  211.82 (1) Every person that is liable to pay tax under this Part for a taxation year shall, not later than the day on or before which the person is required by section 150 to file a return of income for the year under Part I, file with the Minister a return for the year under this Part in prescribed form containing an estimate of the tax payable by the person for the year. 
  
  ### Provisions applicable to this Part
  
  (2) Subsections 150(2) and (3), sections 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require. 
  211.9  [Repealed, 2013, c. 34, s. 346]  
  
  # PART XII.6 
  
  ## Tax on Flow-through Shares 
  
  ### Tax imposed
  
  211.91 (1) Every corporation shall pay a tax under this Part in respect of each month (other than January) in a calendar year equal to the amount determined by the formula is the total of all amounts each of which is an amount that the corporation purported to renounce in the year under subsection 66(12.6) or 66(12.601) because of the application of subsection 66(12.66) (other than an amount purported to be renounced in respect of expenses incurred or to be incurred in connection with production or potential production in a province where a tax, similar to the tax provided under this Part, is payable by the corporation under the laws of the province as a consequence of the failure to incur the expenses that were purported to be renounced); is the total of all amounts each of which is an amount that the corporation purported to renounce in the year under subsection 66(12.6) or 66(12.601) because of the application of subsection 66(12.66) and that is not included in the value of A; is the total of all expenses described in paragraph 66(12.66)(b) that are 
  (a) made or incurred by the end of the month by the corporation, and 
  (b) in respect of the purported renunciations in respect of which an amount is included in the value of A; is the total of all expenses described in paragraph 66(12.66)(b) that are 
  (a) made or incurred by the end of the month by the corporation, and 
  (b) in respect of the purported renunciations in respect of which an amount is included in the value of B; is the rate of interest prescribed for the purpose of subsection 164(3) for the month; and is 
  (a) one, where the month is December, and 
  (b) nil, in any other case. 
  
  ### Return and payment of tax
  
  (2) A corporation liable to tax under this Part in respect of one or more months in a calendar year shall, before March of the following calendar year, 
  (a) file with the Minister a return for the year under this Part in prescribed form containing an estimate of the tax payable under this Part by it in respect of each month in the year; and 
  (b) pay to the Receiver General the amount of tax payable under this Part by it in respect of each month in the year. 
  
  ### COVID-19 – expenses deemed incurred earlier
  
  (2.1) If an agreement referred to in subsection 66(12.66) was made in 2019 or 2020, 
  (a) the reference in subsection (2) to “the following calendar year” is to be read as a reference to “the second following calendar year”; and 
  (b) for the purposes of this section and, where subparagraph (iii) applies, paragraph 66(12.66)(a), Canadian exploration expenses incurred by a corporation in respect of the agreement in a particular month in a calendar year are deemed to have been incurred 
  (i) in January 2020, if the expenses were incurred in 2020 and the agreement was entered into in 2019, 
  (ii) in January 2021, if the expenses were incurred in 2021 and the agreement was entered into in 2020, and 
  (iii) 12 months earlier, in any other case. 
  
  ### Provisions applicable to Part
  
  (3) Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require. 
  
  # PART XIII 
  
  ## Tax on Income from Canada of Non-resident Persons 
  
  ### Tax
  
  212 (1) Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part I to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, 
  
  ### Management fee
  
  (a) a management or administration fee or charge; 
  
  ### Interest
  
  (b) interest that 
  (i) is not fully exempt interest and is paid or payable 
  (A) to a person with whom the payer is not dealing at arm’s length, or 
  (B) in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length, or 
  (ii) is participating debt interest; 
  
  ### Estate or trust income
  
  (c) income of or from an estate or a trust to the extent that the amount 
  (i) is included in computing the income of the non-resident person under subsection 104(13), except to the extent that the amount is deemed by subsection 104(21) to be a taxable capital gain of the non-resident person, or 
  (ii) can reasonably be considered (having regard to all the circumstances including the terms and conditions of the estate or trust arrangement) to be a distribution of, or derived from, an amount received by the estate or trust as, on account of, in lieu of payment of or in satisfaction of, a dividend on a share of the capital stock of a corporation resident in Canada, other than a taxable dividend; 
  
  ### Rents, royalties, etc.
  
  (d) rent, royalty or similar payment, including, but not so as to restrict the generality of the foregoing, any payment 
  (i) for the use of or for the right to use in Canada any property, invention, trade-name, patent, trademark, design or model, plan, secret formula, process or other thing whatever, 
  (ii) for information concerning industrial, commercial or scientific experience where the total amount payable as consideration for that information is dependent in whole or in part on 
  (A) the use to be made of, or the benefit to be derived from, that information, 
  (B) production or sales of goods or services, or 
  (C) profits, 
  (iii) for services of an industrial, commercial or scientific character performed by a non-resident person where the total amount payable as consideration for those services is dependent in whole or in part on 
  (A) the use to be made of, or the benefit to be derived from, those services, 
  (B) production or sales of goods or services, or 
  (C) profits, but not including a payment made for services performed in connection with the sale of property or the negotiation of a contract, 
  (iv) unless paragraph (i) applies to the amount, made pursuant to an agreement between a person resident in Canada and a non-resident person under which the non-resident person agrees not to use or not to permit any other person to use any thing referred to in subparagraph (i) or any information referred to in subparagraph (ii), or 
  (v) that was dependent on the use of or production from property in Canada whether or not it was an instalment on the sale price of the property, but not including an instalment on the sale price of agricultural land, but not including 
  (vi) a royalty or similar payment on or in respect of a copyright in respect of the production or reproduction of any literary, dramatic, musical or artistic work, 
  (vii) a payment in respect of the use by a railway company or by a person whose principal business is that of a common carrier of property that is railway rolling stock as defined in the definition 
  *rolling stock* in section 2 of the Railway Act  
  (A) if the payment is made for the use of that property for a period or periods not expected to exceed in the aggregate 90 days in any 12 month period, or 
  (B) in any other case, if the payment is made pursuant to an agreement in writing entered into before November 19, 1974; 
  (viii) a payment made under a bona fide cost-sharing arrangement under which the person making the payment shares on a reasonable basis with one or more non-resident persons research and development expenses in exchange for an interest, or for civil law a right, in any or all property or other things of value that may result therefrom,  
  (ix) a rental payment for the use of or the right to use outside Canada any tangible, or for civil law corporeal, property, 
  (x) any payment made to a person with whom the payer is dealing at arm’s length, to the extent that the amount thereof is deductible in computing the income of the payer under Part I from a business carried on by the payer in a country other than Canada, 
  (xi) a payment made to a person with whom the payer is dealing at arm’s length for the use of or the right to use property that is 
  (A) an aircraft, 
  (B) furniture, fittings or equipment attached to an aircraft, 
  (C) a spare part for property described in clause 212(1)(d)(xi)(A) or 212(1)(d)(xi)(B), 
  (D) air navigation equipment utilized in the provision of services under the Civil Air Navigation Services Commercialization Act or computer software the use of which is necessary for the operation of that equipment that is used by the payer for no other purpose; or  
  (xii) an amount to which subsection (5) would apply if that subsection were read without reference to “to the extent that the amount relates to that use or reproduction”; 
  
  ### Timber royalties
  
  (e) a timber royalty in respect of a timber resource property or a timber limit in Canada (which, for the purposes of this Part, includes any consideration for a right under or pursuant to which a right to cut or take timber from a timber resource property or a timber limit in Canada is obtained or derived, to the extent that the consideration is dependent on, or computed by reference to, the amount of timber cut or taken); 
  (f)  [Repealed, 1997, c. 25, s. 63]  
  
  ### Patronage dividend
  
  (g) a patronage dividend, that is, a payment made pursuant to an allocation in proportion to patronage as defined by section 135 or an amount that would, under subsection 135(7), be included in computing the non-resident person’s income if that person were resident in Canada; 
  
  ### Pension benefits
  
  (h) a payment of a superannuation or pension benefit, other than 
  (i)  [Repealed, 1996, c. 21, s. 55]  
  (ii) an amount distributed from a pooled registered pension plan that has been designated by the administrator of the plan in accordance with subsection 147.5(18), 
  (iii) an amount or payment referred to in subsection 81(1) to the extent that that amount or payment would not, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be included in computing that person’s income, 
  (iii.1) the portion of the payment that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to a pooled registered pension plan, registered pension plan, registered retirement savings plan, registered retirement income fund or specified pension plan and that 
  (A) because of any of subsections 146(21), 147.3(9) and 147.5(22) would not, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be included in computing the non-resident person’s income, or 
  (B) by reason of paragraph 60(j) or 60(j.2) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year, 
  (iii.2) an amount referred to in paragraph 110(1)(f) to the extent that the amount would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was paid, be deductible in computing that person’s taxable income or that of the spouse or common-law partner of that person, 
  (iv) in the case of a payment described in section 57, that portion of the payment that would, by virtue of that section, not be included in the recipient’s income for the taxation year in which it was received, if the recipient were resident in Canada throughout that year, or 
  (iv.1) the portion of the payment that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to acquire an annuity contract in circumstances to which subsection 146(21) applies, except such portion, if any, of the payment as may reasonably be regarded as attributable to services rendered by the person, to or in respect of whom the payment is made, in taxation years 
  (v) during which the person at no time was resident in Canada, and 
  (vi) throughout which the person was not employed, or was only occasionally employed, in Canada; 
  
  ### Restrictive covenant amount
  
  (i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year; 
  
  ### Benefits
  
  (j) any benefit described in any of subparagraphs 56(1)(a)(iii) to 56(1)(a)(vi), any amount described in paragraph 56(1)(x) or 56(1)(z) (other than an amount transferred under circumstances in which subsection 207.6(7) applies) or the purchase price of an interest in a retirement compensation arrangement; 
  
  ### Retiring allowances
  
  (j.1) a payment of any allowance described in subparagraph 56(1)(a)(ii), except 
  (i) such portion, if any, of the payment as may reasonably be regarded as attributable to services rendered by the person, to or in respect of whom the payment is made, in taxation years 
  (A) during which the person at no time was resident in Canada, and 
  (B) throughout which the person was not employed, or was only occasionally employed, in Canada, and 
  (ii) the portion of the payment transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form to a registered pension plan or to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)) that would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the income of the non-resident person by virtue of paragraph 60(j.1); 
  
  ### Supplementary unemployment benefit plan payments
  
  (k) a payment by a trustee under a registered supplementary unemployment benefit plan; 
  
  ### Registered retirement savings plan payments
  
  (l) a payment out of or under a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan” that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 146 to be included in computing the income of the non-resident person for the year, other than the portion thereof that 
  (i) has been transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form 
  (A) to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)), 
  (B) to acquire an annuity described in subparagraph 60(l)(ii) under which the non-resident person is the annuitant, or 
  (C) to a carrier (within the meaning assigned by subsection 146.3(1)) as consideration for a registered retirement income fund under which the non-resident person is the annuitant (within the meaning assigned by subsection 146.3(1)), and 
  (ii) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the income of the non-resident person for the year by virtue of paragraph 60(l); 
  
  ### Advanced life deferred annuity payment
  
  (l.1) a payment of an amount described in paragraph 56(1)(z.5); 
  
  ### Deferred profit sharing plan payments
  
  (m) a payment under a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan” that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 147, if it were read without reference to subsections 147(10.1) and 147(20), to be included in computing the non-resident person’s income for the year, other than the portion thereof that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to a registered pension plan or registered retirement savings plan and that 
  (i) by reason of subsection 147(20) would not, if the non-resident person had been resident in Canada throughout the year, be included in computing the non-resident person’s income, or 
  (ii) by reason of paragraph 60(j.2) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year; 
  
  ### Income-averaging annuity contract payments
  
  (n) a payment under an income-averaging annuity contract, any proceeds of the surrender, cancellation, redemption, sale or other disposition of an income-averaging annuity contract, or any amount deemed by subsection 61.1(1) to have been received by the non-resident person as proceeds of the disposition of an income-averaging annuity contract; 
  
  ### Other annuity payments
  
  (o) a payment under an annuity contract (other than a payment in respect of an annuity issued in the course of carrying on a life insurance business in a country other than Canada) to the extent of the amount in respect of the interest of the non-resident person in the contract that, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, 
  (i) would be required to be included in computing the income of the non-resident person for the year, and 
  (ii) would not be deductible in computing that income; 
  
  ### Former TFSA
  
  (p) an amount that would, if the non-resident person had been resident in Canada at the time at which the amount was paid, be required by paragraph 12(1)(z.5) to be included in computing the non-resident person’s income for the taxation year that includes that time; 
  
  ### Registered retirement income fund payments
  
  (q) a payment out of or under a registered retirement income fund that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 146.3 to be included in computing the non-resident person’s income for the year, other than the portion thereof that 
  (i) has been transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form 
  (A) to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)), 
  (B) to acquire an annuity described in subparagraph 60(l)(ii) under which the non-resident person is the annuitant, or 
  (C) to a carrier (within the meaning assigned by subsection 146.3(1)) as consideration for a registered retirement income fund under which the non-resident person is the annuitant (within the meaning assigned by subsection 146.3(1)), and 
  (ii) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year by reason of paragraph 60(l); 
  
  ### Registered education savings plan
  
  (r) a payment that is 
  (i) required by paragraph 56(1)(q) to be included in computing the non-resident person’s income under Part I for a taxation year, and 
  (ii) not required to be included in computing the non-resident person’s taxable income or taxable income earned in Canada for the year; 
  
  ### Registered disability savings plan
  
  (r.1) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was paid, be required by paragraph 56(1)(q.1) to be included in computing the non-resident person’s income for the taxation year; 
  
  ### Home insulation or energy conversion grants
  
  (s) a grant under a prescribed program of the Government of Canada relating to home insulation or energy conversion; 
  
  ### NISA Fund No. 2 payments
  
  (t) a payment out of a NISA Fund No. 2 to the extent that that amount would, if Part I applied, be required by subsection 12(10.2) to be included in computing the person’s income for a taxation year; 
  
  ### Amateur athlete trust payments
  
  (u) a payment in respect of an amateur athlete trust that would, if Part I applied, be required by section 143.1 to be included in computing the person’s income for a taxation year; 
  
  ### Payments under an eligible funeral arrangement
  
  (v) a payment made by a custodian (within the meaning assigned by subsection 148.1(1)) of an arrangement that was, at the time it was established, an eligible funeral arrangement, to the extent that such amount would, if the non-resident person were resident in Canada, be included because of subsection 148.1(3) in computing the person’s income; 
  (w) a payment out of a trust that is, or was, at any time, an employee life and health trust, except to the extent that it is a payment of a designated employee benefit (as defined by subsection 144.1(1)); 
  
  ### Tax informant program
  
  (x) a payment of an amount described in paragraph 56(1)(z.4); or 
  
  ### First home savings account
  
  (y) a payment out of a FHSA, other than any portion of the payment that is transferred in accordance with subsection 146.6(7). 
  
  ### Tax on dividends
  
  (2) Every non-resident person shall pay an income tax of 25% on every amount that a corporation resident in Canada pays or credits, or is deemed by Part I or Part XIV to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, 
  (a) a taxable dividend (other than a capital gains dividend within the meaning assigned by subsection 130.1(4), 131(1) or 133(7.1)); or 
  (b) a capital dividend. 
  
  ### Exempt dividends
  
  (2.1) Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement or a specified securities lending arrangement if 
  (a) the amount is deemed by subparagraph 260(8)(a)(ii) to be a dividend; 
  (b) either 
  (i) the arrangement is a fully collateralized arrangement, or 
  (ii) the borrower and the lender are dealing at arm’s length; and 
  (c) the security that is transferred or lent to the borrower under the securities lending arrangement is a share of a class of the capital stock of a non-resident corporation. 
  
  ### Interest — definitions
  
  (3) The following definitions apply for the purpose of paragraph (1)(b).  
  *fully exempt interest* means  
  (a) interest that is paid or payable on a bond, debenture, note, mortgage, hypothecary claim or similar debt obligation 
  (i) of, or guaranteed (otherwise than by being insured by the Canada Deposit Insurance Corporation) by, the Government of Canada, 
  (ii) of the government of a province, 
  (iii) of an agent of a province, 
  (iv) of a municipality in Canada or a municipal or public body performing a function of government in Canada, 
  (v) of a corporation, commission or association to which any of paragraphs 149(1)(d) to (d.6) applies, or 
  (vi) of an educational institution or a hospital if repayment of the principal amount of the obligation and payment of the interest is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province; 
  (b) interest that is paid or payable on a mortgage, hypothecary claim or similar debt obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property, or to immovables situated outside Canada or a real right in any such immovable, except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real or immovable property situated outside Canada; 
  (c) interest that is paid or payable to a prescribed international organization or agency; or 
  (d) an amount paid or payable or credited under a securities lending arrangement, or a specified securities lending arrangement, that is deemed by subparagraph 260(8)(a)(i) to be a payment made by a borrower to a lender of interest, if the arrangement is a fully collateralized arrangement, and 
  (i) the following conditions are met: 
  (A) the arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and 
  (B) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (b) of the definition qualified security in subsection 260(1) and issued by a non-resident issuer,  
  (ii) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (c) of the definition qualified security in subsection 260(1), or  
  (iii) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (a) or (b). ( intérêts entièrement exonérés)   
  *participating debt interest* means interest (other than interest described in any of paragraphs (b) to (d) of the definition 
  *fully exempt interest*) that is paid or payable on an obligation, other than a prescribed obligation, all or any portion of which interest is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation. (intérêts sur des créances participatives)  
  
  ### Back-to-back loan arrangement
  
  (3.1) Subsection (3.2) applies at any time in respect of a taxpayer if 
  (a) the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, interest (determined without reference to paragraph 18(6.1)(b) and subsection 214(16)) in respect of a particular debt or other obligation to pay an amount to a person or partnership (in this subsection and subsection (3.2) referred to as the 
  *immediate funder*);  
  (b) the immediate funder is not 
  (i) a person resident in Canada that does not deal at arm’s length with the taxpayer, or 
  (ii) a partnership each member of which is a person described in subparagraph (i); 
  (c) at any time in the period during which the interest accrued (in this subsection and subsections (3.2) and (3.3) referred to as the 
  *relevant period*), a relevant funder, in respect of a particular relevant funding arrangement,  
  (i) has an amount outstanding as or on account of a debt or other obligation to pay an amount to a person or partnership that meets any of the following conditions: 
  (A) recourse in respect of the debt or other obligation is limited in whole or in part, either immediately or in the future and either absolutely or contingently, to a relevant funding arrangement, or 
  (B) it can reasonably be concluded that all or a portion of the particular relevant funding arrangement was entered into, or was permitted to remain in effect, because 
  (I) all or a portion of the debt or other obligation was entered into or was permitted to remain outstanding, or 
  (II) the relevant funder anticipated that all or a portion of the debt or other obligation would become owing or remain outstanding, or 
  (ii) has a specified right in respect of a particular property that was granted directly or indirectly by a person or partnership and 
  (A) the existence of the specified right is required under the terms and conditions of the particular relevant funding arrangement, or 
  (B) it can reasonably be concluded that all or a portion of the particular relevant funding arrangement was entered into, or was permitted to remain in effect, because 
  (I) the specified right was granted, or 
  (II) the relevant funder anticipated that the specified right would be granted; 
  (d) the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to any ultimate funder rather than the immediate funder, is greater than the tax payable under this Part (determined without reference to this subsection and subsection (3.2)) in respect of the particular amount; and 
  (e) at any time during the relevant period, the total of all amounts — each of which is an amount outstanding as or on account of a debt or other obligation owed by the immediate funder that is a relevant funding arrangement or the fair market value of a particular property in respect of which the immediate funder is granted a specified right that is a relevant funding arrangement — is equal to at least 25% of the total of 
  (i) the amount outstanding as or on account of the particular debt or other obligation, and 
  (ii) the total of all amounts each of which is an amount (other than the amount described in subparagraph (i)) that the taxpayer, or a person or partnership that does not deal at arm’s length with the taxpayer, has outstanding as or on account of a debt or other obligation to pay an amount to the immediate funder under the agreement, or an agreement that is connected to the agreement, under which the particular debt or other obligation was entered into where 
  (A) the immediate funder is granted a 
  *security interest* (as defined in subsection 18(5)) in respect of a property that is the debt or other obligation owed by the immediate funder or the particular property, as the case may be, and the security interest secures the payment of two or more debts or other obligations that include the debt or other obligation and the particular debt or other obligation, and  
  (B) each security interest that secures the payment of a debt or other obligation referred to in clause (A) secures the payment of every debt or other obligation referred to in that clause. 
  
  ### Back-to-back loan arrangement
  
  (3.2) If this subsection applies at any time in respect of a taxpayer, then for the purposes of paragraph (1)(b), the taxpayer is deemed, at that time, to pay interest to each ultimate funder, the amount of which is determined for each particular ultimate funder by the formula is the particular amount referred to in paragraph (3.1)(a); is the portion, if any, of the particular amount deemed by subsection 214(16) to have been paid by the taxpayer as a dividend; is the average of all amounts each of which is, at a particular time in the relevant period, the amount determined by the formula is the lesser of the following amounts: 
  (a) the amount of the particular debt or other obligation referred to in paragraph (3.1)(a) outstanding at the particular time, and 
  (b) the total of all amounts each of which is at that particular time 
  (i) an amount outstanding as or on account of a debt or other obligation that is owed to the particular ultimate funder under a relevant funding arrangement, 
  (ii) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has granted a specified right under a relevant funding arrangement, or 
  (iii) if neither subparagraph (i) nor (ii) applies at that particular time, nil, and is the total of all amounts each of which is, at the particular time, the amount that is 
  (a) an amount outstanding as or on account of a debt or other obligation that is owed by the particular ultimate funder under a relevant funding arrangement, 
  (b) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has a specified right under a relevant funding arrangement, or 
  (c) if neither paragraph (a) nor (b) applies at that particular time, nil; is the average of all amounts each of which is the amount of the particular debt or other obligation outstanding at a time in the relevant period; is the rate of tax (determined without reference to subsection 214(16)) that would be imposed under this Part on the particular amount if the particular amount were paid by the taxpayer to the particular ultimate funder at that time; and is the rate of tax (determined without reference to subsection 214(16)) imposed under this Part on the immediate funder in respect of all or the portion of the particular amount paid or credited to the immediate funder. 
  
  ### Back-to-back arrangement — election
  
  (3.21) Subsection (3.22) applies in respect of a taxpayer and two or more ultimate funders (referred to in this subsection and subsection (3.22) as the 
  *electing ultimate funders*) at any time if  
  (a) at that time, subsection (3.2) applies in respect of the taxpayer; 
  (b) prior to that time, the taxpayer and the electing ultimate funders have jointly filed an election under this subsection; 
  (c) the election designates one of the electing ultimate funders to be the recipient of interest payments that are deemed to be made by the taxpayer under subsection (3.22); 
  (d) at that time, the tax that would be payable under this Part in respect of an interest payment by the taxpayer to the designated ultimate funder is not less than the tax that would be payable under this Part if the interest payment were made by the taxpayer to any of the other electing ultimate funders; and 
  (e) the election has not been revoked prior to that time. 
  
  ### Back-to-back arrangement — election
  
  (3.22) If this subsection applies at any time in respect of a taxpayer and two or more electing ultimate funders, then each interest payment that would, in the absence of this subsection, have been deemed under subsection (3.2) to have been made at that time by the taxpayer to an electing ultimate funder, and received by the electing ultimate funder from the taxpayer, is deemed to have instead been 
  (a) made by the taxpayer to the designated ultimate funder; and 
  (b) received by the designated ultimate funder from the taxpayer. 
  
  ### Excess funding
  
  (3.3) Subsection (3.4) applies in respect of a particular relevant funder if the amount determined by the following formula is greater than nil: is the total of all amounts each of which is the amount owing by the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has a specified right, under a relevant funding arrangement; and is the total of all amounts each of which is the amount owed to the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has granted a specified right, under a relevant funding arrangement. 
  
  ### Excess funding — deemed funding allocation
  
  (3.4) If this subsection applies in respect of a particular relevant funder, for the purposes of subsections (3.2) to (3.4) (other than for the purpose of applying subsections (3.3) and (3.4) in respect of the particular relevant funder), each amount that is owed by the particular relevant funder, or that is the fair market value of a property in respect of which the particular relevant funder has been granted a specified right, under a relevant funding arrangement, is deemed to be the amount determined by the formula is the amount owing or the fair market value of the property, as the case may be; is the amount determined for A in subsection (3.3); and is the amount determined for B in subsection (3.3). 
  
  ### Multiple funding arrangements
  
  (3.5) If an amount owing by a relevant funder or a specified right held by the relevant funder is a relevant funding arrangement in respect of more than one particular debt or other obligation referred to in paragraph (3.1)(a), for the purposes of applying subsections (3.2) to (3.4) in respect of each of the particular debts or other obligations, the amount owing, or the fair market value of the property in respect of which the specified right was granted, as the case may be, is deemed, in respect of each particular debt or other obligation, to be the amount determined by the formula is the total of all amounts each of which is an amount owing to the relevant funder, or the fair market value of a property in respect of which the relevant funder has granted a specified right, under a relevant funding arrangement, in respect of the particular debt or other obligation; is the total of all amounts each of which is an amount owing to the relevant funder, or the fair market value of a property in respect of which the relevant funder has granted a specified right, under a relevant funding arrangement, in respect of all of the particular debts or other obligations; and is the amount owing by the relevant funder or the fair market value of the property in respect of which the relevant funder holds the specified right. 
  
  ### Back-to-back loan arrangement — character substitution
  
  (3.6) Subsection (3.7) applies in respect of 
  (a) shares (other than specified shares) of the capital stock of a particular relevant funder, in respect of a particular relevant funding arrangement, if — at any time at or after the time when the particular debt or other obligation referred to in paragraph (3.1)(a) was entered into — the particular relevant funder has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, a dividend on the shares, either immediately or in the future and either absolutely or contingently, to a person or partnership, and any of the following conditions is met: 
  (i) the amount of the dividend is determined, in whole or in part, by reference to an amount of interest paid or credited, or an obligation to pay or credit interest, under a relevant funding arrangement, or 
  (ii) it can reasonably be concluded that the particular relevant funding arrangement was entered into or was permitted to remain in effect, because 
  (A) the shares were issued or were permitted to remain issued and outstanding, or 
  (B) it was anticipated that the shares would be issued or would be permitted to remain issued and outstanding; or 
  (b) a specified royalty arrangement, if — at any time at or after the time when the particular debt or other obligation referred to in paragraph (3.1)(a) was entered into — a particular relevant funder, in respect of a particular relevant funding arrangement, is a specified licensee that has an obligation to pay or credit an amount under the specified royalty arrangement, either immediately or in the future and either absolutely or contingently, to a person or partnership, and any of the following conditions is met: 
  (i) the amount is determined, in whole or in part, by reference to an amount of interest paid or credited, or an obligation to pay or credit interest, under a relevant funding arrangement, or 
  (ii) it can reasonably be concluded that the particular relevant funding arrangement was entered into or was permitted to remain in effect, because 
  (A) the specified royalty arrangement was entered into or was permitted to remain in effect, or 
  (B) it was anticipated that the specified royalty arrangement would be entered into or remain in effect. 
  
  ### Back-to-back loan arrangement — character substitution
  
  (3.7) If this subsection applies in respect of a specified royalty arrangement (under which a particular relevant funder is a specified licensee) or shares of the capital stock of a particular relevant funder, then, for the purposes of subsections (3.1) to (3.8), 
  (a) the specified royalty arrangement or the holding of the shares, as the case may be, is deemed to be a relevant funding arrangement; 
  (b) the specified licensor or shareholder, as the case may be, in respect of the relevant funding arrangement, is deemed to be a relevant funder, in respect of the relevant funding arrangement; 
  (c) the conditions in paragraph (3.1)(c) are deemed to be met in respect of the relevant funding arrangement; and 
  (d) the relevant funder is deemed to be owed, under the relevant funding arrangement and by the particular relevant funder, an amount as or on account of a debt, the outstanding amount of which is determined by the formula is the total of all amounts each of which is at the particular time, 
  (i) an amount outstanding as or on account of a debt or other obligation that is owed to the particular relevant funder under a relevant funding arrangement, 
  (ii) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular relevant funder has granted a specified right under a relevant funding arrangement, or 
  (iii) if neither subparagraph (i) nor (ii) applies at that particular time, nil, is the total of all amounts each of which is, at the particular time, in respect of a relevant funding arrangement (other than a relevant funding arrangement deemed under paragraph (a)) and is 
  (i) an amount outstanding as or on account of a debt or other obligation that is owed by the particular relevant funder under the relevant funding arrangement, 
  (ii) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular relevant funder has been granted a specified right under a relevant funding arrangement, or 
  (iii) if neither subparagraph (i) nor (ii) applies at that particular time, nil, is the fair market value, at the particular time, of 
  (i) if the relevant funding arrangement is described in paragraph (3.6)(a), the shares, or 
  (ii) if the relevant funding arrangement is described in paragraph (3.6)(b), the specified royalty arrangement, and is the total of all amounts each of which is, in respect of a relevant funding arrangement referred to in the description of C, the amount determined for C at the particular time. 
  
  ### Back-to-back loan arrangement — definitions
  
  (3.8) The following definitions apply in this subsection and subsections (3.1) to (3.7) and (3.81).  
  *relevant funder*, in respect of a relevant funding arrangement, means  
  (a) if the relevant funding arrangement is described in paragraph (a) of the definition relevant funding arrangement, the immediate funder referred to in paragraph (3.1)(a);  
  (b) if the relevant funding arrangement is described in paragraph (b) of the definition relevant funding arrangement, the creditor in respect of the debt or other obligation or the grantor of the specified right, as the case may be; or  
  (c) a person or partnership that does not deal at arm’s length with a person or partnership that is referred to in paragraph (a) or (b) and that deals at arm’s length with the taxpayer. ( bailleur de fonds considéré)   
  *relevant funding arrangement* means  
  (a) the particular debt or other obligation referred to in paragraph (3.1)(a); and 
  (b) each debt or other obligation or specified right, owing by or granted to a relevant funder, in respect of a particular relevant funding arrangement, if the debt or other obligation or specified right meets the conditions in subparagraph (3.1)(c)(i) or (ii) in respect of a relevant funding arrangement. ( mécanisme de financement considéré)   
  *specified licensee* means  
  (a) a lessee, licensee or grantee of a right similar to a right granted under a lease or licence, under a specified royalty arrangement; 
  (b) an assignee under a specified royalty arrangement; or 
  (c) a purchaser under a specified royalty arrangement. ( porteur de licence déterminé)   
  *specified licensor* means  
  (a) a lessor, licensor or grantor of a right similar to a right granted under a lease or licence, under a specified royalty arrangement; 
  (b) an assignor under a specified royalty arrangement; or 
  (c) a seller under a specified royalty arrangement. ( cédant de licence déterminé)   
  *specified right* has the same meaning as in subsection 18(5). (droit déterminé)   
  *specified royalty arrangement* has the same meaning as in subsection (3.94). (mécanisme de redevance déterminé)   
  *specified share* means a share of the capital stock of a corporation if, under the terms or conditions of the share, or any agreement or arrangement relating to the share,  
  (a) the holder of the share may cause the share to be redeemed, acquired or cancelled; 
  (b) the issuing corporation is, or may be, required to redeem, acquire or cancel the share at a specific time; or 
  (c) the share is convertible or exchangeable into a share that meets the conditions in paragraph (a) or (b). ( action déterminée)   
  *ultimate funder* means a relevant funder, in respect of a relevant funding arrangement (other than the immediate funder) that either  
  (a) is not a debtor, or a holder of a specified right, under a relevant funding arrangement; or 
  (b) is a debtor, or a holder of a specified right, under a relevant funding arrangement, if the amount that would — if the relevant funder were an ultimate funder — be determined for C in the formula in subsection (3.2) is greater than nil. ( bailleur de fonds ultime)  
  
  ### Specified shares
  
  (3.81) For the purposes of subsections (3.1) to (3.8), 
  (a) specified shares of a relevant funder, in respect of a relevant funding arrangement, held at any time by a person or partnership are deemed to be a debt of the relevant funder owing to the person or partnership; and 
  (b) the amount outstanding at that time as or on account of the debt is deemed to be equal to the fair market value of the specified shares at that time. 
  
  ### Back-to-back arrangement — rents, royalties, similar payments
  
  (3.9) Subsection (3.91) applies at any time in respect of a taxpayer if 
  (a) the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, rent, royalty or similar payment, in respect of a particular lease, licence or similar agreement, to a non-resident person or a partnership any member of which is a non-resident person (in this subsection and subsections (3.91) to (3.94) referred to as the 
  *immediate licensor*);  
  (b) at any time at or after the time when the particular lease, licence or similar agreement was entered into, 
  (i) a relevant licensor in respect of a particular relevant royalty arrangement has an obligation to pay or credit an amount, either immediately or in the future and either absolutely or contingently, to a person or partnership, in respect of a specified royalty arrangement, and either of the following additional conditions is met: 
  (A) the amount is determined, in whole or in part, by reference to 
  (I) an amount paid or credited, or an obligation to pay or credit an amount, in respect of a relevant royalty arrangement, or 
  (II) one or more of the fair market value of, any revenue, profits, income, or cash flow from, or any other similar criteria in respect of, a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or 
  (B) it can reasonably be concluded that the particular relevant royalty arrangement was entered into, or was permitted to remain in effect, because 
  (I) the specified royalty arrangement was entered into or was permitted to remain in effect, or 
  (II) it was anticipated that the specified royalty arrangement would be entered into or remain in effect, and 
  (ii) either the person or partnership 
  (A) does not deal at arm’s length with the taxpayer, or 
  (B) deals at arm’s length with the taxpayer, if it can reasonably be concluded that one of the main purposes of the specified royalty arrangement was 
  (I) to reduce or avoid the tax payable under this Part in respect of the particular amount, or 
  (II) to avoid the application of subsection (3.91); and 
  (c) the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to an ultimate licensor rather than the immediate licensor, is greater than the tax payable under this Part (determined without reference to this subsection and subsection (3.91)) in respect of the particular amount. 
  
  ### Back-to-back arrangement — rents, royalties, similar payments
  
  (3.91) If this subsection applies at any time in respect of a taxpayer, then, for the purposes of paragraph (1)(d), the taxpayer is deemed, at that time, to pay to each ultimate licensor an amount — of the same character as the particular amount referred to in paragraph (3.9)(a) — determined for each particular ultimate licensor by the formula is the particular amount referred to in paragraph (3.9)(a); is 
  (a) the portion of the amount referred to in paragraph (3.9)(a) that is demonstrated, to the satisfaction of the Minister, to be reasonably allocable to the particular ultimate licensor, and 
  (b) if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, one; is 
  (a) the total of all amounts, each of which is the portion of the amount referred to in paragraph (3.9)(a) that is demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each ultimate licensor, and 
  (b) if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, the number of ultimate licensors; is 
  (a) if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, the highest rate of tax that would be imposed under this Part on the particular amount referred to in paragraph (3.9)(a) if the particular amount were paid by the taxpayer to any of the ultimate licensors at that time, and 
  (b) in any other case, the rate of tax that would be imposed under this Part on the particular amount referred to in paragraph (3.9)(a) if the particular amount were paid by the taxpayer to the particular ultimate licensor at that time; and is the rate of tax imposed under this Part at that time on the immediate licensor in respect of the particular amount, referred to in paragraph (3.9)(a), paid or credited to the immediate licensor. 
  
  ### Back-to-back arrangement — character substitution
  
  (3.92) Subsection (3.93) applies in respect of 
  (a) shares of the capital stock of a particular relevant licensor, in respect of a particular relevant royalty arrangement, if — at any time at or after the time when a particular lease, license or similar agreement referred to in paragraph (3.9)(a) was entered into — the particular relevant licensor has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, a dividend on the shares, either immediately or in the future and either absolutely or contingently, to a person or partnership, and 
  (i) either of the following conditions is met: 
  (A) the amount of the dividend is determined, in whole or in part, by reference to 
  (I) an amount of rent, royalty or similar payment paid or credited, or an obligation to pay or credit rent, royalty or similar payment, under a relevant royalty arrangement, or 
  (II) one or more of the fair market value of, any revenue profits, income or cash flow from, or any other similar criteria in respect of a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or 
  (B) it can reasonably be concluded that the particular relevant royalty arrangement was entered into or was permitted to remain in effect, because 
  (I) the shares were issued or were permitted to remain issued and outstanding, or 
  (II) it was anticipated that the shares would be issued or would be permitted to remain issued and outstanding, and 
  (ii) either the person or partnership 
  (A) does not deal at arm’s length with the taxpayer referred to in paragraph (3.9)(a), or 
  (B) deals at arm’s length with that taxpayer, if it can reasonably be concluded that one of the main purposes of the issuance of the shares was 
  (I) to reduce or avoid the tax payable under this Part in respect of the particular amount referred to in paragraph (3.9)(a), or 
  (II) to avoid the application of subsection (3.91); and 
  (b) an amount outstanding as or on account of a debt or other obligation to pay an amount, if — at any time at or after the time when a particular lease, license or similar agreement referred to in paragraph (3.9)(a) was entered into — a particular relevant licensor, in respect of a particular relevant royalty arrangement, has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, interest under the debt or other obligation, either immediately or in the future and either absolutely or contingently, to a person or partnership, and 
  (i) either of the following conditions is met: 
  (A) the amount of the interest is determined, in whole or in part, by reference to 
  (I) an amount of rent, royalty or similar payment paid or credited, or an obligation to pay or credit rent, royalty or similar payment, under a relevant royalty arrangement, or 
  (II) one or more of the fair market value of, any revenue profits, income or cash flow from, or any other similar criteria in respect of a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or 
  (B) it can reasonably be concluded that the particular relevant royalty arrangement was entered into or was permitted to remain in effect, because 
  (I) the debt or other obligation was entered into or was permitted to remain in effect, or 
  (II) it was anticipated that the debt or other obligation would be entered into or remain in effect, and 
  (ii) either the person or partnership 
  (A) does not deal at arm’s length with the taxpayer referred to in paragraph (3.9)(a), or 
  (B) deals at arm’s length with that taxpayer, if it can reasonably be concluded that one of the main purposes of entering into the debt or other obligation was 
  (I) to reduce or avoid the tax payable under this Part in respect of the particular amount referred to in paragraph (3.9)(a), or 
  (II) to avoid the application of subsection (3.91). 
  
  ### Back-to-back arrangement — character substitution
  
  (3.93) If this subsection applies in respect of a debt or other obligation to pay an amount (under which a particular relevant licensor is a borrower) or shares of the capital stock of a particular relevant licensor, then, for the purposes of subsections (3.9) to (3.94), 
  (a) the debt or other obligation or the holding of the shares, as the case may be, is deemed to be a relevant royalty arrangement; 
  (b) the creditor or shareholder, as the case may be, in respect of the relevant royalty arrangement, is deemed to be a relevant licensor, in respect of the relevant royalty arrangement; and 
  (c) the relevant royalty arrangement is deemed to be a specified royalty arrangement in respect of which the conditions in paragraph (3.9)(b) are met. 
  
  ### Back-to-back arrangement — definitions
  
  (3.94) The following definitions apply in this subsection and subsections (3.9) to (3.93).  
  *lease, licence or similar agreement* means an agreement under which a rent, royalty or similar payment is or could be made. (convention de bail, licence ou autre convention semblable)   
  *relevant licensor*, in respect of a relevant royalty arrangement, means  
  (a) if the relevant royalty arrangement is described in paragraph (a) of the definition relevant royalty arrangement, the immediate licensor referred to in paragraph (3.9)(a);  
  (b) if the relevant royalty arrangement is described in paragraph (b) of the definition relevant royalty arrangement, a person or partnership that is the lessor, the licensor or the grantor of a right similar to a right granted under a lease or licence, the assignor or the seller, as the case may be; or  
  (c) a person or partnership that does not deal at arm’s length with a relevant licensor referred to in paragraph (a) or (b). ( cédant de licence considéré)   
  *relevant royalty arrangement* means  
  (a) the particular lease, licence or similar agreement referred to in paragraph (3.9)(a); and 
  (b) each specified royalty arrangement that 
  (i) meets, in respect of a relevant royalty arrangement, the conditions in clause (3.9)(b)(i)(A) or (B), and 
  (ii) is an arrangement in respect of which the person or partnership referred to in subparagraph (3.9)(b)(ii) meets the conditions in clause (3.9)(b)(ii)(A) or (B). ( mécanisme de redevance considéré)   
  *rent, royalty or similar payment* means a rent, royalty or similar payment described in paragraph (1)(d) and, for greater certainty, includes any payment described in subparagraphs (1)(d)(i) to (v) but does not include any payment described in subparagraphs (1)(d)(vi) to (xii). (loyer, redevance ou paiement semblable)   
  *specified royalty arrangement* means a lease, license or similar agreement, an assignment or an instalment sale. (mécanisme de redevance déterminé)   
  *ultimate licensor* means a relevant licensor (other than the immediate licensor), in respect of a relevant royalty arrangement, that is not, under a relevant royalty arrangement,  
  (a) a lessee, a licensee or a grantee of a right similar to a right granted under a lease or licence; 
  (b) an assignee; or 
  (c) a purchaser. ( cédant de licence ultime)  
  
  ### Interpretation of 
  *management or administration fee or charge* 
  
  (4) For the purpose of paragraph 212(1)(a), 
  *management or administration fee or charge* does not include any amount paid or credited or deemed by Part I to have been paid or credited to a non-resident person as, on account or in lieu of payment of, or in satisfaction of,  
  (a) a service performed by the non-resident person if, at the time the non-resident person performed the service 
  (i) the service was performed in the ordinary course of a business carried on by the non-resident person that included the performance of such a service for a fee, and 
  (ii) the non-resident person and the payer were dealing with each other at arm’s length, or 
  (b) a specific expense incurred by the non-resident person for the performance of a service that was for the benefit of the payer, to the extent that the amount so paid or credited was reasonable in the circumstances. 
  
  ### Motion picture films
  
  (5) Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part I to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, payment for a right in or to the use of 
  (a) a motion picture film, or 
  (b) a film, video tape or other means of reproduction for use in connection with television (other than solely in connection with and as part of a news program produced in Canada), that has been, or is to be, used or reproduced in Canada to the extent that the amount relates to that use or reproduction. 
  
  ### Acting services
  
  (5.1) Notwithstanding any regulation made under paragraph 214(13)(c), every person who is either a non-resident individual who is an actor or that is a corporation related to such an individual shall pay an income tax of 23% on every amount paid or credited, or provided as a benefit, to or on behalf of the person for the provision in Canada of the acting services of the actor in a film or video production. 
  
  ### Relief from double taxation
  
  (5.2) Where a corporation is liable to tax under subsection (5.1) in respect of an amount for acting services of an actor (in this subsection referred to as the “corporation payment”) and the corporation pays, credits or provides as a benefit to the actor an amount for those acting services (in this subsection referred to as the “actor payment”), no tax is payable under subsection (5.1) with respect to the actor payment except to the extent that it exceeds the corporation payment. 
  
  ### Reduction of withholding
  
  (5.3) If the Minister is satisfied that the deduction or withholding otherwise required by section 215 from an amount described in subsection (5.1), would cause undue hardship, the Minister may determine a lesser amount to be deducted or withheld and that lesser amount is deemed to be the amount so required to be deducted or withheld. 
  
  ### Interest on provincial bonds from wholly-owned subsidiaries
  
  (6) Where an amount described by subsection 212(1) relates to interest on bonds or other obligations of or guaranteed by Her Majesty in right of a province or interest on bonds or other obligations provision for the payment of which was made by a statute of a provincial legislature, the tax payable under subsection 212(1) is 5% of that amount. 
  
  ### Where s. (6) does not apply
  
  (7) Subsection 212(6) does not apply to interest on any bond or other obligation described therein that was issued after December 20, 1960, except any such bond or other obligation for the issue of which arrangements were made on or before that day with a dealer in securities, if the existence of the arrangements for the issue of the bond or other obligation can be established by evidence in writing given or made on or before that day. 
  
  ### Bonds issued after December 20, 1960 in exchange for earlier bonds
  
  (8) For the purposes of this Part, where any bond, except a bond to which clause 212(1)(b)(ii)(C) applies, was issued after December 20, 1960 in exchange for a bond issued on or before that day, it shall, if the terms on which the bond for which it was exchanged was issued conferred on the holder thereof the right to make the exchange, be deemed to have been issued on or before December 20, 1960. 
  
  ### Exemptions
  
  (9) Where 
  (a) a dividend or interest is received by a trust from a non-resident-owned investment corporation, 
  (b) an amount (in this subsection referred to as the “royalty payment”) is received by a trust as, on account of, in lieu of payment of or in satisfaction of, a royalty on or in respect of a copyright in respect of the production or reproduction of any literary, dramatic, musical or artistic work, 
  (c) interest is received by a mutual fund trust maintained primarily for the benefit of non-resident persons, or 
  (d) a dividend or interest is received by a trust that is created under a reinsurance trust agreement 
  (i) to which a regulatory authority — being the Superintendent of Financial Institutions or a provincial regulatory authority having powers similar to those of the Superintendent — is a party, and 
  (ii) that accords with guidelines issued by the regulatory authority relating to reinsurance arrangements with unregistered insurers and a particular amount is paid or credited to a non-resident person as income of or from the trust and can reasonably be regarded as having been derived from the dividend, interest or royalty payment, as the case may be, no tax is payable because of paragraph 212(1)(c) as a consequence of the payment or crediting of the particular amount if no tax would have been payable under this Part in respect of the dividend, interest or royalty payment, as the case may be, if it had been paid directly to the non-resident person instead of to the trust. 
  
  ### Trust beneficiaries residing outside of Canada
  
  (10) Where all the beneficiaries of a trust established before 1949 reside, during a taxation year, in one country other than Canada and all amounts included in computing the income of the trust for the taxation year were received from persons resident in that country, no tax is payable under paragraph 212(1)(c) on an amount paid or credited in the taxation year to a beneficiary as income of or from the trust. 
  
  ### Payment to beneficiary as income of trust
  
  (11) An amount paid or credited by a trust or an estate to a beneficiary or other person beneficially interested therein shall be deemed, for the purpose of paragraph 212(1)(c) and without limiting the generality thereof, to have been paid or credited as income of the trust or estate, regardless of the source from which the trust or estate derived it. 
  
  ### Deemed payments to spouse, etc.
  
  (12) Where by reason of subsection 56(4) or 56(4.1) or any of sections 74.1 to 75 of this Act or section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, there is included in computing a taxpayer’s income under Part I for a taxation year an amount paid or credited to a non-resident person in the year, no tax is payable under this section on that amount.  
  
  ### Rent and other payments
  
  (13) For the purposes of this section, where a non-resident person pays or credits an amount as, on account or in lieu of payment of, or in satisfaction of, 
  (a) rent for the use in Canada of property (other than property that is rolling stock as defined in section 2 of the Railway Act),  
  (b) a timber royalty in respect of a timber resource property or a timber limit in Canada, 
  (c) a payment of a superannuation or pension benefit under a registered pension plan or of a distribution to one or more persons out of or under a retirement compensation arrangement, 
  (d) a payment of a retiring allowance or a death benefit to the extent that the payment is deductible in computing the payer’s taxable income earned in Canada, 
  (e) a payment described in any of paragraphs 212(1)(k) to 212(1)(n), 212(1)(q) and 212(1)(v), 
  (f) interest on any mortgage, hypothecary claim or other indebtedness entered into or issued or modified after March 31, 1977 and secured by real property situated in Canada or an interest therein, or by immovables situated in Canada or real rights therein, to the extent that the amount so paid or credited is deductible in computing the non-resident person’s taxable income earned in Canada or the amount on which the non-resident person is liable to pay tax under Part I, or 
  (g) an amount to which paragraph (1)(i) would apply if the amount paid or credited were paid or credited by a person resident in Canada, and that amount affects, or is intended to affect, in any way whatever, 
  (i) the acquisition or provision of property or services in Canada, 
  (ii) the acquisition or provision of property or services outside Canada by a person resident in Canada, or 
  (iii) the acquisition or provision outside Canada of a taxable Canadian property, the non-resident person shall be deemed in respect of that payment to be a person resident in Canada. 
  
  ### Application of Part XIII tax where payer or payee is a partnership
  
  (13.1) For the purposes of this Part, other than section 216, 
  (a) where a partnership pays or credits an amount to a non-resident person, the partnership shall, in respect of the portion of that amount that is deductible, or that would but for section 21 be deductible in computing the amount of the income or loss, as the case may be, referred to in paragraph 96(1)(f) or 96(1)(g) if the references therein to “a particular place” and “that particular place” were read as references to “Canada”, be deemed to be a person resident in Canada; 
  (a.1) where a partnership pays, credits or provides to a non-resident person an amount described in subsection (5.1), the partnership is deemed in respect of the amount to be a person; and 
  (b) where a person resident in Canada pays or credits an amount to a partnership (other than a Canadian partnership within the meaning assigned by section 102), the partnership shall be deemed, in respect of that payment, to be a non-resident person. 
  
  ### Application of Part XIII tax — payer subject to Part I
  
  (13.2) For the purposes of this Part, if a particular non-resident person pays or credits an amount (other than an amount to which subsection (13) applies) to another non-resident person or to a partnership (other than a Canadian partnership), the particular non-resident person is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing 
  (a) the particular non-resident person’s taxable income earned in Canada from a source that is neither a treaty-protected business nor a treaty-protected property; or 
  (b) the amount on which the particular non-resident person is liable to pay tax under Part I because of section 216. 
  
  ### Application of Part XIII to authorized foreign bank
  
  (13.3) An authorized foreign bank is deemed to be a person resident in Canada for the purposes of 
  (a) this Part, in respect of any amount paid or credited to or by the bank in respect of its Canadian banking business; and 
  (b) the application in paragraph (13.1)(b) and subsection (13.2) of the definition Canadian partnership (as defined in subsection 248(1)), in respect of a membership interest in a partnership held by the bank in the course of its Canadian banking business.  
  (14)  [Repealed, 2007, c. 35, s. 59]  
  
  ### Certain obligations
  
  (15) For the purposes of subparagraph (1)(b)(ii), after November 18, 1974 interest on a bond, debenture, note, mortgage, hypothecary claim or similar obligation that is insured by the Canada Deposit Insurance Corporation is deemed not to be interest with respect to an obligation guaranteed by the Government of Canada. 
  
  ### Payments for temporary use of rolling stock
  
  (16) Clause 212(1)(d)(vii)(A) does not apply to a payment in a year for the temporary use of railway rolling stock by a railway company to a person resident in a country other than Canada unless that country grants substantially similar relief for the year to the company in respect of payments received by it for the temporary use by a person resident in that country of railway rolling stock. 
  
  ### Exception
  
  (17) This section is not applicable to payments out of or under an employee benefit plan or employee trust. 
  
  ### Payments to the International Olympic Committee and the International Paralympic Committee
  
  (17.1) Notwithstanding subsections (1) and (2), 
  (a) the International Olympic Committee is not taxable under this Part on any amount paid or credited to it, after 2005 and before 2011, in respect of the 2010 Olympic Winter Games, and 
  (b) the International Paralympic Committee is not taxable under this Part on any amount paid or credited to it, after 2005 and before 2011, in respect of the 2010 Paralympic Winter Games. 
  
  ### Undertaking
  
  (18) Every person who in a taxation year is a prescribed financial institution or a person resident in Canada who is a registered securities dealer shall on demand from the Minister, served personally or by registered letter, file within such reasonable time as may be stipulated in the demand, an undertaking in prescribed form relating to the avoidance of payment of tax under this Part. 
  
  ### Tax on registered securities dealers
  
  (19) Every taxpayer who is a registered securities dealer resident in Canada shall pay a tax under this Part equal to the amount determined by the formula is the total of all amounts each of which is the amount of money provided before the end of a day to the taxpayer (and not returned or repaid before the end of the day) by or on behalf of a non-resident person as collateral or as consideration for a security that was lent or transferred under a designated securities lending arrangement, is the total of 
  (a) all amounts each of which is the amount of money provided before the end of the day by or on behalf of the taxpayer (and not returned or repaid before the end of the day) to a non-resident person as collateral or as consideration for a security that is described in paragraph (a) of the definition 
  *fully exempt interest* in subsection (3), or that is an obligation of the government of any country, province, state, municipality or other political subdivision, and that was lent or transferred under a securities lending arrangement, and  
  (b) the greater of 
  (i) 10 times the greatest amount determined, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be the capital employed by the taxpayer at the end of the day, and 
  (ii) 20 times the greatest amount of capital required, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be maintained by the taxpayer as a margin in respect of securities described in paragraph (a) of the definition 
  *fully exempt interest* in subsection (3), or that is an obligation of the government of any country, province, state, municipality or other political subdivision, at the end of the day, and  is the prescribed rate of interest in effect for the day, and shall remit that amount to the Receiver General on or before the 15th day of the month after the month in which the day occurs. 
  
  ### Designated SLA
  
  (20) For the purpose of subsection (19), a designated securities lending arrangement is a securities lending arrangement 
  (a) under which 
  (i) the lender is a prescribed financial institution or a registered securities dealer resident in Canada, 
  (ii) the particular security lent or transferred is an obligation described in paragraph (a) of the definition 
  *fully exempt interest* in subsection (3) or an obligation of the government of any country, prov- ince, state, municipality or other political subdivision,  
  (iii) the amount of money provided to the lender at any time during the term of the arrangement either as collateral or as consideration for the particular security does not exceed 110% of the fair market value at that time of the particular security; and 
  (b) that was neither intended, nor made as a part of a series of securities lending arrangements, loans or other transactions that was intended, to be in effect for more than 270 days. 
  
  ### Interest coupon stripping arrangement — conditions
  
  (21) Subsection (22) applies at any time in respect of a taxpayer if 
  (a) the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, interest to a person or partnership (in this subsection and subsection (22) referred to as the “interest coupon holder”) in respect of a debt or other obligation, other than a specified publicly offered debt obligation, owed to another person or partnership (in this subsection and subsection (22) referred to as the “non-arm’s length creditor”) that is 
  (i) a non-resident person with whom the taxpayer is not dealing at arm’s length, or 
  (ii) a partnership other than a Canadian partnership; and 
  (b) the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to the non-arm’s length creditor rather than the interest coupon holder, is greater than the tax payable under this Part (determined without reference to subsection (22)) in respect of the particular amount. 
  
  ### Interest coupon stripping arrangement — application
  
  (22) If this subsection applies at any time in respect of a taxpayer, then for the purpose of paragraph (1)(b), the taxpayer is deemed, at that time, to pay interest to the non-arm’s length creditor, the amount of which is determined by the formula is the particular amount referred to in paragraph (21)(a); is the rate of tax that would be imposed under this Part in respect of the particular amount if the particular amount were paid by the taxpayer to the non-arm’s length creditor rather than the interest coupon holder at that time; and is the rate of tax imposed under this Part in respect of the particular amount paid or credited to the interest coupon holder at that time. 
  
  ### Definition of specified publicly offered debt obligation 
  
  (23) For the purposes of subsection (21), 
  *specified publicly offered debt obligation* means a debt or other obligation that meets the following conditions:  
  (a) it was issued by the taxpayer as part of an offering that is lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with and, where required by law, accepted for filing by a public authority; and 
  (b) it can reasonably be considered that none of the main purposes of a transaction or event, or series of transactions or events, as a part of which the taxpayer pays or credits an amount as, on account or in lieu of payment of, or in satisfaction of, interest to a person or partnership in respect of the debt or other obligation is to avoid or reduce tax that would otherwise be payable under this Part by a non-resident person or partnership to whom the debt or other obligation is owed. 
  
  ### Non-arm’s length sales of shares by non-residents
  
  212.1 (1) Subsection (1.1) applies if a non-resident person disposes of shares (in this section referred to as the “subject shares”) of any class of the capital stock of a corporation resident in Canada (in this section referred to as the “subject corporation”) to another corporation resident in Canada (in this section referred to as the “purchaser corporation”) with which the non-resident person does not (otherwise than because of a right referred to in paragraph 251(5)(b)) deal at arm’s length and, immediately after the disposition, the subject corporation is connected (within the meaning that would be assigned by subsection 186(4) if the references in that subsection to “payer corporation” and “particular corporation” were read as “subject corporation” and “purchaser corporation”, respectively, and if section 186 were read without reference to its subsection (6)) with the purchaser corporation. 
  
  ### Non-arm’s length sales of shares by non-residents
  
  (1.1) If this subsection applies, 
  (a) the amount, if any, by which the fair market value of any consideration (other than any share of the capital stock of the purchaser corporation) received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares exceeds the paid-up capital in respect of the subject shares immediately before the disposition shall, for the purposes of this Act, be deemed to be a dividend 
  (i) in the case that, immediately before the disposition, the purchaser corporation controlled the non-resident person, 
  (A) paid at the time of the disposition by the subject corporation to the non-resident person, and 
  (B) received at that time by the non-resident person from the subject corporation, and 
  (ii) in any other case, 
  (A) paid at the time of the disposition by the purchaser corporation to the non-resident person, and 
  (B) received at that time by the non-resident person from the purchaser corporation; and 
  (b) in computing the paid-up capital at any particular time after March 31, 1977 of any particular class of shares of the capital stock of the purchaser corporation, there shall be deducted that proportion of the amount, if any, by which the increase, if any, by virtue of the disposition, in the paid-up capital, computed without reference to this section as it applies to the disposition, in respect of all of the shares of the capital stock of the purchaser corporation exceeds the amount, if any, by which 
  (i) the paid-up capital in respect of the subject shares immediately before the disposition exceeds 
  (ii) the fair market value of the consideration described in paragraph (a), that the increase, if any, by virtue of the disposition, in the paid-up capital, computed without reference to this section as it applies to the disposition, in respect of the particular class of shares is of the increase, if any, by virtue of the disposition, in the paid-up capital, computed without reference to this section as it applies to the disposition, in respect of all of the issued shares of the capital stock of the purchaser corporation. 
  
  ### Deemed consideration
  
  (1.2) For the purposes of subsections (1) and (1.1), if, in the absence of this subsection, no consideration would be received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares, the non-resident person is deemed to receive consideration other than shares of the capital stock of the purchaser corporation from the purchaser corporation for the subject shares, the fair market value of which is equal to the amount, if any, by which the fair market value of the subject shares disposed of by the non-resident person exceeds the amount of any increase because of the disposition in the fair market value of the shares of the capital stock of the purchaser corporation. 
  
  ### Idem
  
  (2) In computing the paid-up capital at any particular time after March 31, 1977 of any particular class of shares of the capital stock of a corporation, there shall be added an amount equal to the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the particular class paid after March 31, 1977 and before the particular time by the corporation and received by a non-resident-owned investment corporation or by a person who is not a corporation resident in Canada exceeds 
  (ii) the total that would be determined under subparagraph (i) if this Act were read without reference to paragraph (1.1)(b), and 
  (b) the total of all amounts each of which is an amount required by paragraph (1.1)(b) to be deducted in computing the paid-up capital in respect of the particular class of shares after March 31, 1977 and before the particular time. 
  
  ### Idem
  
  (3) For the purposes of this section, 
  (a) a non-resident person shall, for greater certainty, be deemed not to deal at arm’s length with a purchaser corporation at the time of a disposition described in subsection (1) if the non-resident person was, 
  (i) immediately before the disposition, one of a group of less than 6 persons that controlled the subject corporation, and 
  (ii) immediately after the disposition, one of a group of less than 6 persons that controlled the purchaser corporation, each member of which was a member of the group referred to in subparagraph (i); 
  (b) for the purposes of determining whether or not a non-resident person referred to in paragraph (a) was a member of a group of less than six persons that controlled a corporation at any time, any shares of the capital stock of that corporation owned at that time by any of the following persons shall be deemed to be owned at that time by the non-resident person and not by the person who actually owned the shares at that time: 
  (i) the non-resident person’s child (within the meaning assigned by subsection 70(10)), who is under 18 years of age, or the non-resident person’s spouse or common-law partner,  
  (ii) a trust of which the non-resident person, a person described in subparagraph (i) or a corporation described in subparagraph (iii) is a beneficiary, 
  (iii) a corporation controlled by the non-resident person, a person described in subparagraph (i), a trust described in subparagraph (ii) or any combination thereof, and 
  (iv) a partnership of which the non-resident person or a person described in one of subparagraphs (i) to (iii) is a majority-interest partner or a member of a majority-interest group of partners (as defined in subsection 251.1(3));  
  (c) a trust and a beneficiary of the trust or a person related to a beneficiary of the trust shall be deemed not to deal with each other at arm’s length; 
  (d) for the purpose of paragraph (a), 
  (i) a group of persons in respect of a corporation means any 2 or more persons each of whom owns shares of the capital stock of the corporation, 
  (ii) a corporation that is controlled by one or more members of a particular group of persons in respect of that corporation shall be considered to be controlled by that group of persons, and 
  (iii) a corporation may be controlled by a person or a particular group of persons notwithstanding that the corporation is also controlled or deemed to be controlled by another person or group of persons; and 
  (e)  [Repealed, 2018, c. 27, s. 21]  
  (f) in this subsection, a person includes a partnership. 
  
  ### Where section does not apply
  
  (4) Notwithstanding subsection (1), subsection (1.1) does not apply in respect of a disposition by a non-resident corporation of shares of a subject corporation to a purchaser corporation if 
  (a) immediately before the disposition, the purchaser corporation controlled the non-resident corporation; and 
  (b) it is not the case that, at the time of the disposition, or as part of a transaction or event or series of transactions or events that includes the disposition, a non-resident person 
  (i) holds, directly or indirectly, shares of the capital stock of the purchaser corporation, and 
  (ii) does not deal at arm’s length with the purchaser corporation. 
  
  ### Tiered trusts and partnerships
  
  (5) For the purposes of this section and paragraph (k) of the definition proceeds of disposition in section 54, a person or partnership that is, at any time, a beneficiary under a trust (other than a trust that is the non-resident person referred to in subsection (1)), or a member of a partnership (such trust or partnership referred to in this subsection as the “particular conduit”), that is a beneficiary under a trust or member of a partnership (such trust or partnership referred to in this subsection as the “other conduit”) is deemed  
  (a) to be a beneficiary under or member of, as the case may be, the other conduit; and 
  (b) to hold the interest in the other conduit that is held by the particular conduit in the proportion expressed by the formula is the portion of the fair market value, at that time, of the person or partnership’s interest in the particular conduit that is attributable to the interest in the other conduit held by the particular conduit, and is the total fair market value, at that time, of all direct interests (determined without reference to this subsection) in the other conduit. 
  
  ### Trusts and partnerships look-through rule
  
  (6) The following rules apply for the following purposes: 
  (a) for the purposes of this subsection and subsections (1) and (1.1), if at any time an interest (in this paragraph referred to as the “pertinent interest”) in a trust or a partnership (each referred to in this subsection as a “conduit”) is disposed of by a person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a “holder”), as the case may be, to a purchaser and any portion of the fair market value of the pertinent interest is attributable to shares of the capital stock of a corporation resident in Canada held, directly or indirectly (unless all of the shares are held indirectly through one or more non-resident corporations), by the conduit (in this paragraph referred to as the “shares held by the conduit”), then 
  (i) the holder is deemed, on a class-by-class basis, to have disposed, at that time, of the shares held by the conduit to the purchaser, and the purchaser is deemed to have acquired the shares, in the proportion expressed by the formula is the portion of the fair market value, at that time, of the pertinent interest that is attributable to the shares held by the conduit, and is the total fair market value, at that time, of the shares held by the conduit, and 
  (ii) the holder is deemed to have received from the purchaser and the purchaser is deemed to have paid to the holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the holder from the purchaser for the pertinent interest, is the amount determined for A in subparagraph (i), and is the total fair market value of the pertinent interest; 
  (b) for the purposes of subsections (1) and (1.1) and paragraph (c), if at any time a conduit (other than a non-resident trust) disposes of shares of the capital stock of a corporation resident in Canada to a purchaser, then 
  (i) each holder of an interest in the conduit is deemed, on a class-by-class basis, to have disposed, at that time, of the shares to the purchaser in the proportion expressed by the formula is the fair market value, at that time, of the holder’s interest in the conduit, and is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and 
  (ii) each holder of an interest in the conduit is deemed to have received from the purchaser and the purchaser is deemed to have paid to each such holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the conduit from the purchaser for the shares, is the amount determined for A in subparagraph (i), and is the amount determined for B in subparagraph (i); 
  (c) for the purposes of subsections (1) and (1.1), if at any time a conduit acquires shares of the capital stock of a corporation resident in Canada from a vendor, then 
  (i) each holder of an interest in the conduit is deemed to have acquired, at that time, the shares from the vendor, on a class-by-class basis, in the proportion expressed by the formula is the fair market value, at that time, of the holder’s interest in the conduit, and is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and 
  (ii) each holder of an interest in the conduit is deemed to have paid to the vendor and the vendor is deemed to have received from each such holder, as consideration for the shares deemed to have been acquired in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is paid by the conduit to the vendor for the shares, is the amount determined for A in subparagraph (i), and is the amount determined for B in subparagraph (i); and 
  (d) for the purpose of determining whether the subject corporation is connected with the purchaser corporation for the purposes of subsection (1) at any time, if at that time a conduit owns shares of the capital stock of the subject corporation, each holder of an interest in the conduit is deemed to own, at that time, the shares of each class of the capital stock of the subject corporation that are owned by the conduit the number of which is determined by the formula is the total number of shares of the class of the capital stock of the subject corporation that are owned by the conduit at that time, is the fair market value, at that time, of the holder’s interest in the conduit, and is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit. 
  
  ### Avoidance of subsections (5) and (6)
  
  (7) The amounts determined for A and B in paragraph (5)(b), for A and B in subparagraph (6)(c)(i) and for B and C in paragraph (6)(d) are, in respect of an interest as a beneficiary under a trust held by a person or partnership, deemed to be equal to one if 
  (a) the person or partnership’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power; and 
  (b) it can reasonably be considered that one of the reasons for the discretionary power is to avoid or limit the application of subsection (1.1). 
  
  ### Application
  
  212.2 (1) This section applies where 
  (a) a taxpayer disposes at a particular time of a share of the capital stock of a corporation resident in Canada (or any property more than 10% of the fair market value of which can be attributed to shares of the capital stock of corporations resident in Canada) to 
  (i) a person resident in Canada, 
  (ii) a partnership in which any person resident in Canada has, directly or indirectly, an interest, or 
  (iii) a person or partnership that acquires the share or the property in the course of carrying on a business through a permanent establishment in Canada, as defined in the Income Tax Regulations ;  
  (b) subsection 212.1(1.1) does not apply in respect of the disposition; 
  (c) the taxpayer is non-resident at the particular time; 
  (d) it is reasonable to conclude that the disposition is part of an expected series of transactions or events that includes the issue after December 15, 1998 of a particular share of the capital stock of a particular insurance corporation resident in Canada on the demutualization (within the meaning assigned by subsection 139.1(1)) of the particular corporation and 
  (i) after the particular time, the redemption, acquisition or cancellation of the particular share, or a share substituted for the particular share, by the particular corporation or the issuer of the substituted share, as the case may be, 
  (ii) after the particular time, an increase in the level of dividends declared or paid on the particular share or a share substituted for the particular share, or 
  (iii) the acquisition, at or after the particular time, of the particular share or a share substituted for the particular share by 
  (A) a person not dealing at arm’s length with the particular corporation or with the issuer of the substituted share, as the case may be, or 
  (B) a partnership any direct or indirect interest in which is held by a person not dealing at arm’s length with the particular corporation or with the issuer of the substituted share, as the case may be; and 
  (e) at the particular time, the person described in subparagraph (a)(i) or (iii) or any person who has, directly or indirectly, an interest in the partnership described in subparagraph (a)(ii) or (iii) knew, or ought reasonably to have known, of the expected series of transactions or events described in paragraph (d). 
  
  ### Deemed dividend
  
  (2) For the purposes of this Part, where property is disposed of at any time by a taxpayer to a person or partnership in circumstances in which this section applies, 
  (a) a taxable dividend is deemed to be paid at that time by the person or partnership to the taxpayer and received at the time by the taxpayer; 
  (b) the amount of the dividend is deemed to be equal to the amount determined by the formula is the portion of the proceeds of disposition of the property that can reasonably be attributed to the fair market value of shares of a class of the capital stock of a corporation resident in Canada, is the fair market value immediately before that time of shares of that class, and is the paid-up capital immediately before that time of that class of shares; and 
  (c) in respect of the dividend, the person or partnership is deemed to be a corporation resident in Canada. 
  
  ### Foreign affiliate dumping — conditions for application
  
  212.3 (1) Subsection (2) applies to an investment in a non-resident corporation (in this section referred to as the “subject corporation”) made at any time (in this section referred to as the “investment time”) by a corporation resident in Canada (in this section referred to as the “CRIC”) if 
  (a) the subject corporation is immediately after the investment time, or becomes as part of a transaction or event or series of transactions or events that includes the making of the investment, a foreign affiliate of 
  (i) the CRIC, or 
  (ii) a corporation that does not deal at arm’s length with the CRIC (if the condition in this paragraph is satisfied because of this subparagraph and not because of subparagraph (i), such a corporation is referred to in paragraph (b) as an “other Canadian corporation”); 
  (b) the CRIC or an other Canadian corporation is immediately after the investment time, or becomes after the investment time and as part of a transaction or event or series of transactions or events that includes the making of the investment, controlled by one non-resident person or, if no single non-resident person controls the CRIC, by a group of non-resident persons not dealing with each other at arm’s length (in this section, that one non-resident person, or each member of the group of non-resident persons, as the case may be, is referred to as a “parent”, and the group of non-resident persons, if any, is referred to as the “group of parents”), and any of the following conditions is satisfied: 
  (i) if, at the investment time, a parent owned all shares of the capital stock of the CRIC and the other Canadian corporation, if applicable, that are owned — determined without reference to paragraph (25)(b) in the case of partnerships referred to in this subparagraph and as if all rights referred to in paragraph 251(5)(b), of the parent, each person that does not deal at arm’s length with the parent and all of those partnerships, were immediate and absolute and the parent and each of the other persons and partnerships had exercised those rights at the investment time — by the parent, persons that are not dealing at arm’s length with the parent and partnerships of which the parent or a person that is not dealing at arm’s length with the parent is a member (other than a limited partner within the meaning assigned by subsection 96(2.4)), the parent would own shares of the capital stock of the CRIC or the other Canadian corporation that 
  (A) give the holders of those shares 25% or more of all of the votes that could be cast at any annual meeting of the shareholders in respect of all shares of the capital stock of the CRIC or the other Canadian corporation, as the case may be, or 
  (B) have a fair market value of 25% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the CRIC or the other Canadian corporation, as the case may be, 
  (ii) the investment is an acquisition of shares of the capital stock of a subject corporation by a CRIC to which this subparagraph applies because of subsection (19), or 
  (iii) under an arrangement entered into in connection with the investment, a person or partnership, other than the CRIC or a person related to the CRIC, has in any material respect the risk of loss or opportunity for gain or profit in respect of a property that can reasonably be considered to relate to the investment; and 
  (c) neither subsection (16) nor (18) applies in respect of the investment. 
  
  ### Foreign affiliate dumping — consequences
  
  (2) If this subsection applies to an investment in a subject corporation made by a CRIC, 
  (a) for the purposes of this Part and subject to subsections (3) and (7), the CRIC is deemed to have paid to each parent, and each parent is deemed to have received from the CRIC, at the dividend time, a dividend in an amount determined by the formula is the total of all amounts each of which is the portion of the fair market value at the investment time of any property (not including shares of the capital stock of the CRIC) transferred, any obligation assumed or incurred, or any benefit otherwise conferred, by the CRIC, or of any property transferred to the CRIC which transfer results in the reduction of an amount owing to the CRIC, that can reasonably be considered to relate to the investment, is 
  (i) if there is one parent, one, and 
  (ii) if there is a group of parents, the fair market value at the dividend time of the shares of the capital stock of the CRIC that are held, directly or indirectly, by the parent, and is 
  (i) if there is one parent, one, and 
  (ii) if there is a group of parents, the total of all amounts each of which is the fair market value at the dividend time of the shares of the capital stock of the CRIC that are held, directly or indirectly, by a parent; and 
  (b) in computing the paid-up capital in respect of any class of shares of the capital stock of the CRIC at any time that is at or after the investment time, there is to be deducted the amount of any increase in the paid-up capital in respect of the class, determined without reference to this section, that can reasonably be considered to relate to the investment. 
  
  ### Dividend substitution election
  
  (3) If a CRIC (or a CRIC and a corporation that is a qualifying substitute corporation in respect of the CRIC at the dividend time) and a parent (or a parent and another non-resident person that at the dividend time is related to the parent) jointly elect in writing under this subsection in respect of an investment, and the election is filed with the Minister on or before the filing-due date of the CRIC for its taxation year that includes the dividend time, then the dividend that would, in the absence of this subsection, be deemed under paragraph (2)(a) to have been paid by the CRIC to the parent and received by the parent from the CRIC is deemed to have instead been 
  (a) paid by the CRIC or the qualifying substitute corporation, as agreed on in the election; and 
  (b) paid to, and received by, the parent or the other non-resident person, as agreed on in the election. 
  
  ### Definitions
  
  (4) The following definitions apply in this section.  
  *cross-border class*, in respect of an investment, means a class of shares of the capital stock of a CRIC or qualifying substitute corporation if, immediately after the dividend time in respect of the investment,  
  (a) a parent, or a non-resident person that does not deal at arm’s length with a parent, owns at least one share of the class; and 
  (b) no more than 30% of the issued and outstanding shares of the class are owned by one or more persons resident in Canada that do not deal at arm’s length with a parent. ( catégorie transfrontalière)   
  *dividend time*, in respect of an investment, means  
  (a) if the CRIC is controlled by a parent or group of parents at the investment time, the investment time; and 
  (b) in any other case, the earlier of 
  (i) the first time, after the investment time, at which the CRIC is controlled by a parent or group of parents, as the case may be, and 
  (ii) the day that is one year after the day that includes the investment time. ( moment du dividende)   
  *qualifying substitute corporation*, at any time in respect of a CRIC, means a corporation resident in Canada  
  (a) that is, at that time, controlled by 
  (i) a parent, 
  (ii) a group of parents, or 
  (iii) a non-resident person that does not deal at arm’s length with a parent; 
  (b) that has, at that time, an equity percentage (as defined in subsection 95(4)) in the CRIC; and  
  (c) shares of the capital stock of which are, at that time, owned by a parent or another non-resident person with which the parent does not, at that time, deal at arm’s length. ( société de substitution admissible)  
  
  ### Modification of terms — paragraph (10)(e)
  
  (5) In the case of an investment described in paragraph (10)(e), the CRIC is deemed for the purposes of paragraph (2)(a) to transfer to the subject corporation property that relates to the investment, the fair market value of which property is 
  (a) if the investment is described in subparagraph (10)(e)(i), the amount owing in respect of the debt obligation referred to in that subparagraph immediately after the investment time, or 
  (b) if the investment is described in subparagraph (10)(e)(ii), the fair market value of the shares referred to in that subparagraph immediately after the investment time. 
  
  ### Sequential investments — paragraph (10)(f)
  
  (5.1) In the case of an investment (in this subsection referred to as the “second investment”) in a subject corporation by a CRIC described in paragraph (10)(f), the amount determined for A in paragraph (2)(a) in respect of the second investment is to be reduced by the amount determined for A in paragraph (2)(a) in respect of a prior investment (in this subsection referred to as the “first investment”) in the subject corporation by another corporation resident in Canada if 
  (a) the first investment is an investment that is described in paragraph (10)(a) or (b) and to which paragraph (2)(a) applies; 
  (b) immediately after the investment time in respect of the first investment, the other corporation is not controlled by 
  (i) if there is one parent in respect of the CRIC, the parent, and 
  (ii) if there is a group of parents in respect of the CRIC, the group of parents; and 
  (c) the other corporation becomes, after the time that is immediately after the investment time in respect of the first investment and as part of a transaction or event or series of transactions or events that includes the making of the first investment, controlled by the parent or group of parents, as the case may be, because of the second investment. 
  
  ### Anti-avoidance rule — cross-border class
  
  (6) A particular class of shares of the capital stock of a CRIC or a qualifying substitute corporation that, in the absence of this subsection, would be a cross-border class in respect of an investment is deemed not to be a cross-border class in respect of the investment if 
  (a) a particular corporation resident in Canada that does not deal at arm’s length with a parent 
  (i) acquires shares of the particular class (or shares that are substituted for those shares) as part of a transaction or event or series of transactions or events that includes the investment, or 
  (ii) owns shares of the particular class (or shares that are substituted for those shares) and, as part of a transaction or event or series of transactions or events that includes the investment, 
  (A) the paid-up capital in respect of the particular class is increased otherwise than as a result of an acquisition described in subparagraph (i), and 
  (B) the increase in paid-up capital in respect of the particular class can reasonably be considered to be connected to funding provided to the particular corporation or another corporation resident in Canada (other than the corporation that issued the particular class) by a parent or a non-resident person that does not deal at arm’s length with a parent, unless 
  (I) the funding results in an increase, equal to the amount funded, in the paid-up capital of shares of a class of the capital stock of the particular corporation, or the other corporation, that is a cross-border class in respect of the investment, and 
  (II) the increase referred to in subclause (I) occurred at or before the time of the increase to the paid-up capital in respect of the particular class; and 
  (b) it can reasonably be considered that one of the main reasons for the acquisition or for the funding, as the case may be, was to increase the amount of a deduction required under paragraph (7)(b) or (c) in computing the paid-up capital in respect of shares of the particular class held by the particular corporation. 
  
  ### Reduction of deemed dividend
  
  (7) If paragraph (2)(a) applies to an investment in a subject corporation made by a CRIC, 
  (a) where the CRIC demonstrates — in respect of one or more classes of shares of the capital stock of the CRIC, or of a qualifying substitute corporation, all the issued and outstanding shares of which are owned, immediately after the dividend time in respect of the investment, by persons that deal at arm’s length with the CRIC — that an amount of paid-up capital in respect of each of the classes arose as a consequence of one or more transfers of property, directly or indirectly, to the CRIC and that all of the property transferred was used by the CRIC to make, in whole or in part, the investment (or, in the case of an investment described in paragraph (10)(f), the direct acquisition referred to in that paragraph), then 
  (i) the amount determined, without reference to this subsection, for A in paragraph (2)(a), is reduced by the lesser of 
  (A) that amount, and 
  (B) the total of all amounts of paid-up capital so demonstrated by the CRIC, and 
  (ii) in computing the paid-up capital in respect of each class described in this paragraph, at any time after the dividend time, there is to be deducted an amount equal to the portion of the amount determined under subparagraph (i) that can reasonably be considered to relate to that class; 
  (b) where the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is equal to or greater than the total of all amounts each of which is an amount of paid-up capital immediately after the dividend time, determined without reference to this paragraph, of a cross-border class in respect of the investment, then 
  (i) the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is reduced by the total referred to in this paragraph, and 
  (ii) in computing, at any time after the dividend time, the paid-up capital in respect of each cross-border class in respect of the investment, there is to be deducted an amount equal to the paid-up capital in respect of that class immediately after the dividend time, determined without reference to this paragraph; 
  (c) where paragraph (b) does not apply and there is at least one cross-border class in respect of the investment, 
  (i) the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is reduced to nil, 
  (ii) in computing, at any time after the dividend time, the paid-up capital in respect of a particular cross-border class in respect of the investment, there is to be deducted the amount, if any, that when added to the total of all amounts that are deducted under this paragraph in computing the paid-up capital of other cross-border classes, results in the greatest total reduction because of this paragraph, immediately after the dividend time, of the paid-up capital in respect of shares of cross-border classes that are owned by a parent or another non-resident person with which a parent does not, at the dividend time, deal at arm’s length, 
  (iii) if the proportion of the shares of a particular class owned, in aggregate, by parents and non-resident persons that do not deal at arm’s length with parents is equal to the proportion so owned of one or more other cross-border classes (in this subparagraph all those classes, together with the particular class, referred to as the “relevant classes”), then the proportion that the reduction under subparagraph (ii) to the paid-up capital in respect of the particular class is of the paid-up capital, determined immediately after the dividend time and without reference to this paragraph, in respect of that class is to be equal to the proportion that the total reduction under subparagraph (ii) to the paid-up capital in respect of all the relevant classes is of the total paid-up capital, determined immediately after the dividend time and without reference to this paragraph, of all the relevant classes, and 
  (iv) the total of all amounts each of which is an amount to be deducted under subparagraph (ii) in computing the paid-up capital of a cross-border class is to be equal to the amount by which the amount determined for A in paragraph (2)(a) is reduced under subparagraph (i); and 
  (d) if the amount determined for A in paragraph (2)(a) is reduced because of any of subparagraphs (a)(i), (b)(i) and (c)(i), 
  (i) the CRIC shall file with the Minister in prescribed manner a form containing prescribed information and the amounts of the paid-up capital, determined immediately after the dividend time and without reference to this subsection, of each class of shares that is described in paragraph (a) or that is a cross-border class in respect of the investment, the paid-up capital of the shares of each of those classes that are owned by a parent or another non-resident person that does not, at the dividend time, deal at arm’s length with a parent, and the reduction under any of subparagraphs (a)(ii), (b)(ii) and (c)(ii) in respect of each of those classes, and 
  (ii) if the form is not filed on or before the CRIC’s filing-due date for its taxation year that includes the dividend time, the CRIC is deemed to have paid to each parent, and each parent is deemed to have received from the CRIC, on the filing-due date, a dividend equal to the total of all amounts each of which is the amount of a reduction because of any of subparagraphs (a)(i), (b)(i) and (c)(i) in the amount the CRIC is deemed under paragraph (2)(a) to have paid to the parent. 
  
  ### Election to not reduce deemed dividend
  
  (7.1) Subsection (7) does not apply in respect of an investment made by a CRIC if 
  (a) the investment was made after March 28, 2012 and before August 16, 2013; 
  (b) at the investment time, each share of the capital stock of the CRIC, and each qualifying substitute corporation in respect of the CRIC, that was not owned by the parent was owned by persons or partnerships with which the parent did not deal at arm’s length; and 
  (c) the CRIC files an election with the Minister before 2017 to have this subsection apply in respect of the investment. 
  
  ### Paid-up capital adjustment
  
  (8) In computing the paid-up capital at any time after March 28, 2012 in respect of a class of shares of the capital stock of a corporation, there is to be added an amount equal to the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporation exceeds 
  (ii) the total that would be determined under subparagraph (i) if this Act were read without reference to paragraph (2)(b) and subsections (7) and (9), and 
  (b) the amount, if any, by which 
  (i) the total of all amounts required by paragraph (2)(b) or subsection (7) to be deducted in computing the paid-up capital in respect of the class before that time exceeds 
  (ii) the total of all amounts required by subsection (9) to be added in computing the paid-up capital in respect of the class before that time. 
  
  ### Paid-up capital reinstatement
  
  (9) If, in respect of an investment in a subject corporation made by a CRIC that is described in any of paragraphs (10)(a) to (f), an amount is deducted under paragraph (2)(b) or subsection (7) in computing the paid-up capital in respect of a class of shares of the capital stock of a particular corporation and, at a time subsequent to the investment time, there is a reduction of paid-up capital referred to in subparagraph (b)(i) or a receipt of property referred to in the description of A in subparagraph (b)(ii), then the paid-up capital in respect of the class is to be increased, immediately before the subsequent time, by the lesser of 
  (a) the amount, if any, by which 
  (i) the total of all amounts deducted, before the subsequent time, under paragraph (2)(b) or subsection (7), in respect of the investment, in computing the paid-up capital in respect of the class exceeds 
  (ii) the total of all amounts added under this subsection, in respect of the investment, to the paid-up capital in respect of the class before the time that is immediately before the subsequent time, and 
  (b) an amount that 
  (i) if the investment is described in paragraph (10)(a), (b) or (f), the paid-up capital in respect of the class is reduced at the subsequent time as part of or because of a distribution of property by the particular corporation and the property (in this paragraph referred to as the “distributed shares”) is shares of the capital stock of the subject corporation or shares of the capital stock of a foreign affiliate of the particular corporation that were substituted for shares of the capital stock of the subject corporation, is equal to the amount determined by the formula is 
  (A) if the investment is described in paragraph (10)(b), the portion of the fair market value, immediately before the subsequent time, of the distributed shares that can reasonably be considered to relate to the contribution of capital that is the investment, and 
  (B) if the investment is described in paragraph (10)(a) or (f), the lesser of 
  (I) the portion of the fair market value, immediately before the subsequent time, of the distributed shares that can reasonably be considered to relate to the shares (in this paragraph referred to as the “acquired shares”) of the capital stock of the subject corporation that were acquired on the investment (other than any portion described in clause (A)), and 
  (II) the proportion of the amount determined under subparagraph (a)(i) that the amount determined under subclause (I) is of the fair market value, immediately before the subsequent time, of the acquired shares, or the portion of the fair market value of shares that were substituted for the acquired shares that can reasonably be considered to relate to the acquired shares, and is 
  (A) if the particular corporation is, immediately after the dividend time, a qualifying substitute corporation in respect of the CRIC, the particular corporation’s equity percentage (as defined in subsection 95(4)) in the CRIC immediately after the dividend time, and 
  (B) in any other case, 100%, and 
  (ii) in any other case, is equal to the amount determined by the formula is the amount that is equal to the fair market value of property that 
  (A) the particular corporation demonstrates has been received at the subsequent time by it or by a corporation resident in Canada that was not dealing at arm’s length with the particular corporation at that time (either of which is in this subparagraph referred to as the “recipient corporation”) 
  (I) as proceeds from the disposition of the acquired shares, or other shares to the extent that the proceeds from the disposition of those other shares can reasonably be considered to relate to the acquired shares or to shares of the capital stock of the subject corporation in respect of which an investment described in paragraph (10)(b) was made, 
  (II) as a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of the subject corporation or the portion, of a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of a foreign affiliate of the particular corporation that were substituted for shares of the capital stock of the subject corporation, that can reasonably be considered to relate to shares of the capital stock of the subject corporation, or 
  (III) if the investment is described in paragraph (10)(c) or (d) or subparagraph (10)(e)(i), 
  1 as a repayment of or as proceeds from the disposition of the debt obligation or amount owing, or 
  2 as interest on the debt obligation or amount owing, and 
  (B) is not received by the recipient corporation 
  (I) as a result of an investment, made by the recipient corporation, to which subsection (16) or (18) applies, or 
  (II) as proceeds from a disposition of property to a corporation resident in Canada for which the acquisition is an investment to which subsection (16) or (18) applies, or to a partnership of which such a corporation is a member, is the amount determined under paragraph (a) in respect of the class, and is the total of all amounts each of which is an amount determined under paragraph (a) in respect of all classes of shares of the capital stock of the particular corporation or of any corporation that does not deal at arm’s length with the particular corporation. 
  
  ### Exchange of debt obligation for shares
  
  (9.1) For the purposes of subsection (9), if at any time a debt obligation that relates to a particular investment described in paragraph (10)(c) or (d) or subparagraph (10)(e)(i) is exchanged for shares of a subject corporation and as part of the exchange there is an acquisition of shares described in subparagraph (18)(b)(i) or paragraph 18(d), then all amounts, in respect of the particular investment, deducted under paragraph (2)(b) or subsection (7) from, or added under subsection (9) to, the paid-up capital in respect of a class of shares before that time are deemed to have been deducted or added, as the case may be, in respect of the acquisition of the shares and not the particular investment. 
  
  ### Continuity for paid-up capital reinstatement
  
  (9.2) If at any particular time shares (in this subsection referred to as the “new shares”) of a class of the capital stock of a corporation resident in Canada are acquired, in a transaction to which any of sections 51, 85, 85.1, 86 and 87 apply, in exchange for a share (in this subsection referred to as the “old share”) of a class of the capital stock of a particular corporation that is either the corporation or another corporation resident in Canada, then for the purposes of subsections (8) and (9), 
  (a) if the corporation that issues the new shares is not the particular corporation, it is deemed to be the same corporation as, and a continuation of, the particular corporation; 
  (b) the new shares are deemed to be the same share, and of the same class of the capital stock of the particular corporation, as the old share; and 
  (c) if the old share remains outstanding after the exchange, it is deemed to be a share of a different class of the capital stock of the particular corporation. 
  
  ### Investment in subject corporation
  
  (10) In this section, 
  *investment*, in a subject corporation made by a CRIC, means any of  
  (a) an acquisition of shares of the capital stock of the subject corporation by the CRIC; 
  (b) a contribution of capital to the subject corporation by the CRIC, which is deemed to include any transaction or event under which a benefit is conferred on the subject corporation by the CRIC; 
  (c) a transaction under which an amount becomes owing by the subject corporation to the CRIC, other than an amount owing 
  (i) that arises in the ordinary course of the business of the CRIC and that is repaid, other than as part of a series of loans or other transactions and repayments, within 180 days after the day on which the amount becomes owing, 
  (ii) that is a pertinent loan or indebtedness immediately after the time of the transaction, or 
  (iii) because a dividend has been declared, but not yet paid, by the subject corporation; 
  (d) an acquisition of a debt obligation of the subject corporation by the CRIC from a person, other than 
  (i) if the acquisition is made in the ordinary course of the business of the CRIC, a debt obligation acquired from a person with which the CRIC deals at arm’s length at the time of the acquisition, or 
  (ii) a debt obligation that is a pertinent loan or indebtedness immediately after the time of the acquisition; 
  (e) an extension of 
  (i) the maturity date of a debt obligation (other than a debt obligation that is a pertinent loan or indebtedness immediately after the time of the extension) owing by the subject corporation to the CRIC, or 
  (ii) the redemption, acquisition or cancellation date of shares of the capital stock of the subject corporation owned by the CRIC; 
  (f) an indirect acquisition by the CRIC of shares of the capital stock of the subject corporation that results from a direct acquisition by the CRIC of shares of the capital stock of another corporation resident in Canada, of which the subject corporation is a foreign affiliate, if the total fair market value of all the shares that are held directly or indirectly by the other corporation and are shares of foreign affiliates of the other corporation exceeds 75% of the total fair market value (determined without reference to debt obligations of any corporation resident in Canada in which the other corporation has a direct or indirect interest) of all of the properties owned by the other corporation; and 
  (g) an acquisition by the CRIC of an option in respect of, or an interest in, or for civil law a right in, shares of the capital stock of, an amount owing by (other than an amount owing described in subparagraph (c)(i) or (ii)), or a debt obligation of (other than a debt obligation described in subparagraph (d)(i) or (ii)), the subject corporation. 
  
  ### Pertinent loan or indebtedness
  
  (11) For the purposes of subsection (10) and subject to subsection 17.1(3), 
  *pertinent loan or indebtedness*, at any time, means an amount owing at that time by the subject corporation to the CRIC in respect of which all of the following apply:  
  (a) either 
  (i) the amount became owing after March 28, 2012, or 
  (ii) the amount became owing before March 29, 2012 and is a debt obligation for which the maturity date was extended after March 28, 2012 and at or before that time; 
  (b) the amount owing is not an amount owing described in subparagraph (10)(c)(i) or a debt obligation described in subparagraph (10)(d)(i); and 
  (c) the CRIC and each parent jointly elect in writing under this paragraph in respect of the amount owing and file the election with the Minister on or before the filing-due date of the CRIC 
  (i) in the case of an amount owing described in subparagraph (a)(i), for the year in which the amount became owing, or 
  (ii) in the case of an amount owing described in subparagraph (a)(ii), for the year in which the extension was made. 
  
  ### Late-filed elections
  
  (12) Where an election referred to in subsection (3) or paragraph (11)(c) was not made on or before the day on or before which the election was required by that paragraph to be made, the election is deemed to have been made on that day if the election is made on or before the day that is three years after that day and the penalty in respect of the election is paid by the CRIC when the election is made. 
  
  ### Penalty for late-filed election
  
  (13) For the purposes of subsection (12), the penalty in respect of an election referred to in that subsection is the amount equal to the product obtained by multiplying $100 by the number of months each of which is a month all or part of which is during the period commencing with the day on or before which the election is required by subsection (3) or paragraph (11)(c), as the case may be, to be made and ending on the day on which the election is made. 
  
  ### Rules for paragraph (10)(f)
  
  (14) For the purposes of paragraph (10)(f), 
  (a) the condition in that paragraph is deemed to be satisfied at the time of the acquisition if 
  (i) any property (other than shares of foreign affiliates of the other corporation that is referred to in that paragraph) held directly or indirectly by that other corporation is disposed of, after the time of the acquisition, directly or indirectly by that corporation as part of a series of transactions or events that includes the acquisition, and 
  (ii) at any time that is subsequent to the time of the acquisition and that is in the period during which the series occurs, the condition in that paragraph would have been satisfied had the acquisition occurred at the subsequent time; and 
  (b) the fair market value of properties held directly or indirectly by the other corporation is not to be taken into account more than once in determining whether the condition in that paragraph is satisfied. 
  
  ### Control
  
  (15) For the purposes of this section and paragraph 128.1(1)(c.3), 
  (a) a CRIC or a taxpayer to which paragraph 128.1(1)(c.3) applies (in this subsection referred to as the “specific corporation”), that would, in the absence of this subsection, be controlled at any time 
  (i) by more than one non-resident person, is deemed not to be controlled at that time by any such person that controls at that time another non-resident person that controls at that time the specific corporation, unless the application of this paragraph would otherwise result in no non-resident person controlling the specific corporation, and 
  (ii) by a particular non-resident corporation is deemed not to be controlled at that time by the particular non-resident corporation if the particular non-resident corporation is controlled at that time by another corporation that is at that time 
  (A) resident in Canada, and 
  (B) not controlled by any non-resident person or group of non-resident persons not dealing with each other at arm’s length; and 
  (b) a non-resident person is deemed not to be a member of a particular group of non-resident persons not dealing with each other at arm’s length that controls the specific corporation if 
  (i) the non-resident person would, absent the application of this paragraph, be a member of the particular group, and 
  (ii) the non-resident person is a member of the particular group solely because it controls, or is a member of a group that controls, another member of the particular group. 
  
  ### Exception — more closely connected business activities
  
  (16) Subject to subsection (19), subsection (2) does not apply to an investment in a subject corporation made by a CRIC if the CRIC demonstrates that all of the following conditions are met: 
  (a) the business activities carried on by the subject corporation and all other corporations (those other corporations in this subsection and subsection (17) referred to as the “subject subsidiary corporations”) in which the subject corporation has, at the investment time, an equity percentage (as defined in subsection 95(4)) are at the investment time, and are expected to remain, on a collective basis, more closely connected to the business activities carried on in Canada by the CRIC, or by any corporation resident in Canada with which the CRIC does not, at the investment time, deal at arm’s length, than to the business activities carried on by any non-resident person with which the CRIC, at the investment time, does not deal at arm’s length, other than  
  (i) the subject corporation, 
  (ii) the subject subsidiary corporations, and 
  (iii) any corporation that is, immediately before the investment time, a controlled foreign affiliate of the CRIC for the purposes of section 17, 
  (b) officers of the CRIC, or of a corporation resident in Canada that did not, at the investment time, deal at arm’s length with the CRIC, had and exercised the principal decision-making authority in respect of the making of the investment and a majority of those officers were, at the investment time, persons each of whom was resident, and working principally, 
  (i) in Canada, or 
  (ii) in a country in which a particular corporation is resident if the particular corporation (in this subsection and subsection (17) referred to as a “connected affiliate”) is a controlled foreign affiliate of the CRIC for the purposes of section 17 and carries on business activities that are, at the investment time, and are expected to remain, at least as closely connected to those of the subject corporation and the subject subsidiary corporations, on a collective basis, as the business activities carried on in Canada by the CRIC, or any corporation resident in Canada with which the CRIC does not, at the investment time, deal at arm’s length, as the case may be, are to those of the subject corporation and the subject subsidiary corporations, on a collective basis; and 
  (c) at the investment time, it is reasonably expected that 
  (i) officers of the CRIC, or of a corporation resident in Canada that does not deal at arm’s length with the CRIC, will have and exercise the ongoing principal decision-making authority in respect of the investment, 
  (ii) a majority of those officers will be persons each of whom will be resident, and working principally, in Canada or in a country in which a connected affiliate is resident, and 
  (iii) the performance evaluation and compensation of the officers of the CRIC, or of the corporation resident in Canada that does not deal at arm’s length with the CRIC, who are resident, and work principally, in Canada, or in a country in which a connected affiliate is resident, will be based on the results of operations of the subject corporation to a greater extent than will be the performance evaluation and compensation of any officer of a non-resident corporation (other than the subject corporation, a corporation controlled by the subject corporation or a connected affiliate) that does not deal at arm’s length with the CRIC. 
  
  ### Dual officers
  
  (17) For the purposes of paragraphs (16)(b) and (c), any person who is an officer of the CRIC, or of a corporation resident in Canada that does not deal at arm’s length with the CRIC, and of a non-resident corporation that does not, at the investment time, deal at arm’s length with the CRIC (other than the subject corporation, a subject subsidiary corporation or a connected affiliate) is deemed to not be resident, and to not work principally, in a country in which a connected affiliate is resident. 
  
  ### Exception — corporate reorganizations
  
  (18) Subject to subsections (18.1) to (20), subsection (2) does not apply to an investment in a subject corporation made by a CRIC if 
  (a) the investment is described in paragraph (10)(a) or (d) and is an acquisition of shares of the capital stock, or a debt obligation, of the subject corporation 
  (i) from a corporation resident in Canada (in this paragraph referred to as the “disposing corporation”) to which the CRIC is, immediately before the investment time, related (determined without reference to paragraph 251(5)(b)), and 
  (A) each shareholder of the disposing corporation immediately before the investment time is 
  (I) if there is only one parent in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and 
  2 at no time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and 
  2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (B) the disposing corporation is 
  (I) if there is only one parent in respect of the CRIC, at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and 
  (A) either 
  (I) if there is only one parent in respect of the CRIC, none of the predecessor corporations are, at any time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, or 
  (II) if there is a group of parents in respect of the CRIC, all of the predecessor corporations are, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is 
  (I) if there is only one parent in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and 
  2 at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and 
  2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents; 
  (b) the investment is described in paragraph (10)(a) and is an acquisition of shares of the capital stock of the subject corporation in which the shares are acquired by the CRIC 
  (i) in an exchange to which subsection 51(1) applies, 
  (ii) as consideration for a disposition of shares to which subsection 85.1(3) applies (determined without reference to subsection 85.1(4)), 
  (iii) in the course of a reorganization of the capital of the subject corporation to which subsection 86(1) applies, 
  (iv) as a result of a foreign merger (as defined in subsection 87(8.1)) under which the subject corporation was formed, 
  (v) on a liquidation and dissolution to which subsection 88(3) applies, 
  (vi) on a redemption of shares of another non-resident corporation that is, immediately before the investment time, a foreign affiliate of the CRIC, 
  (vii) as a dividend or a qualifying return of capital, within the meaning assigned by subsection 90(3), in respect of the shares of another non-resident corporation that is, immediately before the investment time, a foreign affiliate of the CRIC, or 
  (viii) as a result of a disposition of the shares by the CRIC to a partnership and to which subsection 97(2) applies; 
  (c) the investment is an indirect acquisition referred to in paragraph (10)(f) that results from a direct acquisition of shares of the capital stock of another corporation resident in Canada 
  (i) from a corporation (in this paragraph referred to as the “disposing corporation”) to which the CRIC is, immediately before the investment time, related (determined without reference to paragraph 251(5)(b)) and 
  (A) each shareholder of the disposing corporation immediately before the investment time is 
  (I) if there is only one parent in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that, immediately before the investment time, is related to the parent, and 
  2 at no time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and 
  2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (B) the disposing corporation is 
  (I) if there is only one parent in respect of the CRIC, at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC, or a corporation of which the CRIC is a shareholder, if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and 
  (A) either 
  (I) if there is only one parent in respect of the CRIC, none of the predecessor corporations are, at any time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, or 
  (II) if there is a group of parents in respect of the CRIC, all of the predecessor corporations are, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or 
  (B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is 
  (I) if there is only one parent in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and 
  2 at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and 
  (II) if there is a group of parents in respect of the CRIC, 
  1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and 
  2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, 
  (iii) in an exchange to which subsection 51(1) applies, 
  (iv) in the course of a reorganization of the capital of the other corporation to which subsection 86(1) applies, 
  (v) to the extent that an investment (other than one described in paragraph (10)(f)) is made in the subject corporation by the other corporation, or by a particular corporation resident in Canada to which the CRIC and the other corporation are related at the investment time, using property transferred, directly or indirectly, by the CRIC to the other corporation or the particular corporation, as the case may be, if the two investments 
  (A) occur within 90 days of each other, and 
  (B) are part of the same series of transactions or events, or 
  (vi) as a result of a disposition of the shares by the CRIC to a partnership and to which subsection 97(2) applies; or 
  (d) the investment is an acquisition of shares of the capital stock of the subject corporation that is described in paragraph (10)(a), or an indirect acquisition referred to in paragraph (10)(f) that results from a direct acquisition of shares of the capital stock of another corporation resident in Canada, if 
  (i) the shares are acquired by the CRIC in exchange for a bond, debenture or note, and 
  (ii) subsection 51(1) would apply to the exchange if the terms of the bond, debenture or note conferred on the holder the right to make the exchange. 
  
  ### Exchange — pertinent loan or indebtedness
  
  (18.1) Subsection (18) does not apply to an investment that is an acquisition of property if the property can reasonably be considered to have been received by the CRIC as repayment in whole or in part, or in settlement, of a pertinent loan or indebtedness. 
  
  ### Preferred shares
  
  (19) Subparagraph (1)(b)(ii) applies, and subsection (16) and paragraphs (18)(b) and (d) do not apply, to an acquisition of shares of the capital stock of a subject corporation by a CRIC if, having regard to all the terms and conditions of the shares and any agreement in respect of the shares, the shares cannot reasonably be considered to fully participate in the profits of the subject corporation and any appreciation in the value of the subject corporation, unless the subject corporation would be a subsidiary wholly-owned corporation of the CRIC throughout the period during which the series of transactions or events that includes the acquisition occurs if the CRIC owned all of the shares of the capital stock of the subject corporation that are owned by any of 
  (a) the CRIC; 
  (b) a corporation resident in Canada that is a subsidiary wholly-owned corporation of the CRIC; and 
  (c) a corporation resident in Canada of which the CRIC is a subsidiary wholly-owned corporation. 
  
  ### Assumption of debt on liquidation or distribution
  
  (20) Subsection (2) applies to an investment in a subject corporation made by a CRIC that is an acquisition of shares of the capital stock of the subject corporation described in any of subparagraphs (18)(b)(v) to (vii) to the extent of the lesser of 
  (a) the total of all amounts each of which is the amount of a debt obligation assumed by the CRIC in respect of the liquidation and dissolution, redemption, dividend or qualifying return of capital, as the case may be, and 
  (b) the fair market value of the shares at the investment time. 
  
  ### Persons deemed not to be related
  
  (21) If it can reasonably be considered that one of the main purposes of one or more transactions or events is to cause two or more persons to be related to each other, or a person or group of persons to control another person, so that, in the absence of this subsection, subsection (2) would not apply because of subsection (18) to an investment in a subject corporation made by a CRIC, those persons are deemed not to be related to each other, or that person or group of persons is deemed not to control that other person, as the case may be, for the purposes of subsection (18). 
  
  ### Mergers
  
  (22) For the purposes of this section and subsections 219.1(3) and (4), 
  (a) if there has been an amalgamation to which subsection 87(11) applies, 
  (i) the new corporation referred to in that subsection is deemed to be the same corporation as, and a continuation of, the parent and each subsidiary referred to in that subsection, 
  (ii) the new corporation is deemed not to acquire any property of the parent, or of any subsidiary, as a result of the amalgamation, and 
  (iii) each shareholder of the new corporation is deemed not to acquire indirectly any shares as a result of the amalgamation; and 
  (b) if there has been a winding-up to which subsection 88(1) applies, 
  (i) the parent referred to in that subsection is deemed to be the same corporation as, and a continuation of, the subsidiary referred to in that subsection, and 
  (ii) the parent is deemed not to acquire any property of the subsidiary as a result of the winding-up. 
  
  ### Indirect investment
  
  (23) Subsection (2) applies to an investment in a subject corporation made by a CRIC to which, in the absence of this subsection, subsection (2) would not apply because of subsection (16) or (24), to the extent that one or more properties received by the subject corporation from the CRIC as a result of the investment, or property substituted for any such property, may reasonably be considered to have been used by the subject corporation, directly or indirectly as part of a series of transactions or events that includes the making of the investment, in a transaction or event to which subsection (2) would have applied if the CRIC had entered into the transaction, or participated in the event, as the case may be, instead of the subject corporation. 
  
  ### Indirect funding
  
  (24) Subsection (2) does not apply to an investment in a subject corporation made by a CRIC to which, in the absence of this subsection, subsection (2) would apply, if the CRIC demonstrates that 
  (a) all the properties received by the subject corporation from the CRIC as a result of the investment were used, at a particular time that is within 30 days after the investment time and at all times after the particular time, by the subject corporation 
  (i) to derive income from activities that can reasonably be considered to be directly related to active business activities carried on by a particular corporation and all of the income is income from an active business because of subparagraph 95(2)(a)(i), or 
  (ii) to make a loan or acquire a property, all or substantially all of the income from which is, or would be, if there were income from the loan or property, derived from amounts paid or payable, directly or indirectly, to the subject corporation by a particular corporation and is, or would be, income from an active business because of subparagraph 95(2)(a)(ii); 
  (b) the particular corporation was, at the particular time, a controlled foreign affiliate of the CRIC for the purposes of section 17; and 
  (c) the particular corporation is, throughout the period that begins at the investment time and during which the series of transactions or events that includes the activities of, or the making of the loan or acquisition of property by, the subject corporation occurs, a corporation in which an investment made by the CRIC would not be subject to subsection (2) because of subsection (16). 
  
  ### Partnerships
  
  (25) For the purposes of this section, subsection 17.1(1) (as it applies in respect of a pertinent loan or indebtedness as defined in subsection (11)), paragraph 128.1(1)(c.3) and subsection 219.1(2), 
  (a) any transaction entered into, or event participated in, by a partnership is deemed to have been entered into, or participated in, as the case may be, by each member of the partnership in the proportion that the fair market value, at the time of the transaction or event, of the member’s interest — held directly or indirectly through one or more other partnerships — in the partnership is of the fair market value, at that time, of all direct interests in the partnership; 
  (b) if at any time, based on the assumptions contained in paragraph 96(1)(c), property would be owned by a partnership, that property is deemed to be owned at that time by each member of the partnership in the proportion that the fair market value, at that time, of the member’s interest — held directly or indirectly through one or more other partnerships — in the partnership is of the fair market value, at that time, of all direct interests in the partnership; 
  (c) if at any time there is an increase (including, for greater certainty, as a result of a particular acquisition of an interest in a partnership in which, immediately prior to the particular acquisition, the member did not have an interest) in the portion of a property that is deemed under paragraph (b) to be owned by a member of a partnership, the member is deemed at that time 
  (i) to acquire the additional portion of the property, and 
  (ii) to transfer property that relates to the acquisition of the additional portion and that has a fair market value equal to the fair market value at that time of the additional portion; 
  (d) if at any time, based on the assumptions contained in paragraph 96(1)(c), an amount would be owing by a partnership, that amount is deemed to be owed by each member of the partnership in the proportion that the fair market value, at that time, of the member’s interest — held directly or indirectly through one or more other partnerships — in the partnership is of the fair market value, at that time, of all direct interests in the partnership; 
  (e) if a member of a partnership enters into a transaction, or participates in an event, with the partnership, paragraph (a) does not apply to the transaction or event to the extent that the transaction or event would, in the absence of this paragraph, be deemed by paragraph (a) to have been entered into, or participated in, as the case may be, by the member; and 
  (f) a person or partnership that is (or is deemed by this paragraph to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership. 
  
  ### Trusts
  
  (26) For the purposes of this section, subsection 17.1(1) (as it applies in respect of a pertinent loan or indebtedness as defined in subsection (11)), paragraph 128.1(1)(c.3) and subsection 219.1(2), and for the purpose of paragraph 251(1)(a) as it applies for the purposes of those provisions,  
  (a) in determining, at any time, whether two persons are related to each other or whether any person is controlled by any other person or group of persons, it shall be assumed that 
  (i) each trust is a corporation having a capital stock of a single class of voting shares divided into 100 issued shares, and 
  (ii) each beneficiary under a trust owned at that time the number of issued shares of that class determined by the formula is the fair market value at that time of the beneficiary’s interest in the trust, and is the total fair market value at that time of all beneficiaries’ interests in the trust; 
  (b) in determining, at any time, the extent to which any person owns shares of the capital stock of a corporation, if at that time a trust resident in Canada owns (determined without reference to this paragraph) shares of the capital stock of the corporation, each beneficiary of the trust is deemed to own, and the trust is deemed not to own, at that time, the shares of each class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust, the number of which is determined by the formula is the total number of shares of the class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust at that time, is the fair market value, at that time, of the beneficiary’s interest in the trust, and is the total fair market value, at that time, of all beneficiaries’ interests in the trust; and 
  (c) if a beneficiary’s share of the income or capital of a trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, then the amounts determined for A and B in paragraph (a), and for B and C in paragraph (b), in respect of the beneficiary are deemed to be equal to one, unless 
  (i) the trust is resident in Canada, and 
  (ii) it cannot reasonably be considered that one of the main reasons for the discretionary power is to avoid or limit the application of paragraph 128.1(1)(c.3) or subsection 212.3(2) or 219.1(2). 
  
  ### Tax non-payable by non-resident person
  
  213 (1) Tax is not payable by a non-resident person under subsection 212(2) on a dividend in respect of a share of the capital stock of a foreign business corporation if not less than 90% of the total of the received or receivable by it that are required to be included in computing its income for the taxation year in which the dividend was paid was received or receivable in respect of the operation by it of public utilities or from mining, transporting and processing of ore in a country in which 
  (a) if the non-resident person is an individual, the non-resident person resides; or 
  (b) if the non-resident person is a corporation, individuals who own more than 50% of its share capital (having full voting rights under all circumstances) reside. 
  
  ### Idem
  
  (2) For the purposes of this section, if 90% of the total of the received or receivable by a corporation that are required to be included in computing its income for a taxation year was received or receivable in respect of the operation by it of public utilities or from the mining, transporting and processing of ore, an amount received or receivable in that year from that corporation by another corporation shall, if it is required to be included in computing the receiving corporation’s income for the year, be deemed to have been received by the receiving corporation in respect of the operation by it of public utilities or from the mining, transporting and processing of ore by it in the country in which the public utilities were operated or the mining, transporting and processing of ore was carried out by the payer corporation. 
  
  ### Corporation deemed to be foreign business corporation
  
  (3) For the purposes of this section, a corporation shall be deemed to be a foreign business corporation at a particular time if it would have been a foreign business corporation within the meaning of section 71 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 (as that section read in its application to the 1971 taxation year), for the taxation year of the corporation in which the particular time occurred, if that section had been applicable to that taxation year.  
  
  ### No deductions
  
  214 (1) The tax payable under section 212 is payable on the amounts described therein without any deduction from those whatever. 
  
  ### Income and capital combined
  
  (2) Where paragraph 16(1)(b) would, if Part I were applicable, result in a part of an amount being included in computing the income of a non-resident person, that part of the amount shall, for the purposes of this Part, be deemed to have been paid or credited to the non-resident person in respect of property, services or otherwise, depending on the nature of that part of the amount. 
  
  ### Deemed payments
  
  (3) For the purposes of this Part, 
  (a) where section 15 or subsection 56(2) would, if Part I were applicable, require an amount to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid to the taxpayer as a dividend from a corporation resident in Canada; 
  (b) where paragraph 56(1)(f) would, if Part I were applicable, require an amount to be included in computing an individual’s income, that amount shall be deemed to have been paid to the individual under an income-averaging annuity contract; 
  (b.1) where paragraph 56(1)(y) would, if Part I were applicable, require an amount to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid to the taxpayer to acquire an interest in a retirement compensation arrangement; 
  (c) where, because of subsection 146(8.1), 146(8.8), 146(8.91), 146(9), 146(10) or 146(12), an amount would, if Part I applied, be required to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid to the taxpayer as a payment under a registered retirement savings plan or an amended plan (within the meaning assigned by subsection 146(12)), as the case may be; 
  (d) where, by virtue of subsection 147(10), 147(13) or 147(15), an amount would, if Part I were applicable, be required to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid to the taxpayer as a payment under a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”, as the case may be; 
  (e) where subsection 130.1(2) would, if Part I were applicable, deem an amount received by a shareholder of a mortgage investment corporation to have been received by the shareholder as interest, that amount shall be deemed to have been paid to the shareholder as interest on a bond issued after 1971; 
  (f) where subsection 104(13) would, if Part I were applicable, require any part of an amount payable by a trust in its taxation year to a beneficiary to be included in computing the income of the non-resident person who is a beneficiary of the trust, that part is deemed to be an amount paid or credited to that person as income of or from the trust 
  (i) on, or at, the earliest of 
  (A) the day on which the amount was paid or credited, 
  (B) the day that is 90 days after the end of the taxation year, and 
  (C) if the taxation year is deemed by subparagraph 128.1(4)(a)(i) to end after July 25, 2012, the time that is immediately before the end of the taxation year, and 
  (ii) not at any later time; 
  (f.1) where paragraph 132.1(1)(d) would, if Part I were applicable, require an amount to be included in computing a taxpayer’s income for a taxation year by reason of a designation by a mutual fund trust under subsection 132.1(1), that amount shall be deemed to be an amount paid or credited to that person as income of or from the trust on the day of the designation; 
  (g)  [Repealed, 2023, c. 26, s. 64]  
  (i) where, because of subsection 146.3(4), 146.3(6), 146.3(6.1), 146.3(7) or 146.3(11), an amount would, if Part I applied, be required to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid to the taxpayer as a payment under a registered retirement income fund; 
  (j)  [Repealed, 1998, c. 19, s. 63(1)]  
  (k) where, because of subsection 143.1(2), an amount distributed at any time by an amateur athlete trust would, if Part I were applicable, be required to be included in computing an individual’s income, that amount shall be deemed to have been paid at that time to the individual as a payment in respect of an amateur athlete trust; and 
  (l) where, because of subsection 12(10.2), an amount would at any particular time, if Part I were applicable, be required to be included in computing a taxpayer’s income, that amount shall be deemed to have been paid by Her Majesty in right of Canada at that time to the taxpayer out of the taxpayer’s NISA Fund No. 2. 
  
  ### Time of deemed payment
  
  (3.1) Except as otherwise expressly provided, each amount deemed by subsection 214(3) to have been paid shall be deemed to have been paid at the time of the event or transaction as a consequence of which the amount would, if Part I were applicable, be required to be included in computing a taxpayer’s income. 
  
  ### Securities
  
  (4) Where, if section 76 were applicable in computing a non-resident person’s income, that section would require an amount to be included in computing the income, that amount shall, for the purpose of this Part, be deemed to have been, at the time the non-resident person received the security, right, certificate or other evidence of indebtedness, paid to the non-resident person on account of the debt in respect of which the non-resident person received it. 
  
  ### Interpretation
  
  (5) Subsection 214(4) is enacted for greater certainty and shall not be construed as limiting the generality of the other provisions of this Part defining on which tax is payable. 
  
  ### Deemed interest
  
  (6) Where, in respect of interest stipulated to be payable, on a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation that has been assigned or otherwise transferred by a non-resident person to a person resident in Canada, subsection 20(14) would, if Part I were applicable, require an amount to be included in computing the transferor’s income, that amount is, for the purposes of this Part, deemed to be a payment of interest on that obligation made by the transferee to the transferor at the time of the assignment or other transfer of the obligation, if 
  (a) the obligation was issued by a person resident in Canada; 
  (b) the obligation was not an obligation described in paragraph 214(8)(a) or 214(8)(b); and 
  (c) the assignment or other transfer is not an assignment or other transfer referred to in paragraph 214(7.1)(b). 
  
  ### Sale of obligation
  
  (7) Where 
  (a) a non-resident person has at any time assigned or otherwise transferred to a person resident in Canada a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by a person resident in Canada, 
  (b) the obligation was not an excluded obligation, and 
  (c) the assignment or other transfer is not an assignment or other transfer referred to in paragraph 214(7.1)(b), the amount, if any, by which 
  (d) the price for which the obligation was assigned or otherwise transferred at that time, exceeds 
  (e) the price for which the obligation was issued, shall, for the purposes of this Part, be deemed to be a payment of interest on that obligation made by the person resident in Canada to the non-resident person at that time. 
  
  ### Idem
  
  (7.1) Where 
  (a) a person resident in Canada has at a particular time assigned or otherwise transferred an obligation to a non-resident person, 
  (b) the non-resident person has at a subsequent time assigned or otherwise transferred the obligation back to the person resident in Canada, and 
  (c) subsection 214(6) or 214(7) would apply with respect to the assignment or other transfer referred to in paragraph 214(7.1)(b), if those subsections were read without reference to paragraphs 214(6)(c) and 214(7)(c), the amount, if any, by which 
  (d) the price for which the obligation was assigned or otherwise transferred at the subsequent time, exceeds 
  (e) the price for which the obligation was assigned or otherwise transferred at the particular time, shall, for the purposes of this Part, be deemed to be a payment of interest on that obligation made by the person resident in Canada to the non-resident person at the subsequent time. 
  
  ### Meaning of 
  *excluded obligation* 
  
  (8) For the purposes of subsection (7), 
  *excluded obligation* means any bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation  
  (a) that is described in paragraph (a) of the definition 
  *fully exempt interest* in subsection 212(3), or on which the interest would have been exempt under subparagraph 212(1)(b)(iii) or (vii) as they applied to the 2007 taxation year;  
  (b) that is prescribed to be a public issue security; or 
  (c) that is not an indexed debt obligation and that was issued for an amount not less than 97% of the principal amount thereof, and the yield from which, expressed in terms of an annual rate on the amount for which the obligation was issued (which annual rate shall, if the terms of the obligation or any agreement relating thereto conferred on the holder thereof a right to demand payment of the principal amount of the obligation or the amount outstanding as or on account of the principal amount thereof, as the case may be, before the maturity of the obligation, be calculated on the basis of the yield that produces the highest annual rate obtainable either on the maturity of the obligation or conditional on the exercise of any such right) does not exceed 4/3 of the interest stipulated to be payable on the obligation, expressed in terms of an annual rate on 
  (i) the principal amount thereof, if no amount is payable on account of the principal amount before the maturity of the obligation, and 
  (ii) the amount outstanding from time to time as or on account of the principal amount thereof, in any other case. 
  
  ### Deemed resident
  
  (9) Where 
  (a) the assignment or other transfer of an obligation to a non-resident person carrying on business in Canada would be described in subsection 214(6) or 214(7) if those subsections were read without reference to paragraphs 214(6)(c) and 214(7)(c) and if that non-resident person were a person resident in Canada, and 
  (b) that non-resident person 
  (i) may deduct, under subsection 20(14), in computing the non-resident person’s taxable income earned in Canada for a taxation year an amount in respect of interest on the obligation, or 
  (ii) may deduct, under Part I, in computing the non-resident person’s taxable income earned in Canada for a taxation year an amount in respect of any amount paid on account of the principal amount of the obligation, the non-resident person shall, with respect to the assignment or other transfer of the obligation, be deemed, for thepurposes of this Part, to be a person resident in Canada. 
  
  ### Reduction of tax
  
  (10) Where a non-resident person has assigned or otherwise transferred to a person resident in Canada an obligation 
  (a) on which an amount of interest was deemed by subsection 214(6) or 214(7) to have been paid, and 
  (b) that the non-resident person had previously acquired from a person resident in Canada, the amount of the tax under this Part that the non-resident person is liable to pay in respect thereof shall be deemed, for the purpose of subsection 227(6), to be that proportion of the tax the non-resident person would otherwise have been liable to pay in respect thereof that 
  (c) the number of days in the period commencing with the day the obligation was last acquired by the non-resident person from a person resident in Canada and ending with the day the obligation was last assigned or otherwise transferred by the non-resident person to a person resident in Canada is of 
  (d) the number of days in the period commencing with the day the obligation was issued and ending with the day the obligation was last assigned or otherwise transferred by the non-resident person to a person resident in Canada. 
  (11)  [Repealed, 2007, c. 35, s. 60]  
  
  ### Where s. (2) does not apply
  
  (12) Subsection 214(2) does not apply in respect of a payment to a non-resident person under any obligation in respect of which that person is liable to pay tax under this Part by reason of subsection 214(7) or 214(7.1). 
  
  ### Regulations respecting residents
  
  (13) The Governor in Council may make general or special regulations, for the purposes of this Part, prescribing 
  (a) who is or has been at any time resident in Canada; 
  (b) where a person was resident in Canada as well as in some other place, what amounts are taxable under this Part; and 
  (c) where a non-resident person carried on business in Canada, what are taxable under this Part or what portion of the tax under this Part is payable by that person. 
  
  ### Assignment of obligation
  
  (14) For the purposes of this section, any transaction or event by which an obligation held by a non-resident person is redeemed in whole or in part or is cancelled shall be deemed to be an assignment of the obligation by the non-resident person. 
  
  ### Standby charges and guarantee fees
  
  (15) For the purposes of this Part, 
  (a) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to guarantee the repayment, in whole or in part, of the principal amount of a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation of a person resident in Canada, any amount paid or credited as consideration for the guarantee is deemed to be a payment of interest on that obligation; and 
  (b) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to lend money, or to make money available, to a person resident in Canada, any amount paid or credited as consideration for so agreeing to lend money or to make money available shall, if the non-resident person would be liable to tax under this Part in respect of interest payable on any obligation issued under the terms of the agreement on the date it was entered into, be deemed to be a payment of interest. 
  
  ### Deemed dividends
  
  (16) For the purposes of this Part, 
  (a) an amount paid or credited as interest by a corporation resident in Canada, or by a partnership, in a taxation year of the corporation to a non-resident person is deemed to have been paid by the corporation as a dividend, and not to have been paid or credited by the corporation or the partnership as interest, to the extent that an amount in respect of the interest 
  (i) is not deductible in computing the income of the corporation for the year because of subsection 18(4), or 
  (ii) is included in computing the income of the corporation for the year under paragraph 12(1)(l.1); and 
  (b) to the extent that amounts paid or credited to a non-resident person in the year are deemed by paragraph (a) to have been paid by a corporation as dividends, the corporation may designate in its return of income under Part I for the year which amounts paid or credited as interest to the non-resident person in the year are deemed to have been paid as dividends and not as interest. 
  
  ### Deemed interest payments
  
  (17) For the purposes of subsection (16), 
  (a) interest payable (other than interest payable pursuant to a legal obligation to pay interest on an amount of interest) by a corporation resident in Canada, or by a partnership, in respect of a taxation year of the corporation, but that has not been paid or credited in the year, is deemed to have been paid immediately before the end of the year and not to have been paid or credited at any other time; and 
  (b) if subsection (6) or (7) deems a payment of interest to have been made to a non-resident person in respect of a debt or other obligation of a corporation, interest that, at the time of the transfer or assignment, is payable by the corporation in respect of the debt or other obligation and has not been paid or credited is deemed to have been paid by the corporation immediately before that time to the non-resident person. 
  
  ### Withholding and remittance of tax
  
  215 (1) When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part, or would be so payable if this Act were read without reference to subparagraph 94(3)(a)(viii) and to subsection 216.1(1), the person shall, notwithstanding any agreement or law to the contrary, deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax and shall submit with the remittance a statement in prescribed form. 
  
  ### Exception - corporate immigration
  
  (1.1) Subsection (1) does not apply in respect of a dividend deemed to be paid under paragraph 128.1(1)(c.1) by a corporation to a non-resident corporation with which the corporation was dealing at arm’s length. 
  
  ### Idem
  
  (2) Where an amount on which an income tax is payable under this Part is paid or credited by an agent or other person on behalf of the debtor either by way of redemption of bearer coupons or warrants or otherwise, the agent or other person by whom the amount was paid or credited shall, notwithstanding any agreement or law to the contrary, deduct or withhold and remit the amount of the tax and shall submit therewith a statement in prescribed form as required by subsection 215(1) and shall thereupon, for purposes of accounting to or obtaining reimbursement from the debtor, be deemed to have paid or credited the full amount to the person otherwise entitled to payment. 
  
  ### Idem
  
  (3) Where an amount on which an income tax is payable under this Part was paid or credited to an agent or other person for or on behalf of the person entitled to payment without the tax having been deducted or withheld under subsection 215(1), the agent or other person shall, notwithstanding any agreement or law to the contrary, deduct or withhold therefrom the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the person entitled to payment in payment of the tax and shall submit therewith a statement in prescribed form, and the agent or other person shall thereupon, for purposes of accounting to the person entitled to payment, be deemed to have paid or credited that amount to that person. 
  
  ### Regulations creating exceptions
  
  (4) The Governor in Council may make regulations with reference to any non-resident person or class of non-resident persons who carries or carry on business in Canada, providing that subsections 215(1) to 215(3) are not applicable to amounts paid to or credited to that person or those persons and requiring the person or persons to file an annual return on a prescribed form and to pay the tax imposed by this Part within a time limited in the regulations. 
  
  ### Regulations reducing deduction or withholding
  
  (5) The Governor in Council may make regulations in respect of any non-resident person or class of non-resident persons to whom any amount is paid or credited as, on account of, in lieu of payment of or in satisfaction of, any amount described in any of paragraphs 212(1)(h), (j) to (m) and (q) reducing the amount otherwise required by any of subsections (1) to (3) to be deducted or withheld from the amount so paid or credited. 
  
  ### Liability for tax
  
  (6) Where a person has failed to deduct or withhold any amount as required by this section from an amount paid or credited or deemed to have been paid or credited to a non-resident person, that person is liable to pay as tax under this Part on behalf of the non-resident person the whole of the amount that should have been deducted or withheld, and is entitled to deduct or withhold from any amount paid or credited by that person to the non-resident person or otherwise recover from the non-resident person any amount paid by that person as tax under this Part on behalf thereof. 
  
  ### Alternatives re rents and timber royalties
  
  216 (1) If an amount has been paid during a taxation year to a non-resident person or to a partnership of which that person was a member as, on account of, in lieu of payment of or in satisfaction of, rent on real or immovable property in Canada or a timber royalty, that person may, within two years (or, if that person has filed an undertaking described in subsection (4) in respect of the year, within six months) after the end of the year, file a return of income under Part I for that year in prescribed form. On so filing and without affecting the liability of the non-resident person for tax otherwise payable under Part I, the non-resident person is, in lieu of paying tax under this Part on that amount, liable to pay tax under Part I for the year as though 
  (a) the non-resident person were a person resident in Canada and not exempt from tax under section 149; 
  (b) the non-resident person’s income from the non-resident person’s interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the non-resident person’s share of the income of a partnership of which the non-resident person was a member from its interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in, timber resource properties and timber limits in Canada, were the non-resident person’s only income; 
  (c) the non-resident person were entitled to no deductions from income for the purpose of computing the non-resident person’s taxable income; and 
  (d) the non-resident person were entitled to no deductions under sections 118 to 118.9 in computing the non-resident person’s tax payable under Part I for the year. 
  
  ### Idem
  
  (2) Where a non-resident person has filed a return of income under Part I as permitted by this section, the amount deducted under this Part from 
  (a) rent on real or immovable property or from timber royalties paid to the person, and 
  (b) the person’s share of the rent on real or immovable property or from timber royalties paid to a partnership of which the person is a member and remitted to the Receiver General shall be deemed to have been paid on account of tax under this section and any portion of the amount so remitted to the Receiver General in a taxation year on the person’s behalf in excess of the person’s liability for tax under this Act for the year shall be refunded to the person. 
  
  ### Idem
  
  (3) Part I is applicable, with such modifications as the circumstances require, to payment of tax under this section. 
  
  ### Optional method of payment
  
  (4) If a non-resident person or, in the case of a partnership, each non-resident person who is a member of the partnership files with the Minister an undertaking in prescribed form to file within six months after the end of a taxation year a return of income under Part I for the year as permitted by this section, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the non-resident person or the partnership, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect under this section not to remit under that subsection, and if that election is made, the elector shall, 
  (a) when any amount is available out of the rent or royalty received for remittance to the non-resident person or the partnership, as the case may be, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the non-resident person or the partnership on account of the tax under this Part; and 
  (b) if the non-resident person or, in the case of a partnership, a non-resident person who is a member of the partnership 
  (i) does not file a return for the year in accordance with the undertaking, or 
  (ii) does not pay under this section the tax the non-resident person or member is liable to pay for the year within the time provided for payment, pay to the Receiver General, on account of the non-resident person’s or the partnership’s tax under this Part, on the expiration of the time for filing or payment, as the case may be, the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty minus the that the elector has remitted in the year under paragraph 216(4)(a) in respect of the rent or royalty. 
  
  ### Optional method of payment
  
  (4.1) If a trust is deemed by subsection 94(3) to be resident in Canada for a taxation year for the purpose of computing the trust’s income for the year, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the trust, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect in prescribed form filed with the Minister under this subsection not to remit under subsection 215(3) in respect of amounts received after the election is made, and if that election is made, the elector shall, 
  (a) when any amount is available out of the rent or royalty received for remittance to the trust, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the trust on account of the trust’s tax under Part I; and 
  (b) if the trust does not file a return for the year as required by section 150, or does not pay the tax that the trust is liable to pay under Part I for the year within the time required by that Part, on the expiration of the time for filing or payment, as the case may be, pay to the Receiver General, on account of the trust’s tax under Part I, the amount by which the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty exceeds the amounts that the elector has remitted in the year under paragraph (a) in respect of the rent or royalty. 
  
  ### Disposition by non-resident
  
  (5) If a person or a trust under which a person is a beneficiary has filed a return of income under Part I for a taxation year as permitted by this section or as required by section 150 and, in computing the amount of the person’s income under Part I an amount has been deducted under paragraph 20(1)(a), or is deemed by subsection 107(2) to have been allowed under that paragraph, in respect of property that is real property in Canada — or an interest therein — or an immovable in Canada — or a real right therein —, a timber resource property or a timber limit in Canada, the person shall file a return of income under Part I in prescribed form on or before the person’s filing-due date for any subsequent taxation year in which the person is non-resident and in which the person, or a partnership of which the person is a member, disposes of that property or any interest, or for civil law any right, in it. On so filing and without affecting the person’s liability for tax otherwise payable under Part I, the person is, in lieu of paying tax under this Part on any amount paid, or deemed by this Part to have been paid, in that subsequent taxation year in respect of any interest in, or for civil law any right in, that property to the person or to a partnership of which the person is a member, liable to pay tax under Part I for that subsequent taxation year as though 
  (a) the person were a person resident in Canada and not exempt from tax under section 149; 
  (b) the person’s income from the person’s interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the person’s share of the income of a partnership of which the person was a member from its interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, were the person’s only income; 
  (c) the person were entitled to no deductions from income for the purpose of computing the person’s taxable income; and 
  (d) the person were entitled to no deductions under sections 118 to 118.9 in computing the person’s tax payable under Part I for the year. 
  
  ### Saving provision
  
  (6) Subsection 216(5) does not apply to require a non-resident person 
  (a) to file a return of income under Part I for a taxation year unless, by filing that return, there would be included in computing the non-resident person’s income under Part I for that year an amount by virtue of section 13; or 
  (b) to include in computing the non-resident person’s income for a taxation year any amount to the extent that that amount has been included in computing the non-resident person’s taxable income earned in Canada for that taxation year by virtue of any provision of this Act other than subsection 216(5). 
  (7)  [Repealed, 2013, c. 34, s. 349]  
  
  ### Restriction on deduction
  
  (8) For greater certainty, in determining the amount of tax payable by a non-resident person under Part I for a taxation year by reason of subsection 216(1) or 216(5), no deduction in computing the non-resident person’s income or tax payable under Part I for the year shall be made to the extent that such a deduction by non-resident persons is not permitted under Part I. 
  
  ### Alternative re: acting services
  
  216.1 (1) No tax is payable under this Part on any amount described in subsection 212(5.1) that is paid, credited or provided to a non-resident person in a taxation year if the person 
  (a) files with the Minister, on or before the person’s filing-due date for the year, a return of income under Part I for the year; and 
  (b) elects in the return to have this section apply for the year. 
  
  ### Deemed Part I payment
  
  (2) If in respect of a particular amount paid, credited or provided in a taxation year, a non-resident person has complied with paragraphs (1)(a) and (b), any amount deducted or withheld and remitted to the Receiver General on behalf of the person on account of tax under subsection 212(5.1) in respect of the particular amount is deemed to have been paid on account of the person’s tax under Part I. 
  
  ### Deemed election and restriction
  
  (3) Where a corporation payment (within the meaning assigned by subsection 212(5.2)) has been made to a non-resident corporation in respect of an actor and at any time the corporation makes an actor payment (within the meaning assigned by subsection 212(5.2)) to or for the benefit of the actor, if the corporation makes an election under subsection (1) for the taxation year in which the corporation payment is made, the actor is deemed to make an election under subsection (1) for the taxation year of the actor in which the corporation makes the actor payment. 
  
  ### Alternative re Canadian benefits
  
  217 (1) In this section, a non-resident person’s “Canadian benefits” for a taxation year is the total of all amounts each of which is an amount paid or credited in the year and in respect of which tax under this Part would, but for this section, be payable by the person because of any of paragraphs 212(1)(h), (j) to (m) and (q). 
  
  ### Part I return
  
  (2) No tax is payable under this Part in respect of a non-resident person’s Canadian benefits for a taxation year if the person 
  (a) files with the Minister, within 6 months after the end of the year, a return of income under Part I for the year; and 
  (b) elects in the return to have this section apply for the year. 
  
  ### Taxable income earned in Canada
  
  (3) Where a non-resident person elects under paragraph (2)(b) for a taxation year, for the purposes of Part I 
  (a) the person is deemed to have been employed in Canada in the year; and 
  (b) the person’s taxable income earned in Canada for the year is deemed to be the greater of 
  (i) the amount that would, but for subparagraph (ii), be the person’s taxable income earned in Canada for the year if 
  (A) paragraph 115(1)(a) included the following subparagraph after subparagraph (i): 
  “(i.1) the non-resident person’s Canadian benefits for the year, within the meaning assigned by subsection 217(1),”, and 
  (B) paragraph 115(1)(f) were read as follows: 
  “(f) such of the other deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the amounts described in subparagraphs (a)(i) to (vi).”; and 
  (ii) the person’s income (computed without reference to subsection 56(8)) for the year minus the total of such of the deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the amounts described in subparagraphs 115(1)(a)(i) to (vi). 
  
  ### Tax credits — limitation
  
  (4) Sections 118 to 118.91 and 118.94 do not apply in computing the tax payable under Part I for a taxation year by a non-resident person who elects under paragraph (2)(b) for the year, unless 
  (a) where section 114 applies to the person for the year, all or substantially all of the person’s income for the year is included in computing the person’s taxable income for the year; or 
  (b) in any other case, all or substantially all of the person’s income for the year is included in computing the amount determined under subparagraph (3)(b)(i) in respect of the person for the year. 
  
  ### Tax credits allowed
  
  (5) In computing the tax payable under Part I for a taxation year by a non-resident person to whom neither paragraph (4)(a) nor paragraph (4)(b) applies for the year there may, notwithstanding section 118.94 and subsection (4), be deducted the lesser of 
  (a) the total of 
  (i) such of the amounts that would have been deductible under any of section 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, as can reasonably be considered wholly applicable, and 
  (ii) the amounts that would have been deductible under any of sections 118 and 118.1, subsection 118.3(1) and sections 118.5 and 118.7 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, and 
  (b) the appropriate percentage for the year of the person’s Canadian benefits for the year. 
  
  ### Special credit
  
  (6) In computing the tax payable under Part I for a taxation year by a non-resident who elects under paragraph (2)(b) for the year, there may be deducted the amount determined by the formula is the amount of tax under Part I that would, but for this subsection, be payable by the person for the year; is the amount determined under subparagraph (3)(b)(ii) in respect of the person for the year; and is the amount determined under subparagraph (3)(b)(i) in respect of the person for the year. 
  
  ### Loan to wholly-owned subsidiary
  
  218 (1) For the purposes of this Act, where 
  (a) a non-resident corporation (in this section referred to as the “parent corporation”) is indebted to 
  (i) a person resident in Canada, or 
  (ii) a non-resident insurance corporation carrying on business in Canada, (in this section referred to as the “creditor”) under an arrangement whereby the parent corporation is required to pay interest in Canadian currency, and 
  (b) the parent corporation has lent the money in respect of which it is so indebted, or a part thereof, to a subsidiary wholly-owned corporation resident in Canada whose principal business is the making of loans (in this section referred to as the “subsidiary corporation”) under an arrangement whereby the subsidiary corporation is required to repay the loan to the parent corporation with interest at the same rate as is payable by the parent corporation to the creditor, the amount so lent by the parent corporation to the subsidiary corporation shall be deemed to have been borrowed by the parent corporation as agent of the subsidiary corporation and interest paid by the subsidiary corporation to the parent corporation that has been paid by the parent corporation to the creditor shall be deemed to have been paid by the subsidiary corporation to the creditor and not by the subsidiary corporation to the parent corporation or by the parent corporation to the creditor. 
  
  ### Idem
  
  (2) Where a parent corporation has lent money to a subsidiary wholly-owned corporation resident in Canada whose principal business is not the making of loans and the money has been lent by that corporation to a subsidiary corporation wholly-owned by it and resident in Canada whose principal business is the making of loans, the loan by the parent corporation shall be deemed, for the purpose of subsection 218(1), to have been a loan to a subsidiary wholly-owned corporation whose principal business is the making of loans. 
  
  ### Election
  
  (3) This section does not apply in respect of any payment of interest unless the parent corporation and the creditor have executed, and filed with the Minister, an election in prescribed form. 
  
  ### Application of election
  
  (4) An election filed under subsection 218(3) does not apply in respect of any payment of interest made more than 12 months before the date on which the election was filed with the Minister. 
  
  ### Application of s. 138.1
  
  218.1 In respect of life insurance policies for which all or any part of an insurer’s reserves vary in amount depending on the fair market value of a specified group of properties, the rules contained in section 138.1 apply for the purposes of this Part. 
  
  # PART XIII.1 
  
  ## Additional Tax on Authorized Foreign Banks 
  
  ### Branch interest tax
  
  218.2 (1) Every authorized foreign bank shall pay a tax under this Part for each taxation year equal to 25% of its taxable interest expense for the year. 
  
  ### Taxable interest expense
  
  (2) The taxable interest expense of an authorized foreign bank for a taxation year is 15% of the amount, if any, by which 
  (a) the total of all amounts on account of interest that are deducted under section 20.2 in computing the bank’s income for the year from its Canadian banking business exceeds 
  (b) the total of all amounts that are included in paragraph (a) and that are in respect of a liability of the bank to another person or partnership. 
  
  ### Where tax not payable
  
  (3) No tax is payable under this Part for a taxation year by an authorized foreign bank if 
  (a) the bank is resident in a country with which Canada has a tax treaty at the end of the year; and 
  (b) no tax similar to the tax under this Part would be payable in that country for the year by a bank resident in Canada carrying on business in that country during the year. 
  
  ### Rate limitation
  
  (4) Notwithstanding any other provision of this Act, the reference in subsection (1) to 25% shall, in respect of a taxation year of an authorized foreign bank that is resident in a country with which Canada has a tax treaty on the last day of the year, be read as a reference to, 
  (a) if the treaty specifies the maximum rate of tax that Canada may impose under this Part for the year on residents of that country, that rate; 
  (b) if the treaty does not specify a maximum rate as described in paragraph (a) but does specify the maximum rate of tax that Canada may impose on a payment of interest in the year by a person resident in Canada to a related person resident in that country, that rate; and 
  (c) in any other case, 25%. 
  
  ### Provisions applicable to Part
  
  (5) Sections 150 to 152, 158, 159, 160.1 and 161 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require. 
  
  # PART XIII.2 
  
  ## Non-resident Investors in Canadian Mutual Funds 
  
  ### Definitions
  
  218.3 (1) The following definitions apply in this Part.  
  *assessable distribution*, in respect of a Canadian property mutual fund investment, means the portion of any amount that is paid or credited (otherwise than as a SIFT trust wind-up event), by the mutual fund that issued the investment, to a non-resident investor who holds the investment, and that is not otherwise subject to tax under Part I or Part XIII. (distribution déterminée)   
  *Canadian property mutual fund investment* means a share of the capital stock of a mutual fund corporation, or a unit of a mutual fund trust, if  
  (a) the share or unit is listed on a designated stock exchange; and 
  (b) more than 50% of the fair market value of the share or unit is attributable to one or more properties each of which is real property in Canada, a Canadian resource property or a timber resource property. ( placement collectif en biens canadiens)   
  *Canadian property mutual fund loss* — of a non-resident investor for a taxation year for which the non-resident investor has filed, on or before their filing-due date for the taxation year, a return of income under this Part in prescribed form, in respect of a Canadian property mutual fund investment — means the lesser of  
  (a) the non-resident investor’s loss (for greater certainty as determined under section 40) for the taxation year from the disposition of the Canadian property mutual fund investment, and 
  (b) the total of all assessable distributions that were paid or credited on the Canadian property mutual fund investment after the non-resident investor last acquired the investment and at or before the time of the disposition. ( perte collective en biens canadiens)   
  *non-resident investor* means a non-resident person or a partnership other than a Canadian partnership. (investisseur non résident)   
  *unused Canadian property mutual fund loss*, of a non-resident investor for a taxation year, means the portion of the total of the non-resident investor’s Canadian mutual fund property losses for preceding taxation years that has neither reduced under subsection (3) the amount of tax payable, nor increased under subsection (5) the amount of a refund of tax paid, under this Part for any preceding taxation year. (perte collective en biens canadiens inutilisée)  
  
  ### Tax payable
  
  (2) If at any time a person (referred to in this section as the “payer”) pays or credits, to a non-resident investor who holds a Canadian property mutual fund investment, an amount as, on account of, in lieu of payment of or in satisfaction of, an assessable distribution, 
  (a) the non-resident investor is deemed for the purposes of this Act, other than section 150, to have disposed at that time, for proceeds equal to the amount of the assessable distribution, of a property 
  (i) that is a taxable Canadian property the adjusted cost base of which to the non-resident investor immediately before that time is nil, and 
  (ii) that is in all other respects identical to the Canadian property mutual fund investment; 
  (b) the non-resident investor is liable to pay an income tax of 15% on the amount of any gain (for greater certainty as determined under section 40) from the disposition; and 
  (c) the payer shall, notwithstanding any agreement or law to the contrary, 
  (i) deduct or withhold 15% from the amount paid or credited, 
  (ii) immediately remit that amount to the Receiver General on behalf of the non-resident investor on account of the tax, and 
  (iii) submit with the remittance a statement in prescribed form. 
  
  ### Use of losses
  
  (3) If a non-resident investor files, on or before their filing-due date for a taxation year, a return of income under this Part in prescribed form for the taxation year, the non-resident investor is liable, instead of paying tax under paragraph (2)(b) in respect of any amount paid or credited in the taxation year, to pay an income tax of 15% for the taxation year on the amount, if any, by which 
  (a) the total of the non-resident investor’s gains under subsection (2) for the taxation year exceeds 
  (b) the total of the non-resident investor’s Canadian property mutual fund losses for the year and the non-resident investor’s unused Canadian property mutual fund loss for the taxation year. 
  
  ### Deemed tax paid
  
  (4) If a non-resident investor files, on or before their filing-due date for a taxation year, a return of income under this Part in prescribed form for the taxation year, any amount that is remitted to the Receiver General in respect of an assessable distribution paid or credited to the non-resident investor in the taxation year is deemed to have been paid on account of the non-resident investor’s tax under subsection (3) for the taxation year. 
  
  ### Refund
  
  (5) The amount, if any, by which the total of all amounts paid on account of a non-resident investor’s tax under subsection (3) for a taxation year exceeds the non-resident investor’s liability for tax under this Part for the taxation year shall be refunded to the non-resident investor. 
  
  ### Excess loss — carryback
  
  (6) If a non-resident investor files, on or before their filing-due date for a taxation year, a return of income under this Part in prescribed form for the taxation year, the Minister shall refund to the non-resident investor an amount equal to the lesser of 
  (a) the total amount of tax under this Part paid by the non-resident investor in each of the three preceding taxation years, to the extent that the Minister has not previously refunded that tax, and 
  (b) 15% of the amount, if any, by which 
  (i) the total of the non-resident investor’s Canadian property mutual fund losses for the taxation year and the non-resident investor’s unused Canadian property mutual fund loss for the taxation year exceeds 
  (ii) the total of all assessable distributions paid or credited to the non-resident investor in the taxation year. 
  
  ### Ordering
  
  (7) In applying subsection (6), amounts of tax are to be considered to be refunded in the order in which they were paid. 
  
  ### Partnership filing-due date
  
  (8) For the purposes of this Part, the taxation year of a partnership is its fiscal period and the filing-due date for the taxation year is to be determined as if the partnership were a corporation. 
  
  ### Partnership — member resident in Canada
  
  (9) If a non-resident investor is a partnership a member of which is resident in Canada, the portion of the tax paid by the partnership under this Part in respect of an assessable distribution paid or credited to the partnership in a particular taxation year of the partnership (or, if the partnership files a return of income for the particular taxation year in accordance with subsection (3), the portion of the tax paid by the partnership under that subsection for the taxation year) that can reasonably be considered to be the member’s share is deemed 
  (a) to be an amount paid on account of that member’s liability for tax under Part I for that member’s taxation year in which the particular taxation year of the partnership ends; and 
  (b) except for the purposes of this subsection, to be neither a tax paid on account of the partnership’s tax under this Part nor a tax paid by the partnership. 
  
  ### Provisions applicable
  
  (10) Section 150.1, subsections 161(1), (7) and (11), sections 162 to 167, Division J of Part I, paragraph 214(3)(f), subsections 215(2), (3) and (6) and sections 227 and 227.1 apply to this Part with any modifications that the circumstances require. 
  
  # PART XIV 
  
  ## Additional Tax on Non-resident Corporations 
  
  ### Additional tax
  
  219 (1) Every corporation that is non-resident in a taxation year shall, on or before its balance-due day for the year, pay a tax under this Part for the year equal to 25% of the amount, if any, by which the total of 
  (a) the corporation’s taxable income earned in Canada for the year (in this subsection referred to as the corporation’s “base amount”), 
  (b) the amount deducted because of section 112 and paragraph 115(1)(e) in computing the corporation’s base amount, 
  (c)  [Repealed, 2003, c. 28, s. 17]  
  (d) the amount, if any, by which the total of all amounts each of which is a taxable capital gain of the corporation for the year from a disposition of a taxable Canadian property exceeds the total of all amounts each of which is 
  (i) an allowable capital loss of the corporation for the year from a disposition of a taxable Canadian property, or 
  (ii) an amount deductible because of paragraphs 111(1)(b) and 115(1)(d) in computing the corporation’s base amount, 
  (e) the total of all amounts each of which is an amount in respect of a grant or credit that 
  (i) can reasonably be considered to have been received by the corporation in the year as a reimbursement or repayment of, or as indemnification or compensation for, an amount deducted because of paragraph (j), as it read in its application to the 1995 taxation year, in computing the amount determined under this subsection for a preceding taxation year that began before 1996, and 
  (ii) was not included in computing the corporation’s base amount for any taxation year, 
  (f) where, at any time in the year, the corporation has made one or more dispositions described in paragraph 219(219)(l) of qualified property, the total of all amounts each of which is an amount in respect of one of those dispositions equal to the amount, if any, by which the fair market value of the qualified property at the time of the disposition exceeds the corporation’s proceeds of disposition of the property, and 
  (g) the amount, if any, claimed for the immediately preceding taxation year under paragraph 219(1)(j) by the corporation, exceeds the total of 
  (h) that proportion of the total of 
  (i) the total of the taxes payable under Parts I, I.3 and VI for the year by the corporation, determined without reference to subsection 219(1.1), and 
  (ii) the total of the income taxes payable to the government of a province for the year by the corporation, determined without reference to subsection 219(1.1), that the corporation’s base amount is of the amount that would, if this Act were read without reference to subsection 219(1.1), be the corporation’s base amount, 
  (i) the total of all amounts each of which is the amount of interest or a penalty paid by the corporation in the year 
  (i) under this Act, or 
  (ii) on or in respect of an income tax payable by it to the government of a province under a law of the province relating to income tax, to the extent that the interest or penalty was not deductible in computing its base amount for any taxation year, 
  (j) where the corporation was carrying on business in Canada at the end of the year, the amount claimed by the corporation for the year, not exceeding the amount prescribed to be its allowance for the year in respect of its investment in property in Canada, and 
  (k)  [Repealed, 2003, c. 28, s. 17]  
  (l) where the corporation has at any time in the year disposed of property (in this paragraph and paragraph 219(1)(f) referred to as “qualified property”) used by it immediately before that time for the purpose of gaining or producing income from a business carried on by it in Canada to a Canadian corporation (in this paragraph referred to as the “purchaser corporation”) that was, immediately after the disposition, a qualified related corporation of the corporation for consideration that includes a share of the capital stock of the purchaser corporation, the total of all amounts each of which is an amount in respect of a disposition in the year of a qualified property equal to the amount, if any, by which 
  (i) the fair market value of the qualified property at the time of the disposition exceeds the total of 
  (ii) the amount, if any, by which the paid-up capital in respect of the issued and outstanding shares of the capital stock of the purchaser corporation increased because of the disposition, and 
  (iii) the fair market value, at the time of receipt, of the consideration (other than shares) given by the purchaser corporation for the qualified property. 
  
  ### Excluded gains
  
  (1.1) For the purposes of subsection (1), the definition 
  *taxable Canadian property* in subsection 248(1) shall be read without reference to paragraphs (a) and (c) to (e) of that definition and as if the only options, interests or rights referred to in paragraph (f) of that definition were those in respect of property described in paragraph (b) of that definition.  
  
  ### Exempt corporations
  
  (2) No tax is payable under this Part for a taxation year by a corporation that was, throughout the year, 
  (a)  [Repealed, 2001, c. 17, s. 177]  
  (b) a corporation whose principal business was 
  (i) the transportation of persons or goods, 
  (ii) communications, or 
  (iii) mining iron ore in Canada; or 
  (c) a corporation exempt from tax under section 149. 
  
  ### Provisions applicable to Part
  
  (3) Sections 150 to 152, 154, 158, 159 and 161 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. 
  
  ### Non-resident insurers
  
  (4) No tax is payable under subsection 219(1) for a taxation year by a non-resident insurer, but where it elects, in prescribed manner and within the prescribed time, to deduct, in computing its Canadian investment fund as of the end of the immediately following taxation year, an amount not greater than the amount, if any, by which 
  (a) the amount, if any, by which the total of 
  (i) the insurer’s surplus funds derived from operations as of the end of the year, and 
  (i.1) where, in any particular taxation year that began before the end of the year, the insurer transferred to a taxable Canadian corporation with which it did not deal at arm’s length any designated insurance property of the insurer for the particular year, and 
  (A) the property was transferred before December 16, 1987 and subsection 138(11.5) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, applied in respect of the transfer, or  
  (B) the property was transferred before November 22, 1985 and subsection 85(1) of that Act applied in respect of the transfer, the amount, if any, by which 
  (C) the total of the fair market value, at the time of the transfer, of all such property exceeds 
  (D) the total of the insurer’s proceeds of disposition of all such property, exceeds the total of 
  (ii) each amount on which the insurer has paid tax under this Part for a previous taxation year, 
  (iii) the amount, if any, by which the insurer’s accumulated 1968 deficit exceeds the amount of the insurer’s maximum tax actuarial reserves for its 1968 taxation year for its life insurance policies in Canada, 
  (iv) the insurer’s loss, if any, for each of its 5 consecutive taxation years ending with its 1968 taxation year, from all insurance businesses (other than its life insurance business) carried on by it in Canada (computed without reference to section 30 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to those years), except to the extent that any such loss was deductible in computing its taxable income for any of its taxation years ending before 1969, and  
  (v) the total of all amounts in respect of which the insurer has filed an election under subsection 219(5.2) for a previous taxation year in accordance with that subsection, exceeds 
  (b) the amount of the insurer’s attributed surplus for the year, the insurer shall, on or before the day on or before which it is required to file a return under Part I for the year, pay a tax for the year equal to 25% of the amount, if any, by which the amount it has so elected to deduct exceeds the amount in respect of which it filed an election under subsection 219(5.2) for the year in accordance with that subsection. 
  
  ### Additional tax on insurer
  
  (5.1) Where a non-resident insurer ceases in a taxation year to carry on all or substantially all of an insurance business in Canada, it shall, on or before its filing-due date for the year, pay a tax for the year equal to 25% of the amount, if any, by which 
  (a) that portion of the amount determined under paragraph 219(4)(a) for the year in respect of the insurer that can reasonably be attributed to the business, including the disposition by it of property that was its designated insurance property in respect of the business for the year in which the disposition occurred, exceeds 
  (b) the amount the insurer and a qualified related corporation of the insurer jointly elect in accordance with subsection 219(5.2) for the year in respect of the business. 
  
  ### Election by non-resident insurer
  
  (5.2) Where 
  (a) a non-resident insurer has ceased to carry on all or substantially all of an insurance business in Canada in a taxation year, and 
  (b) the insurer has transferred the business to a qualified related corporation of the insurer and the insurer and the corporation have elected to have subsection 138(11.5) apply in respect of the transfer, the insurer and the corporation may elect, in prescribed manner and within prescribed time, to reduce the amount in respect of which the insurer would otherwise be liable to pay tax under subsection 219(5.1) by an amount not exceeding the lesser of 
  (c) the amount determined under paragraph 219(5.1)(a) in respect of the insurer in respect of the business, and 
  (d) the total of the paid-up capital of the shares of the capital stock of the corporation received by the insurer as consideration for the transfer of the business and any contributed surplus arising on the issue of those shares. 
  
  ### Deemed payment of dividend
  
  (5.3) Where, at any time in a taxation year, 
  (a) a qualified related corporation of a non-resident insurer ceases to be a qualified related corporation of that insurer, or 
  (b) the tax deferred account of a qualified related corporation of a non-resident insurer exceeds the total of the paid-up capital in respect of all the shares of the capital stock of the corporation and its contributed surplus, the corporation shall be deemed to have paid, immediately before that time, a dividend to the insurer in an amount equal to 
  (c) where paragraph 219(5.3)(a) is applicable, the balance of the tax deferred account of the corporation at that time, or 
  (d) where paragraph 219(5.3)(b) is applicable, the amount of the excess referred to in that paragraph at that time. 
  
  ### Definitions
  
  (7) In this Part,  
  *accumulated 1968 deficit* of a life insurer means such amount as can be established by the insurer to be its deficit as of the end of its 1968 taxation year from carrying on its life insurance business in Canada on the assumption that the amounts of its assets and liabilities (including reserves of any kind)  
  (a) as of the end of any taxation year before its 1968 taxation year, were the amounts thereof determined for the purposes of the Superintendent of Insurance for Canada or other similar officer, and 
  (b) as of the end of its 1968 taxation year, were 
  (i) in respect of depreciable property, the capital cost thereof as of the first day of its 1969 taxation year, 
  (ii) in respect of policy reserves, the insurer’s maximum tax actuarial reserves for its 1968 taxation year for life insurance policies issued by it in the course of carrying on its life insurance business in Canada, and 
  (iii) in respect of other assets and liabilities, the amounts thereof determined as of the end of that year for the purpose of computing its income for its 1969 taxation year; ( déficit accumulé pour 1968)   
  *attributed surplus* of an insurer for a taxation year has the meaning assigned by regulation; (surplus attribué)   
  *Canadian investment fund* has the meaning prescribed for that expression; (fonds de placement canadien)   
  *maximum tax actuarial reserves* has the meaning assigned by subsection 138(12); (provision actuarielle maximale aux fins d’impôt)   
  *surplus funds derived from operations* has the meaning assigned by subsection 138(12); (fonds excédentaire résultant de l’activité)   
  *tax deferred account* of a qualified related corporation at any time means the amount determined by the formula  is the total of all amounts each of which is an amount in respect of which the qualified related corporation and a non-resident insurer have elected jointly before that time in accordance with subsection 219(5.2), and is the total of all amounts each of which is the amount of a dividend deemed by subsection 219(5.3) to have been paid by the qualified related corporation before that time. ( compte d’impôt différé)  
  
  ### Meaning of 
  *qualified related corporation* 
  
  (8) For the purposes of this Part, a corporation is a 
  *qualified related corporation* of a particular corporation if it is resident in Canada and all of the issued and outstanding shares (other than directors’ qualifying shares) of its capital stock (having full voting rights under all circumstances) are owned by  
  (a) the particular corporation, 
  (b) a subsidiary wholly-owned corporation of the particular corporation, 
  (c) a corporation of which the particular corporation is a subsidiary wholly-owned corporation, 
  (d) a subsidiary wholly-owned corporation of a corporation of which the particular corporation is also a subsidiary wholly-owned corporation, or 
  (e) any combination of corporations each of which is a corporation described in paragraph 219(8)(a), 219(8)(b), 219(8)(c) or 219(8)(d), and, for the purpose of this subsection, a subsidiary wholly-owned corporation of a particular corporation includes any subsidiary wholly-owned corporation of a corporation that is a subsidiary wholly-owned corporation of the particular corporation. 
  
  ### Corporate emigration
  
  219.1 (1) If a taxation year of a corporation (in this subsection and subsection (2) referred to as the “emigrating corporation”) is deemed by paragraph 128.1(4)(a) to have ended at any time, the emigrating corporation shall, on or before its filing-due date for the year, pay a tax under this Part for the year equal to the amount determined by the formula is the fair market value of all the property owned by the emigrating corporation immediately before that time; and is the total of 
  (a) the paid-up capital in respect of all the shares of the capital stock of the emigrating corporation immediately before that time, 
  (b) all amounts (other than amounts payable by the emigrating corporation in respect of dividends and amounts payable under this section) each of which is a debt owing by the emigrating corporation, or an obligation of the emigrating corporation to pay an amount, that is outstanding at that time, and 
  (c) if a tax was payable by the emigrating corporation under subsection 219(1) or this section for a preceding taxation year that began before 1996 and after the emigrating corporation last became resident in Canada, four times the total of all amounts that would, but for sections 219.2 and 219.3 and any tax treaty, have been so payable. 
  
  ### Foreign affiliate dumping — emigrating corporation
  
  (2) The paid-up capital referred to in paragraph (a) of the description of B in subsection (1) is deemed to be nil if 
  (a) one or more shares of the emigrating corporation are, at the time the emigrating corporation ceases to be resident in Canada, owned by another corporation resident in Canada; 
  (b) the other corporation is controlled, at that time, by a non-resident person or a group of non-resident persons not dealing with each other at arm’s length; and 
  (c) the emigrating corporation is, immediately after that time — or becomes, as part of a transaction or event or series of transactions or events that includes the emigrating corporation ceasing to be resident in Canada — a foreign affiliate of the other corporation. 
  
  ### Application of subsection (4)
  
  (3) Subsection (4) applies if 
  (a) a corporation ceases to be resident in Canada at any time (referred to in subsection (4) as the “emigration time”); 
  (b) an amount is required by paragraph 212.3(2)(b) or subsection 212.3(7) to be deducted in computing the paid-up capital in respect of a class of shares of the capital stock of the corporation because of an investment in a subject corporation made by a CRIC that is described in any of paragraphs 212.3(10)(a) to (f); 
  (c) subsection 212.3(9) has not applied in respect of any reduction of the paid-up capital in respect of a class of shares of the capital stock of the corporation or a specified predecessor corporation (as defined in subsection 95(1)) of the corporation; and 
  (d) subsection (2) does not apply in respect of the cessation of residence. 
  
  ### Paid-up capital reinstatement
  
  (4) If this subsection applies, the paid-up capital referred to in paragraph (a) of the description of B in subsection (1) is to be increased, immediately before the time that is immediately before the emigration time, by the lesser of 
  (a) the total of all amounts each of which is an amount by which the paid-up capital of a class of shares of the capital stock of the corporation was required by paragraph 212.3(2)(b) or subsection 212.3(7) to be reduced in respect of an investment in a subject corporation made by the CRIC that is described in any of paragraphs 212.3(10)(a) to (f); and 
  (b) the total of all amounts each of which is 
  (i) the fair market value of a share of the capital stock of a subject corporation that is owned by the corporation immediately before the emigration time, 
  (ii) the portion of the fair market value of a particular share of the capital stock of a foreign affiliate of the corporation owned by the corporation immediately before the emigration time that may reasonably be considered to relate to a share of the capital stock of a subject corporation that was previously owned by the corporation and for which the particular share was substituted, or 
  (iii) the fair market value of a debt obligation, other than a pertinent loan or indebtedness (as defined in subsection 212.3(11)), of a subject corporation that is owned by the corporation immediately before the emigration time. 
  
  ### Assigned meanings from section 212.3
  
  (5) For the purposes of subsections (3) and (4), 
  *CRIC* and 
  *subject corporation* have the meaning assigned to those terms by subsection 212.3(1) and 
  *investment* has the same meaning as in subsection 212.3(10).  
  
  ### Limitation on rate of branch tax
  
  219.2 Notwithstanding any other provision of this Act, where an agreement or convention between the Government of Canada and the government of another country that has the force of law in Canada 
  (a) does not limit the rate of tax under this Part on corporations resident in that other country, and 
  (b) provides that, where a dividend is paid by a corporation resident in Canada to a corporation resident in that other country that owns all of the shares of the capital stock of the corporation resident in Canada, the rate of tax imposed on the dividend shall not exceed a specified rate, any reference in section 219 to a rate of tax shall, in respect of a taxation year of a corporation to which that agreement or convention applies on the last day of that year, be read as a reference to the specified rate. 
  
  ### Effect of tax treaty
  
  219.3 For the purpose of section 219.1, where an agreement or convention between the Government of Canada and the government of another country that has the force of law in Canada provides that the rate of tax imposed on a dividend paid by a corporation resident in Canada to a corporation resident in the other country that owns all of the shares of the capital stock of the corporation resident in Canada shall not exceed a specified rate, the reference in section 219.1 to “25%” shall, in respect of a corporation that ceased to be resident in Canada and to which the agreement or convention applies at the beginning of its first taxation year after its taxation year that is deemed by paragraph 128.1(4)(a) to have ended, be read as a reference to the specified rate unless it can reasonably be concluded that one of the main reasons that the corporation became resident in the other country was to reduce the amount of tax payable under this Part or Part XIII. 
  
  # PART XV 
  
  ## Administration and Enforcement 
  
  ## Administration 
  
  ### Minister’s duty
  
  220 (1) The Minister shall administer and enforce this Act and the Commissioner of Revenue may exercise all the powers and perform the duties of the Minister under this Act. 
  
  ### Officers, clerks and employees
  
  (2) Such officers, clerks and employees as are necessary to administer and enforce this Act shall be appointed or employed in the manner authorized by law. 
  
  ### Delegation
  
  (2.01) The Minister may authorize an officer or a class of officers to exercise powers or perform duties of the Minister under this Act. 
  
  ### Waiver of filing of documents
  
  (2.1) Where any provision of this Act or a regulation requires a person to file a prescribed form, receipt or other document, or to provide prescribed information, the Minister may waive the requirement, but the person shall provide the document or information at the Minister’s request. 
  
  ### Exception
  
  (2.2) Subsection (2.1) does not apply in respect of a prescribed form, receipt or document, or prescribed information, that is filed with the Minister on or after the day specified, in respect of the form, receipt, document or information, in subsection 37(11) or paragraph (m) of the definition investment tax credit in subsection 127(9).  
  
  ### Extensions for returns
  
  (3) The Minister may at any time extend the time for making a return under this Act. 
  
  ### Waiver of penalty or interest
  
  (3.1) The Minister may, on or before the day that is ten calendar years after the end of a taxation year of a taxpayer (or in the case of a partnership, a fiscal period of the partnership) or on application by the taxpayer or partnership on or before that day, waive or cancel all or any portion of any penalty or interest otherwise payable under this Act by the taxpayer or partnership in respect of that taxation year or fiscal period, and notwithstanding subsections 152(4) to (5), any assessment of the interest and penalties payable by the taxpayer or partnership shall be made that is necessary to take into account the cancellation of the penalty or interest. 
  
  ### Late, amended or revoked elections
  
  (3.2) The Minister may extend the time for making an election or grant permission to amend or revoke an election if 
  (a) the election was otherwise required to be made by a taxpayer or by a partnership, under a prescribed provision, on or before a day in a taxation year of the taxpayer (or in the case of a partnership, a fiscal period of the partnership); and 
  (b) the taxpayer or the partnership applies, on or before the day that is ten calendar years after the end of the taxation year or the fiscal period, to the Minister for that extension or permission. 
  
  ### Joint election — pension income split
  
  (3.201) On application by a taxpayer, the Minister may extend the time for making an election, or grant permission to amend or revoke an election, under section 60.03 if 
  (a) the application is made on or before the day that is three calendar years after the taxpayer’s filing-due date for the taxation year to which the election applies; and 
  (b) the taxpayer is resident in Canada 
  (i) if the taxpayer is deceased at the time of the application, at the time that is immediately before the taxpayer’s death, or 
  (ii) in any other case, at the time of the application. 
  
  ### Designations and allocations
  
  (3.21) For the purpose of subsection (3.2), 
  (a) a designation in any form prescribed for the purpose of paragraph 80(2)(i) or any of subsections 80(5) to (11) or 80.03(7) is deemed to be an election under a prescribed provision of this Act; 
  (a.1) a designation is deemed to be an election under a prescribed provision of this Act if the designation is made under the definition principal residence in section 54; and  
  (b) a designation or allocation under subsection 132.11(6) is deemed to be an election under a prescribed provision of this Act. 
  
  ### Date of late election, amended election or revocation
  
  (3.3) Where, under subsection 220(3.2), the Minister has extended the time for making an election or granted permission to amend or revoke an election, 
  (a) the election or the amended election, as the case may be, shall be deemed to have been made on the day on or before which the election was otherwise required to be made and in the manner in which the election was otherwise required to be made, and, in the case of an amendment to an election, that election shall be deemed, otherwise than for the purposes of this section, never to have been made; and 
  (b) the election that was revoked shall be deemed, otherwise than for the purposes of this section, never to have been made. 
  
  ### Assessments
  
  (3.4) Notwithstanding subsections 152(4), 152(4.01), 152(4.1) and 152(5), such assessment of the tax, interest and penalties payable by each taxpayer in respect of any taxation year that began before the day an application is made under subsection 220(3.2) to the Minister shall be made as is necessary to take into account the election, the amended election or the revocation, as the case may be, referred to in subsection 220(3.3). 
  
  ### Penalty for late filed, amended or revoked elections
  
  (3.5) Where, on application by a taxpayer or a partnership, the Minister extends the time for making an election or grants permission to amend or revoke an election (other than an extension or permission under subsection (3.201)), the taxpayer or the partnership, as the case may be, is liable to a penalty equal to the lesser of 
  (a) $8,000, and 
  (b) the product obtained when $100 is multiplied by the number of complete months from the day on or before which the election was required to be made to the day the application was made in a form satisfactory to the Minister. 
  
  ### Unpaid balance of penalty
  
  (3.6) The Minister shall, with all due dispatch, examine each election, amended election and revoked election referred to in subsection 220(3.3), assess any penalty payable and send a notice of assessment to the taxpayer or the partnership, as the case may be, and the taxpayer or the partnership, as the case may be, shall pay forthwith to the Receiver General the amount, if any, by which the penalty so assessed exceeds the total of all amounts previously paid on account of that penalty. 
  
  ### Idem
  
  (3.7) The provisions of Divisions I and J of Part I apply, with such modifications as the circumstances require, to an assessment made under this section as though it had been made under section 152. 
  
  ### Dishonoured instruments
  
  (3.8) For the purposes of this Act and section 155.1 of the Financial Administration Act  
  (a) any charge that becomes payable at any time by a person under the Financial Administration Act in respect of an instrument tendered in payment or settlement of an amount that is payable or remittable under this Act is deemed to be an amount that becomes payable or remittable by the person at that time under this Act;  
  (b) sections 152, 158 and 159, subsections 161(1), (2) and (11), sections 162 to 167 and Division J of this Part are applicable to the amount deemed to become payable or remittable by this subsection with any modifications that the circumstances require; 
  (c) Part II of the Interest and Administrative Charges Regulations does not apply to the charge; and  
  (d) any debt under subsection 155.1(3) of the Financial Administration Act in respect of the charge is deemed to be extinguished at the time the total of the amount and any applicable interest under this Act is paid.  
  
  ### Security
  
  (4) The Minister may, if the Minister considers it advisable in a particular case, accept security for payment of any amount that is or may become payable under this Act. 
  
  ### Idem
  
  (4.1) Where a taxpayer has objected to or appealed from an assessment under this Act, the Minister shall, while the objection or appeal is outstanding, accept adequate security furnished by or on behalf of the taxpayer for payment of the amount in controversy except to the extent that the Minister may collect the amount because of subsection 225.1(7). 
  
  ### Surrender of excess security
  
  (4.2) Where at any time a taxpayer requests in writing that the Minister surrender any security accepted by the Minister under subsection 220(4) or 220(4.1), the Minister shall surrender the security to the extent that the value of the security exceeds the total of payable under this Act by the taxpayer at that time. 
  
  ### Security furnished by a member institution of a deposit insurance corporation
  
  (4.3) The Minister shall accept adequate security furnished by or on behalf of a taxpayer that is a member institution in relation to a deposit insurance corporation (within the meaning assigned by subsection 137.1(5)) for payment of 
  (a) the tax payable under this Act by the taxpayer for a taxation year, to the extent that the amount of that tax exceeds the amount that that tax would be if no amount that the taxpayer is obliged to repay to the corporation were included under paragraph 137.1(10)(a) or 137.1(10)(b) in computing the taxpayer’s income for the year or a preceding taxation year, and 
  (b) interest payable under this Act by the taxpayer on the amount determined under paragraph 220(4.3)(a), until the earlier of 
  (c) the day on which the taxpayer’s obligation referred to in paragraph 220(4.3)(a) to repay the amount to the corporation is settled or extinguished, and 
  (d) the day that is 10 years after the end of the year. 
  
  ### Additional security
  
  (4.4) The adequacy of security furnished by or on behalf of a taxpayer under subsection 220(4.3) shall be determined by the Minister and the Minister may require additional security to be furnished from time to time by or on behalf of the taxpayer where the Minister determines that the security that has been furnished is no longer adequate. 
  
  ### Security for departure tax
  
  (4.5) If an individual who is deemed by subsection 128.1(4) to have disposed of a property (other than a right to a benefit under, or an interest in a trust governed by, an employee benefit plan) at any particular time in a taxation year (in this section referred to as the individual’s “emigration year”) elects, in prescribed manner on or before the individual’s balance-due day for the emigration year, that this subsection and subsections (4.51) to (4.54) apply in respect of the emigration year, 
  (a) the Minister shall, until the individual’s balance-due day for a particular taxation year that begins after the particular time, accept adequate security furnished by or on behalf of the individual on or before the individual’s balance-due day for the emigration year for the lesser of 
  (i) the amount determined by the formula is the total amount of taxes under Parts I and I.1 that would be payable by the individual for the emigration year if the exclusion or deduction of each amount referred to in paragraph 161(7)(a) were not taken into account, is the total amount of taxes under those Parts that would have been so payable if each property (other than a right to a benefit under, or an interest in a trust governed by, an employee benefit plan) deemed by subsection 128.1(4) to have been disposed of at the particular time, and that has not been subsequently disposed of before the beginning of the particular year, were not deemed by subsection 128.1(4) to have been disposed of by the individual at the particular time, and is the total of all amounts deemed under this or any other Act to have been paid on account of the individual’s tax under this Part for the emigration year, and 
  (ii) if the particular year immediately follows the emigration year, the amount determined under subparagraph (i), and in any other case, the amount determined under this paragraph in respect of the individual for the taxation year that immediately precedes the particular year, and 
  (b) except for the purposes of subsections 161(2), (4) and (4.01), 
  (i) interest under this Act for any period that ends on the individual’s balance-due day for the particular year and throughout which security is accepted by the Minister, and 
  (ii) any penalty under this Act computed with reference to an individual’s tax payable for the year that was, without reference to this paragraph, unpaid shall be computed as if the particular amount for which adequate security has been accepted under this subsection were an amount paid by the individual on account of the particular amount. 
  
  ### Deemed security
  
  (4.51) If an individual (other than a trust) elects under subsection (4.5) that that subsection apply in respect of a taxation year, for the purposes of this subsection and subsections (4.5) and (4.52) to (4.54), the Minister is deemed to have accepted at any time after the election is made adequate security for a total amount of taxes payable under Parts I and I.1 by the individual for the emigration year equal to the lesser of 
  (a) the total amount of those taxes that would be payable for the year by a trust resident in Canada (other than a graduated rate estate or a qualified disability trust as defined in subsection 122(3)) the taxable income of which for the year is $50,000, and 
  (b) the greatest amount for which the Minister is required to accept security furnished by or on behalf of the individual under subsection (4.5) at that time in respect of the emigration year, and that security is deemed to have been furnished by the individual before the individual’s balance-due day for the emigration year. 
  
  ### Limit
  
  (4.52) Notwithstanding subsections (4.5) and (4.51), the Minister is deemed at any time not to have accepted security under subsection (4.5) in respect of an individual’s emigration year for any amount greater than the amount, if any, by which 
  (a) the total amount of taxes that would be payable by the individual under Parts I and I.1 for the year if the exclusion or deduction of each amount referred to in paragraph 161(7)(a), in respect of which the day determined under paragraph 161(7)(b) is after that time, were not taken into account exceeds 
  (b) the total amount of taxes that would be determined under paragraph (a) if this Act were read without reference to subsection 128.1(4). 
  
  ### Inadequate security
  
  (4.53) Subject to subsection (4.7), if it is determined at any particular time that security accepted by the Minister under subsection (4.5) is not adequate to secure the particular amount for which it was furnished by or on behalf of an individual, 
  (a) subject to a subsequent application of this subsection, the security shall be considered after the particular time to secure only the amount for which it is adequate security at the particular time; 
  (b) the Minister shall notify the individual in writing of the determination and shall accept adequate security, for all or any part of the particular amount, furnished by or on behalf of the individual within 90 days after the day of notification; and 
  (c) any security accepted in accordance with paragraph (b) is deemed to have been accepted by the Minister under subsection (4.5) on account of the particular amount at the particular time. 
  
  ### Extension of time
  
  (4.54) If in the opinion of the Minister it would be just and equitable to do so, the Minister may at any time extend 
  (a) the time for making an election under subsection (4.5); 
  (b) the time for furnishing and accepting security under subsection (4.5); or 
  (c) the 90-day period for the acceptance of security under paragraph (4.53)(b). 
  
  ### Security for tax on distributions of taxable Canadian property to non-resident beneficiaries
  
  (4.6) Where 
  (a) solely because of the application of subsection 107(5), paragraphs 107(2)(a) to (c) do not apply to a distribution by a trust in a particular taxation year (in this section referred to as the trust’s “distribution year”) of taxable Canadian property, and 
  (b) the trust elects, in prescribed manner on or before the trust’s balance-due day for the distribution year, that this subsection and subsections (4.61) to (4.63) apply in respect of the distribution year, the following rules apply: 
  (c) the Minister shall, until the trust’s balance-due day for a subsequent taxation year, accept adequate security furnished by or on behalf of the trust on or before the trust’s balance-due day for the distribution year for the lesser of 
  (i) the amount determined by the formula is the total amount of taxes under Parts I and I.1 that would be payable by the trust for the distribution year if the exclusion or deduction of each amount referred to in paragraph 161(7)(a) were not taken into account, is the total amount of taxes under those Parts that would have been so payable if the rules in subsection 107(2) (other than the election referred to in that subsection) had applied to each disposition by the trust in the distribution year of property (other than property subsequently disposed of before the beginning of the subsequent year) to which paragraph (a) applies, and is the total of all amounts deemed under this or any other Act to have been paid on account of the trust’s tax under this Part for the distribution year, and 
  (ii) where the subsequent year immediately follows the distribution year, the amount determined under subparagraph (i), and in any other case, the amount determined under this paragraph in respect of the trust for the taxation year that immediately precedes the subsequent year, and 
  (d) except for the purposes of subsections 161(2), (4) and (4.01), 
  (i) interest under this Act for any period that ends on the trust’s balance-due day for the subsequent year and throughout which security is accepted by the Minister, and 
  (ii) any penalty under this Act computed with reference to the trust’s tax payable for the year that was, without reference to this paragraph, unpaid shall be computed as if the particular amount for which adequate security has been accepted under this subsection were an amount paid by the trust on account of the particular amount. 
  
  ### Limit
  
  (4.61) Notwithstanding subsection (4.6), the Minister is deemed at any time not to have accepted security under that subsection in respect of a trust’s distribution year for any amount greater than the amount, if any, by which 
  (a) the total amount of taxes that would be payable by the trust under Parts I and I.1 for the year if the exclusion or deduction of each amount referred to in paragraph 161(7)(a), in respect of which the day determined under paragraph 161(7)(b) is after that time, were not taken into account exceeds 
  (b) the total amount of taxes that would be determined under paragraph (a) if paragraphs 107(2)(a) to (c) had applied to each distribution by the trust in the year of property to which paragraph (1)(a) applies. 
  
  ### Inadequate security
  
  (4.62) Subject to subsection (4.7), where it is determined at any particular time that security accepted by the Minister under subsection (4.6) is not adequate to secure the particular amount for which it was furnished by or on behalf of a trust, 
  (a) subject to a subsequent application of this subsection, the security shall be considered after the particular time to secure only the amount for which it is adequate security at the particular time; 
  (b) the Minister shall notify the trust in writing of the determination and shall accept adequate security, for all or any part of the particular amount, furnished by or on behalf of the trust within 90 days after the notification; and 
  (c) any security accepted in accordance with paragraph (b) is deemed to have been accepted by the Minister under subsection (4.6) on account of the particular amount at the particular time. 
  
  ### Extension of time
  
  (4.63) Where in the opinion of the Minister it would be just and equitable to do so, the Minister may at any time extend 
  (a) the time for making an election under subsection (4.6); 
  (b) the time for furnishing and accepting security under subsection (4.6); or 
  (c) the 90-day period for the acceptance of the security under paragraph (4.62)(b). 
  
  ### Undue hardship
  
  (4.7) If, in respect of any period of time, the Minister determines that an individual who has made an election under either subsection (4.5) or (4.6) 
  (a) cannot, without undue hardship, pay or reasonably arrange to have paid on the individual’s behalf, an amount of taxes to which security under that subsection would relate, and 
  (b) cannot, without undue hardship, provide or reasonably arrange to have provided on the individual’s behalf, adequate security under that subsection, the Minister may, in respect of the election, accept for the period security different from, or of lesser value than, that which the Minister would otherwise accept under that subsection. 
  
  ### Limit
  
  (4.71) In making a determination under subsection (4.7), the Minister shall ignore any transaction that is a disposition, lease, encumbrance, mortgage, hypothec, or other voluntary restriction by a person or partnership of the person’s or partnership’s rights in respect of a property, if the transaction can reasonably be considered to have been entered into for the purpose of influencing the determination. 
  
  ### Administration of oaths
  
  (5) Any officer or servant employed in connection with the administration or enforcement of this Act, if designated by the Minister for the purpose, may, in the course of that employment, administer oaths and take and receive affidavits, declarations and affirmations for the purposes of or incidental to the administration or enforcement of this Act or regulations made thereunder, and every officer or servant so designated has for those purposes all the powers of a commissioner for administering oaths or taking affidavits. 
  
  ### Assignment by corporation
  
  (6) Notwithstanding section 67 of the Financial Administration Act and any other provision of a law of Canada or a province, a corporation may assign any amount payable to it under this Act. 
  
  ### Effect of assignment
  
  (7) An assignment referred to in subsection 220(6) is not binding on Her Majesty in right of Canada and, without limiting the generality of the foregoing, 
  (a) the Minister is not required to pay to the assignee the assigned amount; 
  (b) the assignment does not create any liability of Her Majesty in right of Canada to the assignee; and 
  (c) the rights of the assignee are subject to all equitable and statutory rights of set-off in favour of Her Majesty in right of Canada. 
  
  ### Regulations
  
  221 (1) The Governor in Council may make regulations 
  (a) prescribing anything that, by this Act, is to be prescribed or is to be determined or regulated by regulation; 
  (b) prescribing the evidence required to establish facts relevant to assessments under this Act; 
  (c) to facilitate the assessment of tax where deductions or exemptions of a taxpayer have changed in a taxation year; 
  (d) requiring any class of persons to make information returns respecting any class of information required in connection with assessments under this Act; 
  (d.1) requiring any person or partnership to provide any information — including their name, address, business number, Social Insurance Number or trust account number — to any class of persons required to make an information return containing that information; 
  (d.2) requiring any class of persons to make information available to the public for the purpose of making information returns respecting any class of information required in connection with assessments under this Act; 
  (e) requiring a person who is, by a regulation made under paragraph 221(1)(d), required to make an information return to supply a copy of the information return or of a prescribed part thereof to the person to whom the information return or part thereof relates; 
  (f)  [Repealed, 1998, c. 19, s. 222(2)]  
  (g) providing for the retention by way of deduction or set-off of the amount of a taxpayer’s income tax or other indebtedness under this Act out of any amount or amounts that may be or become payable by Her Majesty to the taxpayer in respect of salary or wages; 
  (h) defining the classes of persons who may be regarded as dependent for the purposes of this Act; 
  (i) defining the classes of non-resident persons who may be regarded for the purposes of this Act 
  (i) as a spouse or common-law partner supported by a taxpayer, or 
  (ii) as a person dependent or wholly dependent on a taxpayer for support, and specifying the evidence required to establish that a person belongs to any such class; and 
  (j) generally to carry out the purposes and provisions of this Act. 
  
  ### Effect
  
  (2) A regulation made under this Act shall have effect from the date it is published in the Canada Gazette or at such time thereafter as may be specified in the regulation unless the regulation provides otherwise and it  
  (a) has a relieving effect only; 
  (b) corrects an ambiguous or deficient enactment that was not in accordance with the objects of this Act or the Income Tax Regulations ;  
  (c) is consequential on an amendment to this Act that is applicable before the date the regulation is published in the Canada Gazette ; or  
  (d) gives effect to a budgetary or other public announcement, in which case the regulation shall not, except where paragraph 221(2)(a), 221(2)(b) or 221(2)(c) applies, have effect 
  (i) before the date on which the announcement was made, in the case of a deduction or withholding from an amount paid or credited, and 
  (ii) before the taxation year in which the announcement is made, in any other case. 
  
  ### Regulations binding Crown
  
  (3) Regulations made under paragraph 221(1)(d) or 221(1)(e) are binding on Her Majesty in right of Canada or a province. 
  
  ### Incorporation by reference
  
  (4) A regulation made under this Act may incorporate by reference material as amended from time to time. 
  
  ### Providing information returns in electronic format
  
  221.01 A person may provide an information return electronically under subsection 209(5) of the Income Tax Regulations if the criteria specified by the Minister are met.  
  
  ### Application of interest
  
  221.1 For greater certainty, where an amendment to this Act or an amendment or enactment that relates to this Act applies to or in respect of any transaction, event or time, or any taxation year, fiscal period or other period of time or part thereof (in this section referred to as the “application time”) occurring, or that is, before the day on which the amendment or enactment is assented to or promulgated, for the purposes of the provisions of this Act that provide for payment of, or liability to, any interest, the amendment or enactment shall, unless a contrary intention is evident, be deemed to have come into force at the beginning of the last taxation year beginning before the application time. 
  
  ### Re-appropriation of amounts
  
  221.2 (1) Where a particular amount was appropriated to an amount (in this section referred to as the “debt”) that is or may become payable by a person under any enactment referred to in paragraphs 223(1)(a) to 223(1)(d), the Minister may, on application by the person, appropriate the particular amount, or a part thereof, to another amount that is or may become payable under any such enactment and, for the purposes of any such enactment, 
  (a) the later appropriation shall be deemed to have been made at the time of the earlier appropriation; 
  (b) the earlier appropriation shall be deemed not to have been made to the extent of the later appropriation; and 
  (c) the particular amount shall be deemed not to have been paid on account of the debt to the extent of the later appropriation. 
  
  ### Re-appropriation of amounts
  
  (2) If a particular amount was appropriated to an amount (in this section referred to as the “debt”) that is or may become payable by a person under this Act, the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001, the Underused Housing Tax Act or the Select Luxury Items Tax Act, the Minister may, on application by the person, appropriate the particular amount, or a part of it, to another amount that is or may become payable under any of those Acts and, for the purposes of any of those Acts,  
  (a) the later appropriation is deemed to have been made at the time of the earlier appropriation; 
  (b) the earlier appropriation is deemed not to have been made to the extent of the later appropriation; and 
  (c) the particular amount is deemed not to have been paid on account of the debt to the extent of the later appropriation. 
  
  ## Collection 
  
  ### Definitions
  
  222 (1) The following definitions apply in this section.  
  *action* means an action to collect a tax debt of a taxpayer and includes a proceeding in a court and anything done by the Minister under subsection 129(2), 131(3), 132(2) or 164(2), section 203 or any provision of this Part. (action)   
  *tax debt* means any amount payable by a taxpayer under this Act. (dette fiscale)  
  
  ### Debts to Her Majesty
  
  (2) A tax debt is a debt due to Her Majesty and is recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by this Act. 
  
  ### No actions after limitation period
  
  (3) The Minister may not commence an action to collect a tax debt after the end of the limitation period for the collection of the tax debt. 
  
  ### Limitation period
  
  (4) The limitation period for the collection of a tax debt of a taxpayer 
  (a) begins 
  (i) if a notice of assessment, or a notice referred to in subsection 226(1), in respect of the tax debt is sent to or served on the taxpayer, after March 3, 2004, on the day that is 90 days after the day on which the last one of those notices is sent or served, and 
  (ii) if subparagraph (i) does not apply and the tax debt was payable on March 4, 2004, or would have been payable on that date but for a limitation period that otherwise applied to the collection of the tax debt, on March 4, 2004; and 
  (b) ends, subject to subsection (8), on the day that is 10 years after the day on which it begins. 
  
  ### Limitation period restarted
  
  (5) The limitation period described in subsection (4) for the collection of a tax debt of a taxpayer restarts (and ends, subject to subsection (8), on the day that is 10 years after the day on which it restarts) on any day, before it would otherwise end, on which 
  (a) the taxpayer acknowledges the tax debt in accordance with subsection (6); 
  (b) the Minister commences an action to collect the tax debt; or 
  (c) the Minister, under subsection 159(3) or 160(2) or paragraph 227(10)(a), assesses any person in respect of the tax debt. 
  
  ### Acknowledgement of tax debts
  
  (6) A taxpayer acknowledges a tax debt if the taxpayer 
  (a) promises, in writing, to pay the tax debt; 
  (b) makes a written acknowledgement of the tax debt, whether or not a promise to pay can be inferred from the acknowledgement and whether or not it contains a refusal to pay; or 
  (c) makes a payment, including a purported payment by way of a negotiable instrument that is dishonoured, on account of the tax debt. 
  
  ### Agent or legal representative
  
  (7) For the purposes of this section, an acknowledgement made by a taxpayer’s agent or legal representative has the same effect as if it were made by the taxpayer. 
  
  ### Extension of limitation period
  
  (8) In computing the day on which a limitation period ends, there shall be added the number of days on which one or more of the following is the case: 
  (a) the Minister may not, because of any of subsections 225.1(2) to (5), take any of the actions described in subsection 225.1(1) in respect of the tax debt; 
  (b) the Minister has accepted and holds security in lieu of payment of the tax debt; 
  (c) if the taxpayer was resident in Canada on the applicable date described in paragraph (4)(a) in respect of the tax debt, the taxpayer is non-resident; or 
  (d) an action that the Minister may otherwise take in respect of the tax debt is restricted or not permitted under any provision of the Bankruptcy and Insolvency Act, of the Companies’ Creditors Arrangement Act or of the Farm Debt Mediation Act.  
  
  ### Bar to claims
  
  (9) Notwithstanding any law of Canada or a province, Her Majesty is not liable for any claim that arises because the Minister collected a tax debt after the end of any limitation period that applied to the collection of the tax debt and before March 4, 2004. 
  
  ### Orders after March 3, 2004 and before effect
  
  (10) Notwithstanding any order or judgment made after March 3, 2004 that declares a tax debt not to be payable by a taxpayer, or that orders the Minister to reimburse to a taxpayer a tax debt collected by the Minister, because a limitation period that applied to the collection of the tax debt ended before royal assent to any measure giving effect to this section, the tax debt is deemed to have become payable on March 4, 2004. 
  
  ### Court costs
  
  222.1 Where an amount is payable by a person to Her Majesty because of an order, judgment or award of a court in respect of the costs of litigation relating to a matter to which this Act applies, subsections 220(4) and 220(4.2) and sections 223, 224 to 225 and 226 apply to the amount as if the amount were a debt owing by the person to Her Majesty on account of tax payable by the person under this Act. 
  
  ### Definition of 
  *amount payable* 
  
  223 (1) For the purposes of subsection 223(2), an 
  *amount payable* by a person means any or all of  
  (a) an amount payable under this Act by the person; 
  (b) an amount payable under the Employment Insurance Act by the person;  
  (b.1) an amount payable under the Unemployment Insurance Act by the person;  
  (c) an amount payable under the Canada Pension Plan by the person; and  
  (d) an amount payable by the person under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act. 
  
  ### Certificates
  
  (2) An amount payable by a person (in this section referred to as a “debtor”) that has not been paid or any part of an amount payable by the debtor that has not been paid may be certified by the Minister as an amount payable by the debtor. 
  
  ### Registration in court
  
  (3) On production to the Federal Court, a certificate made under subsection 223(2) in respect of a debtor shall be registered in the Court and when so registered has the same effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the Court against the debtor for a debt in the amount certified plus interest thereon to the day of payment as provided by the statute or statutes referred to in subsection 223(1) under which the amount is payable and, for the purpose of any such proceedings, the certificate shall be deemed to be a judgment of the Court against the debtor for a debt due to Her Majesty, enforceable in the amount certified plus interest thereon to the day of payment as provided by that statute or statutes. 
  
  ### Costs
  
  (4) All reasonable costs and charges incurred or paid in respect of the registration in the Court of a certificate made under subsection 223(2) or in respect of any proceedings taken to collect the amount certified are recoverable in like manner as if they had been included in the amount certified in the certificate when it was registered. 
  
  ### Charge on property
  
  (5) A document issued by the Federal Court evidencing a certificate in respect of a debtor registered under subsection (3), a writ of that Court issued pursuant to the certificate or any notification of the document or writ (such document, writ or notification in this section referred to as a “memorial”) may be filed, registered or otherwise recorded for the purpose of creating a charge, lien or priority on, or a binding interest in, property in a province, or any interest in, or for civil law any right in, such property, held by the debtor in the same manner as a document evidencing 
  (a) a judgment of the superior court of the province against a person for a debt owing by the person, or 
  (b) an amount payable or required to be remitted by a person in the province in respect of a debt owing to Her Majesty in right of the province may be filed, registered or otherwise recorded in accordance with or pursuant to the law of the province to create a charge, lien or priority on, or a binding interest in, the property or interest. 
  
  ### Creation of charge
  
  (6) If a memorial has been filed, registered or otherwise recorded under subsection (5), 
  (a) a charge, lien or priority is created on, or a binding interest is created in, property in the province, or any interest in, or for civil law any right in, such property, held by the debtor, or 
  (b) such property, or interest or right in the property, is otherwise bound, in the same manner and to the same extent as if the memorial were a document evidencing a judgment referred to in paragraph (5)(a) or an amount referred to in paragraph (5)(b), and the charge, lien, priority or binding interest created shall be subordinate to any charge, lien, priority or binding interest in respect of which all steps necessary to make it effective against other creditors were taken before the time the memorial was filed, registered or otherwise recorded. 
  
  ### Proceedings in respect of memorial
  
  (7) If a memorial is filed, registered or otherwise recorded in a province under subsection 223(5), proceedings may be taken in the province in respect of the memorial, including proceedings 
  (a) to enforce payment of the amount evidenced by the memorial, interest on the amount and all costs and charges paid or incurred in respect of 
  (i) the filing, registration or other recording of the memorial, and 
  (ii) proceedings taken to collect the amount, 
  (b) to renew or otherwise prolong the effectiveness of the filing, registration or other recording of the memorial, 
  (c) to cancel or withdraw the memorial wholly or in respect of any of the property, or interests or rights, affected by the memorial, or 
  (d) to postpone the effectiveness of the filing, registration or other recording of the memorial in favour of any right, charge, lien or priority that has been or is intended to be filed, registered or otherwise recorded in respect of any property, or interest or right, affected by the memorial, in the same manner and to the same extent as if the memorial were a document evidencing a judgment referred to in paragraph 223(5)(a) or an amount referred to in paragraph 223(5)(b), except that if in any such proceeding or as a condition precedent to any such proceeding any order, consent or ruling is required under the law of the province to be made or given by the superior court of the province or a judge or official of the court, a like order, consent or ruling may be made or given by the Federal Court or a judge or official of the Federal Court and, when so made or given, has the same effect for the purposes of the proceeding as if it were made or given by the superior court of the province or a judge or official of the court. 
  
  ### Presentation of documents
  
  (8) If 
  (a) a memorial is presented for filing, registration or other recording under subsection (5) or a document relating to the memorial is presented for filing, registration or other recording for the purpose of any proceeding described in subsection (7) to any official in the land registry system, personal property or movable property registry system, or other registry system, of a province, it shall be accepted for filing, registration or other recording, or 
  (b) access is sought to any person, place or thing in a province to make the filing, registration or other recording, the access shall be granted in the same manner and to the same extent as if the memorial or document relating to the memorial were a document evidencing a judgment referred to in paragraph 223(5)(a) or an amount referred to in paragraph 223(5)(b) for the purpose of a like proceeding, as the case may be, except that, if the memorial or document is issued by the Federal Court or signed or certified by a judge or official of the Court, any affidavit, declaration or other evidence required under the law of the province to be provided with or to accompany the memorial or document in the proceedings is deemed to have been provided with or to have accompanied the memorial or document as so required. 
  
  ### Sale, etc.
  
  (9) Notwithstanding any law of Canada or of a province, a sheriff or other person shall not, without the written consent of the Minister, sell or otherwise dispose of any property, or publish any notice or otherwise advertise in respect of any sale or other disposition of any property pursuant to any process issued or charge, lien, priority or binding interest created in any proceeding to collect an amount certified in a certificate made under subsection 223(2), interest on the amount and costs, but if that consent is subsequently given, any property that would have been affected by such a process, charge, lien, priority or binding interest if the Minister’s consent had been given at the time the process was issued or the charge, lien, priority or binding interest was created, as the case may be, shall be bound, seized, attached, charged or otherwise affected as it would be if that consent had been given at the time the process was issued or the charge, lien, priority or binding interest was created, as the case may be. 
  
  ### Completion of notices, etc.
  
  (10) If information required to be set out by any sheriff or other person in a minute, notice or document required to be completed for any purpose cannot, by reason of subsection 223(9), be so set out, the sheriff or other person shall complete the minute, notice or document to the extent possible without that information and, when the consent of the Minister is given under that subsection, a further minute, notice or document setting out all the information shall be completed for the same purpose, and the sheriff or other person having complied with this subsection is deemed to have complied with the Act, regulation or rule requiring the information to be set out in the minute, notice or document. 
  
  ### Application for an order
  
  (11) A sheriff or other person who is unable, by reason of subsection 223(9) or 223(10), to comply with any law or rule of court is bound by any order made by a judge of the Federal Court, on an ex parte application by the Minister, for the purpose of giving effect to the proceeding, charge, lien, priority or binding interest.  
  
  ### Deemed security
  
  (11.1) When a charge, lien, priority or binding interest created under subsection 223(6) by filing, registering or otherwise recording a memorial under subsection 223(5) is registered in accordance with subsection 87(1) of the Bankruptcy and Insolvency Act, it is deemed  
  (a) to be a claim that is secured by a security and that, subject to subsection 87(2) of that Act, ranks as a secured claim under that Act; and 
  (b) to also be a claim referred to in paragraph 86(2)(a) of that Act. 
  
  ### Details in certificates and memorials
  
  (12) Notwithstanding any law of Canada or of a province, in any certificate made under subsection 223(2) in respect of a debtor, in any memorial evidencing the certificate or in any writ or document issued for the purpose of collecting an amount certified, it is sufficient for all purposes 
  (a) to set out, as the amount payable by the debtor, the total of amounts payable by the debtor without setting out the separate making up that total; and 
  (b) to refer to the rate of interest to be charged on the separate amounts making up the amount payable in general terms as interest at the rate prescribed under this Act applicable from time to time on amounts payable to the Receiver General without indicating the specific rates of interest to be charged on each of the separate amounts or to be charged for any particular period of time. 
  
  ### Application of ss. 223(1) to (8) and (12)
  
  223.1 (1) Subsections 223(1) to 223(8) and 223(12) are applicable with respect to certificates made under section 223 or section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, after 1971 and documents evidencing such certificates that were issued by the Federal Court and that were filed, registered or otherwise recorded after 1977 under the laws of a province, except that, where any such certificate or document was the subject of an action pending in a court on February 10, 1988 or the subject of a court decision given on or before that date, section 223 shall be read, for the purposes of applying it with respect to that certificate or document, as section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, read at the time the certificate was registered or the document was issued, as the case may be.  
  
  ### Application of ss. 223(9) to (11)
  
  (2) Subsections 223(9) to 223(11) are applicable with respect to certificates made under section 223, or section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, after September 13, 1988.  
  
  ### Garnishment
  
  224 (1) Where the Minister has knowledge or suspects that a person is, or will be within one year, liable to make a payment to another person who is liable to make a payment under this Act (in this subsection and subsections 224(1.1) and 224(3) referred to as the “tax debtor”), the Minister may in writing require the person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act. 
  
  ### Idem
  
  (1.1) Without limiting the generality of subsection 224(1), where the Minister has knowledge or suspects that within 90 days 
  (a) a bank, credit union, trust company or other similar person (in this section referred to as the “institution”) will lend or advance moneys to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by, a tax debtor who is indebted to the institution and who has granted security in respect of the indebtedness, or 
  (b) a person, other than an institution, will lend or advance moneys to, or make a payment on behalf of, a tax debtor who the Minister knows or suspects 
  (i) is employed by, or is engaged in providing services or property to, that person or was or will be, within 90 days, so employed or engaged, or 
  (ii) where that person is a corporation, is not dealing at arm’s length with that person, the Minister may in writing require the institution or person, as the case may be, to pay in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act the moneys that would otherwise be so lent, advanced or paid and any moneys so paid to the Receiver General shall be deemed to have been lent, advanced or paid, as the case may be, to the tax debtor. 
  
  ### Garnishment
  
  (1.2) Notwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act, any other enactment of Canada, any enactment of a province or any law, but subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act, if the Minister has knowledge or suspects that a particular person is, or will become within one year, liable to make a payment  
  (a) to another person (in this subsection referred to as the “tax debtor”) who is liable to pay an amount assessed under subsection 227(10.1) or a similar provision, or 
  (b) to a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the tax debtor, the Minister may in writing require the particular person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor or the secured creditor in whole or in part to the Receiver General on account of the tax debtor’s liability under subsection 227(10.1) or the similar provision, and on receipt of that requirement by the particular person, the amount of those moneys that is so required to be paid to the Receiver General shall, notwithstanding any security interest in those moneys, become the property of Her Majesty to the extent of that liability as assessed by the Minister and shall be paid to the Receiver General in priority to any such security interest. 
  
  ### Definitions
  
  (1.3) In subsection 224(1.2),  
  *secured creditor* means a person who has a security interest in the property of another person or who acts for or on behalf of that person with respect to the security interest and includes a trustee appointed under a trust deed relating to a security interest, a receiver or receiver-manager appointed by a secured creditor or by a court on the application of a secured creditor, a sequestrator or any other person performing a similar function; (créancier garanti)   
  *security interest* means any interest in, or for civil law any right in, property that secures payment or performance of an obligation and includes an interest, or for civil law a right, created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for; (garantie)   
  *similar provision* means a provision, similar to subsection 227(10.1), of any Act of a province that imposes a tax similar to the tax imposed under this Act, where the province has entered into an agreement with the Minister of Finance for the collection of the taxes payable to the province under that Act. (disposition semblable)  
  
  ### Garnishment
  
  (1.4) Provisions of this Act that provide that a person who has been required to do so by the Minister must pay to the Receiver General an amount that would otherwise be lent, advanced or paid to a taxpayer who is liable to make a payment under this Act, or to that taxpayer’s secured creditor, apply to Her Majesty in right of Canada or a province. 
  
  ### Minister’s receipt discharges original liability
  
  (2) The receipt of the Minister for moneys paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment. 
  
  ### Idem
  
  (3) Where the Minister has, under this section, required a person to pay to the Receiver General on account of a liability under this Act of a tax debtor moneys otherwise payable by the person to the tax debtor as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the requirement applies to all such payments to be made by the person to the tax debtor until the liability under this Act is satisfied and operates to require payments to the Receiver General out of each such payment of such amount as is stipulated by the Minister in the requirement. 
  
  ### Failure to comply with s. (1), (1.2) or (3) requirement
  
  (4) Every person who fails to comply with a requirement under subsection 224(1), 224(1.2) or 224(3) is liable to pay to Her Majesty an amount equal to the amount that the person was required under subsection 224(1), 224(1.2) or 224(3), as the case may be, to pay to the Receiver General. 
  
  ### Failure to comply with s. (1.1) requirement
  
  (4.1) Every institution or person that fails to comply with a requirement under subsection 224(1.1) with respect to moneys to be lent, advanced or paid is liable to pay to Her Majesty an amount equal to the lesser of 
  (a) the total of moneys so lent, advanced or paid, and 
  (b) the amount that the institution or person was required under that subsection to pay to the Receiver General. 
  
  ### Service of garnishee
  
  (5) Where a person carries on business under a name or style other than the person’s own name, notification to the person of a requirement under subsection 224(1), 224(1.1) or 224(1.2) may be addressed to the name or style under which the person carries on business and, in the case of personal service, shall be deemed to be validly served if it is left with an adult person employed at the place of business of the addressee. 
  
  ### Idem
  
  (6) Where persons carry on business in partnership, notification to the persons of a requirement under subsection 224(1), 224(1.1) or 224(1.2) may be addressed to the partnership name and, in the case of personal service, shall be deemed to be validly served if it is served on one of the partners or left with an adult person employed at the place of business of the partnership. 
  
  ### Recovery by deduction or set-off
  
  224.1 Where a person is indebted to Her Majesty under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of the taxes payable to the province under that Act, the Minister may require the retention by way of deduction or set-off of such amount as the Minister may specify out of any amount that may be or become payable to the person by Her Majesty in right of Canada. 
  
  ### Acquisition of debtor’s property
  
  224.2 For the purpose of collecting debts owed by a person to Her Majesty under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act, the Minister may purchase or otherwise acquire any interest in, or for civil law any right in, the person’s property that the Minister is given a right to acquire in legal proceedings or under a court order or that is offered for sale or redemption and may dispose of any interest or right so acquired in such manner as the Minister considers reasonable. 
  
  ### Payment of moneys seized from tax debtor
  
  224.3 (1) Where the Minister has knowledge or suspects that a particular person is holding moneys that were seized by a police officer in the course of administering or enforcing the criminal law of Canada from another person (in this section referred to as the “tax debtor”) who is liable to make a payment under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act and that are restorable to the tax debtor, the Minister may in writing require the particular person to turn over the moneys otherwise restorable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act or under the Act of the province, as the case may be. 
  
  ### Receipt of Minister
  
  (2) The receipt of the Minister for moneys turned over as required by this section is a good and sufficient discharge of the requirement to restore the moneys to the tax debtor to the extent of the amount so turned over. 
  
  ### Seizure of goods, chattels or movable property
  
  225 (1) If a person has failed to pay an amount as required by this Act, the Minister may give 30 days notice to the person by registered mail addressed to the person’s latest known address of the Minister’s intention to direct that the person’s goods and chattels, or movable property, be seized and sold, and, if the person fails to make the payment before the expiration of the 30 days, the Minister may issue a certificate of the failure and direct that the person’s goods and chattels, or movable property, be seized. 
  
  ### Sale of seized property
  
  (2) Property seized under this section shall be kept for 10 days at the cost and charges of the owner and, if the owner does not pay the amount owing together with the costs and charges within the 10 days, the property seized shall be sold by public auction. 
  
  ### Notice of sale
  
  (3) Except in the case of perishable goods, notice of the sale setting out the time and place thereof, together with a general description of the property to be sold shall, a reasonable time before the goods are sold, be published at least once in one or more newspapers of general local circulation. 
  
  ### Surplus returned to owner
  
  (4) Any surplus resulting from the sale after deduction of the amount owing and all costs and charges shall be paid or returned to the owner of the property seized. 
  
  ### Exemptions from seizure
  
  (5) Goods and chattels, or movable property, of any person in default that would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section. 
  
  ### Collection restrictions
  
  225.1 (1) If a taxpayer is liable for the payment of an amount assessed under this Act, other than an amount assessed under subsection 152(4.2), 169(3) or 220(3.1), the Minister shall not, until after the collection-commencement day in respect of the amount, do any of the following for the purpose of collecting the amount: 
  (a) commence legal proceedings in a court, 
  (b) certify the amount under section 223, 
  (c) require a person to make a payment under subsection 224(1), 
  (d) require an institution or a person to make a payment under subsection 224(1.1), 
  (e)  [Repealed, 2006, c. 4, s. 166]  
  (f) require a person to turn over moneys under subsection 224.3(1), or 
  (g) give a notice, issue a certificate or make a direction under subsection 225(1). 
  
  ### Collection-commencement day
  
  (1.1) The collection-commencement day in respect of an amount is 
  (a) in the case of an amount assessed under subsection 188(1.1) in respect of a notice of intention to revoke given under subsection 168(1) or any of subsections 149.1(2) to (4.1), one year after the day on which the notice was mailed; 
  (b) in the case of an amount assessed under section 188.1, one year after the day on which the notice of assessment was sent; and 
  (c) in any other case, 90 days after the day on which the notice of assessment was sent. 
  
  ### No action by Minister
  
  (2) If a taxpayer has served a notice of objection under this Act to an assessment of an amount payable under this Act, the Minister shall not, for the purpose of collecting the amount in controversy, take any of the actions described in paragraphs (1)(a) to (g) until after the day that is 90 days after the day on which notice is sent to the taxpayer that the Minister has confirmed or varied the assessment. 
  
  ### Idem
  
  (3) Where a taxpayer has appealed from an assessment of an amount payable under this Act to the Tax Court of Canada, the Minister shall not, for the purpose of collecting the amount in controversy, take any of the actions described in paragraphs (1)(a) to (g) before the day of mailing of a copy of the decision of the Court to the taxpayer or the day on which the taxpayer discontinues the appeal, whichever is the earlier. 
  
  ### Idem
  
  (4) Where a taxpayer has agreed under subsection 173(1) that a question should be determined by the Tax Court of Canada, or where a taxpayer is served with a copy of an application made under subsection 174(1) to that Court for the determination of a question, the Minister shall not take any of the actions described in paragraphs (1)(a) to (g) for the purpose of collecting that part of an amount assessed, the liability for payment of which will be affected by the determination of the question, before the day on which the question is determined by the Court. 
  
  ### Idem
  
  (5) Notwithstanding any other provision in this section, where a taxpayer has served a notice of objection under this Act to an assessment or has appealed to the Tax Court of Canada from an assessment and agrees in writing with the Minister to delay proceedings on the objection or appeal, as the case may be, until judgment has been given in another action before the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada in which the issue is the same or substantially the same as that raised in the objection or appeal of the taxpayer, the Minister may take any of the actions described in paragraphs (1)(a) to (g) for the purpose of collecting the amount assessed, or a part thereof, determined in a manner consistent with the decision or judgment of the Court in the other action at any time after the Minister notifies the taxpayer in writing that 
  (a) the decision of the Tax Court of Canada in that action has been mailed to the Minister, 
  (b) judgment has been pronounced by the Federal Court of Appeal in that action, or 
  (c) judgment has been delivered by the Supreme Court of Canada in that action, as the case may be. 
  
  ### Where ss. (1) to (4) do not apply
  
  (6) Subsections (1) to (4) do not apply with respect to 
  (a) an amount payable under Part VIII; 
  (a.1) an amount payable under section 281; 
  (b) an amount required to be deducted or withheld, and required to be remitted or paid, under this Act or the Regulations; 
  (c) an amount of tax required to be paid under section 116 or a regulation made under subsection 215(4) but not so paid; 
  (d) the amount of any penalty payable for failure to remit or pay an amount referred to in paragraph (b) or (c) as and when required by this Act or a regulation made under this Act; and 
  (e) any interest payable under a provision of this Act on an amount referred to in this paragraph or any of paragraphs (a) to (d). 
  
  ### One-half collection
  
  (7) If an amount has been assessed under this Act in respect of a corporation for a taxation year in which it was a large corporation, or in respect of a particular amount claimed under section 110.1 or 118.1 where the particular amount was claimed in respect of a tax shelter, then subsections (1) to (4) do not limit any action of the Minister to collect 
  (a) at any time on or before the particular day that is 90 days after the day of the sending of the notice of assessment, 1/2 of the amount so assessed; and 
  (b) at any time after the particular day, the amount, if any, by which the amount so assessed exceeds the total of 
  (i) all amounts collected before that time with respect to the assessment, and 
  (ii) 1/2 of the amount in controversy at that time. 
  
  ### Definition of large corporation 
  
  (8) For the purposes of this section and section 235, a corporation (other than a corporation described in subsection 181.1(3)) is a 
  *large corporation* in a particular taxation year if the total of the taxable capital employed in Canada of the corporation, at the end of the particular taxation year, and the taxable capital employed in Canada of any other corporation, at the end of the other corporation’s last taxation year that ends at or before the end of the particular taxation year, if the other corporation is related (within the meaning assigned for the purposes of section 181.5) to the corporation at the end of the particular taxation year, exceeds $10 million, and, for the purpose of this subsection, a corporation formed as a result of the amalgamation or merger of 2 or more predecessor corporations is deemed to be the same corporation as, and a continuation of, each predecessor corporation.  
  
  ### Definition of 
  *judge* 
  
  225.2 (1) In this section, 
  *judge* means a judge or a local judge of a superior court of a province or a judge of the Federal Court.  
  
  ### Authorization to proceed forthwith
  
  (2) Notwithstanding section 225.1, where, on ex parte application by the Minister, a judge is satisfied that there are reasonable grounds to believe that the collection of all or any part of an amount assessed in respect of a taxpayer would be jeopardized by a delay in the collection of that amount, the judge shall, on such terms as the judge considers reasonable in the circumstances, authorize the Minister to take forthwith any of the actions described in paragraphs 225.1(1)(a) to 225.1(1)(g) with respect to the amount.  
  
  ### Notice of assessment not sent
  
  (3) An authorization under subsection 225.2(2) in respect of an amount assessed in respect of a taxpayer may be granted by a judge notwithstanding that a notice of assessment in respect of that amount has not been sent to the taxpayer at or before the time the application is made where the judge is satisfied that the receipt of the notice of assessment by the taxpayer would likely further jeopardize the collection of the amount, and for the purposes of sections 222, 223, 224, 224.1, 224.3 and 225, the amount in respect of which an authorization is so granted shall be deemed to be an amount payable under this Act. 
  
  ### Affidavits
  
  (4) Statements contained in an affidavit filed in the context of an application under this section may be based on belief with the grounds therefor. 
  
  ### Service of authorization and of notice of assessment
  
  (5) An authorization granted under this section in respect of a taxpayer shall be served by the Minister on the taxpayer within 72 hours after it is granted, except where the judge orders the authorization to be served at some other time specified in the authorization, and, where a notice of assessment has not been sent to the taxpayer at or before the time of the application, the notice of assessment shall be served together with the authorization. 
  
  ### How service effected
  
  (6) For the purposes of subsection 225.2(5), service on a taxpayer shall be effected by 
  (a) personal service on the taxpayer; or 
  (b) service in accordance with directions, if any, of a judge. 
  
  ### Application to judge for direction
  
  (7) Where service on a taxpayer cannot reasonably otherwise be effected as and when required under this section, the Minister may, as soon as practicable, apply to a judge for further direction. 
  
  ### Review of authorization
  
  (8) Where a judge of a court has granted an authorization under this section in respect of a taxpayer, the taxpayer may, on 6 clear days notice to the Deputy Attorney General of Canada, apply to a judge of the court to review the authorization. 
  
  ### Limitation period for review application
  
  (9) An application under subsection 225.2(8) shall be made 
  (a) within 30 days from the day on which the authorization was served on the taxpayer in accordance with this section; or 
  (b) within such further time as a judge may allow, on being satisfied that the application was made as soon as practicable. 
  
  ### Hearing in camera 
  
  (10) An application under subsection 225.2(8) may, on the application of the taxpayer, be heard in camera, if the taxpayer establishes to the satisfaction of the judge that the circumstances of the case justify in camera proceedings.  
  
  ### Disposition of application
  
  (11) On an application under subsection 225.2(8), the judge shall determine the question summarily and may confirm, set aside or vary the authorization and make such other order as the judge considers appropriate. 
  
  ### Directions
  
  (12) Where any question arises as to the course to be followed in connection with anything done or being done under this section and there is no direction in this section with respect thereto, a judge may give such direction with regard thereto as, in the opinion of the judge, is appropriate. 
  
  ### No appeal from review order
  
  (13) No appeal lies from an order of a judge made pursuant to subsection 225.2(11). 
  
  ### Taxpayer leaving Canada
  
  226 (1) Where the Minister suspects that a taxpayer has left or is about to leave Canada, the Minister may, before the day otherwise fixed for payment, by notice served personally or by registered letter addressed to the taxpayer’s latest known address, demand payment of the amount of all taxes, interest and penalties for which the taxpayer is liable or would be liable if the time for payment had arrived, and that amount shall be paid forthwith by the taxpayer notwithstanding any other provision of this Act. 
  
  ### Seizure in case of default of payment
  
  (2) If a taxpayer fails to pay, as required, any tax, interest or penalties demanded under this section, the Minister may direct that the goods and chattels, or movable property, of the taxpayer be seized and subsections 225(2) to (5) apply, with respect to the seizure, with any modifications that the circumstances require. 
  
  ### Withholding taxes
  
  227 (1) No action lies against any person for deducting or withholding any sum of money in compliance or intended compliance with this Act. 
  
  ### Return filed with person withholding
  
  (2) Where a person (in this subsection referred to as the “payer”) is required by regulations made under subsection 153(1) to deduct or withhold from a payment to another person an amount on account of that other person’s tax for the year, that other person shall, from time to time as prescribed, file a return with the payer in prescribed form. 
  
  ### Failure to file return
  
  (3) Every person who fails to file a return as required by subsection (2) is liable to have the deduction or withholding under section 153 on account of the person’s tax made as though the person were a person who is neither married nor in a common-law partnership and is without dependants. 
  
  ### Trust for moneys deducted
  
  (4) Every person who deducts or withholds an amount under this Act is deemed, notwithstanding any security interest (as defined in subsection 224(1.3)) in the amount so deducted or withheld, to hold the amount separate and apart from the property of the person and from property held by any secured creditor (as defined in subsection 224(1.3)) of that person that but for the security interest would be property of the person, in trust for Her Majesty and for payment to Her Majesty in the manner and at the time provided under this Act. 
  
  ### Extension of trust
  
  (4.1) Notwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act (except sections 81.1 and 81.2 of that Act), any other enactment of Canada, any enactment of a province or any other law, where at any time an amount deemed by subsection 227(4) to be held by a person in trust for Her Majesty is not paid to Her Majesty in the manner and at the time provided under this Act, property of the person and property held by any secured creditor (as defined in subsection 224(1.3)) of that person that but for a security interest (as defined in subsection 224(1.3)) would be property of the person, equal in value to the amount so deemed to be held in trust is deemed  
  (a) to be held, from the time the amount was deducted or withheld by the person, separate and apart from the property of the person, in trust for Her Majesty whether or not the property is subject to such a security interest, and 
  (b) to form no part of the estate or property of the person from the time the amount was so deducted or withheld, whether or not the property has in fact been kept separate and apart from the estate or property of the person and whether or not the property is subject to such a security interest and is property beneficially owned by Her Majesty notwithstanding any security interest in such property and in the proceeds thereof, and the proceeds of such property shall be paid to the Receiver General in priority to all such security interests. 
  
  ### Meaning of security interest
  
  (4.2) For the purposes of subsections 227(4) and 227(4.1), a security interest does not include a prescribed security interest. 
  
  ### Application to Crown
  
  (4.3) For greater certainty, subsections (4) to (4.2) apply to Her Majesty in right of Canada or a province where Her Majesty in right of Canada or a province is a secured creditor (within the meaning assigned by subsection 224(1.3)) or holds a security interest (within the meaning assigned by that subsection). 
  
  ### Payments by trustees, etc.
  
  (5) Where a specified person in relation to a particular person (in this subsection referred to as the “payer”) has any direct or indirect influence over the disbursements, property, business or estate of the payer and the specified person, alone or together with another person, authorizes or otherwise causes a payment referred to in subsection 135(3), 135.1(7) or 153(1), or on or in respect of which tax is payable under Part XII.5 or XIII, to be made by or on behalf of the payer, the specified person 
  (a) is, for the purposes of subsections 135(3) and 153(1), section 215 and this section, deemed to be a person who made the payment; 
  (a.1) is, for the purposes of subsections 135.1(7) and 211.8(2), deemed to be a person who redeemed, acquired or cancelled a share and made the payment as a consequence of the redemption, acquisition or cancellation; 
  (b) is jointly and severally, or solidarily, liable with the payer to pay to the Receiver General 
  (i) all amounts payable by the payer because of any of subsections 135(3), 135.1(7), 153(1) and 211.8(2) and section 215 in respect of the payment, and 
  (ii) all amounts payable under this Act by the payer because of any failure to comply with any of those provisions in respect of the payment; and 
  (c) is entitled to deduct or withhold from any amount paid or credited by the specified person to the payer or otherwise recover from the payer any amount paid under this subsection by the specified person in respect of the payment. 
  
  ### Definition of 
  *specified person* 
  
  (5.1) In subsection 227(5), a 
  *specified person* in relation to a particular person means a person who is, in relation to the particular person or the disbursements, property, business or estate of the particular person,  
  (a) a trustee; 
  (b) a liquidator; 
  (c) a receiver; 
  (d) an interim receiver; 
  (e) a receiver-manager; 
  (f) a trustee in bankruptcy or other person appointed under the Bankruptcy and Insolvency Act ;  
  (g) an assignee; 
  (h) a secured creditor (as defined in subsection 224(1.3)); 
  (i) an executor, a liquidator of a succession or an administrator; 
  (j) any person acting in a capacity similar to that of a person referred to in any of paragraphs 227(5.1)(a) to 227(5.1)(i); 
  (k) a person appointed (otherwise than as an employee of the creditor) at the request of, or on the advice of, a secured creditor in relation to the particular person to monitor, or provide advice in respect of, the disbursements, property, business or estate of the particular person under circumstances such that it is reasonable to conclude that the person is appointed to protect or advance the interests of the creditor; or 
  (l) an agent of a specified person referred to in any of paragraphs 227(5.1)(a) to 227(5.1)(k). 
  
  ###  
  *Person* includes partnership 
  
  (5.2) For the purposes of this section, references in subsections 227(5) and 227(5.1) to persons include partnerships. 
  
  ### Excess withheld, returned or applied
  
  (6) Where a person on whose behalf an amount has been paid under Part XII.5 or XIII to the Receiver General was not liable to pay tax under that Part or where the amount so paid is in excess of the amount that the person was liable to pay, the Minister shall, on written application made no later than 2 years after the end of the calendar year in which the amount was paid, pay to the person the amount so paid or such part of it as the person was not liable to pay, unless the person is or is about to become liable to make a payment to Her Majesty in right of Canada, in which case the Minister may apply the amount otherwise payable under this subsection to that liability and notify the person of that action. 
  
  ### Repayment of non-resident shareholder loan
  
  (6.1) Where, in respect of a loan from or indebtedness to a corporation or partnership, a person on whose behalf an amount was paid to the Receiver General under Part XIII because of subsection 15(2) and paragraph 214(3)(a) repays the loan or indebtedness or a portion of it and it is established by subsequent events or otherwise that the repayment was not made as part of a series of loans or other transactions and repayments, the Minister shall, on written application made no later than 2 years after the end of the calendar year in which the repayment is made, pay to the person an amount equal to the lesser of 
  (a) the amount so paid to the Receiver General in respect of the loan or indebtedness or portion of it, as the case may be, and 
  (b) the amount that would be payable to the Receiver General under Part XIII if a dividend described in paragraph 212(2)(a) equal in amount to the amount of the loan or indebtedness repaid were paid by the corporation or partnership to the person at the time of the repayment, unless the person is or is about to become liable to make a payment to Her Majesty in right of Canada, in which case the Minister may apply the amount otherwise payable under this subsection to that liability and notify the person of that action. 
  
  ### Foreign affiliate dumping  — late-filed form
  
  (6.2) If, in respect of an investment described in subsection 212.3(10), a corporation is deemed by subparagraph 212.3(7)(d)(ii) to pay a dividend and the corporation subsequently complies with the requirements of subparagraph 212.3(7)(d)(i) in respect of the investment, 
  (a) subject to paragraph (b), the Minister shall, on written application made on a particular day that is, or is no more than two years after, the day on which the form described in subparagraph 212.3(7)(d)(i) is filed, pay to the corporation an amount equal to the lesser of 
  (i) the total of all amounts, if any, paid to the Receiver General, on or prior to the particular day, on behalf of a person and in respect of the liability of the person to pay an amount under Part XIII in respect of the dividend, and 
  (ii) the amount that the person was liable to pay in respect of the dividend under Part XIII; 
  (b) where the corporation or the person is or is about to become liable to make a payment to Her Majesty in right of Canada, the Minister may apply the amount otherwise payable under paragraph (a) to that liability and notify the corporation, and, if applicable, the person, of that action; and 
  (c) for the purposes of this Part (other than subparagraph (a)(i)), if the amount described in subparagraph (a)(ii) exceeds the amount described in subparagraph (a)(i), the corporation is deemed to pay that excess to the Receiver General on the day on which the form described in subparagraph 212.3(7)(d)(i) is filed. 
  
  ### Application for assessment
  
  (7) Where, on application under subsection 227(6) by or on behalf of a person to the Minister in respect of an amount paid under Part XII.5 or XIII to the Receiver General, the Minister is not satisfied 
  (a) that the person was not liable to pay any tax under that Part, or 
  (b) that the amount paid was in excess of the tax that the person was liable to pay, the Minister shall assess any amount payable under that Part by the person and send a notice of assessment to the person, and sections 150 to 163, subsections 164(1) and 164(1.4) to 164(7), sections 164.1 to 167 and Division J of Part I apply with any modifications that the circumstances require. 
  
  ### Application for determination
  
  (7.1) Where, on application under subsection 227(6.1) by or on behalf of a person to the Minister in respect of an amount paid under Part XIII to the Receiver General, the Minister is not satisfied that the person is entitled to the amount claimed, the Minister shall, at the person’s request, determine, with all due dispatch, the amount, if any, payable under subsection 227(6.1) to the person and shall send a notice of determination to the person, and sections 150 to 163, subsections 164(1) and 164(1.4) to 164(7), sections 164.1 to 167 and Division J of Part I apply with such modifications as the circumstances require. 
  
  ### Penalty
  
  (8) Subject to subsection (9.5), every person who in a calendar year has failed to deduct or withhold any amount as required by subsection 153(1) or section 215 is liable to a penalty of 
  (a) 10% of the amount that should have been deducted or withheld; or 
  (b) where at the time of the failure a penalty under this subsection was payable by the person in respect of an amount that should have been deducted or withheld during the year and the failure was made knowingly or under circumstances amounting to gross negligence, 20% of that amount. 
  
  ### Joint and several, or solidary, liability
  
  (8.1) If a particular person has failed to deduct or withhold an amount as required under subsection 153(1) or section 215 in respect of an amount that has been paid to a non-resident person, the non-resident person is jointly and severally, or solidarily, liable with the particular person to pay any interest payable by the particular person pursuant to subsection (8.3) in respect thereof. 
  
  ### Retirement compensation arrangement deductions
  
  (8.2) Where a person has failed to deduct or withhold any amount as required under subsection 153(1) in respect of a contribution under a retirement compensation arrangement, that person is liable to pay to Her Majesty an amount equal to the amount of the contribution, and each payment on account of that amount is deemed to be, in the year in which the payment is made, 
  (a) for the purposes of paragraph 20(1)(r), a contribution by the person to the arrangement; and 
  (b) an amount on account of tax payable by the custodian under Part XI.3. 
  
  ### Interest on amounts not deducted or withheld
  
  (8.3) A person who fails to deduct or withhold any amount as required by subsection 135(3), 135.1(7), 153(1) or 211.8(2) or section 215 shall pay to the Receiver General interest on the amount at the prescribed rate, computed 
  (a) in the case of an amount required by subsection 153(1) to be deducted or withheld from a payment to another person, from the fifteenth day of the month immediately following the month in which the amount was required to be deducted or withheld, or from such earlier day as may be prescribed for the purposes of subsection 153(1), to, 
  (i) where that other person is not resident in Canada, the day of payment of the amount to the Receiver General, and 
  (ii) where that other person is resident in Canada, the earlier of the day of payment of the amount to the Receiver General and April 30 of the year immediately following the year in which the amount was required to be deducted or withheld; 
  (b) in the case of an amount required by subsection 135(3) or 135.1(7) or section 215 to be deducted or withheld, from the day on which the amount was required to be deducted or withheld to the day of payment of the amount to the Receiver General; and 
  (c) in the case of an amount required by subsection 211.8(2) to be withheld, from the day on or before which the amount was required to be remitted to the Receiver General to the day of the payment of the amount to the Receiver General. 
  
  ### Liability to pay amount not deducted or withheld
  
  (8.4) A person who fails to deduct or withhold any amount as required under subsection 135(3) or 135.1(7) in respect of a payment made to another person or under subsection 153(1) in respect of an amount paid to another person who is non-resident or who is resident in Canada solely because of paragraph 250(1)(a) is liable to pay as tax under this Act on behalf of the other person the whole of the amount that should have been so deducted or withheld and is entitled to deduct or withhold from any amount paid or credited by the person to the other person or otherwise to recover from the other person any amount paid by the person as tax under this Part on behalf of the other person. 
  
  ### No penalty — certain deemed payments
  
  (8.5) Subsection (8) does not apply to a corporation in respect of 
  (a) an amount of interest deemed by subsection 214(16) to have been paid as a dividend by the corporation unless, if the Act were read without reference to subsection 214(16), a penalty under subsection (8) would have applied in respect of the amount; and 
  (b) an amount deemed by subparagraph 212.3(7)(d)(ii) or subsection 247(12) to have been paid as a dividend by the corporation. 
  
  ### No penalty — qualifying non-resident employers
  
  (8.6) Subsection (8) does not apply to a 
  *qualifying non-resident employer* (as defined in subsection 153(6)) in respect of a payment made to an employee if, after reasonable inquiry, the employer had no reason to believe at the time of the payment that the employee was not a 
  *qualifying non-resident employee* (as defined in subsection 153(6)).  
  
  ### Penalty
  
  (9) Subject to subsection 227(9.5), every person who in a calendar year has failed to remit or pay as and when required by this Act or a regulation an amount deducted or withheld as required by this Act or a regulation or an amount of tax that the person is, by section 116 or by a regulation made under subsection 215(4), required to pay is liable to a penalty of 
  (a) subject to paragraph (b), if 
  (i) the Receiver General receives that amount on or before the day it was due, but that amount is not paid in the manner required, 3% of that amount, 
  (ii) the Receiver General receives that amount 
  (A) no more than three days after it was due, 3% of that amount, 
  (B) more than three days and no more than five days after it was due, 5% of that amount, or 
  (C) more than five days and no more than seven days after it was due, 7% of that amount, or 
  (iii) that amount is not paid or remitted on or before the seventh day after it was due, 10% of that amount; or 
  (b) where at the time of the failure a penalty under this subsection was payable by the person in respect of an amount that should have been remitted or paid during the year and the failure was made knowingly or under circumstances amounting to gross negligence, 20% of that amount. 
  
  ### Penalty
  
  (9.1) Notwithstanding any other provision of this Act, any other enactment of Canada, any enactment of a province or any other law, the penalty for failure to remit an amount required to be remitted by a person on or before a prescribed date under subsection 153(1), subsection 21(1) of the Canada Pension Plan, subsection 53(1) of the Unemployment Insurance Act and subsection 82(1) of the Employment Insurance Act shall, unless the person who is required to remit the amount has, knowingly or under circumstances amounting to gross negligence, delayed in remitting the amount or has, knowingly or under circumstances amounting to gross negligence, remitted an amount less than the amount required, apply only to the amount by which the total of all so required to be remitted on or before that date exceeds $500.  
  
  ### Interest on amounts deducted or withheld but not remitted
  
  (9.2) Where a person has failed to remit as and when required by this Act or a regulation an amount deducted or withheld as required by this Act or a regulation, the person shall pay to the Receiver General interest on the amount at the prescribed rate computed from the day on which the person was so required to remit the amount to the day of remittance of the amount to the Receiver General. 
  
  ### Interest on certain tax not paid
  
  (9.3) Where a person fails to pay an amount of tax that, because of section 116, subsection 212(19) or a regulation made under subsection 215(4), the person is required to pay, as and when the person is required to pay it, the person shall pay to the Receiver General interest on the amount at the prescribed rate computed from the day on or before which the amount was required to be paid to the day of payment of the amount to the Receiver General. 
  
  ### Liability to pay amount not remitted
  
  (9.4) A person who has failed to remit as and when required by this Act or a regulation an amount deducted or withheld from a payment to another person as required by this Act or a regulation is liable to pay as tax under this Act on behalf of the other person the amount so deducted or withheld. 
  
  ### Payment from same establishment
  
  (9.5) In applying paragraphs 227(8)(b) and 227(9)(b) in respect of an amount required by paragraph 153(1)(a) to be deducted or withheld, each establishment of a person shall be deemed to be a separate person. 
  
  ### Assessment
  
  (10) The Minister may at any time assess any amount payable under 
  (a) subsection 227(8), 227(8.1), 227(8.2), 227(8.3) or 227(8.4) or 224(4) or 224(4.1) or section 227.1 or 235 by a person, 
  (b) subsection 237.1(7.4) or (7.5), 237.3(8), 237.4(12) or 237.5(5) by a person or partnership, 
  (c) subsection 227(10.2) by a person as a consequence of a failure of a non-resident person to deduct or withhold any amount, or 
  (d) Part XIII by a person resident in Canada, and, where the Minister sends a notice of assessment to that person or partnership, Divisions I and J of Part I apply with any modifications that the circumstances require. 
  
  ### Part XII.5
  
  (10.01) The Minister may at any time assess any amount payable under Part XII.5 by a person resident in Canada and, where the Minister sends a notice of assessment to that person, Divisions I and J of Part I apply with any modifications that the circumstances require. 
  
  ### Idem
  
  (10.1) The Minister may at any time assess 
  (a) any amount payable under section 116 or subsection 227(9), 227(9.2), 227(9.3) or 227(9.4) by any person, 
  (a.1)  [Repealed, 1997, c. 25, s. 67(7)]  
  (b) any amount payable under subsection 227(10.2) by any person as a consequence of a failure by a non-resident person to remit any amount, and 
  (c) any amount payable under Part XII.5 or XIII by any non-resident person, and, where the Minister sends a notice of assessment to the person, sections 150 to 163, subsections 164(1) and 164(1.4) to 164(7), sections 164.1 to 167 and Division J of Part I apply with such modifications as the circumstances require. 
  
  ### Joint and several, or solidary, liability re contributions to RCA
  
  (10.2) If a non-resident person fails to deduct, withhold or remit an amount as required by subsection 153(1) in respect of a contribution under a retirement compensation arrangement that is paid on behalf of the employees or former employees of an employer with whom the non-resident person does not deal at arm’s length, the employer is jointly and severally, or solidarily, liable with the non-resident person to pay any amount payable under subsection (8), (8.2), (8.3), (9), (9.2) or (9.4) by the non-resident person in respect of the contribution. 
  (10.3) to (10.9)  [Repealed, 1994, c. 7, Sch. VIII, s. 153]  
  
  ### Withholding tax
  
  (11) Provisions of this Act requiring a person to deduct or withhold an amount in respect of taxes from amounts payable to a taxpayer are applicable to Her Majesty in right of Canada or a province. 
  
  ### Agreement not to deduct void
  
  (12) Where this Act requires an amount to be deducted or withheld, an agreement by the person on whom that obligation is imposed not to deduct or withhold is void. 
  
  ### Minister’s receipt discharges debtor
  
  (13) The receipt of the Minister for an amount deducted or withheld by any person as required by or under this Act is a good and sufficient discharge of the liability of any debtor to the debtor’s creditor with respect thereto to the extent of the amount referred to in the receipt. 
  
  ### Application of other Parts
  
  (14) Parts IV, IV.1, VI and VI.1 do not apply to any corporation for any period throughout which it is exempt from tax because of section 149. 
  
  ### Partnership included in “person”
  
  (15) In this section, a reference to a “person” with respect to any amount deducted or withheld or required to be deducted or withheld is deemed to include a partnership. 
  
  ### Municipal or provincial corporation excepted
  
  (16) A corporation that at any time in a taxation year would be a corporation described in any of paragraphs 149(1)(d) to (d.6) but for a provision of an appropriation Act is deemed not to be a private corporation for the purposes of Part IV with respect to that year. 
  
  ### Liability of directors for failure to deduct
  
  227.1 (1) Where a corporation has failed to deduct or withhold an amount as required by subsection 135(3) or 135.1(7) or section 153 or 215, has failed to remit such an amount or has failed to pay an amount of tax for a taxation year as required under Part VII or VIII, the directors of the corporation at the time the corporation was required to deduct, withhold, remit or pay the amount are jointly and severally, or solidarily, liable, together with the corporation, to pay that amount and any interest or penalties relating to it. 
  
  ### Limitations on liability
  
  (2) A director is not liable under subsection 227.1(1), unless 
  (a) a certificate for the amount of the corporation’s liability referred to in that subsection has been registered in the Federal Court under section 223 and execution for that amount has been returned unsatisfied in whole or in part; 
  (b) the corporation has commenced liquidation or dissolution proceedings or has been dissolved and a claim for the amount of the corporation’s liability referred to in that subsection has been proved within six months after the earlier of the date of commencement of the proceedings and the date of dissolution; or 
  (c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the amount of the corporation’s liability referred to in that subsection has been proved within six months after the date of the assignment or bankruptcy order.  
  
  ### Idem
  
  (3) A director is not liable for a failure under subsection 227.1(1) where the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances. 
  
  ### Limitation period
  
  (4) No action or proceedings to recover any amount payable by a director of a corporation under subsection 227.1(1) shall be commenced more than two years after the director last ceased to be a director of that corporation. 
  
  ### Amount recoverable
  
  (5) Where execution referred to in paragraph 227.1(2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution. 
  
  ### Preference
  
  (6) Where a director pays an amount in respect of a corporation’s liability referred to in subsection 227.1(1) that is proved in liquidation, dissolution or bankruptcy proceedings, the director is entitled to any preference that Her Majesty in right of Canada would have been entitled to had that amount not been so paid and, where a certificate that relates to that amount has been registered, the director is entitled to an assignment of the certificate to the extent of the director’s payment, which assignment the Minister is hereby empowered to make. 
  
  ### Contribution
  
  (7) A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim. 
  
  ### Applying payments under collection agreements
  
  228 Where a payment is made to the Minister on account of tax under this Act, an Act of a province that imposes a tax similar to the tax imposed under this Act, or any two or more such Acts, such part of that payment as is applied by the Minister in accordance with the provisions of a collection agreement entered into under Part III of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act against the tax payable by a taxpayer for a taxation year under this Act discharges the liability of the taxpayer for that tax only to the extent of the part of the payment so applied, notwithstanding that the taxpayer directed that the payment be applied in a manner other than that provided in the collection agreement or made no direction as to its application.  
  
  ### Repeal of s. 229
  
  229.1 (1) Section 229 is repealed. 
  
  ### Coming into force
  
  (2) Subsection 229.1(1) shall come into force on a day to be fixed by proclamation. 
  
  ## General 
  
  ### Records and books
  
  230 (1) Every person carrying on business and every person who is required, by or pursuant to this Act, to pay or collect taxes or other amounts shall keep records and books of account (including an annual inventory kept in prescribed manner) at the person’s place of business or residence in Canada or at such other place as may be designated by the Minister, in such form and containing such information as will enable the taxes payable under this Act or the taxes or other amounts that should have been deducted, withheld or collected to be determined. 
  
  ### Records and books
  
  (2) Every qualified donee referred to in paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) shall keep records and books of account — in the case of a qualified donee referred to in any of subparagraphs (a)(i) and (iii) and paragraphs (b), (b.1) and (c) of that definition, at an address in Canada recorded with the Minister or designated by the Minister — containing  
  (a) information in such form as will enable the Minister to determine whether there are any grounds for the revocation of its registration under this Act; 
  (b) a duplicate of each receipt containing prescribed information for a donation received by it; and 
  (c) other information in such form as will enable the Minister to verify the donations to it for which a deduction or tax credit is available under this Act. 
  
  ### Idem, lawyers
  
  (2.1) For greater certainty, the records and books of account required by subsection 230(1) to be kept by a person carrying on business as a lawyer (within the meaning assigned by subsection 232(1)) whether by means of a partnership or otherwise, include all accounting records of the lawyer, including supporting vouchers and cheques. 
  
  ### Minister’s requirement to keep records, etc.
  
  (3) Where a person has failed to keep adequate records and books of account for the purposes of this Act, the Minister may require the person to keep such records and books of account as the Minister may specify and that person shall thereafter keep records and books of account as so required. 
  
  ### Limitation period for keeping records, etc.
  
  (4) Every person required by this section to keep records and books of account shall retain 
  (a) the records and books of account referred to in this section in respect of which a period is prescribed, together with every account and voucher necessary to verify the information contained therein, for such period as is prescribed; and 
  (b) all other records and books of account referred to in this section, together with every account and voucher necessary to verify the information contained therein, until the expiration of six years from the end of the last taxation year to which the records and books of account relate. 
  
  ### Electronic records
  
  (4.1) Every person required by this section to keep records who does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection 230(4). 
  
  ### Exemptions
  
  (4.2) The Minister may, on such terms and conditions as are acceptable to the Minister, exempt a person or a class of persons from the requirement in subsection 230(4.1). 
  
  ### Exception where no return filed
  
  (5) Where, in respect of any taxation year, a person referred to in subsection 230(1) has not filed a return with the Minister as and when required by section 150, that person shall retain every record and book of account that is required by this section to be kept and that relates to that taxation year, together with every account and voucher necessary to verify the information contained therein, until the expiration of six years from the day the return for that taxation year is filed. 
  
  ### Exception where objection or appeal
  
  (6) Where a person required by this section to keep records and books of account serves a notice of objection or where that person is a party to an appeal to the Tax Court of Canada under this Act, that person shall retain every record, book of account, account and voucher necessary for dealing with the objection or appeal until, in the case of the serving of a notice of objection, the time provided by section 169 to appeal has elapsed or, in the case of an appeal, until the appeal is disposed of and any further appeal in respect thereof is disposed of or the time for filing any such further appeal has expired. 
  
  ### Exception where demand by Minister
  
  (7) Where the Minister is of the opinion that it is necessary for the administration of this Act, the Minister may, by registered letter or by a demand served personally, require any person required by this section to keep records and books of account to retain those records and books of account, together with every account and voucher necessary to verify the information contained therein, for such period as is specified in the letter or demand. 
  
  ### Permission for earlier disposal
  
  (8) A person required by this section to keep records and books of account may dispose of the records and books of account referred to in this section, together with every account and voucher necessary to verify the information contained therein, before the expiration of the period in respect of which those records and books of account are required to be kept if written permission for their disposal is given by the Minister. 
  
  ### Records re monetary contributions - Canada Elections Act 
  
  230.1 (1) Every agent authorized under the Canada Elections Act to accept monetary contributions referred to in that Act shall keep records, sufficient to enable each monetary contribution within the meaning assigned by subsection 127(4.1) that they receive and the expenditures that they make to be verified, (including a duplicate of the receipt referred to in subsection 127(3) for each of those monetary contributions) at  
  (a) in the case of an agent other than an official agent of a candidate, the address recorded in the registry of political parties or of electoral district associations referred to in the Canada Elections Act ; and  
  (b) in the case of an official agent of a candidate, the agent’s address set out in the nomination papers filed under that Act with the returning officer when the candidate was a prospective candidate or any other address that the Minister designates. 
  
  ### Information Return
  
  (2) Each agent to whom subsection (1) applies shall file with the Minister an information return in prescribed form and containing prescribed information. The return is to be filed within the period for the filing of a financial transactions return or an electoral campaign return, as the case may be, under the Canada Elections Act.  
  
  ### Application of subsections 230(3) to (8)
  
  (3) Subsections 230(3) to (8) apply, with any modifications that the circumstances require, in respect of the keeping of records by agents as required by subsection (1). 
  (4) and (5)  [Repealed, 1994, c. 21, s. 106]  
  (6) and (7)  [Repealed, 2003, c. 19, s. 74(1)]  
  
  ### Definitions
  
  231 In sections 231.1 to 231.8,  
  *authorized person* means a person authorized by the Minister for the purposes of sections 231.1 to 231.5; (personne autorisée)   
  *document* includes money, a security and a record; (document)   
  *dwelling-house* means the whole or any part of a building or structure that is kept or occupied as a permanent or temporary residence and includes  
  (a) a building within the curtilage of a dwelling-house that is connected to it by a doorway or by a covered and enclosed passageway, and 
  (b) a unit that is designed to be mobile and to be used as a permanent or temporary residence and that is being used as such a residence; ( maison d’habitation)   
  *judge* means a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court. (juge)  
  
  ### Information gathering
  
  231.1 (1) An authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of this Act, 
  (a) inspect, audit or examine any document, including books and records, of a taxpayer or any other person that may be relevant in determining the obligations or entitlements of the taxpayer or any other person under this Act; 
  (b) examine any property or process of, or matter relating to, a taxpayer or any other person, an examination of which may assist the authorized person in determining the obligations or entitlements of the taxpayer or any other person under this Act; 
  (c) enter any premises or place where any business is carried on, any property is kept, anything is done in connection with any business or any books or records are or should be kept, except that, if the premises or place is a dwelling-house, the authorized person may enter the dwelling-house without the consent of the occupant only under the authority of a warrant under subsection (3); 
  (d) require a taxpayer or any other person to give the authorized person all reasonable assistance, to answer all proper questions relating to the administration or enforcement of this Act and 
  (i) to attend with the authorized person, at a place designated by the authorized person, or by video-conference or by another form of electronic communication, and to answer the questions orally, and 
  (ii) to answer the questions in writing, in any form specified by the authorized person; and 
  (e) require a taxpayer or any other person to give the authorized person all reasonable assistance with anything the authorized person is authorized to do under this Act. 
  (2)  [Repealed, 2022, c. 19, s. 54]  
  
  ### Application
  
  (3) Where, on ex parte application by the Minister, a judge is satisfied by information on oath that  
  (a) there are reasonable grounds to believe that a dwelling-house is a premises or place referred to in paragraph 231.1(1)(c), 
  (b) entry into the dwelling-house is necessary for any purpose relating to the administration or enforcement of this Act, and 
  (c) entry into the dwelling-house has been, or there are reasonable grounds to believe that entry will be, refused, the judge may issue a warrant authorizing an authorized person to enter the dwelling-house subject to such conditions as are specified in the warrant but, where the judge is not satisfied that entry into the dwelling-house is necessary for any purpose relating to the administration or enforcement of this Act, the judge may 
  (d) order the occupant of the dwelling-house to provide to an authorized person reasonable access to any document or property that is or should be kept in the dwelling-house, and 
  (e) make such other order as is appropriate in the circumstances to carry out the purposes of this Act, to the extent that access was or may be expected to be refused and that the document or property is or may be expected to be kept in the dwelling-house. 
  
  ### Requirement to provide documents or information
  
  231.2 (1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice sent or served in accordance with subsection (1.1), require that any person provide, within such reasonable time as is stipulated in the notice, 
  (a) any information or additional information, including a return of income or a supplementary return; or 
  (b) any document. 
  
  ### Notice
  
  (1.1) A notice referred to in subsection (1) may be 
  (a) served personally; 
  (b) sent by registered or certified mail; or 
  (c) sent electronically to a bank or credit union that has provided written consent to receive notices under subsection (1) electronically. 
  
  ### Unnamed persons
  
  (2) The Minister shall not impose on any person (in this section referred to as a “third party”) a requirement under subsection 231.2(1) to provide information or any document relating to one or more unnamed persons unless the Minister first obtains the authorization of a judge under subsection 231.2(3). 
  
  ### Judicial authorization
  
  (3) A judge of the Federal Court may, on application by the Minister and subject to any conditions that the judge considers appropriate, authorize the Minister to impose on a third party a requirement under subsection (1) relating to an unnamed person or more than one unnamed person (in this section referred to as the “group”) if the judge is satisfied by information on oath that 
  (a) the person or group is ascertainable; and 
  (b) the requirement is made to verify compliance by the person or persons in the group with any duty or obligation under this Act. 
  (c) and (d)  [Repealed, 1996, c. 21, s. 58(1)]  
  (4) to (6)  [Repealed, 2013, c. 33, s. 21]  
  
  ### Search warrant
  
  231.3 (1) A judge may, on ex parte application by the Minister, issue a warrant in writing authorizing any person named therein to enter and search any building, receptacle or place for any document or thing that may afford evidence as to the commission of an offence under this Act and to seize the document or thing and, as soon as practicable, bring it before, or make a report in respect of it to, the judge or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section.  
  
  ### Evidence in support of application
  
  (2) An application under subsection 231.3(1) shall be supported by information on oath establishing the facts on which the application is based. 
  
  ### Evidence
  
  (3) A judge may issue the warrant referred to in subsection 231.3(1) where the judge is satisfied that there are reasonable grounds to believe that 
  (a) an offence under this Act was committed; 
  (b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and 
  (c) the building, receptacle or place specified in the application is likely to contain such a document or thing. 
  
  ### Contents of warrant
  
  (4) A warrant issued under subsection 231.3(1) shall refer to the offence for which it is issued, identify the building, receptacle or place to be searched and the person alleged to have committed the offence and it shall be reasonably specific as to any document or thing to be searched for and seized. 
  
  ### Seizure of document
  
  (5) Any person who executes a warrant under subsection 231.3(1) may seize, in addition to the document or thing referred to in that subsection, any other document or thing that the person believes on reasonable grounds affords evidence of the commission of an offence under this Act and shall as soon as practicable bring the document or thing before, or make a report in respect thereof to, the judge who issued the warrant or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section. 
  
  ### Retention of things seized
  
  (6) Subject to subsection 231.3(7), where any document or thing seized under subsection 231.3(1) or 231.3(5) is brought before a judge or a report in respect thereof is made to a judge, the judge shall, unless the Minister waives retention, order that it be retained by the Minister, who shall take reasonable care to ensure that it is preserved until the conclusion of any investigation into the offence in relation to which the document or thing was seized or until it is required to be produced for the purposes of a criminal proceeding. 
  
  ### Return of things seized
  
  (7) Where any document or thing seized under subsection 231.3(1) or 231.3(5) is brought before a judge or a report in respect thereof is made to a judge, the judge may, of the judge’s own motion or on summary application by a person with an interest in the document or thing on three clear days notice of application to the Deputy Attorney General of Canada, order that the document or thing be returned to the person from whom it was seized or the person who is otherwise legally entitled thereto if the judge is satisfied that the document or thing 
  (a) will not be required for an investigation or a criminal proceeding; or 
  (b) was not seized in accordance with the warrant or this section. 
  
  ### Access and copies
  
  (8) The person from whom any document or thing is seized pursuant to this section is entitled, at all reasonable times and subject to such reasonable conditions as may be imposed by the Minister, to inspect the document or thing and to obtain one copy of the document at the expense of the Minister. 
  
  ### Inquiry
  
  231.4 (1) The Minister may, for any purpose related to the administration or enforcement of this Act, authorize any person, whether or not the person is an officer of the Canada Revenue Agency, to make such inquiry as the person may deem necessary with reference to anything relating to the administration or enforcement of this Act. 
  
  ### Appointment of hearing officer
  
  (2) Where the Minister, pursuant to subsection 231.4(1), authorizes a person to make an inquiry, the Minister shall forthwith apply to the Tax Court of Canada for an order appointing a hearing officer before whom the inquiry will be held. 
  
  ### Powers of hearing officer
  
  (3) For the purposes of an inquiry authorized under subsection 231.4(1), a hearing officer appointed under subsection 231.4(2) in relation thereto has all the powers conferred on a commissioner by sections 4 and 5 of the Inquiries Act and that may be conferred on a commissioner under section 11 thereof.  
  
  ### When powers to be exercised
  
  (4) A hearing officer appointed under subsection 231.4(2) in relation to an inquiry shall exercise the powers conferred on a commissioner by section 4 of the Inquiries Act in relation to such persons as the person authorized to make the inquiry considers appropriate for the conduct thereof but the hearing officer shall not exercise the power to punish any person unless, on application by the hearing officer, a judge of a superior or county court certifies that the power may be exercised in the matter disclosed in the application and the applicant has given to the person in respect of whom the applicant proposes to exercise the power 24 hours notice of the hearing of the application or such shorter notice as the judge considers reasonable.  
  
  ### Rights of witness at inquiry
  
  (5) Any person who gives evidence in an inquiry authorized under subsection 231.4(1) is entitled to be represented by counsel and, on request made by the person to the Minister, to receive a transcript of the evidence given by the person. 
  
  ### Rights of person whose affairs are investigated
  
  (6) Any person whose affairs are investigated in the course of an inquiry authorized under subsection 231.4(1) is entitled to be present and to be represented by counsel throughout the inquiry unless the hearing officer appointed under subsection 231.4(2) in relation to the inquiry, on application by the Minister or a person giving evidence, orders otherwise in relation to the whole or any part of the inquiry on the ground that the presence of the person and the person’s counsel, or either of them, would be prejudicial to the effective conduct of the inquiry. 
  
  ### Copies
  
  231.5 (1) Where any document is seized, inspected, audited, examined or provided under any of sections 231.1 to 231.4, the person by whom it is seized, inspected, audited or examined or to whom it is provided or any officer of the Canada Revenue Agency may make, or cause to be made, one or more copies thereof and, in the case of an electronic document, make or cause to be made a print-out of the electronic document, and any document purporting to be certified by the Minister or an authorized person to be a copy of the document, or to be a print-out of an electronic document, made pursuant to this section is evidence of the nature and content of the original document and has the same probative force as the original document would have if it were proven in the ordinary way. 
  
  ### Compliance
  
  (2) No person shall, physically or otherwise, interfere with, hinder or molest an official (in this subsection having the meaning assigned by subsection 241(10)) doing anything that the official is authorized to do under this Act or attempt to interfere with, hinder or molest any official doing or prevent or attempt to prevent an official from doing, anything that the official is authorized to do under this Act, and every person shall, unless the person is unable to do so, do everything that the person is required to do by or under subsection (1) or sections 231.1 to 231.4. 
  
  ### Definition of foreign-based information or document 
  
  231.6 (1) For the purposes of this section, 
  *foreign-based information or document* means any information or document that is available or located outside Canada and that may be relevant to the administration or enforcement of this Act, including the collection of any amount payable under this Act by any person.  
  
  ### Requirement to provide foreign-based information
  
  (2) Notwithstanding any other provision of this Act, the Minister may, by notice sent or served in accordance with subsection (3.1), require that a person resident in Canada or a non-resident person carrying on business in Canada provide any foreign-based information or document. 
  
  ### Notice
  
  (3) The notice referred to in subsection 231.6(2) shall set out 
  (a) a reasonable period of time of not less than 90 days for the production of the information or document; 
  (b) a description of the information or document being sought; and 
  (c) the consequences under subsection 231.6(8) to the person of the failure to provide the information or documents being sought within the period of time set out in the notice. 
  
  ### Notice
  
  (3.1) A notice referred to in subsection (2) may be 
  (a) served personally; 
  (b) sent by registered or certified mail; or 
  (c) sent electronically to a bank or credit union that has provided written consent to receive notices under subsection (2) electronically. 
  
  ### Review of foreign information requirement
  
  (4) The person who is sent or served with a notice of a requirement under subsection (2) may, within 90 days after the notice is sent or served, apply to a judge for a review of the requirement. 
  
  ### Powers on review
  
  (5) On hearing an application under subsection 231.6(4) in respect of a requirement, a judge may 
  (a) confirm the requirement; 
  (b) vary the requirement as the judge considers appropriate in the circumstances; or 
  (c) set aside the requirement if the judge is satisfied that the requirement is unreasonable. 
  
  ### Unreasonableness
  
  (6) For the purposes of paragraph (5)(c), the requirement to provide the information or document shall not be considered to be unreasonable because the information or document is under the control of or available to a non-resident person that is not controlled by the person who is sent or served with the notice of the requirement under subsection (2) if that person is related to the non-resident person. 
  
  ### Time period not to count
  
  (7) The period of time between the day on which an application for review of a requirement is made pursuant to subsection (4) and the day on which the application is finally disposed of shall not be counted in the computation of 
  (a) the period of time set out in the notice of the requirement; and 
  (b) the period of time within which an assessment may be made pursuant to subsection 152(4). 
  
  ### Consequence of failure
  
  (8) If a person fails to comply substantially with a notice sent or served under subsection (2) and if the notice is not set aside by a judge pursuant to subsection (5), any court having jurisdiction in a civil proceeding relating to the administration or enforcement of this Act shall, on motion of the Minister, prohibit the introduction by that person of any foreign-based information or document covered by that notice. 
  
  ### Compliance order
  
  231.7 (1) On summary application by the Minister, a judge may, notwithstanding subsection 238(2), order a person to provide any access, assistance, information or document sought by the Minister under section 231.1 or 231.2 if the judge is satisfied that 
  (a) the person was required under section 231.1 or 231.2 to provide the access, assistance, information or document and did not do so; and 
  (b) in the case of information or a document, the information or document is not protected from disclosure by solicitor-client privilege (within the meaning of subsection 232(1)). 
  
  ### Notice required
  
  (2) An application under subsection (1) must not be heard before the end of five clear days from the day the notice of application is served on the person against whom the order is sought. 
  
  ### Judge may impose conditions
  
  (3) A judge making an order under subsection (1) may impose any conditions in respect of the order that the judge considers appropriate. 
  
  ### Contempt of court
  
  (4) If a person fails or refuses to comply with an order, a judge may find the person in contempt of court and the person is subject to the processes and the punishments of the court to which the judge is appointed. 
  
  ### Appeal
  
  (5) An order by a judge under subsection (1) may be appealed to a court having appellate jurisdiction over decisions of the court to which the judge is appointed. An appeal does not suspend the execution of the order unless it is so ordered by a judge of the court to which the appeal is made. 
  
  ### Time period not to count
  
  231.8 The following periods of time shall not be counted in the computation of the period of time within which an assessment may be made for a taxation year of a taxpayer under subsection 152(4): 
  (a) where the taxpayer is sent or served with a notice of a requirement under subsection 231.2(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and 
  (b) where an application is commenced by the Minister under subsection 231.7(1) to order the taxpayer to provide any access, assistance, information or document, the period of time between the day on which the taxpayer files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of. 
  
  ### Definitions
  
  232 (1) In this section,  
  *custodian* means a person in whose custody a package is placed pursuant to subsection 232(3); (gardien)   
  *judge* means a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court; (juge)   
  *lawyer* means, in the province of Quebec, an advocate or notary and, in any other province, a barrister or solicitor; (avocat)   
  *officer* means a person acting under the authority conferred by or under sections 231.1 to 231.5; (fonctionnaire)   
  *solicitor-client privilege* means the right, if any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground that the communication is one passing between the person and the person’s lawyer in professional confidence, except that for the purposes of this section an accounting record of a lawyer, including any supporting voucher or cheque, shall be deemed not to be such a communication. (privilège des communications entre client et avocat)  
  
  ### Solicitor-client privilege defence
  
  (2) Where a lawyer is prosecuted for failure to comply with a requirement under section 231.2 with respect to information or a document, the lawyer shall be acquitted if the lawyer establishes to the satisfaction of the court 
  (a) that the lawyer, on reasonable grounds, believed that a client of the lawyer had a solicitor-client privilege in respect of the information or document; and 
  (b) that the lawyer communicated to the Minister, or some person duly authorized to act for the Minister, the lawyer’s refusal to comply with the requirement together with a claim that a named client of the lawyer had a solicitor-client privilege in respect of the information or document. 
  
  ### Seizure of certain documents where privilege claimed
  
  (3) Where, pursuant to section 231.3, an officer is about to seize a document in the possession of a lawyer and the lawyer claims that a named client of the lawyer has a solicitor-client privilege in respect of that document, the officer shall, without inspecting, examining or making copies of the document, 
  (a) seize the document and place it, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package; and 
  (b) place the package in the custody of the sheriff of the district or county in which the seizure was made or, if the officer and the lawyer agree in writing on a person to act as custodian, in the custody of that person. 
  
  ### Examination of certain documents where privilege claimed
  
  (3.1) Where, pursuant to section 231.1, an officer is about to inspect or examine a document in the possession of a lawyer or where, pursuant to section 231.2, the Minister has required provision of a document by a lawyer, and the lawyer claims that a named client or former client of the lawyer has a solicitor-client privilege in respect of the document, no officer shall inspect or examine the document and the lawyer shall 
  (a) place the document, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package or, if the officer and the lawyer agree, allow the pages of the document to be initialed and numbered or otherwise suitably identified; and 
  (b) retain it and ensure that it is preserved until it is produced to a judge as required under this section and an order is issued under this section in respect of the document. 
  
  ### Application to judge
  
  (4) Where a document has been seized and placed in custody under subsection 232(3) or is being retained under subsection 232(3.1), the client, or the lawyer on behalf of the client, may 
  (a) within 14 days after the day the document was so placed in custody or commenced to be so retained apply, on three clear days notice of motion to the Deputy Attorney General of Canada, to a judge for an order 
  (i) fixing a day, not later than 21 days after the date of the order, and place for the determination of the question whether the client has a solicitor-client privilege in respect of the document, and 
  (ii) requiring the production of the document to the judge at that time and place; 
  (b) serve a copy of the order on the Deputy Attorney General of Canada and, where applicable, on the custodian within 6 days of the day on which it was made and, within the same time, pay to the custodian the estimated expenses of transporting the document to and from the place of hearing and of safeguarding it; and 
  (c) if the client or lawyer has proceeded as authorized by paragraph 232(4)(b), apply at the appointed time and place for an order determining the question. 
  
  ### Disposition of application
  
  (5) An application under paragraph 232(4)(c) shall be heard in camera, and on the application  
  (a) the judge may, if the judge considers it necessary to determine the question, inspect the document and, if the judge does so, the judge shall ensure that it is repackaged and resealed; and 
  (b) the judge shall decide the matter summarily and, 
  (i) if the judge is of the opinion that the client has a solicitor-client privilege in respect of the document, shall order the release of the document to the lawyer, and 
  (ii) if the judge is of the opinion that the client does not have a solicitor-client privilege in respect of the document, shall order 
  (A) that the custodian deliver the document to the officer or some other person designated by the Commissioner of Revenue, in the case of a document that was seized and placed in custody under subsection 232(3), or 
  (B) that the lawyer make the document available for inspection or examination by the officer or other person designated by the Commissioner of Revenue, in the case of a document that was retained under subsection 232(3.1), and the judge shall, at the same time, deliver concise reasons in which the judge shall identify the document without divulging the details thereof. 
  
  ### Order to deliver or make available
  
  (6) Where a document has been seized and placed in custody under subsection 232(3) or where a document is being retained under subsection 232(3.1) and a judge, on the application of the Attorney General of Canada, is satisfied that neither the client nor the lawyer has made an application under paragraph 232(4)(a) or, having made that application, neither the client nor the lawyer has made an application under paragraph 232(4)(c), the judge shall order 
  (a) that the custodian deliver the document to the officer or some other person designated by the Commissioner of Revenue, in the case of a document that was seized and placed in custody under subsection 232(3); or 
  (b) that the lawyer make the document available for inspection or examination by the officer or other person designated by the Commissioner of Revenue, in the case of a document that was retained under subsection 232(3.1). 
  
  ### Delivery by custodian
  
  (7) The custodian shall 
  (a) deliver the document to the lawyer 
  (i) in accordance with a consent executed by the officer or by or on behalf of the Deputy Attorney General of Canada or the Commissioner of Revenue, or 
  (ii) in accordance with an order of a judge under this section; or 
  (b) deliver the document to the officer or some other person designated by the Commissioner of Revenue 
  (i) in accordance with a consent executed by the lawyer or the client, or 
  (ii) in accordance with an order of a judge under this section. 
  
  ### Continuation by another judge
  
  (8) Where the judge to whom an application has been made under paragraph 232(4)(a) cannot for any reason act or continue to act in the application under paragraph 232(4)(c), the application under paragraph 232(4)(c) may be made to another judge. 
  
  ### Costs
  
  (9) No costs may be awarded on the disposition of any application under this section. 
  
  ### Directions
  
  (10) Where any question arises as to the course to be followed in connection with anything done or being done under this section, other than subsection 232(2), 232(3) or 232(3.1), and there is no direction in this section with respect thereto, a judge may give such direction with regard thereto as, in the judge’s opinion, is most likely to carry out the object of this section of allowing solicitor-client privilege for proper purposes. 
  
  ### Prohibition
  
  (11) The custodian shall not deliver a document to any person except in accordance with an order of a judge or a consent under this section or except to any officer or servant of the custodian for the purposes of safeguarding the document. 
  
  ### Idem
  
  (12) No officer shall inspect, examine or seize a document in the possession of a lawyer without giving the lawyer a reasonable opportunity of making a claim under this section. 
  
  ### Authority to make copies
  
  (13) At any time while a document is in the custody of a custodian under this section, a judge may, on an ex parte application of the lawyer, authorize the lawyer to examine or make a copy of the document in the presence of the custodian or the judge by an order that shall contain such provisions as may be necessary to ensure that the document is repackaged and that the package is resealed without alteration or damage.  
  
  ### Waiver of claim of privilege
  
  (14) Where a lawyer has, for the purpose of subsection 232(2), 232(3) or 232(3.1), made a claim that a named client of the lawyer has a solicitor-client privilege in respect of information or a document, the lawyer shall at the same time communicate to the Minister or some person duly authorized to act for the Minister the address of the client last known to the lawyer so that the Minister may endeavour to advise the client of the claim of privilege that has been made on the client’s behalf and may thereby afford the client an opportunity, if it is practicable within the time limited by this section, of waiving the claim of privilege before the matter is to be decided by a judge or other tribunal. 
  
  ### Compliance
  
  (15) No person shall hinder, molest or interfere with any person doing anything that that person is authorized to do by or pursuant to this section or prevent or attempt to prevent any person doing any such thing and, notwithstanding any other Act or law, every person shall, unless the person is unable to do so, do everything the person is required to do by or pursuant to this section. 
  
  ### Information return
  
  233 (1) Every person shall, on written demand from the Minister served personally or otherwise, whether or not the person has filed an information return as required by this Act or the regulations, file with the Minister, within such reasonable time as is stipulated in the demand, the information return if it has not been filed or such information as is designated in the demand. 
  
  ### Partnerships
  
  (2) Every partnership shall, on written demand from the Minister served personally or otherwise on any member of the partnership, file with the Minister, within such reasonable time as is stipulated in the demand, an information return required under section 233.3, 233.4 or 233.6. 
  
  ### Application to members of partnerships
  
  (3) For the purposes of this subsection and subsection 233(2), a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership. 
  
  ### Definitions
  
  233.1 (1) The definitions in this subsection apply in this section.  
  *reportable transaction* means  
  (a) in the case of 
  (i) a reporting person for a taxation year who is not resident in Canada at any time in the year, or 
  (ii) a reporting partnership for a fiscal period no member of which is resident in Canada in the period, a transaction or series of transactions that relate in any manner whatever to a business carried on in Canada by the reporting person or partnership in the year or period or a preceding taxation year or period; and 
  (b) in any other case, a transaction or series of transactions that relate in any manner whatever to a business carried on by a reporting person (other than a business carried on by a reporting person as a member of a partnership) or partnership in a taxation year or fiscal period. ( opération à déclarer)   
  *reporting partnership* for a fiscal period means a partnership  
  (a) a member of which is resident in Canada in the period; or 
  (b) that carries on a business in Canada in the period. ( société de personnes déclarante)   
  *reporting person* for a taxation year means a person who, at any time in the year,  
  (a) is resident in Canada; or 
  (b) is non-resident and carries on a business (other than a business carried on as a member of a partnership) in Canada. ( déclarant)   
  *transaction* includes an arrangement or event. (opération)  
  
  ### Reporting person’s information return
  
  (2) Subject to subsection 233.1(4), a reporting person for a taxation year shall, on or before the reporting person’s filing-due date for the year, file with the Minister, in respect of each non-resident person with whom the reporting person does not deal at arm’s length in the year and each partnership of which such a non-resident person is a member, an information return for the year in prescribed form containing prescribed information in respect of the reportable transactions in which the reporting person and the non-resident person or the partnership, as the case may be, participated in the year. 
  
  ### Reporting partnership’s information return
  
  (3) Subject to subsection 233.1(4), a reporting partnership for a fiscal period shall, on or before the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the period or would be required to be so filed if that section applied to the reporting partnership, file with the Minister, in respect of each non-resident person with whom the reporting partnership, or a member of the reporting partnership, does not deal at arm’s length in the period and each partnership of which such a non-resident person is a member, an information return for the period in prescribed form containing prescribed information in respect of the reportable transactions in which the reporting partnership and the non-resident person or the partnership, as the case may be, participated in the period.  
  
  ### De minimis exception
  
  (4) A reporting person or partnership that, but for this subsection, would be required under subsection 233.1(2) or 233.1(3) to file an information return for a taxation year or fiscal period is not required to file the return unless the total of all amounts, each of which is the total fair market value of the property or services that relate to a reportable transaction in which the reporting person or partnership and any non-resident person with whom the reporting person or partnership, or a member of the reporting partnership, does not deal at arm’s length in the year or period, or a partnership of which such a non-resident person is a member, as the case may be, participated in the year or period, exceeds $1,000,000. 
  
  ### Deemed member of partnership
  
  (5) For the purposes of this section, a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership. 
  
  ### Definitions
  
  233.2 (1) The definitions in this subsection apply in this section.  
  *exempt trust* means  
  (a) a trust that is governed by a foreign retirement arrangement; 
  (b) a trust that 
  (i) is resident in a country under the laws of which an income tax is imposed, 
  (ii) is exempt under the laws referred to in subparagraph (i) from the payment of income tax to the government of that country, 
  (iii) is established principally in connection with, or the principal purpose of which is to administer or provide benefits under, one or more superannuation, pension or retirement funds or plans or any funds or plans established to provide employee benefits, and 
  (iv) is either 
  (A) maintained primarily for the benefit of non-resident individuals, or 
  (B) governed by an employees profit sharing plan; or 
  (c) a trust 
  (i) where the interest of each beneficiary under the trust is described by reference to units, and 
  (ii) that complies with prescribed conditions. ( fiducie exonérée)   
  *specified beneficiary* [Repealed, 2013, c. 34, s. 21]   
  *specified foreign trust* [Repealed, 2013, c. 34, s. 21]  
  
  ### Rule of application
  
  (2) In this section and paragraph 233.5(c.1), subsections 94(1), (2) and (10) to (13) apply, except that the reference to the expression “(other than restricted property)” in the definition 
  *arm’s length transfer* in subsection 94(1) is to be read as a reference to the expression “(other than property to which paragraph 94(2)(g) applies but not including a unit of a mutual fund trust or of a trust that would be a mutual fund trust if section 4801 of the Income Tax Regulations were read without reference to paragraph 4801(b), a share of the capital stock of a mutual fund corporation, or a particular share of the capital stock of a corporation (other than a closely held corporation) which particular share is identical to a share that is, at the transfer time, of a class that is listed on a designated stock exchange)”.  
  (3)  [Repealed, 2013, c. 34, s. 21]  
  
  ### Filing information on foreign trusts
  
  (4) A person shall file an information return in prescribed form, in respect of a taxation year of a particular trust (other than an exempt trust or a trust described in any of paragraphs (c) to (h) of the definition 
  *exempt foreign trust* in subsection 94(1)) with the Minister on or before the person’s filing-due date for the person’s taxation year in which the particular trust’s taxation year ends if  
  (a) the particular trust is non-resident at a specified time in that taxation year of the particular trust; 
  (b) the person is a contributor, a connected contributor or a resident contributor to the particular trust; and 
  (c) the person 
  (i) is resident in Canada at that specified time, and 
  (ii) is not, at that specified time, 
  (A) a mutual fund corporation, 
  (B) an exempt person, 
  (C) a mutual fund trust, 
  (D) a trust described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1),  
  (E) a registered investment, 
  (F) a trust in which all persons beneficially interested are persons described in clauses (A) to (E), or 
  (G) a contributor to the particular trust by reason only of being a contributor to another trust that is resident in Canada and is described in any of clauses (B) to (F). 
  
  ### Similar arrangements
  
  (4.1) In this section and sections 162, 163 and 233.5, a person’s obligations under subsection (4) (except to the extent that they are waived in writing by the Minister) are to be determined as if a contributor described in paragraph (4)(b) were any person who had transferred or loaned property, an arrangement or entity were a non-resident trust throughout the calendar year that includes the time referred to in paragraph (a) and that calendar year were a taxation year of the arrangement or entity, if 
  (a) the person at any time, directly or indirectly, transferred or loaned the property to be held 
  (i) under the arrangement and the arrangement is governed by the laws of a country or a political subdivision of a country other than Canada or exists, was formed or organized, or was last continued under the laws of a country or a political subdivision of a country other than Canada, or 
  (ii) by the entity and the entity is a non-resident entity (as defined by subsection 94.1(2)); 
  (b) the transfer or loan is not an arm’s length transfer; 
  (c) the transfer or loan is not solely in exchange for property that would be described in paragraphs (a) to (i) of the definition 
  *specified foreign property* in subsection 233.3(1) if that definition were read without reference to paragraphs (j) to (q);  
  (d) the arrangement or entity is not a trust in respect of which the person would, if this Act were read without reference to this subsection, be required to file an information return for a taxation year that includes that time; and 
  (e) the arrangement or entity is, for a taxation year or fiscal period of the arrangement or entity that includes that time, not 
  (i) an exempt foreign trust (as defined in subsection 94(1)), 
  (ii) a foreign affiliate in respect of which the person is a reporting entity (within the meaning assigned by subsection 233.4(1)), or 
  (iii) an exempt trust. 
  
  ### Joint filing
  
  (5) Where information returns in respect of a trust’s taxation year would, but for this subsection, be required to be filed under subsection 4 by a particular person and another person, and the particular person identifies the other person in an election filed in writing with the Minister, for the purposes of applying this Act to the particular person 
  (a) the information return filed by the other person shall be treated as if it had been filed by the particular person; 
  (b) the information required to be provided with the return by the particular person shall be deemed to be the information required to be provided by the other person with the return; 
  (c) the day on or before which the return is required to be filed by the particular person is deemed to be the later of the day on or before which 
  (i) the return would, but for this subsection, have been required to have been filed by the particular person, and 
  (ii) the return is required to have been filed by the other person; and 
  (d) each act and omission of the other person in respect of the return is deemed to be an act or omission of the particular person. 
  
  ### Definitions
  
  233.3 (1) The definitions in this subsection apply in this section.  
  *reporting entity* for a taxation year or fiscal period means a specified Canadian entity for the year or period where, at any time (other than a time when the entity is non-resident) in the year or period, the total of all amounts each of which is the cost amount to the entity of a specified foreign property of the entity exceeds $100,000. (déclarant)   
  *specified Canadian entity* for a taxation year or fiscal period means  
  (a) a taxpayer resident in Canada in the year that is not 
  (i) a mutual fund corporation, 
  (ii) a non-resident-owned investment corporation, 
  (iii) a person (other than a trust) all of whose taxable income for the year is exempt from tax under Part I, 
  (iv) a trust all of the taxable income of which for the year is exempt from tax under Part I, 
  (v) a mutual fund trust, 
  (vi) a trust described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1),  
  (vii) a registered investment, nor 
  (viii) a trust in which all persons beneficially interested are persons described in subparagraphs (i) to (vii); and 
  (b) a partnership where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is a non-resident person or a taxpayer referred to in any of subparagraphs (a)(i) to (viii), is less than 90% of the income or loss of the partnership for the period, and, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of this paragraph. ( entité canadienne déterminée)   
  *specified foreign property* of a person or partnership means any property of the person or the partnership that is  
  (a) funds or intangible property, or for civil law incorporeal property, situated, deposited or held outside Canada, 
  (b) tangible property, or for civil law corporeal property, situated outside Canada, 
  (c) a share of the capital stock of a non-resident corporation, 
  (d) an interest in a non-resident trust, 
  (e) an interest in a partnership that owns or holds specified foreign property, 
  (f) an interest in, or right with respect to, an entity that is non-resident, 
  (g) indebtedness owed by a non-resident person, 
  (h) an interest in, or for civil law a right in, or a right — under a contract in equity or otherwise either immediately or in the future and either absolutely or contingently — to, any property (other than any property owned by a corporation or trust that is not the person) that is specified foreign property, and 
  (i) property that, under the terms or conditions thereof or any agreement relating thereto, is convertible into, is exchangeable for or confers a right to acquire, property that is specified foreign property, but does not include 
  (j) property that is used or held exclusively in the course of carrying on an active business of the person or partnership (determined as if the person or partnership were a corporation resident in Canada), 
  (k) a share of the capital stock or indebtedness of a non-resident corporation that is a foreign affiliate of the person or partnership for the purpose of section 233.4, 
  (l) an interest in, or indebtedness of, a non-resident trust that is a foreign affiliate of the person or partnership for the purpose of section 233.4, 
  (m) an interest in a non-resident trust that was not acquired for consideration by either the person or partnership or a person related to the person or partnership, 
  (n) an interest in a trust that is described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1), or that would be described in paragraph (b) of that definition if that paragraph were read as follows:  
  (b) a trust that 
  (i) is resident in Australia or New Zealand for income tax purposes under the laws of Australia or New Zealand, as the case may be, 
  (ii) qualifies for a reduced rate of income tax under the income tax laws of its country of residence referred to in subparagraph (i), 
  (iii) is established principally for the purpose of administering or providing benefits under a superannuation, pension or retirement fund or plan, and 
  (iv) is maintained primarily for the benefit of individuals that are resident in Australia or New Zealand, as the case may be; or 
  (o) an interest in a partnership that is a specified Canadian entity, 
  (o.1) a right with respect to, or indebtedness of, an authorized foreign bank that is issued by, and payable or otherwise enforceable at, a branch in Canada of the bank, 
  (p) personal-use property of the person or partnership, and 
  (q) an interest in, or for civil law a right in, or a right to acquire, a property that is described in any of paragraphs (j) to (p). ( bien étranger déterminé)  
  
  ### Application to members of partnerships
  
  (2) For the purpose of this section, a person who is a member of a partnership that is a member of another partnership 
  (a) is deemed to be a member of the other partnership; and 
  (b) the person’s share of the income or loss of the other partnership is deemed to be equal to the amount of that income or loss to which the person is directly or indirectly entitled. 
  
  ### Returns respecting foreign property
  
  (3) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form on or before the day that is 
  (a) where the entity is a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership or would be required to be so filed if that section applied to the partnership; and  
  (b) where the entity is not a partnership, the entity’s filing-due date for the year. 
  
  ### Reporting entity
  
  233.4 (1) For the purpose of this section, 
  *reporting entity* for a taxation year or fiscal period means  
  (a) a taxpayer resident in Canada (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) of which a non-resident corporation is a foreign affiliate at any time in the year; 
  (b) a taxpayer resident in Canada (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) of which a non-resident trust is a foreign affiliate at any time in the year; and 
  (c) a partnership 
  (i) where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is not resident in Canada or that is a taxpayer all of whose taxable income for the year in which the period ends is exempt from tax under Part I, is less than 90% of the income or loss of the partnership for the period, and, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of determining a member’s share of the partnership’s income for the purpose of this subparagraph, and 
  (ii) of which a non-resident corporation or trust is a foreign affiliate at any time in the fiscal period. 
  
  ### Rules of application
  
  (2) For the purpose of this section, in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a taxpayer resident in Canada or of a partnership 
  (a) paragraph (b) of the definition 
  *equity percentage* in subsection 95(4) shall be read as if the reference to “any corporation” were a reference to “any corporation other than a corporation resident in Canada”;  
  (b) the definitions 
  *direct equity percentage* and 
  *equity percentage* in subsection 95(4) shall be read as if a partnership were a person;  
  (c) the definitions 
  *controlled foreign affiliate* and 
  *foreign affiliate* in subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada; and  
  (d) if the taxpayer is a member of one or more partnerships described in subparagraph (1)(c)(i) of which a non-resident corporation or trust is a foreign affiliate, and the taxpayer does not have any direct or indirect interest (determined without reference to subsection 93.1(1)) in the non-resident corporation or trust other than through its interest in the partnerships, then the non-resident corporation or trust is deemed not to be a foreign affiliate of the taxpayer. 
  
  ### Application to members of partnerships
  
  (3) For the purpose of this section, a person who is a member of a partnership that is a member of another partnership 
  (a) is deemed to be a member of the other partnership; and 
  (b) the person’s share of the income or loss of the other partnership is deemed to be equal to the amount of that income or loss to which the person is directly or indirectly entitled. 
  
  ### Returns respecting foreign affiliates
  
  (4) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 10 months after the end of the year or period. 
  
  ### Due diligence exception
  
  233.5 The information required in a return filed under section 233.2 or 233.4 does not include information that is not available, on the day on which the return is filed, to the person or partnership required to file the return where 
  (a) there is a reasonable disclosure in the return of the unavailability of the information; 
  (b) before that day, the person or partnership exercised due diligence in attempting to obtain the information; 
  (c) if the return is required to be filed under section 233.2 in respect of a trust, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 and before June 23, 2000 that gave rise to the requirement to file a return for a taxation year of the trust that ended before 2007 or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2 in respect of each taxation year of the trust that ended before 2007; 
  (c.1) if the return is required to be filed under section 233.2, at the time of each contribution (determined with reference to subsection 233.2(2)) made by the person or partnership after June 22, 2000 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2; 
  (c.2) if the return is required to be filed under section 233.4 by a person or partnership in respect of a corporation that is a controlled foreign affiliate for the purpose of that section of the person or partnership, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.4; and 
  (d) if the information subsequently becomes available to the person or partnership, it is filed with the Minister not more than 90 days after it becomes so available. 
  
  ### Returns respecting distributions from non-resident trusts
  
  233.6 (1) Where a specified Canadian entity (as defined by subsection 233.3(1)) for a taxation year or fiscal period receives a distribution of property from, or is indebted to, a non-resident trust (other than a trust that was an excluded trust in respect of the year or period of the entity or an estate that arose on and as a consequence of the death of an individual) in the year or period and the entity is beneficially interested in the trust at any time in the year or period, the entity shall file with the Minister for the year or period a return in prescribed form on or before the day that is 
  (a) where the entity is a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership or would be required to be so filed if that section applied to the partnership; and  
  (b) where the entity is not a partnership, the entity’s filing-due date for the year. 
  
  ### Excluded trust defined
  
  (2) For the purpose of subsection 233.6(1), an excluded trust in respect of the taxation year or fiscal period of an entity means 
  (a) a trust described in paragraph (a) or (b) of the definition 
  *exempt trust* in subsection 233.2(1) throughout the portion of the year or period during which the trust was extant;  
  (b) a trust in respect of which the entity is required by section 233.2 to file a return in respect of each taxation year of the trust that ends in the entity’s year; 
  (c) a trust an interest in which is at any time in the year or period specified foreign property (as defined by subsection 233.3(1)) of the entity, where the entity is a reporting entity (as defined by subsection 233.3(1)) for the year or period; and 
  (d) a trust in respect of which the entity is required by section 233.4 to file a return for the year or period. 
  
  ### Exception for first-year residents
  
  233.7 Notwithstanding sections 233.2, 233.3, 233.4 and 233.6, a person who, but for this section, would be required under any of those sections to file an information return for a taxation year, is not required to file the return if the person is an individual (other than a trust) who first became resident in Canada in the year. 
  
  ### Country-by-country report — definitions
  
  233.8 (1) The following definitions apply in this section.  
  *business entity* means  
  (a) a person (other than an individual that is not a trust) or partnership; and 
  (b) a business that is carried on through a permanent establishment, if a separate financial statement for the business is prepared for financial reporting, regulatory, tax reporting or internal management control purposes. ( entité)   
  *consolidated financial statements* means financial statements in which the assets, liabilities, income, expenses and cash flows of the members of a group are presented as those of a single economic entity. (états financiers consolidés)   
  *constituent entity*, of an MNE group, means  
  (a) any business entity of the MNE group that 
  (i) is included in the consolidated financial statements of the MNE group for financial reporting purposes, or 
  (ii) would be required to be included if equity interests in any of the business entities in the MNE group were traded on a public securities exchange; and 
  (b) any business entity that is excluded from the MNE group’s consolidated financial statements solely because of size or materiality. ( entité constitutive)   
  *excluded MNE group* means two or more business entities that meet the conditions in paragraphs (a) and (b) of the definition MNE group, if, with respect to a particular fiscal year of the MNE group, it has a total consolidated group revenue of less than €750 million during the fiscal year immediately preceding the particular fiscal year, as reflected in its consolidated financial statements for the preceding fiscal year. (groupe d’entreprises multinationales exclu)   
  *fiscal year*, of an MNE group, means an annual accounting period with respect to which the ultimate parent entity of the MNE group prepares its financial statements. (exercice)   
  *multinational enterprise group* or 
  *MNE group* means two or more business entities, if  
  (a) they are either required to prepare consolidated financial statements for financial reporting purposes under applicable accounting principles or would be so required if equity interests in any of the business entities were traded on a public securities exchange; 
  (b) one of the business entities is resident in a particular jurisdiction and 
  (i) another business entity resides in a different jurisdiction, or 
  (ii) is subject to tax in a different jurisdiction with respect to a business carried on by it through a business entity — described in paragraph (b) of the definition business entity — in that other jurisdiction; and  
  (c) they are not an excluded MNE group. ( groupe d’entreprises multinationales)   
  *permanent establishment* has the meaning assigned by regulation. (établissement stable)   
  *qualifying competent authority agreement* means an agreement that  
  (a) is between authorized representatives of those jurisdictions that are parties to a listed international agreement; and 
  (b) requires the automatic exchange of country-by-country reports between the party jurisdictions. ( accord admissible)   
  *reporting fiscal year* means a fiscal year, if the financial and operational results of the fiscal year are reflected in the country-by-country report. (exercice déclarable)   
  *surrogate parent entity* means a constituent entity of an MNE group that has been appointed by the MNE group — in substitution for the ultimate parent entity — to file the country-by-country report on behalf of the MNE group, if one or more of the conditions in subparagraph (3)(b)(ii) applies. (entité mère de substitution)   
  *systemic failure* means, with respect to a jurisdiction, that the jurisdiction has a qualifying competent authority agreement in effect with Canada, but  
  (a) has suspended automatic exchange (for reasons other than those that are in accordance with the terms of the agreement); or 
  (b) has persistently failed to automatically provide country-by-country reports in its possession — in respect of MNE groups that have constituent entities in Canada — to Canada. ( défaillance systémique)   
  *ultimate parent entity* means a constituent entity of an MNE group that meets the following conditions:  
  (a) the constituent entity holds directly or indirectly a sufficient interest in one or more constituent entities of the MNE group so that it is required to prepare consolidated financial statements under accounting principles generally applied in its jurisdiction of residence, or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of residence; and 
  (b) no other constituent entity of the MNE group holds, directly or indirectly, an interest in it that is described in paragraph (a). ( entité mère ultime)  
  
  ### Determination of residence — ultimate parent entity
  
  (2) For the purposes of this section, if an ultimate parent entity is a partnership, it is deemed to be resident 
  (a) if it is, under the laws of another jurisdiction, resident in that other jurisdiction for tax purposes, in that other jurisdiction; and 
  (b) in any other case, in the jurisdiction under the laws of which it was organized. 
  
  ### Filing obligations
  
  (3) A report in prescribed form (this report, along with each substantially similar report required to be filed in a jurisdiction other than Canada, collectively referred to in this section as a 
  *country-by-country report*), in respect of a reporting fiscal year of an MNE group, shall be filed in prescribed manner with the Minister on or before the date specified in subsection (6) by  
  (a) the ultimate parent entity of the MNE group, if it is resident in Canada in the reporting fiscal year; or 
  (b) a constituent entity of the MNE group — which is not the ultimate parent entity of the MNE group — with respect to the reporting fiscal year of the MNE group, if the following conditions are satisfied: 
  (i) the constituent entity is resident in Canada in the reporting fiscal year, and 
  (ii) one of the following conditions applies: 
  (A) the ultimate parent entity of the MNE group is not obligated to file a country-by-country report in its jurisdiction of residence, 
  (B) the jurisdiction of residence of the ultimate parent entity of the MNE group does not have a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report for the reporting fiscal year, or 
  (C) there has been a systemic failure of the jurisdiction of residence of the ultimate parent entity and the Minister has notified the constituent entity of the systemic failure. 
  
  ### Designation for multiple constituent entities
  
  (4) If more than one constituent entity of an MNE group is described in paragraph (3)(b) in respect of a reporting fiscal year, one of those constituent entities may be designated — on or before the date specified in subsection (6) in respect of the reporting fiscal year — so that it is entitled to file a country-by-country report for the reporting fiscal year with the Minister on behalf of all such constituent entities in the MNE group. 
  
  ### Surrogate filing
  
  (5) Notwithstanding subsection (3), a constituent entity of an MNE group described in paragraph (3)(b) is not required to file a country-by-country report with the Minister with respect to a reporting fiscal year if 
  (a) a surrogate parent entity of the MNE group files a country-by-country report in respect of the reporting fiscal year with the tax authority of its jurisdiction of residence on or before the date specified in subsection (6); and 
  (b) the jurisdiction of residence of the surrogate parent entity 
  (i) requires filing of country-by-country reports, 
  (ii) has a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report in respect of the reporting fiscal year, 
  (iii) is not in a position of systemic failure, and 
  (iv) has been notified by the surrogate parent entity that it is the surrogate parent entity. 
  
  ### Time for filing
  
  (6) A country-by-country report in respect of a reporting fiscal year of an MNE group that is required to be filed by a constituent entity under this section shall be filed on or before the later of 
  (a) if notification of systemic failure has been received by the constituent entity, 30 days after receipt of the notification, and 
  (b) 12 months after the last day of the reporting fiscal year. 
  
  ### Ownership certificates
  
  234 (1) Before the bearer coupon or warrant representing either interest or dividends payable by any debtor or cheque representing dividends or interest payable by a non-resident debtor is negotiated by or on behalf of a resident of Canada, there shall be completed by or on behalf of the resident an ownership certificate in prescribed form. 
  
  ### Idem
  
  (2) An ownership certificate completed pursuant to subsection 234(1) shall be delivered in such manner, at such time and at such place as may be prescribed. 
  
  ### Idem
  
  (3) The operation of this section may be extended by regulation to bearer coupons or warrants negotiated by or on behalf of non-resident persons. 
  
  ### Penalty for failing to file corporate returns
  
  235 Every large corporation (within the meaning assigned by subsection 225.1(8)) that fails to file a return for a taxation year as and when required by section 150 or 190.2 is liable, in addition to any penalty otherwise provided, to a penalty for each such failure equal to the amount determined by the formula is the total of 
  (a) 0.0005% of the corporation’s taxable capital employed in Canada at the end of the taxation year, and 
  (b) 0.25% of the tax that would be payable under Part VI by the corporation for the year if this Act were read without reference to subsection 190.1(3); and is the number of complete months, not exceeding 40, from the day on or before which the return was required to be filed to the day on which the return is filed. 
  
  ### Execution of documents by corporations
  
  236 A return, certificate or other document made by a corporation pursuant to this Act or a regulation shall be signed on its behalf by the President, Secretary or Treasurer of the corporation or by any other officer or person thereunto duly authorized by the Board of Directors or other governing body of the corporation. 
  
  ### Social Insurance Number
  
  237 (1) Every individual (other than a trust) who was resident or employed in Canada at any time in a taxation year and who files a return of income under Part I for the year, or in respect of whom an information return is to be made by a person pursuant to a regulation made under paragraph 221(1)(d), shall, 
  (a) on or before the first day of February of the year immediately following the year for which the return of income is filed, or 
  (b) within 15 days after the individual is requested by the person to provide the individual’s Social Insurance Number, apply to the Canada Employment Insurance Commission in prescribed form and manner for the assignment to the individual of a Social Insurance Number unless the individual has previously been assigned, or made application to be assigned, a Social Insurance Number. 
  
  ### Production of number
  
  (1.1) Every person and partnership shall provide their designated number 
  (a) in any return filed under this Act; and 
  (b) to another person or partnership at the request of the other person or partnership, if the other person or partnership is required to make an information return pursuant to this Act or the Regulations requiring the designated number. 
  
  ### Designated number
  
  (1.2) For the purpose of subsection (1.1), 
  *designated number*, of a person or partnership, means  
  (a) in the case of an individual (other than a trust), their Social Insurance Number; 
  (b) in the case of a trust, its trust account number; and 
  (c) in any other case, the person’s or partnership’s business number. 
  
  ### Number required in information returns
  
  (2) For the purposes of this Act and the Regulations, a person or partnership required to make an information return requiring a business number, Social Insurance Number or trust account number of another person or partnership 
  (a) shall make a reasonable effort to obtain the number from the other person or partnership; and 
  (b) shall not knowingly use, communicate or allow to be communicated, otherwise than as required or authorized under this Act or a regulation, the number without the written consent of the other person or partnership. 
  
  ### Authority to communicate number
  
  (3) A particular person may communicate, or allow to be communicated, a business number, Social Insurance Number or trust account number to another person related to the particular person where the other person is required, by this Act or the Regulations, to make an information return that requires the number. 
  
  ### Authority to communicate number
  
  (4) An insurance corporation may communicate, or allow to be communicated, to another person the business number, Social Insurance Number or trust account number of a particular person or partnership if 
  (a) the other person became the holder of a share of the capital stock of the insurance corporation, or of a holding corporation (in this subsection having the meaning assigned by subsection 139.1(1)) in respect of the insurance corporation, on the share’s issuance in connection with the demutualization (as defined by subsection 139.1(1)) of the insurance corporation; 
  (b) the other person became the holder of the share in the other person’s capacity as nominee or agent for the particular person or partnership pursuant to an arrangement established by the insurance corporation or a holding corporation in respect of the insurance corporation; and 
  (c) the other person is required, by this Act or the Regulations, to make an information return, in respect of the disposition of the share or income from the share, that requires the number. 
  
  ### Definitions
  
  237.1 (1) In this section,  
  *gifting arrangement* means any arrangement under which it may reasonably be considered, having regard to statements or representations made or proposed to be made in connection with the arrangement, that if a person were to enter into the arrangement, the person would  
  (a) make a gift to a qualified donee, or a contribution referred to in subsection 127(4.1), of property acquired by the person under the arrangement; or 
  (b) incur a limited-recourse debt, determined under subsection 143.2(6.1), that can reasonably be considered to relate to a gift to a qualified donee or a monetary contribution referred to in subsection 127(4.1); ( arrangement de don)   
  *person* includes a partnership; (personne)   
  *promoter* in respect of a tax shelter means a person who in the course of a business  
  (a) sells or issues, or promotes the sale, issuance or acquisition of, the tax shelter, 
  (b) acts as an agent or adviser in respect of the sale or issuance, or the promotion of the sale, issuance or acquisition, of the tax shelter, or 
  (c) accepts, whether as a principal or agent, consideration in respect of the tax shelter, and more than one person may be a tax shelter promoter in respect of the same tax shelter; ( promoteur)   
  *tax shelter* means  
  (a) a gifting arrangement described by paragraph (b) of the definition gifting arrangement ; and  
  (b) a gifting arrangement described by paragraph (a) of the definition gifting arrangement, or a property (including any right to income) other than a flow-through share or a prescribed property, in respect of which it can reasonably be considered, having regard to statements or representations made or proposed to be made in connection with the gifting arrangement or the property, that, if a person were to enter into the gifting arrangement or acquire an interest in the property, at the end of a particular taxation year that ends within four years after the day on which the gifting arrangement is entered into or the interest is acquired,  
  (i) the total of all amounts each of which is 
  (A) an amount, or a loss in the case of a partnership interest, represented to be deductible in computing the person’s income for the particular year or any preceding taxation year in respect of the gifting arrangement or the interest in the property (including, if the property is a right to income, an amount or loss in respect of that right that is stated or represented to be so deductible), or 
  (B) any other amount stated or represented to be deemed under this Act to be paid on account of the person’s tax payable, or to be deductible in computing the person’s income, taxable income or tax payable under this Act, for the particular year or any preceding taxation year in respect of the gifting arrangement or the interest in the property, other than an amount so stated or represented that is included in computing a loss described in clause (A), would equal or exceed 
  (ii) the amount, if any, by which 
  (A) the cost to the person of the property acquired under the gifting arrangement, or of the interest in the property at the end of the particular year, determined without reference to section 143.2, would exceed 
  (B) the total of all amounts each of which is the amount of any prescribed benefit that is expected to be received or enjoyed, directly or indirectly, in respect of the property acquired under the gifting arrangement, or of the interest in the property, by the person or another person with whom the person does not deal at arm’s length. ( abri fiscal)  
  
  ### Application
  
  (2) A promoter in respect of a tax shelter shall apply to the Minister in prescribed form for an identification number for the tax shelter unless an identification number therefor has previously been applied for. 
  
  ### Identification
  
  (3) On receipt of an application under subsection 237.1(2) for an identification number for a tax shelter, together with prescribed information and an undertaking satisfactory to the Minister that books and records in respect of the tax shelter will be kept and retained at a place in Canada that is satisfactory to the Minister, the Minister shall issue an identification number for the tax shelter. 
  
  ### Sales prohibited
  
  (4) A person may, at any time, whether as a principal or an agent, sell or issue, or accept consideration in respect of, a tax shelter only if 
  (a) the Minister has issued before that time an identification number for the tax shelter; and 
  (b) that time is during the calendar year designated by the Minister as being applicable to the identification number. 
  
  ### Providing tax shelter number
  
  (5) Every promoter in respect of a tax shelter shall 
  (a) make reasonable efforts to ensure that all persons who acquire or otherwise invest in the tax shelter are provided with the identification number issued by the Minister for the tax shelter; 
  (b) prominently display on the upper right-hand corner of any statement of earnings prepared by or on behalf of the promoter in respect of the tax shelter the identification number issued for the tax shelter; and 
  (c) on every written statement made after 1995 by the promoter that refers either directly or indirectly and either expressly or impliedly to the issuance by the Canada Revenue Agency of an identification number for the tax shelter, as well as on the copies of the portion of the information return to be forwarded pursuant to subsection 237.1(7.3), prominently display 
  (i) where the statement or return is wholly or partly in English, the following: “ ‘The identification number issued for this tax shelter shall be included in any income tax return filed by the investor. Issuance of the identification number is for administrative purposes only and does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter.’ ” 
  (ii) where the statement or return is wholly or partly in French, the following: “ ‘ Le numéro d’inscription attribué à cet abri fiscal doit figurer dans toute déclaration d’impôt sur le revenu produite par l’investisseur. L’attribution de ce numéro n’est qu’une formalité administrative et ne confirme aucunement le droit de l’investisseur aux avantages fiscaux découlant de cet abri fiscal. ’ ”  and 
  (iii) where the statement includes neither English nor French, the following: “ ‘The identification number issued for this tax shelter shall be included in any income tax return filed by the investor. Issuance of the identification number is for administrative purposes only and does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter.’ ” “ ‘ Le numéro d’inscription attribué à cet abri fiscal doit figurer dans toute déclaration d’impôt sur le revenu produite par l’investisseur. L’attribution de ce numéro n’est qu’une formalité administrative et ne confirme aucunement le droit de l’investisseur aux avantages fiscaux découlant de cet abri fiscal. ’ ”  
  
  ### Deductions and claims disallowed
  
  (6) No amount may be deducted or claimed by a person in respect of a tax shelter unless the person files with the Minister a prescribed form containing prescribed information, including the identification number for the tax shelter. 
  
  ### Deductions and claims disallowed
  
  (6.1) No amount may be deducted or claimed by any person for any taxation year in respect of a tax shelter of the person where any person is liable to a penalty under subsection 237.1(7.4) or 162(9) in respect of the tax shelter or interest on the penalty and 
  (a) the penalty or interest has not been paid; or 
  (b) the penalty and interest have been paid, but an amount on account of the penalty or interest has been repaid under subsection 164(1.1) or applied under subsection 164(2). 
  
  ### Assessments
  
  (6.2) Notwithstanding subsections 152(4) to 152(5), such assessments, determinations and redeterminations may be made as are necessary to give effect to subsection 237.1(6.1). 
  
  ### Information return
  
  (7) Every promoter in respect of a tax shelter who accepts consideration in respect of the tax shelter or who acts as a principal or agent in respect of the tax shelter in a calendar year shall, in prescribed form and manner, file an information return for the year containing 
  (a) the name, address and the business number, Social Insurance Number or trust account number of each person who so acquires or otherwise invests in the tax shelter in the year, 
  (b) the amount paid by each of those persons in respect of the tax shelter, and 
  (c) such other information as is required by the prescribed form unless an information return in respect of the tax shelter has previously been filed. 
  
  ### Time for filing return
  
  (7.1) An information return required under subsection 237.1(7) to be filed in respect of the acquisition of an interest in a tax shelter in a calendar year shall be filed with the Minister on or before the last day of February of the following calendar year. 
  
  ### Time for filing — special case
  
  (7.2) Notwithstanding subsection 237.1(7.1), where a person is required under subsection 237.1(7) to file an information return in respect of a business or activity and the person discontinues that business or activity, the return shall be filed on or before the earlier of 
  (a) the day referred to in subsection 237.1(7.1); and 
  (b) the day that is 30 days after the day of the discontinuance. 
  
  ### Copies to be provided
  
  (7.3) Every person required to file a return under subsection 237.1(7) shall, on or before the day on or before which the return is required to be filed with the Minister, forward to each person to whom the return relates 2 copies of the portion of the return relating to that person. 
  
  ### Penalty
  
  (7.4) Every person who files false or misleading information with the Minister in respect of an application under subsection 237.1(2) or, whether as a principal or as an agent, sells, issues or accepts consideration in respect of a tax shelter before the Minister has issued an identification number for the tax shelter is liable to a penalty equal to the greater of 
  (a) $500, and 
  (b) 25% of the greater of 
  (i) the total of all amounts each of which is the consideration received or receivable from a person in respect of the tax shelter before the correct information is filed with the Minister or the identification number is issued, as the case may be, and 
  (ii) the total of all amounts each of which is an amount stated or represented to be the value of property that a particular person who acquires or otherwise invests in the tax shelter could donate to a qualified donee, if the tax shelter is a gifting arrangement and consideration has been received or is receivable from the particular person in respect of the tax shelter before the correct information is filed with the Minister or the identification number is issued, as the case may be. 
  
  ### Penalty
  
  (7.5) Every person who is required under subsection (7) to file an information return and who fails to comply with a demand under section 233 to file the return, or to report in the return information required under paragraph (7)(a) or (b), is liable to a penalty equal to 25% of the greater of 
  (a) the total of all amounts each of which is the consideration received or receivable by the person in respect of the tax shelter from a particular person in respect of whom information required under paragraph (7)(a) or (b) had not been reported at or before the time that the demand was issued or the return was filed, as the case may be, and 
  (b) if the tax shelter is a gifting arrangement, the total of all amounts each of which is an amount stated or represented to be the value of property that the particular person could donate to a qualified donee. 
  
  ### Application of ss. 231 to 231.3
  
  (8) Without restricting the generality of sections 231 to 231.3, where an application under subsection 237.1(2) with respect to a tax shelter has been made, notwithstanding that a return of income has not been filed by any taxpayer under section 150 for the taxation year of the taxpayer in which an amount is claimed as a deduction in respect of the tax shelter, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the tax shelter. 
  
  ### Application of s. 237.1
  
  237.2 Section 237.1 is applicable with respect to interests acquired after August 31, 1989. 
  
  ### Definitions
  
  237.3 (1) The following definitions apply in this section.  
  *advisor*, in respect of a transaction or series of transactions, means each person who provides, directly or indirectly in any manner whatever, any contractual protection in respect of the transaction or series, or any assistance or advice with respect to creating, developing, planning, organizing or implementing the transaction or series, to another person (including any person who enters into the transaction for the benefit of another person). (conseiller)   
  *avoidance transaction* means a transaction if it may reasonably be considered that one of the main purposes of the transaction, or of a series of transactions of which the transaction is a part, is to obtain a tax benefit. (opération d’évitement)   
  *confidential protection*, in respect of a transaction or series of transactions, means anything that prohibits the disclosure to any person or to the Minister of the details or structure of the transaction or series under which a tax benefit results, or would result but for section 245, but for greater certainty, the disclaiming or restricting of an advisor’s liability shall not be considered confidential protection if it does not prohibit the disclosure of the details or structure of the transaction or series. (droit à la confidentialité)   
  *contractual protection*, in respect of a transaction or series of transactions, means  
  (a) any form of insurance or other protection, including, without limiting the generality of the foregoing, an indemnity, compensation or a guarantee, that 
  (i) either immediately or in the future and either absolutely or contingently, 
  (A) protects a person against a failure of the transaction or series to achieve any tax benefit from the transaction or series, or 
  (B) pays for or reimburses any expense, fee, tax, interest, penalty or similar amount that may be incurred by a person in the course of a dispute in respect of a tax benefit from the transaction or series, and 
  (ii) is not 
  (A) standard professional liability insurance, or 
  (B) integral to an agreement between persons acting at arm’s length for the sale or transfer of all or part of a business (either directly or through the sale or transfer of one or more corporations, partnerships or trusts) where it is reasonable to consider that the insurance or protection 
  (I) is intended to ensure that the purchase price paid under the agreement takes into account any liabilities of the business immediately prior to the sale or transfer, and 
  (II) is obtained primarily for purposes other than to achieve any tax benefit from the transaction or series; and 
  (b) any form of undertaking provided by a promoter, or by any person who does not deal at arm’s length with a promoter, that provides, either immediately or in the future and either absolutely or contingently, assistance, directly or indirectly in any manner whatever, to a person in the course of a dispute in respect of a tax benefit from the transaction or series. ( protection contractuelle)   
  *fee*, in respect of a transaction or series of transactions, means any consideration that is, or could be, received or receivable, directly or indirectly in any manner whatever, by an advisor or a promoter, or any person who does not deal at arm’s length with an advisor or promoter, for  
  (a) providing advice or an opinion with respect to the transaction or series; 
  (b) creating, developing, planning, organizing or implementing the transaction or series; 
  (c) promoting or selling an arrangement, plan or scheme that includes, or relates to, the transaction or series; 
  (d) preparing documents supporting the transaction or series, including tax returns or any information returns to be filed under this Act; or 
  (e) providing contractual protection. ( honoraires)   
  *person* includes a partnership. (personne)   
  *promoter*, in respect of a transaction or series of transactions, means each person who  
  (a) promotes or sells (whether as principal or agent and whether directly or indirectly) an arrangement, plan or scheme (referred to in this definition as an “arrangement”), if it may reasonably be considered that the arrangement includes or relates to the transaction or series; 
  (b) makes a statement or representation (whether as principal or agent and whether directly or indirectly) that a tax benefit could result from an arrangement, if it may reasonably be considered that 
  (i) the statement or representation was made in furtherance of the promoting or selling of the arrangement, and 
  (ii) the arrangement includes or relates to the transaction or series; or 
  (c) accepts (whether as principal or agent and whether directly or indirectly) consideration in respect of an arrangement referred to in paragraph (a) or (b). ( promoteur)   
  *reportable transaction*, at any time, means an avoidance transaction that is entered into by or for the benefit of a person, and each transaction that is part of a series of transactions that includes the avoidance transaction, if at the time any of the following paragraphs applies in respect of the avoidance transaction or series:  
  (a) an advisor or promoter, or any person who does not deal at arm’s length with the advisor or promoter, has or had an entitlement, either immediately or in the future and either absolutely or contingently, to a fee (other than a fee in relation to a prescribed form required to be filed under subsection 37(11)) that to any extent 
  (i) is based on the amount of a tax benefit that results, or would result but for section 245, from the avoidance transaction or series, 
  (ii) is contingent upon the obtaining of a tax benefit that results, or would result but for section 245, from the avoidance transaction or series, or may be refunded, recovered or reduced, in any manner whatever, based upon the failure of the person to obtain a tax benefit from the avoidance transaction or series, or 
  (iii) is attributable to the number of persons 
  (A) who participate in the avoidance transaction or series, or in a similar avoidance transaction or series, or 
  (B) who have been provided access to advice or an opinion given by the advisor or promoter regarding the tax consequences from the avoidance transaction or series, or from a similar avoidance transaction or series; 
  (b) an advisor or promoter in respect of the avoidance transaction or series, or any person who does not deal at arm’s length with the advisor or promoter, obtains or obtained confidential protection, and the prohibition on disclosure provided under the confidential protection provides confidentiality in respect of a tax treatment in relation to the avoidance transaction or series, 
  (i) in the case of an advisor, from a person to whom the advisor has provided any assistance or advice with respect to the avoidance transaction or series under the terms of an engagement of the advisor by that person to provide such assistance or advice, or 
  (ii) in the case of a promoter, from a person 
  (A) to whom an arrangement, plan or scheme has been promoted or sold in the circumstances described in paragraph (a) of the definition 
  *promoter*,  
  (B) to whom a statement or representation described in paragraph (b) of the definition 
  *promoter* has been made, or  
  (C) from whom consideration described in paragraph (c) of the definition 
  *promoter* has been received; or  
  (c) either 
  (i) the person (in this subparagraph referred to as the “particular person”), another person who entered into the avoidance transaction for the benefit of the particular person or any other person who does not deal at arm’s length with the particular person or with a person who entered into the avoidance transaction for the benefit of the particular person, has or had contractual protection in respect of the avoidance transaction or series, otherwise than as a result of a fee described in paragraph (a), or 
  (ii) an advisor or promoter in respect of the avoidance transaction or series, or any person who does not deal at arm’s length with the advisor or promoter, has or had contractual protection in respect of the avoidance transaction or series, otherwise than as a result of a fee described in paragraph (a). ( opération à déclarer)   
  *solicitor-client privilege* [Repealed, 2023, c. 26, s. 68]   
  *tax benefit* has the meaning assigned by subsection 245(1). (avantage fiscal)   
  *tax treatment*, of a person, means a treatment in respect of a transaction, or series of transactions, that the person uses, or plans to use, in a return of income or an information return (or would use in a return of income or an information return if a return of income or an information return were filed) and includes the person’s decision not to include a particular amount in a return of income or an information return. (traitement fiscal)   
  *transaction* has the meaning assigned by subsection 245(1). (opération)  
  
  ### Application
  
  (2) An information return in prescribed form and containing prescribed information in respect of a reportable transaction must be filed with the Minister by 
  (a) every person for whom a tax benefit results, or for whom a tax benefit is expected to result based on the person’s tax treatment of the reportable transaction, from 
  (i) the reportable transaction, 
  (ii) any other reportable transaction that is part of a series of transactions that includes the reportable transaction, or 
  (iii) a series of transactions that includes the reportable transaction; 
  (b) every person who has entered into, for the benefit of a person described in paragraph (a), an avoidance transaction that is a reportable transaction; 
  (c) every advisor or promoter in respect of the reportable transaction, or in respect of any other transaction that is part of a series of transactions that includes the reportable transaction, who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee in respect of any of those transactions that is 
  (i) described in paragraph (a) of the definition 
  *reportable transaction* in subsection (1), or  
  (ii) in respect of contractual protection provided in circumstances described in paragraph (c) of the definition 
  *reportable transaction* in subsection (1); and  
  (d) every person who is not dealing at arm’s length with an advisor or promoter in respect of the reportable transaction and who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee that is referred to in paragraph (c). 
  
  ### Clarification of reporting transactions in series
  
  (3) For greater certainty, and subject to subsection (11), if subsection (2) applies to a person in respect of each reportable transaction that is part of a series of transactions that includes an avoidance transaction, the filing of a prescribed form by the person that reports each transaction in the series is deemed to satisfy the obligation of the person under subsection (2) in respect of each transaction so reported. 
  
  ### Clerical or secretarial services
  
  (4) For greater certainty, subsection (2) does not apply to a person solely because the person provided clerical services or secretarial services with respect to a reportable transaction. 
  
  ### Time for filing return
  
  (5) An information return required under subsection (2) to be filed with the Minister for a reportable transaction must be filed by 
  (a) a person described in paragraph (2)(a) or (b) on or before the particular day that is 90 days after the earliest of 
  (i) the day on which the person becomes contractually obligated to enter into the reportable transaction, 
  (ii) the day on which the person enters into the reportable transaction, and 
  (iii) if the person is described in paragraph (2)(a) and a person described in paragraph (2)(b) enters into the reportable transaction for the benefit of the person described in paragraph (2)(a), the day on which the reportable transaction is entered into; and 
  (b) a person described in paragraph (2)(c) or (d) no later than the earliest particular day described in paragraph (a) for a person described in paragraph (2)(a) or (b) in respect of the reportable transaction. 
  
  ### Tax benefits disallowed
  
  (6) At any time, section 245 is to be read without reference to its subsection (4) in respect of any reportable transaction in respect of a person described in paragraph (2)(a) in relation to the reportable transaction if, at that time, 
  (a) the obligation under subsection (2) of the person in respect of the reportable transaction, or any other reportable transaction that is part of a series of transactions that includes the reportable transaction, has not been satisfied; 
  (b) a person is liable to a penalty under subsection (8) in respect of the reportable transaction or any other reportable transaction that is part of a series of transactions that includes the reportable transaction; and 
  (c) the penalty under subsection (8) or interest on the penalty has not been paid, or has been paid but an amount on account of the penalty or interest has been repaid under subsection 164(1.1) or applied under subsection 164(2). 
  
  ### Assessments
  
  (7) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (8). 
  
  ### Penalty
  
  (8) Every person who fails to file an information return in respect of a reportable transaction as required under subsection (2) on or before the day required under subsection (5) is liable to a penalty equal to 
  (a) if the person is described in paragraph (2)(a) or (b), 
  (i) if the person is a corporation and the carrying value of the corporation’s assets is greater than or equal to $50 million for its last taxation year that ends prior to the day on which the information return is required to be filed under subsection (5), $2,000 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of 
  (A) $100,000, and 
  (B) 25% of the amount of the tax benefit in respect of the reportable transaction, and 
  (ii) in any other case, $500 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of 
  (A) $25,000, and 
  (B) 25% of the amount of the tax benefit in respect of the reportable transaction; and 
  (b) if the person is described in paragraph (2)(c) or (d), the total of 
  (i) the amount of the fees charged by that person in respect of the reportable transaction, 
  (ii) $10,000, and 
  (iii) $1,000 multiplied by the number of days during which the failure continues, up to a maximum of $100,000. 
  
  ### Penalty – deeming rule
  
  (8.1) If a person described in both paragraphs (2)(b) and (d) is liable to a penalty under subsection (8) in respect of a reportable transaction, the amount of the penalty is deemed to be equal to the greater of the amounts determined under paragraphs (8)(a) and (b). 
  
  ### Carrying value
  
  (8.2) For the purpose of subparagraph (8)(a)(i), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)(a) and (b). 
  (9)  [Repealed, 2023, c. 26, s. 68]  
  (10)  [Repealed, 2023, c. 26, s. 68]  
  
  ### Due diligence
  
  (11) A person required to file an information return in respect of a reportable transaction is not liable for a penalty under subsection (8) if the person has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances. 
  
  ### Reporting not an admission
  
  (12) The filing of an information return under this section by a person in respect of a reportable transaction is not an admission by the person that 
  (a) section 245 applies in respect of any transaction; or 
  (b) any transaction is part of a series of transactions. 
  
  ### Application of sections 231 to 231.3
  
  (13) Without restricting the generality of sections 231 to 231.3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (2)(a) that results (or is expected to result) from the reportable transaction, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the reportable transaction. 
  
  ### Tax shelters and flow-through shares
  
  (14) For the purpose of this section, a reportable transaction does not include a transaction that is, or is part of a series of transactions that includes, 
  (a) the acquisition of a tax shelter for which an information return has been filed with the Minister under subsection 237.1(7); or 
  (b) the issuance of a flow-through share for which an information return has been filed with the Minister under subsection 66(12.68). 
  
  ### Tax shelters and flow-through shares — penalty
  
  (15) Notwithstanding subsection (8), the amount of the penalty, if any, that applies on a person under that subsection in respect of a reportable transaction shall not exceed the amount determined by the formula is the amount of the penalty imposed on the person under subsection (8), determined without reference to this subsection; and is 
  (a) if the reportable transaction is the acquisition of a tax shelter, the amount of the penalty, if any, that applies on the person under subsection 237.1(7.4) in respect of the tax shelter, 
  (b) if the reportable transaction is the issuance of a flow-through share, the amount of the penalty, if any, that applies on the person under subsection 66(12.74) in respect of the issuance of the flow-through share, and 
  (c) in any other case, nil. 
  
  ### Anti-avoidance
  
  (16) Subsection (14) does not apply to a reportable transaction if it is reasonable, having regard to all of the circumstances, to conclude that one of the main reasons for the acquisition of a tax shelter, or the issuance of a flow-through share, is to avoid the application of this section. 
  
  ### Solicitor-client privilege
  
  (17) For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege. 
  
  ### Definitions
  
  237.4 (1) The following definitions apply in this section.  
  *advisor*, in respect of a notifiable transaction, means each person who provides, directly or indirectly in any manner whatever, any assistance or advice with respect to creating, developing, planning, organizing or implementing the notifiable transaction, to another person (including any person who enters into the notifiable transaction for the benefit of another person). (conseiller)   
  *fee*, in respect of a notifiable transaction, has the same meaning as in subsection 237.3(1). (honoraires)   
  *notifiable transaction*, at any time, means  
  (a) a transaction that is the same as, or substantially similar to, a transaction that is designated at that time by the Minister under subsection (3); and 
  (b) a transaction in a series of transactions that is the same as, or substantially similar to, a series of transactions that is designated at that time by the Minister under subsection (3). ( opération à signaler)   
  *person* includes a partnership. (personne)   
  *promoter*, in respect of a notifiable transaction, has the same meaning as in subsection 237.3(1). (promoteur)   
  *tax benefit* has the same meaning as in subsection 245(1). (avantage fiscal)   
  *tax treatment* has the same meaning as in subsection 237.3(1). (traitement fiscal)   
  *transaction* has the same meaning as in subsection 245(1). (opération)  
  
  ### Interpretation – substantially similar
  
  (2) For the purposes of the definition notifiable transaction in subsection (1), the term “substantially similar”  
  (a) includes any transaction, or series of transactions, in respect of which a person is expected to obtain the same or similar types of tax consequences (as defined in subsection 245(1)) and that is either factually similar or based on the same or similar tax strategy; and  
  (b) is to be interpreted broadly in favour of disclosure. 
  
  ### Designation of notifiable transactions
  
  (3) The Minister may designate for the purposes of this section, with the concurrence of the Minister of Finance, in such manner as the Minister considers appropriate, transactions or series of transactions. 
  
  ### Requirement to file return
  
  (4) An information return in prescribed form and containing prescribed information in respect of a notifiable transaction must be filed with the Minister by 
  (a) every person for whom a tax benefit results, or for whom a tax benefit is expected to result based on the person’s tax treatment of the notifiable transaction, from 
  (i) the notifiable transaction, 
  (ii) any other notifiable transaction that is part of a series of transactions that includes the notifiable transaction, or 
  (iii) a series of transactions that includes the notifiable transaction; 
  (b) every person who has entered into, for the benefit of a person described in paragraph (a), the notifiable transaction; 
  (c) every advisor or promoter in respect of the notifiable transaction; and 
  (d) every person who is not dealing at arm’s length with an advisor or promoter described in paragraph (c) and who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee in respect of the notifiable transaction. 
  
  ### Application
  
  (5) For the purpose of subsection (4), if any particular person that is an employer or a partnership is required to file an information return in respect of a notifiable transaction under paragraph (4)(c) or (d), the filing of an information return required under those paragraphs by the particular person in respect of the notifiable transaction in prescribed form and manner is deemed to have been made by each employee or partner of the particular person in respect of the particular transaction. 
  
  ### Due diligence
  
  (6) Paragraphs (4)(a) and (b) do not apply to a person in respect of a notifiable transaction if the person has exercised the degree of care, diligence and skill in determining whether the transaction is a notifiable transaction that a reasonably prudent person would have exercised in comparable circumstances. 
  
  ### Reasonable expectation to know
  
  (7) Paragraphs (4)(c) and (d) do not apply to a person in respect of a notifiable transaction unless the person knows or should reasonably be expected to know that the transaction was a notifiable transaction. 
  
  ### Clerical or secretarial services
  
  (8) For greater certainty, subsection (4) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the notifiable transaction. 
  
  ### Time for filing return
  
  (9) An information return required under subsection (4) to be filed with the Minister for a notifiable transaction must be filed by 
  (a) a person described in paragraph (4)(a) or (b) on or before the particular day that is 90 days after the earliest of 
  (i) the day on which the person becomes contractually obligated to enter into the notifiable transaction, 
  (ii) the day on which the person enters into the notifiable transaction, and 
  (iii) if the person is described in paragraph (4)(a) and a person described in paragraph (4)(b) enters into the notifiable transaction for the benefit of the person described in paragraph (4)(a), the day on which the notifiable transaction is entered into; and 
  (b) a person described in paragraph (4)(c) or (d) no later than the earliest particular day described in paragraph (a) for a person described in paragraph (4)(a) or (b) in respect of the notifiable transaction. 
  
  ### Clarification of reporting transactions in series
  
  (10) For greater certainty, if subsection (4) applies to a person in respect of each transaction that is part of a series of transactions that includes a notifiable transaction, the filing of the information return by the person that reports each transaction in the series is deemed to satisfy the obligation of the person under subsection (4) in respect of each transaction so reported. 
  
  ### Assessments
  
  (11) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (12). 
  
  ### Penalty
  
  (12) Every person who fails to file an information return in respect of a notifiable transaction as required under subsection (4) on or before the particular day required under subsection (9) is liable to a penalty equal to 
  (a) if the person is described in paragraph (4)(a) or (b), 
  (i) if the person is a corporation and the carrying value of the corporation’s assets is greater than or equal to $50 million for its last taxation year that ends prior to the day on which the information return is required to be filed under subsection (4), $2,000 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of 
  (A) $100,000, and 
  (B) 25% of the amount of the tax benefit in respect of the notifiable transaction, and 
  (ii) in any other case, $500 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of 
  (A) $25,000, and 
  (B) 25% of the amount of the tax benefit in respect of the notifiable transaction; and 
  (b) if the person is described in paragraph (4)(c) or (d), the total of 
  (i) the amount of the fees charged by that person in respect of the notifiable transaction, 
  (ii) $10,000, and 
  (iii) $1,000 multiplied by the number of days during which the failure continues, up to a maximum of $100,000. 
  
  ### Penalty – deeming rule
  
  (13) If a person described in both paragraphs (4)(b) and (d) is liable to a penalty under subsection (12) in respect of a notifiable transaction, the amount of the penalty is deemed to be equal to the greater of the amounts determined under paragraphs (12)(a) and (b). 
  
  ### Penalty – non-application
  
  (14) For greater certainty, if any person is deemed to have filed an information return in prescribed form and manner in respect of a particular notifiable transaction under subsection (5), that person is not liable to a penalty under subsection (12) in respect of the particular transaction. 
  
  ### Carrying value
  
  (15) For the purpose of subparagraph (12)(a)(i), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)(a) and (b). 
  
  ### Return – not an admission
  
  (16) The filing of an information return under this section by a person in respect of a notifiable transaction is not an admission by the person that any transaction is part of a series of transactions. 
  
  ### Application of sections 231 to 231.3
  
  (17) Without restricting the generality of sections 231 to 231.3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (4)(a) that results (or is expected to result) from a notifiable transaction, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the notifiable transaction. 
  
  ### Solicitor-client privilege
  
  (18) For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege. 
  
  ### Definitions
  
  237.5 (1) The following definitions apply in this section.  
  *consolidated financial statements* has the same meaning as in subsection 233.8(1). (états financiers consolidés)   
  *person* includes a partnership. (personne)   
  *relevant financial statements* of a corporation for a taxation year, means audited financial statements that are prepared  
  (a) in respect of 
  (i) the corporation, or 
  (ii) a group, of which the corporation is a member, of two or more persons required to prepare consolidated financial statements for financial reporting purposes under applicable accounting principles; 
  (b) in accordance with 
  (i) International Financial Reporting Standards, or 
  (ii) other country-specific generally accepted accounting principles (such as U.S. generally accepted accounting principles) relevant for corporations that are listed on a stock exchange outside Canada; and 
  (c) for a period of time that ends in the taxation year. ( états financiers de référence)   
  *reportable uncertain tax treatment*, of a corporation for a taxation year, means a tax treatment of the corporation in respect of which uncertainty is reflected in relevant financial statements of the corporation for the year. (traitement fiscal incertain à déclarer)   
  *reporting corporation*, for a taxation year, means a corporation if  
  (a) the corporation has relevant financial statements for the year; 
  (b) the carrying value of the corporation’s assets is greater than or equal to $50 million at the end of the year; and 
  (c) the corporation is required to file a return of income for the year under section 150. ( société déclarante)   
  *tax treatment*, of a corporation, means a treatment in respect of a transaction, or series of transactions, that the corporation uses, or plans to use, in a return of income or an information return (or would use in a return of income or an information return if a return of income or an information return were filed) and includes the corporation’s decision not to include a particular amount in a return of income or an information return. (traitement fiscal)   
  *transaction* has the same meaning as in subsection 245(1). (opération)  
  
  ### Filing requirement
  
  (2) Every reporting corporation for a taxation year that has one or more reportable uncertain tax treatments for the year must file with the Minister an information return in prescribed form and containing prescribed information in respect of each reportable uncertain tax treatment of the corporation for the year. 
  
  ### Filing requirement – deadline
  
  (3) An information return required under subsection (2) to be filed by a corporation for a taxation year must be filed with the Minister on or before the corporation’s filing-due date for the year. 
  
  ### Assessments
  
  (4) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (5). 
  
  ### Penalty
  
  (5) Every corporation that fails to report a reportable uncertain tax treatment on an information return as required under subsection (2) on or before the day required under subsection (3) is liable to a penalty, for each such failure to report, equal to $2,000 multiplied by the number of weeks during which the failure continues, up to a maximum of $100,000. 
  
  ### Due diligence
  
  (6) A corporation required to file an information return in respect of a reportable uncertain tax treatment is not liable for a penalty under subsection (5) if the corporation has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances. 
  
  ### Return – not an admission
  
  (7) The filing of an information return in respect of a reportable uncertain tax treatment as required under subsection (2) by a corporation is not an admission by the corporation that 
  (a) the tax treatment is not in accordance with this Act or the regulations; or 
  (b) any transaction is part of a series of transactions. 
  
  ### Application of sections 231 to 231.3
  
  (8) Without restricting the generality of sections 231 to 231.3, if a corporation is required to file an information return under subsection (2) in respect of a reportable uncertain tax treatment of the corporation for a taxation year, even if a return of income has not been filed by the corporation under section 150 for the year, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the reportable uncertain tax treatment including, for greater certainty, any information relating to any transaction, or series of transactions, to which the reportable uncertain tax treatment relates. 
  
  ### Carrying value
  
  (9) For the purposes of the definition reporting corporation in subsection (1), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)(a) and (b).  
  
  ## Offences and Punishment 
  
  ### Offences and punishment
  
  238 (1) Every person who has failed to file or make a return as and when required by or under this Act or a regulation or who has failed to comply with subsection 116(3), 127(3.1) or (3.2), 147.1(7) or 153(1), any of sections 230 to 232, 244.7 and 267 or a regulation made under subsection 147.1(18) or with an order made under subsection (2) is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to 
  (a) a fine of not less than $1,000 and not more than $25,000; or 
  (b) both the fine described in paragraph 238(1)(a) and imprisonment for a term not exceeding 12 months. 
  
  ### Compliance orders
  
  (2) Where a person has been convicted by a court of an offence under subsection 238(1) for a failure to comply with a provision of this Act or a regulation, the court may make such order as it deems proper in order to enforce compliance with the provision. 
  
  ### Saving
  
  (3) Where a person has been convicted under this section of failing to comply with a provision of this Act or a regulation, the person is not liable to pay a penalty imposed under section 162 or 227 for the same failure unless the person was assessed for that penalty or that penalty was demanded from the person before the information or complaint giving rise to the conviction was laid or made. 
  
  ### Other offences and punishment
  
  239 (1) Every person who has 
  (a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer filed or made as required by or under this Act or a regulation, 
  (b) to evade payment of a tax imposed by this Act, destroyed, altered, mutilated, secreted or otherwise disposed of the records or books of account of a taxpayer, 
  (c) made, or assented to or acquiesced in the making of, false or deceptive entries, or omitted, or assented to or acquiesced in the omission, to enter a material particular, in records or books of account of a taxpayer, 
  (d) wilfully, in any manner, evaded or attempted to evade compliance with this Act or payment of taxes imposed by this Act, or 
  (e) conspired with any person to commit an offence described in paragraphs 239(1)(a) to 239(1)(d), is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to 
  (f) a fine of not less than 50%, and not more than 200%, of the amount of the tax that was sought to be evaded, or 
  (g) both the fine described in paragraph 239(1)(f) and imprisonment for a term not exceeding 2 years. 
  
  ### Offenses re refunds and credits
  
  (1.1) Every person who obtains or claims a refund or credit under this Act to which the person or any other person is not entitled or obtains or claims a refund or credit under this Act in an amount that is greater than the amount to which the person or other person is entitled 
  (a) by making, or participating in, assenting to or acquiescing in the making of, a false or deceptive statement in a return, certificate, statement or answer filed or made under this Act or a regulation, 
  (b) by destroying, altering, mutilating, hiding or otherwise disposing of a record or book of account of the person or other person, 
  (c) by making, or assenting to or acquiescing in the making of, a false or deceptive entry in a record or book of account of the person or other person, 
  (d) by omitting, or assenting to or acquiescing in an omission to enter a material particular in a record or book of account of the person or other person, 
  (e) wilfully in any manner, or 
  (f) by conspiring with any person to commit any offence under this subsection, is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to 
  (g) a fine of not less than 50% and not more than 200% of the amount by which the amount of the refund or credit obtained or claimed exceeds the amount, if any, of the refund or credit to which the person or other person, as the case may be, is entitled, or 
  (h) both the fine described in paragraph 239(1.1)(g) and imprisonment for a term not exceeding 2 years. 
  
  ### Prosecution on indictment
  
  (2) Every person who is charged with an offence described in subsection 239(1) or 239(1.1) may, at the election of the Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to 
  (a) a fine of not less than 100% and not more than 200% of 
  (i) where the offence is described in subsection 239(1), the amount of the tax that was sought to be evaded, and 
  (ii) where the offence is described in subsection 239(1.1), the amount by which the amount of the refund or credit obtained or claimed exceeds the amount, if any, of the refund or credit to which the person or other person, as the case may be, is entitled; and 
  (b) imprisonment for a term not exceeding 5 years. 
  
  ### Providing incorrect tax shelter identification number
  
  (2.1) Every person who wilfully provides another person with an incorrect identification number for a tax shelter is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to 
  (a) a fine of not less than 100%, and not more than 200%, of the cost to the other person of that person’s interest in the shelter; 
  (b) imprisonment for a term not exceeding 2 years; or 
  (c) both the fine described in paragraph 239(2.1)(a) and the imprisonment described in paragraph 239(2.1)(b). 
  
  ### Offence with respect to confidential information
  
  (2.2) Every person who 
  (a) contravenes subsection 241(1), or 
  (b) knowingly contravenes an order made under subsection 241(4.1) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months, or to both. 
  
  ### Idem
  
  (2.21) Every person 
  (a) to whom taxpayer information has been provided for a particular purpose under paragraph 241(4)(b), (c), (e), (h), (k), (n), (o) or (p). 
  (b) who is an official to whom taxpayer information has been provided for a particular purpose under paragraph 241(4)(a), (d), (f), (f.1), (i), (j.1) or (j.2) and who for any other purpose knowingly uses, provides to any person, allows the provision to any person of, or allows any person access to, that information is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months, or to both. 
  
  ### Definitions
  
  (2.22) In subsection 239(2.21), official and taxpayer information have the meanings assigned by subsection 241(10).  
  
  ### Offence with respect to an identification number
  
  (2.3) Every person to whom the business number of a taxpayer or partnership, to whom the Social Insurance Number of an individual or to whom the trust account number of a trust has been provided under this Act or the Regulations, and every officer, employee and agent of such a person, who without written consent of the individual, taxpayer, partnership or trust, as the case may be, knowingly uses, communicates or allows to be communicated the number (otherwise than as required or authorized by law, in the course of duties in connection with the administration or enforcement of this Act or for a purpose for which it was provided by the individual, taxpayer, partnership or trust, as the case may be) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months, or to both. 
  (2.31)  [Repealed, 2017, c. 12, s. 13]  
  
  ### Penalty on conviction
  
  (3) If a person is convicted under this section, the person is not liable to pay a penalty imposed under any of sections 162, 163, 163.2 and 163.3 for the same contravention unless the penalty is assessed before the information or complaint giving rise to the conviction was laid or made. 
  
  ### Stay of appeal
  
  (4) Where, in any appeal under this Act, substantially the same facts are at issue as those that are at issue in a prosecution under this section, the Minister may file a stay of proceedings with the Tax Court of Canada and thereupon the proceedings before that Court are stayed pending final determination of the outcome of the prosecution. 
  
  ### Offence and punishment without reference to subsection 120(2.2)
  
  (5) In determining whether an offence under this Act, for which a person may on summary conviction or indictment be liable for a fine or imprisonment, has been committed, and in determining the punishment for such an offence, this Act is to be read without reference to subsection 120(2.2). 
  
  ### Definitions
  
  239.1 (1) The definitions in subsection 163.3(1) apply in this section. 
  
  ### Offences
  
  (2) Every person that, without lawful excuse, the proof of which lies on the person, 
  (a) uses an electronic suppression of sales device or a similar device or software in relation to records that are required to be kept by any person under section 230, 
  (b) acquires or possesses an electronic suppression of sales device, or a right in respect of an electronic suppression of sales device, that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230, 
  (c) designs, develops, manufactures, possesses for sale, offers for sale, sells, transfers or otherwise makes available to another person an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230, 
  (d) supplies installation, upgrade or maintenance services for an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230, or 
  (e) participates in, assents to or acquiesces in the commission of, or conspires with any person to commit, an offence described in any of paragraphs (a) to (d), is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to a fine of not less than $10,000 and not more than $500,000 or to imprisonment for a term not exceeding two years, or to both. 
  
  ### Prosecution on indictment
  
  (3) Every person that is charged with an offence described in subsection (2) may, at the election of the Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to a fine of not less than $50,000 and not more than $1,000,000 or to imprisonment for a term not exceeding five years, or to both. 
  
  ### Penalty on conviction
  
  (4) A person that is convicted of an offence under this section is not liable to pay a penalty imposed under any of sections 162, 163, 163.2 and 163.3 for the same action unless a notice of assessment for that penalty was issued before the information or complaint giving rise to the conviction was laid or made. 
  
  ### Stay of appeal
  
  (5) If, in any appeal under this Act, substantially the same facts are at issue as those that are at issue in a prosecution under this section, the Minister may file a stay of proceedings with the Tax Court of Canada and, upon that filing, the proceedings before that Court are stayed pending final determination of the outcome of the prosecution. 
  
  ### Definition of 
  *taxable obligation* and 
  *non-taxable obligation* 
  
  240 (1) In this section, 
  *taxable obligation* means any bond, debenture or similar obligation the interest on which would, if paid by the issuer to a non-resident person, be subject to the payment of tax under Part XIII by that non-resident person at the rate provided in subsection 212(1) (otherwise than by virtue of subsection 212(6)), and 
  *non-taxable obligation* means any bond, debenture or similar obligation the interest on which would not, if paid by the issuer to a non-resident person, be subject to the payment of tax under Part XIII by that non-resident person.  
  
  ### Interest coupon to be identified in prescribed manner — offence and punishment
  
  (2) Every person who, at any time after July 14, 1966, issues 
  (a) any taxable obligation, or 
  (b) any non-taxable obligation the right to interest on which is evidenced by a coupon or other writing that does not form part of, or is capable of being detached from, the evidence of indebtedness under the obligation is, unless the coupon or other writing is marked or identified in prescribed manner by the letters “AX” in the case of a taxable obligation, and by the letter “F” in the case of a non-taxable obligation, on the face thereof, guilty of an offence and liable on summary conviction to a fine not exceeding $500. 
  
  ### Provision of information
  
  241 (1) Except as authorized by this section, no official or other representative of a government entity shall 
  (a) knowingly provide, or knowingly allow to be provided, to any person any taxpayer information; 
  (b) knowingly allow any person to have access to any taxpayer information; or 
  (c) knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act or for the purpose for which it was provided under this section.  
  
  ### Evidence relating to taxpayer information
  
  (2) Notwithstanding any other Act of Parliament or other law, no official or other representative of a government entity shall be required, in connection with any legal proceedings, to give or produce evidence relating to any taxpayer information. 
  
  ### Communication where proceedings have been commenced
  
  (3) Subsections 241(1) and 241(2) do not apply in respect of 
  (a) criminal proceedings, either by indictment or on summary conviction, that have been commenced by the laying of an information or the preferring of an indictment, under an Act of Parliament; or 
  (b) any legal proceedings relating to the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act or any other Act of Parliament or law of a province that provides for the imposition or collection of a tax or duty.  
  
  ### Circumstances involving danger
  
  (3.1) The Minister may provide to appropriate persons any taxpayer information relating to imminent danger of death or physical injury to any individual. 
  
  ### Certain qualified donees
  
  (3.2) An official may provide to any person the following taxpayer information relating to another person (in this subsection referred to as the “registrant”) that was at any time a registered charity, registered Canadian amateur athletic association or registered journalism organization: 
  (a) a copy of the registrant’s governing documents, including its statement of purpose, and function in the case of a Canadian amateur athletic association; 
  (b) any information provided in prescribed form to the Minister by the registrant on applying for registration under this Act; 
  (c) the names of the persons who at any time were the registrant’s directors and the periods during which they were its directors; 
  (d) a copy of the notification of the registrant’s registration, including any conditions and warnings; 
  (e) if the registration of the registrant has been revoked or annulled, a copy of the entirety of or any part of any letter sent by or on behalf of the Minister to the registrant relating to the grounds for the revocation or annulment; 
  (f) financial statements required to be filed with an information return referred to in subsection 149.1(14) or (14.1); 
  (g) a copy of the entirety of or any part of any letter or notice by the Minister to the registrant relating to a suspension under section 188.2 or an assessment of tax or penalty under this Act (other than the amount of a liability under subsection 188(1.1)); 
  (h) in the case of a registrant that is a charity, an application by the registrant, and information filed in support of the application, for a designation, determination or decision by the Minister under any of subsections 149.1(6.3), (7), (8) and (13); and 
  (i) in the case of a registrant that is a charity, in respect of an application for a determination by the Minister under subsection 149.1(5), information in respect of the application, including 
  (i) the application, 
  (ii) information filed in support of the application, and 
  (iii) a copy of the entirety of or any part of any letter or notice by the Minister to the registrant relating to the application. 
  
  ### Information may be communicated
  
  (3.3) The Minister of Canadian Heritage may communicate or otherwise make available to the public, in any manner that that Minister considers appropriate, the following taxpayer information in respect of a Canadian film or video production certificate (as defined under subsection 125.4(1)) that has been issued or revoked: 
  (a) the title of the production for which the Canadian film or video production certificate was issued; 
  (b) the name of the taxpayer to whom the Canadian film or video production certificate was issued; 
  (c) the names of the producers of the production; 
  (d) the names of the individuals in respect of whom and places in respect of which that Minister has allotted points in respect of the production in accordance with regulations made for the purpose of section 125.4; 
  (e) the total number of points so allotted; and 
  (f) any revocation of the Canadian film or video production certificate. 
  
  ### Information may be communicated
  
  (3.4) The Minister may communicate or otherwise make available to the public, in any manner that the Minister considers appropriate, the following taxpayer information: 
  (a) the names of each organization in respect of which an individual can be entitled to a deduction under subsection 118.02(2); 
  (b) information relating to the eligibility, for the deduction under subsection 118.02(2), of subscriptions offered by organizations referred to in paragraph (a); and 
  (c) the start and, if applicable, end of the period in which paragraph (a) or (b) applies in respect of any particular organization or subscription. 
  
  ### Information may be communicated
  
  (3.5) The Minister may communicate or otherwise make available to the public, in any manner that the Minister considers appropriate, the name of any person or partnership that makes an application under section 125.7. 
  
  ### Where taxpayer information may be disclosed
  
  (4) An official may 
  (a) provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act, solely for that purpose;  
  (b) provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of determining any tax, interest, penalty or other amount that is or may become payable by the person, or any refund or tax credit to which the person is or may become entitled, under this Act or any other amount that is relevant for the purposes of that determination; 
  (c) provide to the person who seeks a certification referred to in paragraph 147.1(10)(a) the certification or a refusal to make the certification, solely for the purposes of administering a registered pension plan; 
  (d) provide taxpayer information 
  (i) to an official of the Department of Finance solely for the purposes of the formulation or evaluation of fiscal policy, 
  (ii) to an official solely for the purposes of the initial implementation of a fiscal policy or for the purposes of the administration or enforcement of an Act of Parliament that provides for the imposition and collection of a tax or duty, 
  (iii) to an official solely for the purposes of the administration or enforcement of a law of a province that provides for the imposition or collection of a tax or duty, 
  (iv) to an official of the government of a province solely for the purposes of the formulation or evaluation of fiscal policy, 
  (v) to an official of the Department of Natural Resources or of the government of a province solely for the purposes of the administration or enforcement of a program of the Government of Canada or of the province relating to the exploration for or exploitation of Canadian petroleum and gas resources, 
  (vi) to an official of the government of a province that has received or is entitled to receive a payment referred to in this subparagraph, or to an official of the Department of Natural Resources, solely for the purposes of the provisions relating to payments to a province in respect of the taxable income of corporations earned in the offshore area with respect to the province under the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, chapter 28 of the Statutes of Canada, 1988, the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act, chapter 3 of the Statutes of Canada, 1987, or similar Acts relating to the exploration for or exploitation of offshore Canadian petroleum and gas resources,  
  (vi.1) to an official of the Department of Natural Resources solely for the purpose of determining whether property is prescribed energy conservation property or whether an outlay or expense is a Canadian renewable and conservation expense, 
  (vii) to an official solely for the purposes of the administration or enforcement of the Pension Benefits Standards Act, 1985, the Pooled Registered Pension Plans Act or a similar law of a province,  
  (vii.1) to an official solely for the purpose of the administration or enforcement of the Canada Education Savings Act or a designated provincial program as defined in subsection 146.1(1),  
  (vii.2) to an official solely for the purposes of the administration and enforcement of Part 1 of the Energy Costs Assistance Measures Act,  
  (vii.3) to an official solely for the purposes of the administration and enforcement of the Children’s Special Allowances Act or the evaluation or formation of policy for that Act,  
  (vii.4) to an official solely for the purposes of the administration and enforcement of the Universal Child Care Benefit Act or the evaluation or formation of policy for that Act,  
  (vii.5) to an official solely for the purposes of the administration or enforcement of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1),  
  (vii.6) to an official solely for the purposes of the administration and enforcement of the Canada Emergency Response Benefit Act or the evaluation or formulation of policy for that Act,  
  (vii.7) to an official solely for the purposes of the administration and enforcement of the Canada Recovery Benefits Act or the Canada Worker Lockdown Benefit Act, or the evaluation or formulation of policy for those Acts,  
  (vii.8) to an official, if the taxpayer information is taxpayer information of an individual who has made an application under the Canada Recovery Benefits Act or the Canada Worker Lockdown Benefit Act, solely for the purposes of the evaluation or formulation of policy for a program administered and enforced by  
  (A) the Minister of Employment and Social Development, 
  (B) the Minister of Labour, or 
  (C) the Canada Employment Insurance Commission, 
  (vii.9) to an official of a department or agency of the Government of Canada or of a provincial government (or to an individual who occupies a similar position in connection with an Aboriginal government) as to the name, Social Insurance Number, date of birth, address, telephone number, email address or occupation of an individual who has made an application under the Canada Recovery Benefits Act or the Canada Worker Lockdown Benefit Act, solely for the purposes of  
  (A) the administration and enforcement of employment benefits and supports and social assistance programs established by a department or agency of the Government of Canada, the government of a province or an Aboriginal government, or 
  (B) the evaluation or formulation of policy of a program established by a department or agency of the Government of Canada, the government of a province or an Aboriginal government, 
  (vii.10) to an official of a department or agency of a provincial government solely for the purposes of the administration and enforcement, or evaluation or formulation of policy, of a program that provides financial assistance in respect of rent or interest payments in the context of the coronavirus disease 2019 (COVID-19) pandemic, 
  (viii) to an official of the Department of Veterans Affairs solely for the purposes of the administration of the War Veterans Allowance Act, the Veterans Well-being Act or Part XI of the Civilian War-related Benefits Act,  
  (ix) to an official of a department or agency of the Government of Canada or of a province as to the name, address, telephone number, occupation, size or type of business of a taxpayer, solely for the purpose of enabling that department or agency to obtain statistical data for research and analysis, 
  (x) to an official of the Canada Employment Insurance Commission or the Department of Employment and Social Development, solely for the purpose of the administration or enforcement of the Employment Insurance Act, an employment program of the Government of Canada (including, for greater certainty, any activity relating to a program for temporary foreign workers for which the administration or enforcement is the responsibility of the Minister of Employment and Social Development under the Immigration and Refugee Protection Regulations) or the evaluation or formation of policy for that Act or program,  
  (x.1) to an official of the Department of Employment and Social Development solely for the purpose of the administration or enforcement of a program established under the authority of the Department of Employment and Social Development Act in respect of children who are deceased or missing as a result of an offence, or a probable offence, under the Criminal Code,  
  (xi) to an official of the Department of Agriculture and Agri-Food or of the government of a province solely for the purposes of the administration or enforcement of a program of the Government of Canada or of the province established under an agreement entered into under the Farm Income Protection Act,  
  (xii) to a member of the Canadian Cultural Property Export Review Board or an official of the Administrative Tribunals Support Service of Canada solely for the purposes of administering sections 32 to 33.2 of the Cultural Property Export and Import Act,  
  (xiii) to an official solely for the purposes of setting off against any sum of money that may be due or payable by Her Majesty in right of Canada a debt due to 
  (A) Her Majesty in right of Canada, or 
  (B) Her Majesty in right of a province, 
  (xiv) to an official solely for the purposes of section 7.1 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act,  
  (xv) to an official of the Financial Transactions and Reports Analysis Centre of Canada solely for the purpose of enabling the Centre to evaluate the usefulness of information provided by the Centre to the Canada Revenue Agency under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act,  
  (xvi) to a person employed or engaged in the service of an office or agency, of the Government of Canada or of a province, whose mandate includes the provision of assistance (as defined in subsection 125.4(1) or 125.5(1)) in respect of film or video productions or film or video production services, solely for the purpose of the administration or enforcement of the program under which the assistance is offered, 
  (xvi.1) to a person employed or engaged in the service of an office or agency, of the Government of Canada or of a province, whose mandate includes the provision of assistance (as defined in subsection 125.6(1)) in respect of qualified Canadian journalism organizations, solely for the purpose of the administration or enforcement of the program under which the assistance is offered,  
  (xvi.2) to a body referred to in paragraph (b) of the definition qualified Canadian journalism organization in subsection 248(1), solely for the purpose of determining eligibility for designation under that paragraph,  
  (xvii) to an official of the Canadian Radio-television and Telecommunications Commission, solely for the purpose of the administration or enforcement of a regulatory function of that Commission, 
  (xviii) to an official of the Canada Revenue Agency solely for the purpose of the collection of amounts owing to Her Majesty in right of Canada or of a province under the Government Employees Compensation Act, the Canada Labour Code, the Merchant Seamen Compensation Act, the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Postal Services Continuation Act, 1997, the Wage Earner Protection Program Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level,  
  (xix) to an official of the Canada Revenue Agency solely for the purpose of the collection of amounts owing to Her Majesty in right of Canada under the Canada Emergency Business Account program established by Export Development Canada in accordance with an authorization made under subsection 23(1) of the Export Development Act,  
  (xx) to an official of 
  (A) the Canada Revenue Agency solely for the purposes of the administration or enforcement of the Dental Benefit Act, or  
  (B) the Department of Health solely for the purposes of the formulation or evaluation of policy for that Act, 
  (xx.1) to an official of 
  (A) the Department of Employment and Social Development or the Department of Health, solely for the purpose of the administration or enforcement of the Canadian Dental Care Plan established under the authority of the Department of Health Act in respect of dental service for individuals, or  
  (B) the Department of Health solely for the purpose of the formulation or evaluation of policy for that plan, 
  (xxi) to an official of the Canada Revenue Agency solely for the purposes of the administration or enforcement of the Rental Housing Benefit Act,  
  (xxii) to a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, the Canada Mortgage and Housing Corporation, solely for the purposes of the formulation or evaluation of policy for the Rental Housing Benefit Act, or  
  (xxiii) to an official solely for the purposes of a security review under subsection 83.032(10) or section 83.034 of the Criminal Code, if the information can reasonably be considered to be relevant to the security review;  
  (e) provide taxpayer information, or allow the inspection of or access to taxpayer information, as the case may be, under, and solely for the purposes of, 
  (i) subsection 36(2) or section 46 of the Access to Information Act,  
  (ii) section 13 of the Auditor General Act,  
  (iii) section 92 of the Canada Pension Plan,  
  (iv) a warrant issued under subsection 21(3) of the Canadian Security Intelligence Service Act,  
  (v) an order made under subsection 462.48(3) of the Criminal Code,  
  (vi) section 26 of the Cultural Property Export and Import Act,  
  (vii) section 79 of the Family Orders and Agreements Enforcement Assistance Act,  
  (viii) paragraph 33.1(a) of the Old Age Security Act,  
  (ix) subsection 34(2) or section 45 of the Privacy Act,  
  (x) section 24 of the Statistics Act,  
  (xi) section 9 of the Tax Rebate Discounting Act,  
  (xii) a provision contained in a tax treaty with another country or in a listed international agreement, or 
  (xiii) an order made under the Mutual Legal Assistance in Criminal Matters Act to gather or send information, for the purposes of an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would constitute an offence for which an order could be obtained under subsection 462.48(3) of the Criminal Code, in response to a request made pursuant to  
  (A) an administrative arrangement entered into under section 6 of the Mutual Legal Assistance in Criminal Matters Act, or  
  (B) a bilateral agreement for mutual legal assistance in criminal matters to which Canada is a party; 
  (f) provide taxpayer information solely for the purposes of sections 23 to 25 of the Financial Administration Act ;  
  (f.1) provide taxpayer information to an official for the purposes of the administration and enforcement of the Charities Registration (Security Information) Act, and where an official has so received taxpayer information, the official may provide that information to another official as permitted by subsection (9.1);  
  (g) use taxpayer information to compile information in a form that does not directly or indirectly reveal the identity of the taxpayer to whom the information relates; 
  (h) use, or provide to any person, taxpayer information solely for a purpose relating to the supervision, evaluation or discipline of an authorized person by Her Majesty in right of Canada in respect of a period during which the authorized person was employed by or engaged by or on behalf of Her Majesty in right of Canada to assist in the administration or enforcement of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act, to the extent that the information is relevant for the purpose;  
  (h.1) use, or provide to an official of a department or agency of the Government of Canada, taxpayer information solely for a purpose relating to the administration or enforcement of a program to provide a one-time payment to persons with disabilities for reasons related to the coronavirus disease 2019 (COVID-19), to the extent that the information is relevant for the purpose; 
  (i) provide access to records of taxpayer information to the Librarian and Archivist of Canada or a person acting on behalf of or under the direction of the Librarian and Archivist, solely for the purposes of section 12 of the Library and Archives of Canada Act, and transfer such records to the care and control of such persons solely for the purposes of section 13 of that Act;  
  (j) use taxpayer information relating to a taxpayer to provide information to the taxpayer; 
  (j.1) provide taxpayer information to an official or a designated person solely for the purpose of permitting the making of an adjustment to a social assistance payment made on the basis of a means, needs or income test if the purpose of the adjustment is to take into account 
  (i) the amount determined in respect of a person for C in subsection 122.61(1), as it read before July 2018, in respect of a base taxation year (as defined in section 122.6) before 2017, or  
  (ii) an amount determined in respect of a person under subsection 122.61(1) or (1.1) in respect of a base taxation year (as defined in section 122.6) after 2014;  
  (j.2) provide information obtained under section 122.62 to an official of the government of a province solely for the purposes of the administration or enforcement of a prescribed law of the province; 
  (k) provide, or allow inspection of or access to, taxpayer information to or by any person otherwise legally entitled to it under an Act of Parliament solely for the purposes for which that person is entitled to the information; 
  (l) subject to subsection (9.2), provide to a representative of a government entity the business number of, the name of (including any trade name or other name used by), and any contact information, corporate information and registration information in respect of, the holder of a business number (other than an excluded individual), if the information is provided solely for the purposes of the administration or enforcement of 
  (i) an Act of Parliament or of a legislature of a province, or 
  (ii) a by-law of a municipality in Canada or a law of an aboriginal government; 
  (m) provide taxpayer information to an official of the government of a province solely for use in the management or administration by that government of a program relating to payments under subsection 164(1.8); 
  (n) provide taxpayer information to any person, solely for the purposes of the administration or enforcement of a law of a province that provides for workers’ compensation benefits; 
  (o) provide taxpayer information to any person solely for the purpose of enabling the Chief Statistician, within the meaning assigned by section 2 of the Statistics Act, to provide to a statistical agency of a province data concerning business activities carried on in the province, where the information is used by the agency solely for research and analysis and the agency is authorized under the law of the province to collect the same or similar information on its own behalf in respect of such activities;  
  (p) provide taxpayer information to a police officer (within the meaning assigned by subsection 462.48(17) of the Criminal Code) solely for the purpose of investigating whether an offence has been committed under the Criminal Code, or the laying of an information or the preferring of an indictment, where  
  (i) such information can reasonably be regarded as being necessary for the purpose of ascertaining the circumstances in which an offence under the Criminal Code may have been committed, or the identity of the person or persons who may have committed an offence, with respect to an official, or with respect to any person related to that official,  
  (ii) the official was or is engaged in the administration or enforcement of this Act, and 
  (iii) the offence can reasonably be considered to be related to that administration or enforcement; 
  (q) provide taxpayer information to an official of the government of a province solely for the use in the management or administration by that government of a program relating to earning supplementation or income support; 
  (r) provide taxpayer information to a person who has — under a program administered by the Canada Revenue Agency to obtain information relating to tax non-compliance — entered into a contract to provide information to the Canada Revenue Agency, to the extent necessary to inform the person of any amount they may be entitled to under the contract and of the status of their claim under the contract; 
  (s) provide taxpayer information, solely for the purpose of ensuring compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, to an official of the Financial Transactions and Reports Analysis Centre of Canada, if the information  
  (i) can reasonably be considered to be relevant to a determination of whether a reporting entity (as defined in section 244.1) has complied with a duty or obligation under Part XV.1, and 
  (ii) does not directly or indirectly reveal the identity of a client (as defined in section 244.1); 
  (t) provide taxpayer information to an official solely for the purpose of enabling the Chief Actuary of the Office of the Superintendent of Financial Institutions to conduct actuarial reviews of pension plans established under the Old Age Security Act as required by the Public Pensions Reporting Act ; or  
  (u) provide to an official of the Department of Industry, solely for the purpose of verifying and validating the data required to be sent under section 21.21 of the Canada Business Corporations Act in respect of a private corporation (in this paragraph referred to as the “particular corporation”), the following information:  
  (i) for each corporation (in this paragraph referred to as the “subject corporation”) that is related to or associated with the particular corporation in a taxation year, 
  (A) the name of the subject corporation, 
  (B) the jurisdiction of residence of the subject corporation, 
  (C) the business number of the subject corporation, 
  (D) the relationship between the particular corporation and the subject corporation, 
  (E) the number of shares of each class of the capital stock of the subject corporation that are owned by the particular corporation, and 
  (F) the percentage of all the issued and outstanding shares of each class of the capital stock of the subject corporation that are owned by the particular corporation, 
  (ii) for each shareholder that holds at least 10% of any class of the capital stock of the particular corporation in a taxation year, 
  (A) the name of the shareholder, 
  (B) whether the shareholder is a corporation, partnership, individual or trust, 
  (C) as the case may be, the shareholder’s 
  (I) business number, 
  (II) partnership account number, 
  (III) social insurance number, or 
  (IV) trust account number, and 
  (D) the percentage of all the issued and outstanding shares of each class of the capital stock of the particular corporation that are owned by the shareholder, and 
  (iii) the taxation year to which the information described in subparagraphs (i) and (ii) relates. 
  
  ### Measures to prevent unauthorized use or disclosure
  
  (4.1) The person who presides at a legal proceeding relating to the supervision, evaluation or discipline of an authorized person may order such measures as are necessary to ensure that taxpayer information is not used or provided to any person for any purpose not relating to that proceeding, including 
  (a) holding a hearing in camera ;  
  (b) banning the publication of the information; 
  (c) concealing the identity of the taxpayer to whom the information relates; and 
  (d) sealing the records of the proceeding. 
  
  ### Disclosure to taxpayer or on consent
  
  (5) An official or other representative of a government entity may provide taxpayer information relating to a taxpayer 
  (a) to the taxpayer; and 
  (b) with the consent of the taxpayer, to any other person. 
  
  ### Appeal from order or direction
  
  (6) An order or direction that is made in the course of or in connection with any legal proceedings and that requires an official, other representative of a government entity or authorized person to give or produce evidence relating to any taxpayer information may, by notice served on all interested parties, be appealed forthwith by the Minister or by the person against whom the order or direction is made to 
  (a) the court of appeal of the province in which the order or direction is made, in the case of an order or direction made by a court or other tribunal established by or pursuant to the laws of the province, whether or not that court or tribunal is exercising a jurisdiction conferred by the laws of Canada; or 
  (b) the Federal Court of Appeal, in the case of an order or direction made by a court or other tribunal established by or pursuant to the laws of Canada. 
  
  ### Disposition of appeal
  
  (7) The court to which an appeal is taken pursuant to subsection 241(6) may allow the appeal and quash the order or direction appealed from or dismiss the appeal, and the rules of practice and procedure from time to time governing appeals to the courts shall apply, with such modifications as the circumstances require, to an appeal instituted pursuant to that subsection. 
  
  ### Stay of order or direction
  
  (8) An appeal instituted pursuant to subsection 241(6) shall stay the operation of the order or direction appealed from until judgment is pronounced. 
  
  ### Threats to security
  
  (9) An official may provide to the head of a recipient Government of Canada institution listed in Schedule 3 to the Security of Canada Information Disclosure Act, or to an official designated for the purposes of that Act by the head of that recipient institution,  
  (a) publicly accessible charity information; 
  (b) taxpayer information, if there are reasonable grounds to suspect that the information would be relevant to 
  (i) an investigation of whether the activity of any person may constitute threats to the security of Canada, as defined in section 2 of the Canadian Security Intelligence Service Act, or  
  (ii) an investigation of whether any of the following offences may have been committed: 
  (A) a terrorism offence as defined in section 2 of the Criminal Code, and  
  (B) an offence under section 462.31 of the Criminal Code, if that investigation is related to a terrorism offence as defined in section 2 of that Act; and  
  (c) information setting out the reasonable grounds referred to in paragraph (b), to the extent that any such grounds rely on information referred to in paragraph (a) or (b). 
  
  ### Threats to security
  
  (9.1) Information — other than designated donor information — provided to an official of the Canadian Security Intelligence Service or the Royal Canadian Mounted Police, as permitted by paragraph (4)(f.1), may be used by such an official, or communicated by such an official to another official of the Canadian Security Intelligence Service or the Royal Canadian Mounted Police for use by that other official, for the purpose of 
  (a) investigating whether an offence may have been committed, ascertaining the identity of a person or persons who may have committed an offence, or prosecuting an offence, which offence is 
  (i) described in Part II.1 of the Criminal Code, or  
  (ii) described in section 462.31 of the Criminal Code, if that investigation, ascertainment or prosecution is related to an investigation, ascertainment or prosecution in respect of an offence described in Part II.1 of that Act; or  
  (b) investigating whether the activities of any person may constitute threats to the security of Canada, as defined in section 2 of the Canadian Security Intelligence Service Act.  
  
  ### Restrictions on information sharing
  
  (9.2) No information may be provided to a representative of a government entity under paragraph (4)(l) in connection with a program, activity or service provided or undertaken by the government entity unless the government entity uses the business number as an identifier in connection with the program, activity or service. 
  
  ### Public disclosure
  
  (9.3) The Minister may, in connection with a program, activity or service provided or undertaken by the Minister, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number (other than an excluded individual). 
  
  ### Public disclosure by representative of government entity
  
  (9.4) A representative of a government entity may, in connection with a program, activity or service provided or undertaken by the government entity, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number (other than an excluded individual), if 
  (a) a representative of the government entity was provided with that information pursuant to paragraph (4)(l); and 
  (b) the government entity uses the business number as an identifier in connection with the program, activity or service. 
  
  ### Serious offences
  
  (9.5) An official may provide to a law enforcement officer of an appropriate police organization 
  (a) taxpayer information, if the official has reasonable grounds to believe that the information will afford evidence of an act or omission in or outside of Canada that, if committed in Canada, would be 
  (i) an offence under any of 
  (A) section 3 of the Corruption of Foreign Public Officials Act,  
  (B) sections 119 to 121, 123 to 125 and 426 of the Criminal Code,  
  (C) section 465 of the Criminal Code as it relates to an offence described in clause (B), and  
  (D) sections 144, 264, 271, 279, 279.02, 281 and 333.1, paragraphs 334(a) and 348(1)(e) and sections 349, 435 and 462.31 of the Criminal Code,  
  (ii) a terrorism offence or a criminal organization offence, as those terms are defined in section 2 of the Criminal Code, for which the maximum term of imprisonment is 10 years or more, or  
  (iii) an offence 
  (A) that is punishable by a minimum term of imprisonment, 
  (B) for which the maximum term of imprisonment is 14 years or life, or 
  (C) for which the maximum term of imprisonment is 10 years and that 
  (I) resulted in bodily harm, 
  (II) involved the import, export, trafficking or production of drugs, or 
  (III) involved the use of a weapon; and 
  (b) information setting out the reasonable grounds referred to in paragraph (a), to the extent that any such grounds rely on information referred to in that paragraph. 
  
  ### Definitions
  
  (10) In this section  
  *aboriginal government* means an aboriginal government as defined in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act ; (gouvernement autochtone)   
  *authorized person* means a person who is engaged or employed, or who was formerly engaged or employed, by or on behalf of Her Majesty in right of Canada to assist in carrying out the provisions of this Act, the Canada Pension Plan, the Unemployment Insurance Act or the Employment Insurance Act ; (personne autorisée)   
  *business number* [Repealed, 1998, c. 19, s. 236(9)]   
  *contact information*, in respect of a holder of a business number, means the name, address, telephone number, facsimile number and preferred language of communication of the holder, or similar information as specified by the Minister in respect of the holder, and includes such information in respect of one or more  
  (a) trustees of the holder, if the holder is a trust, 
  (b) members of the holder, if the holder is a partnership, 
  (c) officers of the holder, if the holder is a corporation, or 
  (d) officers or members of the holder, if the holder is not described by any of paragraphs (a) to (c); ( coordonnées)   
  *corporate information*, in respect of a holder of a business number that is a corporation, means the name (including the number assigned by the incorporating authority), date of incorporation, jurisdiction of incorporation and any information on the dissolution, reorganization, amalgamation, winding-up or revival of the corporation; (renseignements d’entreprise)   
  *court of appeal* has the meaning assigned by the definition 
  *court of appeal* in section 2 of the Criminal Code ; (cour d’appel)   
  *designated donor information* means information of a charity, or of a person who has at any time made an application for registration as a registered charity, that is directly attributable to a gift that has been made or proposed to be made to the charity or applicant and that is presented in any form that directly or indirectly reveals the identity of the donor or prospective donor, other than a donor or prospective donor who is not resident in Canada and is neither a citizen of Canada nor a person described in subsection 2(3); (renseignements désignés sur les donateurs)   
  *designated person* means any person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of,  
  (a) a municipality in Canada, or 
  (b) a public body performing a function of government in Canada, or any person who was formerly so employed, who formerly occupied such a position or who was formerly so engaged; ( personne déterminée)   
  *designated taxpayer information* [Repealed, 2015, c. 20, s. 6]   
  *excluded individual* means an individual who is a holder of a business number solely because the individual is required under this Act to deduct or withhold an amount from an amount paid or credited or deemed to be paid or credited; (particulier exclu)   
  *government entity* means  
  (a) a department or agency of the government of Canada or of a province, 
  (b) a municipality in Canada, 
  (c) an aboriginal government, 
  (d) a corporation all of the shares (except directors’ qualifying shares) of the capital stock of which are owned by one or more persons each of which is 
  (i) Her Majesty in right of Canada, 
  (ii) Her Majesty in right of a province, 
  (iii) a municipality in Canada, or 
  (iv) a corporation described in this paragraph, or 
  (e) a board or commission, established by Her Majesty in right of Canada or Her Majesty in right of a province, that performs an administrative or regulatory function of government, or by one or more municipalities in Canada, that performs an administrative or regulatory function of a municipality; ( entité gouvernementale)   
  *official* means any person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of,  
  (a) Her Majesty in right of Canada or a province, or 
  (b) an authority engaged in administering a law of a province similar to the Pension Benefits Standards Act, 1985 or the Pooled Registered Pension Plans Act,  or any person who was formerly so employed, who formerly occupied such a position or who was formerly so engaged and, for the purposes of subsection 239(2.21), subsections 241(1) and 241(2), the portion of subsection 241(4) before paragraph (a), and subsections 241(5) and 241(6), includes a designated person; ( fonctionnaire)   
  *publicly accessible charity information* means taxpayer information that is  
  (a) described in subsection (3.2), or that would be described in that subsection if the words “that was at any time a registered charity” were read as “that has at any time made an application for registration as a registered charity”, 
  (b) information — other than designated donor information — submitted to the Minister with, or required to be contained in, any public information return filed or required to be filed under subsection 149.1(14), or 
  (c) information prepared from information referred to in paragraph (a) or (b); ( renseignement d’organismes de bienfaisance accessible au public)   
  *registration information*, in respect of a holder of a business number, means  
  (a) any information pertaining to the legal form of the holder, 
  (b) the type of activities carried on or proposed to be carried on by the holder, 
  (c) each date on which 
  (i) the business number was issued to the holder, 
  (ii) the holder began activities, 
  (iii) the holder ceased or resumed activities, or 
  (iv) the business number assigned to the holder was changed, and 
  (d) the reasons for the cessation, resumption or change referred to in subparagraph (c)(iii) or (iv); ( renseignements relatifs à l’inscription)   
  *representative* of a government entity means a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, a government entity, and includes, for the purposes of subsections (1), (2), (5) and (6), a person who was formerly so employed, who formerly occupied such a position or who formerly was so engaged; (représentant)   
  *taxpayer information* means information of any kind and in any form relating to one or more taxpayers that is  
  (a) obtained by or on behalf of the Minister for the purposes of this Act, or 
  (b) prepared from information referred to in paragraph (a), but does not include information that does not directly or indirectly reveal the identity of the taxpayer to whom it relates and, for the purposes of applying subsections (2), (5) and (6) to a representative of a government entity that is not an official, taxpayer information includes only the information referred to in paragraph (4)(l). ( renseignement confidentiel)  
  
  ### References to “this Act”
  
  (11) The references in subsections (1), (3), (4) and (10) to “this Act” shall be read as references to “this Act or the Federal-Provincial Fiscal Arrangements Act ”.  
  
  ### Officers, etc., of corporations
  
  242 Where a corporation commits an offence under this Act, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted. 
  
  ### Power to decrease punishment
  
  243 Notwithstanding the Criminal Code or any other statute or law in force on June 30, 1948, the court has, in any prosecution or proceeding under this Act, no power to impose less than the minimum fine or imprisonment fixed by this Act or to suspend sentence.  
  
  ## Procedure and Evidence 
  
  ### Information or complaint
  
  244 (1) An information or complaint under this Act may be laid or made by any officer of the Canada Revenue Agency, by a member of the Royal Canadian Mounted Police or by any person thereto authorized by the Minister and, where an information or complaint purports to have been laid or made under this Act, it shall be deemed to have been laid or made by a person thereto authorized by the Minister and shall not be called in question for lack of authority of the informant or complainant except by the Minister or by a person acting for the Minister or Her Majesty. 
  
  ### Two or more offences
  
  (2) An information or complaint in respect of an offence under this Act may be for one or more offences and no information, complaint, warrant, conviction or other proceeding in a prosecution under this Act is objectionable or insufficient by reason of the fact that it relates to two or more offences. 
  
  ### Venue
  
  (3) An information or complaint in respect of an offence under this Act may be heard, tried or determined by any court, judge or justice if the accused is resident, carrying on business, found or apprehended or is in custody within the territorial jurisdiction of the court, judge or justice, as the case may be, although the matter of the information or complaint did not arise within that jurisdiction. 
  
  ### Limitation period
  
  (4) An information or complaint under the provisions of the Criminal Code relating to summary convictions, in respect of an offence under this Act, may be laid or made at any time within but not later than 8 years after the day on which the matter of the information or complaint arose.  
  
  ### Proof of service by mail
  
  (5) Where, by this Act or a regulation, provision is made for sending by mail a request for information, notice or demand, an affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has knowledge of the facts in the particular case, that such a request, notice or demand was sent by registered letter on a named day to the person to whom it was addressed (indicating the address) and that the officer identifies as exhibits attached to the affidavit the post office certificate of registration of the letter or a true copy of the relevant portion thereof and a true copy of the request, notice or demand, shall, in the absence of proof to the contrary, be received as evidence of the sending and of the request, notice or demand. 
  
  ### Proof of personal service
  
  (6) Where, by this Act or a regulation, provision is made for personal service of a request for information, notice or demand, an affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has knowledge of the facts in the particular case, that such a request, notice or demand was served personally on a named day on the person to whom it was directed and that the officer identifies as an exhibit attached to the affidavit a true copy of the request, notice or demand, shall, in the absence of proof to the contrary, be received as evidence of the personal service and of the request, notice or demand. 
  
  ### Proof of electronic delivery
  
  (6.1) If, by this Act or a regulation, provision is made for sending a notice to a person electronically, an affidavit of an officer of the Canada Revenue Agency sworn before a commissioner or other person authorized to take affidavits, shall, in the absence of proof to the contrary, be received as evidence of the sending and of the notice if the affidavit sets out that 
  (a) the officer has knowledge of the facts in the particular case; 
  (b) the notice was sent electronically to the person on a named day; and 
  (c) the officer identifies as exhibits attached to the affidavit copies of 
  (i) an electronic message confirming the notice has been sent to the person, and 
  (ii) the notice. 
  
  ### Proof of failure to comply
  
  (7) Where, by this Act or a regulation, a person is required to make a return, statement, answer or certificate, an affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and that after a careful examination and search of those records the officer has been unable to find in a given case that the return, statement, answer or certificate, as the case may be, has been made by that person, shall, in the absence of proof to the contrary, be received as evidence that in that case that person did not make the return, statement, answer or certificate, as the case may be. 
  
  ### Proof of time of compliance
  
  (8) Where, by this Act or a regulation, a person is required to make a return, statement, answer or certificate, an affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and that after careful examination of those records the officer has found that the return, statement, answer or certificate was filed or made on a particular day, shall, in the absence of proof to the contrary, be received as evidence that it was filed or made on that day and not prior thereto. 
  
  ### Proof of documents
  
  (9) An affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and that a document annexed to the affidavit is a document or true copy of a document, or a print-out of an electronic document, made by or on behalf of the Minister or a person exercising a power of the Minister or by or on behalf of a taxpayer, is evidence of the nature and contents of the document. 
  
  ### Proof of no appeal
  
  (10) An affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and has knowledge of the practice of the Agency and that an examination of those records shows that a notice of assessment for a particular taxation year or a notice of determination was mailed or otherwise communicated to a taxpayer on a particular day under this Act and that, after careful examination and search of those records, the officer has been unable to find that a notice of objection or of appeal from the assessment or determination or a request under subsection 245(6), as the case may be, was received within the time allowed, shall, in the absence of proof to the contrary, be received as evidence of the statements contained in it. 
  
  ### Presumption
  
  (11) Where evidence is offered under this section by an affidavit from which it appears that the person making the affidavit is an officer of the Canada Revenue Agency, it is not necessary to prove the person’s signature or that the person is such an officer nor is it necessary to prove the signature or official character of the person before whom the affidavit was sworn. 
  
  ### Judicial notice
  
  (12) Judicial notice shall be taken of all orders or regulations made under this Act without those orders or regulations being specially pleaded or proven. 
  
  ### Proof of documents
  
  (13) Every document purporting to have been executed under, or in the course of the administration or enforcement of, this Act over the name in writing of the Minister, the Deputy Minister of National Revenue, the Commissioner of Customs and Revenue, the Commissioner of Revenue or an officer authorized to exercise a power or perform a duty of the Minister under this Act is deemed to have been signed, made and issued by the Minister, the Deputy Minister, the Commissioner of Customs and Revenue, the Commissioner of Revenue or the officer unless it has been called in question by the Minister or by a person acting for the Minister or Her Majesty. 
  (13.1)  [Repealed, 1994, c. 13, s. 10]  
  
  ### Mailing or sending date
  
  (14) For the purposes of this Act, where any notice or notification described in subsection 149.1(6.3), 152(3.1), 165(3) or 166.1(5) or any notice of assessment or determination is mailed, or sent electronically, it shall be presumed to be mailed or sent, as the case may be, on the date of that notice or notification. 
  
  ### Date when electronic notice sent
  
  (14.1) If a notice or other communication in respect of an individual, other than a notice or other communication that refers to the business number of a person or partnership, is made available in electronic format such that it can be read or perceived by an individual or a computer system or other similar device, the notice or other communication is presumed to be sent to the individual and received by the individual on the date that an electronic message is sent, to the electronic address most recently provided by the individual to the Minister for the purposes of this subsection, informing the individual that a notice or other communication requiring the individual’s immediate attention is available in the individual’s secure electronic account. A notice or other communication is considered to be made available if it is posted by the Minister in the individual’s secure electronic account and the individual has authorized that notices or other communications may be made available in this manner and has not before that date revoked that authorization in a manner specified by the Minister. 
  
  ### Date when electronic notice sent — My Business Account
  
  (14.2) A notice or other communication that is made available in electronic format such that it can be read or perceived by an individual or a computer system or other similar device, and that refers to the business number of a person or partnership, is presumed to be sent to the person or partnership and received by the person or partnership on the date that it is posted by the Minister in the secure electronic account in respect of a business number of the person or partnership, unless the person or partnership has requested, 30 days prior to that date, in a manner specified by the Minister, that the notice or other communication be sent by mail. 
  
  ### Date when assessment made
  
  (15) If any notice of assessment or determination has been sent by the Minister as required by this Act, the assessment or determination is deemed to have been made on the day of sending of the notice of the assessment or determination. 
  
  ### Forms prescribed or authorized
  
  (16) Every form purporting to be a form prescribed or authorized by the Minister shall be deemed to be a form authorized under this Act by the Minister unless called in question by the Minister or by a person acting for the Minister or Her Majesty. 
  
  ### Proof of return in prosecution for offence
  
  (17) In any prosecution for an offence under this Act, the production of a return, certificate, statement or answer required by or under this Act or a regulation, purporting to have been filed or delivered by or on behalf of the person charged with the offence or to have been made or signed by or on behalf of that person shall, in the absence of proof to the contrary, be received as evidence that the return, certificate, statement or answer was filed or delivered, or was made or signed, by or on behalf of that person. 
  
  ### Idem, in proceedings under Division J of Part I
  
  (18) In any proceedings under Division J of Part I, the production of a return, certificate, statement or answer required by or under this Act or a regulation, purporting to have been filed or delivered, or to have been made or signed, by or on behalf of the taxpayer shall, in the absence of proof to the contrary, be received as evidence that the return, certificate, statement or answer was filed or delivered, or was made or signed, by or on behalf of the taxpayer. 
  
  ### Proof of statement of non-receipt
  
  (19) In any prosecution for an offence under this Act, an affidavit of an officer of the Canada Revenue Agency, sworn before a commissioner or other person authorized to take affidavits, setting out that the officer has charge of the appropriate records and that an examination of those records shows that an amount required under this Act to be remitted to the Receiver General on account of tax for a year has not been received by the Receiver General, shall, in the absence of proof to the contrary, be received as evidence of the statements contained therein. 
  
  ### Members of partnerships
  
  (20) For the purposes of this Act, 
  (a) a reference in any notice or other document to the firm name of a partnership shall be read as a reference to all the members thereof; and 
  (b) any notice or other document shall be deemed to have been provided to each member of a partnership if the notice or other document is mailed to, served on or otherwise sent to the partnership 
  (i) at its latest known address or place of business, or 
  (ii) at the latest known address 
  (A) where it is a limited partnership, of any member thereof whose liability as a member is not limited, or 
  (B) in any other case, of any member thereof. 
  
  ### Proof of return filed
  
  (21) For the purposes of this Act, a document presented by the Minister purporting to be a print-out of the information in respect of a taxpayer received under section 150.1 by the Minister from a person shall be received as evidence and, in the absence of evidence to the contrary, is proof of the return filed by the person under that section. 
  
  ### Filing of information returns
  
  (22) Where a person who is required by this Act or a regulation to file an information return in prescribed form with the Minister meets the criteria specified in writing by the Minister, the person may at any time file the information return with the Minister by way of electronic filing (within the meaning assigned by subsection 150.1(1)) and the person shall be deemed to have filed the information return with the Minister at that time, and a document presented by the Minister purporting to be a print-out of the information so received by the Minister shall be received as evidence and, in the absence of evidence to the contrary, is proof of the information return so deemed to have been filed. 
  
  # PART XV.1 
  
  ## Reporting of Electronic Funds Transfer 
  
  ### Definitions
  
  244.1 The following definitions apply in this Part.  
  *cash* means coins referred to in section 7 of the Currency Act, notes issued by the Bank of Canada pursuant to the Bank of Canada Act that are intended for circulation in Canada or coins or bank notes of countries other than Canada. (espèces)   
  *casino* means  
  (a) the government of a province that, in accordance with paragraph 207(1)(a) of the Criminal Code,  
  (i) in a permanent establishment that is held out to be a casino, conducts and manages a lottery scheme that includes games of roulette or card games, or 
  (ii) in any other permanent establishment, conducts and manages games that are operated on or through a slot machine, as defined in subsection 207(4.01) of that Act, or any other similar electronic gaming device, if there are more than 50 of those machines or other devices in the establishment;  
  (b) the government of a province that, in accordance with paragraph 207(1)(a) of the Criminal Code, conducts and manages a lottery scheme, other than bingo or the sale of lottery tickets, that is accessible to the public through the Internet or other digital network, except if the network is an internal network within an establishment referred to in subparagraph (a)(ii);  
  (c) an organization that, in accordance with paragraph 207(1)(b) of the Criminal Code, in a permanent establishment that is held out to be a casino, conducts and manages a lottery scheme that includes games of roulette or card games, unless the organization is a registered charity and the lottery scheme is conducted or managed for a period of not more than two consecutive days at a time; and  
  (d) the board of a fair or of an exhibition, or the operator of a concession leased by such a board, that, in accordance with paragraph 207(1)(c) of the Criminal Code, in a permanent establishment that is held out to be a casino, conducts and manages a lottery scheme that includes games of roulette or card games. (casino)   
  *client* means a particular entity that engages in a financial transaction or activity with a reporting entity and includes an entity on whose behalf the particular entity is acting. (client)   
  *credit union central* means a central cooperative credit society, as defined in section 2 of the Cooperative Credit Associations Act, or a credit union central or a federation of credit unions or caisses populaires that is regulated by a provincial Act other than one enacted by the legislature of Quebec. (centrale de caisses de crédit)   
  *electronic funds transfer* means the transmission — through any electronic, magnetic or optical device, telephone instrument or computer — of instructions for the transfer of funds, other than the transfer of funds within Canada. In the case of Society for Worldwide Interbank Financial Telecommunication messages, only SWIFT MT 103 messages are included. (télévirement)   
  *entity* means an individual, a body corporate, a partnership, a fund or an unincorporated association or organization. (entité)   
  *funds* means cash, currency or securities, or negotiable instruments or other financial instruments, in any form, that indicate an entity’s title or interest, or for civil law a right, in them. (fonds)   
  *money services business* means an entity  
  (a) that has a place of business in Canada and that is engaged in the business of providing at least one of the following services: 
  (i) foreign exchange dealing, 
  (ii) remitting funds or transmitting funds by any means or through any entity or electronic funds transfer network, 
  (iii) issuing or redeeming money orders, traveller’s cheques or other similar negotiable instruments except for cheques payable to a named entity, 
  (iv) dealing in virtual currencies, as defined by regulation, or 
  (v) a prescribed service; or 
  (b) that does not have a place of business in Canada, that is engaged in the business of providing at least one of the following services that is directed at entities in Canada, and that provides those services to their customers in Canada: 
  (i) foreign exchange dealing, 
  (ii) remitting funds or transmitting funds by any means or through any entity or electronic funds transfer network, 
  (iii) issuing or redeeming money orders, traveller’s cheques or other similar negotiable instruments except for cheques payable to a named entity, 
  (iv) dealing in virtual currencies, as defined by regulation, or 
  (v) a prescribed service. ( entreprise de transfert de fonds ou de vente de titres négociables)   
  *reporting entity* means an entity that is  
  (a) an authorized foreign bank within the meaning of section 2 of the Bank Act in respect of its business in Canada, or a bank to which that Act applies;  
  (b) a cooperative credit society, savings and credit union or caisse populaire regulated by a provincial Act;  
  (c) a financial services cooperative regulated by An Act respecting financial services cooperatives, R.S.Q., c. C-67.3, or An Act respecting the Mouvement Desjardins, S.Q. 2000, c. 77;  
  (d) an association regulated by the Cooperative Credit Associations Act ;  
  (e) a company to which the Trust and Loan Companies Act applies;  
  (f) a trust company regulated by a provincial Act; 
  (g) a loan company regulated by a provincial Act; 
  (h) a money services business; 
  (i) a casino, including a casino owned or controlled by Her Majesty; 
  (j) a department or an agent of Her Majesty in right of Canada or of a province that is engaged in the business of accepting deposit liabilities in the course of providing financial services to the public; or 
  (k) a credit union central in respect of financial services it offers to an entity, other than an entity that is referred to in any of paragraphs (a) to (g) and (j) and is a member of that credit union central. ( entité déclarante)  
  
  ### Electronic funds transfer
  
  244.2 (1) Every reporting entity shall file with the Minister an information return in prescribed form in respect of 
  (a) the sending out of Canada, at the request of a client, of an electronic funds transfer of $10,000 or more in the course of a single transaction; or 
  (b) the receipt from outside Canada of an electronic funds transfer, sent at the request of a client, of $10,000 or more in the course of a single transaction. 
  
  ### Transfer within Canada
  
  (2) For greater certainty and subject to subsection (3), subsection (1) does not apply to a reporting entity in respect of an electronic funds transfer if the entity 
  (a) sends the transfer to an entity in Canada, even if the final recipient is outside Canada; or 
  (b) receives the transfer from an entity in Canada, even if the initial sender is outside Canada. 
  
  ### Intermediary
  
  (3) Subsection (1) applies to a reporting entity in respect of an electronic funds transfer if the entity 
  (a) orders another reporting entity to send, at the request of a client, the transfer out of Canada, unless it provides the other reporting entity with the name and address of the client; or 
  (b) receives the transfer for a beneficiary in Canada from another reporting entity in circumstances where the initial sender is outside Canada, unless the transfer contains the name and address of the beneficiary. 
  
  ### Transfer conducted by agent
  
  (4) If a particular reporting entity is an agent of or is authorized to act on behalf of another reporting entity in respect of an electronic funds transfer, subsection (1) applies, in respect of the transfer, to the other reporting entity and not to the particular reporting entity. 
  
  ### Entities outside Canada
  
  (5) Subsection (1) does not apply to an entity described in paragraph (b) of the definition 
  *money services business* in respect of the services it provides to entities outside Canada.  
  
  ### Casino
  
  244.3 An electronic funds transfer in respect of which subsection 244.2(1) applies that occurs in the course of a business, temporarily conducted for charitable purposes in the establishment of a casino by a registered charity carried on for not more than two consecutive days at a time under the supervision of the casino, shall be reported by the supervising casino. 
  
  ### Single transaction
  
  244.4 (1) For the purposes of this Part, two or more electronic funds transfers of less than $10,000 each that are made within 24 consecutive hours and that total $10,000 or more are considered to be made in the course of a single transaction of $10,000 or more if 
  (a) an individual, other than a trust, who is a reporting entity knows that the transfers are conducted by, or on behalf of, the same entity; and 
  (b) an employee of a reporting entity, other than an entity described in paragraph (a), knows that the transfers are conducted by, or on behalf of, the same entity. 
  
  ### Exception
  
  (2) For greater certainty, subsection (1) does not apply in respect of an electronic funds transfer sent to two or more beneficiaries if the transfer is requested by 
  (a) an administrator of a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province; 
  (b) a department or agent of Her Majesty in right of Canada or of a province; 
  (c) an incorporated city, town, village, metropolitan authority, township, district, county, rural municipality or other incorporated municipal body or an agent of any of them; 
  (d) an organization that operates a public hospital and that is designated by the Minister as a hospital authority under the Excise Tax Act, or an agent of such an organization; or  
  (e) a corporation that has minimum net assets of $75 million on its last audited balance sheet, whose shares are traded on a Canadian stock exchange or a designated stock exchange and that operates in a country that is a member of the Financial Action Task Force on Money Laundering established in 1989. 
  
  ### Foreign currency
  
  244.5 If an electronic funds transfer is carried out by a reporting entity in a foreign currency, the amount of the transfer is to be converted into Canadian dollars using 
  (a) the official conversion rate of the Bank of Canada for the currency published in the Bank of Canada’s Daily Memorandum of Exchange Rates that is in effect at the time of the transfer; or  
  (b) if no official conversion rate is set out in that publication for the currency, the conversion rate that the entity would use for the currency in the normal course of business at the time of the transfer. 
  
  ### Filing of return
  
  244.6 An information return in respect of an electronic funds transfer that is required to be filed by a reporting entity under this Part shall be filed 
  (a) not later than five working days after the day of the transfer; and 
  (b) using electronic media, in the manner specified by the Minister, if the entity has the technical capabilities to do so. 
  
  ### Record keeping
  
  244.7 (1) Every reporting entity that is required to file an information return under this Part shall keep such records as will enable the Minister to determine whether the entity has complied with its duties and obligations under this Part. 
  
  ### Form of records
  
  (2) A record that is required to be kept under this Part may be kept in machine-readable or electronic form if a paper copy can be readily produced from it. 
  
  ### Retention of records
  
  (3) A reporting entity that is required to keep records under this Part in respect of an electronic funds transfer shall retain those records for a period of at least five years from the day of the transfer. 
  
  # PART XVI 
  
  ## Tax Avoidance 
  
  ### Definitions
  
  245 (1) In this section,  
  *tax benefit* means  
  (a) a reduction, avoidance or deferral of tax or other amount payable under this Act, and includes a reduction, avoidance or deferral of tax or other amount that would be payable under this Act but for a tax treaty, 
  (b) an increase in a refund of tax or other amount under this Act, and includes an increase in a refund of tax or other amount under this Act as a result of a tax treaty, or 
  (c) a reduction, increase or preservation of an amount that could at a subsequent time 
  (i) be relevant for the purpose of computing an amount referred to in paragraph (a) or (b), and 
  (ii) result in any of the effects described in paragraph (a) or (b); ( avantage fiscal)   
  *tax consequences*, to a person, means  
  (a) the amount of income, taxable income or taxable income earned in Canada of the person under this Act, 
  (b) the tax or other amount payable by, or refundable to, the person under this Act, or 
  (c) any other amount that is, or could at a subsequent time be, relevant for the purpose of computing an amount referred to in paragraph (a) or (b); ( attribut fiscal)   
  *transaction* includes an arrangement or event. (opération)  
  
  ### General anti-avoidance provision
  
  (2) Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction. 
  
  ### Avoidance transaction
  
  (3) An avoidance transaction means any transaction 
  (a) that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or  
  (b) that is part of a series of transactions, which series, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit.  
  
  ### Application of subsection (2)
  
  (4) Subsection (2) applies to a transaction only if it may reasonably be considered that the transaction 
  (a) would, if this Act were read without reference to this section, result directly or indirectly in a misuse of the provisions of any one or more of 
  (i) this Act, 
  (ii) the Income Tax Regulations,  
  (iii) the Income Tax Application Rules,  
  (iv) a tax treaty, or 
  (v) any other enactment that is relevant in computing tax or any other amount payable by or refundable to a person under this Act or in determining any amount that is relevant for the purposes of that computation; or 
  (b) would result directly or indirectly in an abuse having regard to those provisions, other than this section, read as a whole. 
  
  ### Determination of tax consequences
  
  (5) Without restricting the generality of subsection (2), and notwithstanding any other enactment, 
  (a) any deduction, exemption or exclusion in computing income, taxable income, taxable income earned in Canada or tax payable or any part thereof may be allowed or disallowed in whole or in part, 
  (b) any such deduction, exemption or exclusion, any income, loss or other amount or part thereof may be allocated to any person, 
  (c) the nature of any payment or other amount may be recharacterized, and 
  (d) the tax effects that would otherwise result from the application of other provisions of this Act may be ignored, in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction. 
  
  ### Request for adjustments
  
  (6) Where with respect to a transaction 
  (a) a notice of assessment, reassessment or additional assessment involving the application of subsection 245(2) with respect to the transaction has been sent to a person, or 
  (b) a notice of determination pursuant to subsection 152(1.11) has been sent to a person with respect to the transaction, any person (other than a person referred to in paragraph (a) or (b)) shall be entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment, reassessment or additional assessment applying subsection (2) or make a determination applying subsection 152(1.11) with respect to that transaction. 
  
  ### Exception
  
  (7) Notwithstanding any other provision of this Act, the tax consequences to any person, following the application of this section, shall only be determined through a notice of assessment, reassessment, additional assessment or determination pursuant to subsection 152(1.11) involving the application of this section. 
  
  ### Duties of Minister
  
  (8) On receipt of a request by a person under subsection 245(6), the Minister shall, with all due dispatch, consider the request and, notwithstanding subsection 152(4), assess, reassess or make an additional assessment or determination pursuant to subsection 152(1.11) with respect to that person, except that an assessment, reassessment, additional assessment or determination may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection 245(6). 
  
  ### Benefit conferred on a person
  
  246 (1) Where at any time a person confers a benefit, either directly or indirectly, by any means whatever, on a taxpayer, the amount of the benefit shall, to the extent that it is not otherwise included in the taxpayer’s income or taxable income earned in Canada under Part I and would be included in the taxpayer’s income if the amount of the benefit were a payment made directly by the person to the taxpayer and if the taxpayer were resident in Canada, be 
  (a) included in computing the taxpayer’s income or taxable income earned in Canada under Part I for the taxation year that includes that time; or 
  (b) where the taxpayer is a non-resident person, deemed for the purposes of Part XIII to be a payment made at that time to the taxpayer in respect of property, services or otherwise, depending on the nature of the benefit. 
  
  ### Arm’s length
  
  (2) Where it is established that a transaction was entered into by persons dealing at arm’s length, bona fide and not pursuant to, or as part of, any other transaction and not to effect payment, in whole or in part, of an existing or future obligation, no party thereto shall be regarded, for the purpose of this section, as having conferred a benefit on a party with whom the first-mentioned party was so dealing.  
  
  # PART XVI.1 
  
  ## Transfer Pricing 
  
  ### Definitions
  
  247 (1) The definitions in this subsection apply in this section.  
  *arm’s length allocation* means, in respect of a transaction, an allocation of profit or loss that would have occurred between the participants in the transaction if they had been dealing at arm’s length with each other. (attribution de pleine concurrence)   
  *arm’s length transfer price* means, in respect of a transaction, an amount that would have been a transfer price in respect of the transaction if the participants in the transaction had been dealing at arm’s length with each other. (prix de transfert de pleine concurrence)   
  *documentation-due date* for a taxation year or fiscal period of a person or partnership means  
  (a) in the case of a person, the person’s filing-due date for the year; or 
  (b) in the case of a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the period or would be required to be so filed if that section applied to the partnership. (date limite de production)   
  *qualifying cost contribution arrangement* means an arrangement under which reasonable efforts are made by the participants in the arrangement to establish a basis for contributing to, and to contribute on that basis to, the cost of producing, developing or acquiring any property, or acquiring or performing any services, in proportion to the benefits which each participant is reasonably expected to derive from the property or services, as the case may be, as a result of the arrangement. (arrangement admissible de participation au coût)   
  *tax benefit* has the meaning assigned by subsection 245(1). (avantage fiscal)   
  *transaction* includes an arrangement or event. (opération)   
  *transfer price* means, in respect of a transaction, an amount paid or payable or an amount received or receivable, as the case may be, by a participant in the transaction as a price, a rental, a royalty, a premium or other payment for, or for the use, production or reproduction of, property or as consideration for services (including services provided as an employee and the insurance or reinsurance of risks) as part of the transaction. (prix de transfert)   
  *transfer pricing capital adjustment* of a taxpayer for a taxation year means the total of  
  (a) all amounts each of which is 
  (i) 1/2 of the amount, if any, by which the adjusted cost base to the taxpayer of a capital property (other than a depreciable property) is reduced in the year because of an adjustment made under subsection (2), or 
  (ii)  [Repealed, 2016, c. 12, s. 62]  
  (iii) the amount, if any, by which the capital cost to the taxpayer of a depreciable property is reduced in the year because of an adjustment made under subsection (2); and 
  (b) all amounts each of which is that proportion of the total of 
  (i) 1/2 of the amount, if any, by which the adjusted cost base to a partnership of a capital property (other than a depreciable property) is reduced in a fiscal period that ends in the year because of an adjustment made under subsection (2), and 
  (ii)  [Repealed, 2016, c. 12, s. 62]  
  (iii) the amount, if any, by which the capital cost to a partnership of a depreciable property is reduced in the period because of an adjustment made under subsection (2), that 
  (iv) the taxpayer’s share of the income or loss of the partnership for the period is of 
  (v) the income or loss of the partnership for the period, and where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of determining a taxpayer’s share of the partnership’s income for the purpose of this definition. ( redressement de capital)   
  *transfer pricing capital setoff adjustment* of a taxpayer for a taxation year means the amount, if any, that would be the taxpayer’s transfer pricing capital adjustment for the year if the references, in the definition 
  *transfer pricing capital adjustment*, to “reduced” were read as “increased”. (redressement compensatoire de capital)   
  *transfer pricing income adjustment* of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection 247(2) (other than an adjustment included in determining a transfer pricing capital adjustment of the taxpayer for a taxation year) would result in an increase in the taxpayer’s income for the year or a decrease in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection 247(2). (redressement de revenu)   
  *transfer pricing income setoff adjustment* of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection 247(2) (other than an adjustment included in determining a transfer pricing capital setoff adjustment of the taxpayer for a taxation year) would result in a decrease in the taxpayer’s income for the year or an increase in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection 247(2). (redressement compensatoire de revenu)  
  
  ### Transfer pricing adjustment
  
  (2) Where a taxpayer or a partnership and a non-resident person with whom the taxpayer or the partnership, or a member of the partnership, does not deal at arm’s length (or a partnership of which the non-resident person is a member) are participants in a transaction or a series of transactions and 
  (a) the terms or conditions made or imposed, in respect of the transaction or series, between any of the participants in the transaction or series differ from those that would have been made between persons dealing at arm’s length, or 
  (b) the transaction or series 
  (i) would not have been entered into between persons dealing at arm’s length, and 
  (ii) can reasonably be considered not to have been entered into primarily for bona fide purposes other than to obtain a tax benefit,  any amounts (in subsection (2.1) referred to as the “initial amounts”) that would be determined for the purposes of applying the provisions of this Act (if this Act were read without reference to this section and section 245) in respect of the taxpayer or the partnership for a taxation year or fiscal period shall be adjusted (in this section referred to as an “adjustment”) to the quantum or nature of the amounts (in subsection (2.1) referred to as the “adjusted amounts”) that would have been determined if, 
  (c) where only paragraph 247(2)(a) applies, the terms and conditions made or imposed, in respect of the transaction or series, between the participants in the transaction or series had been those that would have been made between persons dealing at arm’s length, or 
  (d) where paragraph 247(2)(b) applies, the transaction or series entered into between the participants had been the transaction or series that would have been entered into between persons dealing at arm’s length, under terms and conditions that would have been made between persons dealing at arm’s length. 
  
  ### Ordering
  
  (2.1) For the purpose of applying subsection (2) in the context of the other provisions of this Act, the following order is to be applied: 
  (a) first determine each of the initial amounts; 
  (b) then make the adjustments, if any, to each of the initial amounts; and 
  (c) then apply each of the provisions of this Act (other than subsection (2) and, for greater certainty, including section 245) using the adjusted amounts. 
  
  ### Penalty
  
  (3) A taxpayer (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) is liable to a penalty for a taxation year equal to 10% of the amount determined under paragraph 247(3)(a) in respect of the taxpayer for the year, where 
  (a) the amount, if any, by which 
  (i) the total of 
  (A) the taxpayer’s transfer pricing capital adjustment for the year, and 
  (B) the taxpayer’s transfer pricing income adjustment for the year exceeds the total of 
  (ii) the total of all amounts each of which is the portion of the taxpayer’s transfer pricing capital adjustment or transfer pricing income adjustment for the year that can reasonably be considered to relate to a particular transaction, where 
  (A) the transaction is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or 
  (B) in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine arm’s length transfer prices or arm’s length allocations in respect of the transaction, and to use those prices or allocations for the purposes of this Act, and 
  (iii) the total of all amounts, each of which is the portion of the taxpayer’s transfer pricing capital setoff adjustment or transfer pricing income setoff adjustment for the year that can reasonably be considered to relate to a particular transaction, where 
  (A) the transaction is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or 
  (B) in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine arm’s length transfer prices or arm’s length allocations in respect of the transaction, and to use those prices or allocations for the purposes of this Act, is greater than 
  (b) the lesser of 
  (i) 10% of the amount that would be the taxpayer’s gross revenue for the year if this Act were read without reference to subsection 247(2), subsections 69(1) and 69(1.2) and section 245, and 
  (ii) $5,000,000. 
  
  ### Contemporaneous documentation
  
  (4) For the purposes of subsection 247(3) and the definition 
  *qualifying cost contribution arrangement* in subsection 247(1), a taxpayer or a partnership is deemed not to have made reasonable efforts to determine and use arm’s length transfer prices or arm’s length allocations in respect of a transaction or not to have participated in a transaction that is a qualifying cost contribution arrangement, unless the taxpayer or the partnership, as the case may be,  
  (a) makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for the taxation year or fiscal period, as the case may be, in which the transaction is entered into, records or documents that provide a description that is complete and accurate in all material respects of 
  (i) the property or services to which the transaction relates, 
  (ii) the terms and conditions of the transaction and their relationship, if any, to the terms and conditions of each other transaction entered into between the participants in the transaction, 
  (iii) the identity of the participants in the transaction and their relationship to each other at the time the transaction was entered into, 
  (iv) the functions performed, the property used or contributed and the risks assumed, in respect of the transaction, by the participants in the transaction, 
  (v) the data and methods considered and the analysis performed to determine the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction, and 
  (vi) the assumptions, strategies and policies, if any, that influenced the determination of the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction; 
  (b) for each subsequent taxation year or fiscal period, if any, in which the transaction continues, makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for that year or period, as the case may be, records or documents that completely and accurately describe each material change in the year or period to the matters referred to in any of subparagraphs 247(4)(a)(i) to 247(4)(a)(vi) in respect of the transaction; and 
  (c) provides the records or documents described in paragraphs 247(4)(a) and 247(4)(b) to the Minister within 3 months after service, made personally or by registered or certified mail, of a written request therefor. 
  
  ### Partner’s gross revenue
  
  (5) For the purpose of subparagraph 247(3)(b)(i), where a taxpayer is a member of a partnership in a taxation year, the taxpayer’s gross revenue for the year as a member of the partnership from any activities carried on by means of the partnership is deemed to be that proportion of the amount that would be the partnership’s gross revenue from the activities if it were a taxpayer (to the extent that amount does not include amounts received or receivable from other partnerships of which the taxpayer is a member in the year), for a fiscal period of the partnership that ends in the year, that 
  (a) the taxpayer’s share of the income or loss of the partnership from its activities for the period is of 
  (b) the income or loss of the partnership from its activities for the period, and where the income and loss of the partnership from its activities are nil for the period, the income of the partnership from its activities for the period is deemed to be $1,000,000 for the purpose of determining a taxpayer’s share of the partnership’s income from its activities for the purpose of this subsection. 
  
  ### Deemed member of partnership
  
  (6) For the purposes of this section, where a person is a member of a partnership that is a member of another partnership, 
  (a) the person is deemed to be a member of the other partnership; and 
  (b) the person’s share of the income or loss of the other partnership is deemed to be equal to the amount of that income or loss to which the person is directly or indirectly entitled. 
  
  ### Exclusion for loans to certain controlled foreign affiliates
  
  (7) Where, in a taxation year of a corporation resident in Canada, a non-resident person owes an amount to the corporation, the non-resident person is a controlled foreign affiliate of the corporation for the purpose of section 17 throughout the period in the year during which the amount is owing and it is established that the amount owing is an amount owing described in paragraph 17(8)(a) or (b), subsection (2) does not apply to adjust the amount of interest paid, payable or accruing in the year on the amount owing. 
  
  ### Exclusion — certain guarantees
  
  (7.1) Subsection (2) does not apply to adjust an amount of consideration paid, payable or accruing to a corporation resident in Canada (in this subsection referred to as the “parent”) in a taxation year of the parent for the provision of a guarantee to a person or partnership (in this subsection referred to as the “lender”) for the repayment, in whole or in part, of a particular amount owing to the lender by a non-resident person, if 
  (a) the non-resident person is a controlled foreign affiliate of the parent for the purposes of section 17 throughout the period in the year during which the particular amount is owing; and 
  (b) it is established that the particular amount would be an amount owing described in paragraph 17(8)(a) or (b) if it were owed to the parent. 
  (8)  [Repealed, 2021, c. 23, s. 60]  
  
  ### Anti-avoidance
  
  (9) For the purposes of determining a taxpayer’s gross revenue under subparagraph 247(3)(b)(i) and subsection 247(5), a transaction or series of transactions is deemed not to have occurred, if one of the purposes of the transaction or series was to increase the taxpayer’s gross revenue for the purpose of subsection 247(3). 
  
  ### No adjustment unless appropriate
  
  (10) An adjustment (other than an adjustment that results in or increases a transfer pricing capital adjustment or a transfer pricing income adjustment of a taxpayer for a taxation year) shall not be made under subsection 247(2) unless, in the opinion of the Minister, the circumstances are such that it would be appropriate that the adjustment be made. 
  
  ### Provisions applicable to Part
  
  (11) Sections 152, 158, 159, 162 to 167 and Division J of Part I apply to this Part, with such modifications as the circumstances require. 
  
  ### Deemed dividends to non-residents
  
  (12) For the purposes of Part XIII, if a particular corporation that is a resident of Canada for the purposes of Part XIII would have a transfer pricing capital adjustment or a transfer pricing income adjustment for a taxation year, if the particular corporation, or a partnership of which the particular corporation is a member, had undertaken no transactions or series of transactions other than those in which a particular non-resident person, or a partnership of which the particular non-resident person is a member, that does not deal at arm’s length with the particular corporation (other than a corporation that was for the purposes of section 17 a controlled foreign affiliate of the particular corporation throughout the period during which the transaction or series of transactions occurred) was a participant, 
  (a) a dividend is deemed to have been paid by the particular corporation and received by the particular non-resident person immediately before the end of the taxation year; and 
  (b) the amount of the dividend is the amount, if any, by which 
  (i) the amount that would be the portion of the total of the particular corporation’s transfer pricing capital adjustment and transfer pricing income adjustment for the taxation year that could reasonably be considered to relate to the particular non-resident person if 
  (A) the only transactions or series of transactions undertaken by the particular corporation were those in which the particular non-resident person was a participant, and 
  (B) the definition 
  *transfer pricing capital adjustment* in subsection (1) were read without reference to the references therein to “1/2 of” and “3/4 of”  exceeds 
  (ii) the amount that would be the portion of the total of the particular corporation’s transfer pricing capital setoff adjustment, and transfer pricing income setoff adjustment, for the taxation year that could reasonably be considered to relate to the particular non-resident person if 
  (A) the only transactions or series of transactions undertaken by the particular corporation were those in which the particular non-resident person was a participant, and 
  (B) the definition 
  *transfer pricing capital adjustment* in subsection (1) were read without reference to the references therein to “1/2 of” and “3/4 of”.  
  
  ### Repatriation
  
  (13) If a dividend is deemed by subsection (12) to have been paid by a corporation and received by a non-resident person, and a particular amount has been paid with the concurrence of the Minister by the non-resident person to the corporation, 
  (a) the amount of the dividend may be reduced by the amount (in this subsection referred to as the “reduction”) that the Minister considers appropriate, having regard to all the circumstances, and 
  (b) subsections 227(8.1) and (8.3) apply as if 
  (i) the amount of the dividend were not reduced, and 
  (ii) on the day on which the particular amount was paid, the corporation paid to the Receiver General an amount equal to the amount that would be required to be withheld and remitted under Part XIII in respect of the reduction. 
  
  ### Repatriation — interest
  
  (14) If the amount of a dividend is reduced under paragraph (13)(a), the amount of interest payable by a taxpayer because of paragraph (13)(b) may be reduced to the amount that the Minister considers appropriate, having regard to all the circumstances, including the provision of reciprocal treatment by the country in which the non-resident person referred to in subsection (13) is resident. 
  
  ### Non-application of provisions
  
  (15) Section 15, subsections 56(2) and 212.3(2) and section 246 do not apply in respect of an amount to the extent that a dividend is deemed by subsection (12) (determined without reference to subsection (13)) to have been paid in respect of the amount. 
  
  # PART XVII 
  
  ## Interpretation 
  
  ### Definitions
  
  248 (1) In this Act,  
  *active business*, in relation to any business carried on by a taxpayer resident in Canada, means any business carried on by the taxpayer other than a specified investment business or a personal services business; (entreprise exploitée activement)   
  *additional voluntary contribution* to a registered pension plan means a contribution that is made by a member to the plan, that is used to provide benefits under a money purchase provision (within the meaning assigned by subsection 147.1(1)) of the plan and that is not required as a general condition of membership in the plan; (cotisation facultative)   
  *adjusted cost base* has the meaning assigned by section 54; (prix de base rajusté)   
  *adjustment time* [Repealed, 2016, c. 12, s. 63]   
  *advanced life deferred annuity* has the meaning assigned by subsection 146.5(1); (rente viagère différée à un âge avancé)   
  *aggregate investment income* has the meaning assigned by subsection 129(4); (revenu de placement total)   
  *allowable business investment loss* has the meaning assigned by section 38; (perte déductible au titre d’un placement d’entreprise)   
  *allowable capital loss* has the meaning assigned by section 38; (perte en capital déductible)   
  *alter ego trust* means a trust to which paragraph 104(4)(a) would apply if that paragraph were read without reference to subparagraph 104(4)(a)(iii) and clauses 104(4)(a)(iv)(B) and (C); (fiducie en faveur de soi-même)   
  *amateur athlete trust* has the meaning assigned by subsection 143.1(1.2); (fiducie au profit d’un athlète amateur)   
  *amortized cost* of a loan or lending asset at any time to a taxpayer means the amount, if any, by which the total of  
  (a) in the case of a loan made by the taxpayer, the total of all amounts advanced in respect of the loan at or before that time, 
  (b) in the case of a loan or lending asset acquired by the taxpayer, the cost of the loan or lending asset to the taxpayer, 
  (c) in the case of a loan or lending asset acquired by the taxpayer, the part of the amount, if any, by which 
  (i) the principal amount of the loan or lending asset at the time it was so acquired exceeds 
  (ii) the cost to the taxpayer of the loan or lending asset that was included in computing the taxpayer’s income for any taxation year ending at or before that time, 
  (c.1) the total of all amounts each of which is an amount in respect of the loan or lending asset that was included in computing the taxpayer’s income for a taxation year that ended at or before that time in respect of changes in the value of the loan or lending asset attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, 
  (d) where the taxpayer is an insurer, any amount in respect of the loan or lending asset that was deemed by reason of paragraph 142(3)(a) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a gain for any taxation year ending at or before that time, and  
  (e) the total of all amounts each of which is an amount in respect of the loan or lending asset that was included under paragraph 12(1)(i) in computing the taxpayer’s income for any taxation year ending at or before that time exceeds the total of 
  (f) the part of the amount, if any, by which 
  (i) the amount referred to in subparagraph (c)(ii) exceeds 
  (ii) the amount referred to in subparagraph (c)(i) that was deducted in computing the taxpayer’s income for any taxation year ending at or before that time, 
  (f.1) the total of all amounts each of which is an amount in respect of the loan or lending asset that was deducted in computing the taxpayer’s income for a taxation year that ended at or before that time in respect of changes in the value of the loan or lending asset attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency, 
  (g) the total of all amounts that, at or before that time, the taxpayer had received as or on account or in lieu of payment of or in satisfaction of the principal amount of the loan or lending asset, 
  (h) where the taxpayer is an insurer, any amount in respect of the loan or lending asset that was deemed by reason of paragraph 142(3)(b) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a loss for any taxation year ending at or before that time, and  
  (i) the total of all amounts each of which is an amount in respect of the loan or lending asset deducted under paragraph 20(1)(p) in computing the taxpayer’s income for any taxation year ending at or before that time; ( coût amorti)   
  *amount* means money, rights or things expressed in terms of the amount of money or the value in terms of money of the right or thing, except that,  
  (a) notwithstanding paragraph (b), in any case where subsection 112(2.1), 112(2.2) or 112(2.4), or section 187.2 or 187.3 or subsection 258(3) or 258(5) applies to a stock dividend, the 
  *amount* of the stock dividend is the greater of  
  (i) the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and 
  (ii) the fair market value of the share or shares paid as a stock dividend at the time of payment, 
  (b) in any case where section 191.1 applies to a stock dividend, the 
  *amount* of the stock dividend for the purposes of Part VI.1 is the greater of  
  (i) the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and 
  (ii) the fair market value of the share or shares paid as a stock dividend at the time of payment, and for any other purpose the amount referred to in subparagraph (i), and 
  (b.1)  [Repealed, 2013, c. 34, s. 358]  
  (c) in any other case, the 
  *amount* of any stock dividend is the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend; (montant)   
  *annuity* includes an amount payable on a periodic basis whether payable at intervals longer or shorter than a year and whether payable under a contract, will or trust or otherwise; (rente)   
  *appropriate percentage*, for a taxation year, means the lowest percentage referred to in subsection 117(2) for the taxation year; (taux de base pour l’année)   
  *assessment* includes a reassessment; (cotisation)   
  *authorized foreign bank* has the meaning assigned by section 2 of the Bank Act ; (banque étrangère autorisée)   
  *automobile* means  
  (a) a motor vehicle that is designed or adapted primarily to carry individuals on highways and streets and that has a seating capacity for not more than the driver and 8 passengers, but does not include 
  (b) an ambulance, 
  (b.1) a clearly marked emergency-response vehicle that is used in connection with or in the course of an individual’s office or employment with a fire department or the police; 
  (b.2) a clearly marked emergency medical response vehicle that is used, in connection with or in the course of an individual’s office or employment with an emergency medical response or ambulance service, to carry emergency medical equipment together with one or more emergency medical attendants or paramedics, 
  (c) a motor vehicle acquired primarily for use as a taxi, a bus used in a business of transporting passengers or a hearse used in the course of a business of arranging or managing funerals, 
  (d) except for the purposes of section 6, a motor vehicle acquired to be sold, rented or leased in the course of carrying on a business of selling, renting or leasing motor vehicles or a motor vehicle used for the purpose of transporting passengers in the course of carrying on a business of arranging or managing funerals, and 
  (e) a motor vehicle 
  (i) of a type commonly called a van or pick-up truck, or a similar vehicle, that has a seating capacity for not more than the driver and two passengers and that, in the taxation year in which it is acquired or leased, is used primarily for the transportation of goods or equipment in the course of gaining or producing income, 
  (ii) of a type commonly called a van or pick-up truck, or a similar vehicle, the use of which, in the taxation year in which it is acquired or leased, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income, or 
  (iii) of a type commonly called a pick-up truck that is used in the taxation year in which it is acquired or leased primarily for the transportation of goods, equipment or passengers in the course of earning or producing income at one or more locations in Canada that are 
  (A) described, in respect of any of the occupants of the vehicle, in subparagraph 6(6)(a)(i) or (ii), and 
  (B) at least 30 kilometres outside the nearest point on the boundary of the nearest population centre, as defined by the last census dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year; ( automobile)   
  *balance-due day* of a taxpayer for a taxation year means,  
  (a) if the taxpayer is a trust, 
  (i) in the case where the time at which the taxation year ends is determined under paragraph 249(4)(a), the day that is 
  (A) in the case where that time occurs in a calendar year after the end of the trust’s particular taxation year that ends on December 15 of that calendar year because of an election made under paragraph 132.11(1)(a), the balance-due day of the trust for the particular taxation year, 
  (B) in the case where clause (A) does not apply and the trust’s particular taxation year that begins immediately after that time ends in the calendar year that includes that time, the balance-due day of the trust for the particular taxation year, and 
  (C) in any other case, 90 days after the end of the calendar year that includes that time, and 
  (ii) in any other case, the day that is 90 days after the end of the taxation year, 
  (b) where the taxpayer is an individual who died after October in the year and before May in the following taxation year, the day that is 6 months after the day of death, 
  (c) in any other case where the taxpayer is an individual, April 30 in the following taxation year, and 
  (d) where the taxpayer is a corporation, 
  (i) the day that is three months after the day on which the taxation year (in this subparagraph referred to as the “current year”) ends, if 
  (A) an amount was deducted under section 125 in computing the corporation’s tax payable under this Part for the current year or for its preceding taxation year, 
  (B) the corporation is, throughout the current year, a Canadian-controlled private corporation, and 
  (C) either 
  (I) in the case of a corporation that is not associated with another corporation in the current year, its taxable income for its preceding taxation year (determined before taking into consideration the specified future tax consequences for that preceding taxation year) does not exceed its business limit for that preceding taxation year, or 
  (II) in the case of a corporation that is associated with one or more other corporations in the current year, the total of the taxable incomes of the corporation and of those other corporations for their last taxation years that ended in the last calendar year that ended before the end of the current year (determined before taking into consideration the specified future tax consequences for those last taxation years) does not exceed the total of the business limits of the corporation and of those other corporations for those last taxation years, and 
  (ii) the day that is two months after the day on which the taxation year ends, in any other case; ( date d’exigibilité du solde)   
  *bank* means a bank within the meaning assigned by section 2 of the Bank Act (other than a federal credit union) or an authorized foreign bank; (banque)   
  *bankrupt* has the meaning assigned by the Bankruptcy and Insolvency Act ; (failli)   
  *benefit under a deferred profit sharing plan* received by a taxpayer in a taxation year means the total of all amounts each of which is an amount received by the taxpayer in the year from a trustee under the plan, minus any amounts deductible under subsections 147(11) and 147(12) in computing the income of the taxpayer for the year; (prestation en vertu d’un régime de participation différée aux bénéfices)   
  *bituminous sands* means sands or other rock materials containing naturally occurring hydrocarbons (other than coal) which hydrocarbons have  
  (a) a viscosity, determined in a prescribed manner, equal to or greater than 10,000 centipoise, or 
  (b) a density, determined in a prescribed manner, equal to or less than 12 degrees API; ( sables bitumineux)   
  *borrowed money* includes the proceeds to a taxpayer from the sale of a post-dated bill drawn by the taxpayer on a bank; (argent emprunté)   
  *business* includes a profession, calling, trade, manufacture or undertaking of any kind whatever and, except for the purposes of paragraph 18(2)(c), section 54.2, subsection 95(1) and paragraph 110.6(14)(f), an adventure or concern in the nature of trade but does not include an office or employment; (commerce)   
  *business limit* of a corporation for a taxation year means the amount determined under section 125 to be its business limit for the year; (plafond des affaires)   
  *business number* means the number (other than a Social Insurance Number or trust account number) used by the Minister to identify  
  (a) a corporation or partnership, or 
  (b) any other association or taxpayer that carries on a business or is required by this Act to deduct or withhold an amount from an amount paid or credited or deemed to be paid or credited under this Act and of which the Minister has notified the corporation, partnership, association or taxpayer; ( numéro d’entreprise)   
  *Canadian banking business* means the business carried on by an authorized foreign bank through a permanent establishment (as defined by regulation) in Canada, other than business conducted through a representative office registered or required to be registered under section 509 of the Bank Act ; (entreprise bancaire canadienne)   
  *Canadian-controlled private corporation* has the meaning assigned by subsection 125(7); (société privée sous contrôle canadien)   
  *Canadian corporation* has the meaning assigned by subsection 89(1); (société canadienne)   
  *Canadian development expense* has the meaning assigned by subsection 66.2(5); (frais d’aménagement au Canada)   
  *Canadian exploration and development expenses* has the meaning assigned by subsection 66(15); (frais d’exploration et d’aménagement au Canada)   
  *Canadian exploration expense* has the meaning assigned by subsection 66.1(6); (frais d’exploration au Canada)   
  *Canadian field processing* means, except as otherwise prescribed,  
  (a) the processing in Canada of raw natural gas at a field separation and dehydration facility, 
  (b) the processing in Canada of raw natural gas at a natural gas processing plant to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas, 
  (c) the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage, 
  (d) the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent, 
  (e) the processing in Canada of crude oil (other than heavy crude oil recovered from an oil or gas well or a tar sands deposit) recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent, and 
  (f) prescribed activities and for the purposes of paragraphs (b) to (d), 
  (g) gas is not considered to cease to be raw natural gas solely because of its processing at a field separation and dehydration facility until it is received by a common carrier of natural gas, and 
  (h) where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant; ( traitement préliminaire au Canada)   
  *Canadian oil and gas property expense* has the meaning assigned by subsection 66.4(5); (frais à l’égard de biens canadiens relatifs au pétrole et au gaz)   
  *Canadian partnership* has the meaning assigned by section 102; (société de personnes canadienne)   
  *Canadian real, immovable or resource property* means  
  (a) a property that would, if this Act were read without reference to the definition real or immovable property in subsection 122.1(1), be a real or immovable property situated in Canada,  
  (b) a Canadian resource property, 
  (c) a timber resource property, 
  (d) a share of the capital stock of a corporation, an income or a capital interest in a trust or an interest in a partnership — other than a taxable Canadian corporation, a SIFT trust (determined without reference to subsection 122.1(2)), a SIFT partnership (determined without reference to subsection 197(8)) or a real estate investment trust (as defined in subsection 122.1(1)) — if more than 50% of the fair market value of the share or interest is derived directly or indirectly from one or any combination of properties described in paragraphs (a) to (c), or 
  (e) any right to or interest in — or, for civil law, any right to or in — any property described in any of paragraphs (a) to (d); ( bien canadien immeuble, réel ou minier)   
  *Canadian resident partnership* means a partnership that, at any time in respect of which the expression is relevant,  
  (a) is a Canadian partnership, 
  (b) would, if it were a corporation, be resident in Canada (including, for greater certainty, a partnership that has its central management and control in Canada), or 
  (c) was formed under the laws of a province; ( société de personnes résidant au Canada)   
  *Canadian resource property* has the meaning assigned by subsection 66(15); (avoir minier canadien)   
  *capital dividend* has the meaning assigned by section 83; (dividende en capital)   
  *capital gain* for a taxation year from the disposition of any property has the meaning assigned by section 39; (gain en capital)   
  *capital interest* of a taxpayer in a trust has the meaning assigned by subsection 108(1); (participation au capital)   
  *capital loss* for a taxation year from the disposition of any property has the meaning assigned by section 39; (perte en capital)   
  *capital property* has the meaning assigned by section 54; (immobilisation)   
  *cash method* has the meaning assigned by subsection 28(1); (méthode de comptabilité de caisse)   
  *cemetery care trust* has the meaning assigned by subsection 148.1(1); (fiducie pour l’entretien d’un cimetière)   
  *common-law partner*, with respect to a taxpayer at any time, means a person who cohabits at that time in a conjugal relationship with the taxpayer and  
  (a) has so cohabited throughout the 12-month period that ends at that time, or 
  (b) would be the parent of a child of whom the taxpayer is a parent, if this Act were read without reference to paragraphs 252(1)(c) and (e) and subparagraph 252(2)(a)(iii), and, for the purpose of this definition, where at any time the taxpayer and the person cohabit in a conjugal relationship, they are, at any particular time after that time, deemed to be cohabiting in a conjugal relationship unless they were living separate and apart at the particular time for a period of at least 90 days that includes the particular time because of a breakdown of their conjugal relationship; ( conjoint de fait)   
  *common-law partnership* means the relationship between two persons who are common-law partners of each other; (union de fait)   
  *common share* means a share the holder of which is not precluded on the reduction or redemption of the capital stock from participating in the assets of the corporation beyond the amount paid up on that share plus a fixed premium and a defined rate of dividend; (action ordinaire)   
  *controlled foreign affiliate* has, except as expressly otherwise provided in this Act, the meaning assigned by subsection 95(1); (société étrangère affiliée contrôlée)   
  *corporation* includes an incorporated company; (société)   
  *corporation incorporated in Canada* includes a corporation incorporated in any part of Canada before or after it became part of Canada; (société constituée au Canada)   
  *cost amount* to a taxpayer of any property at any time means, except as expressly otherwise provided in this Act,  
  (a) where the property was depreciable property of the taxpayer of a prescribed class, the amount that would be that proportion of the undepreciated capital cost to the taxpayer of property of that class at that time that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not been disposed of by the taxpayer before that time if subsection 13(7) were read without reference to paragraph 13(7)(e) and if 
  (i) paragraph 13(7)(b) were read as follows: 
  “(b) where a taxpayer, having acquired property for some other purpose, has commenced at a later time to use it for the purpose of gaining or producing income, the taxpayer shall be deemed to have acquired it at that later time at a capital cost to the taxpayer equal to the fair market value of the property at that later time;”, and 
  (ii) subparagraph 13(7)(d)(i) were read as follows: 
  “(i) if the use regularly made by the taxpayer of the property for the purpose of gaining or producing income has increased, the taxpayer shall be deemed to have acquired at that time depreciable property of that class at a capital cost equal to the proportion of its fair market value at that time that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and” 
  (b) where the property was capital property (other than depreciable property) of the taxpayer, its adjusted cost base to the taxpayer at that time, 
  (c) where the property was property described in an inventory of the taxpayer, its value at that time as determined for the purpose of computing the taxpayer’s income, 
  (c.1) where the taxpayer was a financial institution in its taxation year that includes that time and the property was a mark-to-market property for the year, the cost to the taxpayer of the property, 
  (d)  [Repealed, 2016, c. 12, s. 63]  
  (d.1) where the property was a loan or lending asset (other than a net income stabilization account or a property in respect of which paragraph (b), (c), (c.1) or (d.2) applies), the amortized cost of the property to the taxpayer at that time, 
  (d.2) where the taxpayer was a financial institution in its taxation year that includes that time and the property was a specified debt obligation (other than a mark-to-market property for the year), the tax basis of the property to the taxpayer at that time, 
  (e) where the property was a right of the taxpayer to receive an amount, other than property that is 
  (i) a debt the amount of which was deducted under paragraph 20(1)(p) in computing the taxpayer’s income for a taxation year that ended before that time, 
  (ii) a net income stabilization account, 
  (iii) a right in respect of which paragraph (b), (c), (c.1), (d.1) or (d.2) applies, or 
  (iv) a right to receive production (as defined in subsection 18.1(1)) to which a matchable expenditure (as defined in subsection 18.1(1)) relates, the amount the taxpayer has a right to receive, 
  (e.1) where the property was a policy loan (within the meaning assigned by subsection 138(12)) of an insurer, nil, 
  (e.2) where the property is an interest of a beneficiary under a qualifying environmental trust, nil, and 
  (f) in any other case, the cost to the taxpayer of the property as determined for the purpose of computing the taxpayer’s income, except to the extent that that cost has been deducted in computing the taxpayer’s income for any taxation year ending before that time; and, for the purposes of this definition, financial institution, mark-to-market property and specified debt obligation have the meanings assigned by subsection 142.2(1), and tax basis has the meaning assigned by subsection 142.4(1); (coût indiqué)   
  *credit union* has the meaning assigned by subsection 137(6), except for the purposes of Part XV.1; (caisse de crédit)   
  *cumulative eligible capital* [Repealed, 2016, c. 12, s. 63]   
  *death benefit* means the total of all amounts received by a taxpayer in a taxation year on or after the death of an employee in recognition of the employee’s service in an office or employment minus  
  (a) where the taxpayer is the only person who has received such an amount and who is a surviving spouse or common-law partner of the employee (which person is, in this definition, referred to as the “surviving spouse or common-law partner”), the lesser of 
  (i) the total of all amounts so received by the taxpayer in the year, and 
  (ii) the amount, if any, by which $10,000 exceeds the total of all amounts received by the taxpayer in preceding taxation years on or after the death of the employee in recognition of the employee’s service in an office or employment, or 
  (b) where the taxpayer is not the surviving spouse or common-law partner of the employee, the lesser of 
  (i) the total of all amounts so received by the taxpayer in the year, and 
  (ii) that proportion of 
  (A) the amount, if any, by which $10,000 exceeds the total of all amounts received by the surviving spouse or common-law partner of the employee at any time on or after the death of the employee in recognition of the employee’s service in an office or employment that 
  (B) the amount described in subparagraph (i) is of 
  (C) the total of all amounts received by all taxpayers other than the surviving spouse or common-law partner of the employee at any time on or after the death of the employee in recognition of the employee’s service in an office or employment; ( prestation consécutive au décès)   
  *deferred amount* at the end of a taxation year under a salary deferral arrangement in respect of a taxpayer means  
  (a) in the case of a trust governed by the arrangement, any amount that a person has a right under the arrangement at the end of the year to receive after the end of the year where the amount has been received, is receivable or may at any time become receivable by the trust as, on account or in lieu of salary or wages of the taxpayer for services rendered in the year or a preceding taxation year, and 
  (b) in any other case, any amount that a person has a right under the arrangement at the end of the year to receive after the end of the year, and, for the purposes of this definition, a right under the arrangement shall include a right that is subject to one or more conditions unless there is a substantial risk that any one of those conditions will not be satisfied; ( montant différé)   
  *deferred profit sharing plan* has the meaning assigned by subsection 147(1); (régime de participation différée aux bénéfices)   
  *depreciable property* has the meaning assigned by subsection 13(21); (bien amortissable)   
  *derivative forward agreement*, of a taxpayer, means an agreement entered into by the taxpayer to purchase or sell a capital property if  
  (a) the term of the agreement exceeds 180 days or the agreement is part of a series of agreements with a term that exceeds 180 days, 
  (b) in the case of a purchase agreement, the difference between the fair market value of the property delivered on settlement, including partial settlement, of the agreement and the amount paid for the property is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than 
  (i) revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property unless 
  (A) the property is 
  (I) a Canadian security (as defined in subsection 39(6)), or  
  (II) an interest in a partnership the fair market value of which is derived, in whole or in part, from a Canadian security, 
  (B) the agreement is an agreement to acquire property from 
  (I) a tax-indifferent investor, or 
  (II) a financial institution (as defined in subsection 142.2(1)), and  
  (C) it can reasonably be considered that one of the main purposes of the series of transactions or events, or any transaction or event in the series, of which the agreement is part is for all or any portion of the capital gain on a disposition (other than a disposition by the seller to the taxpayer under the agreement) of a Canadian security referred to in clause (A) — as part of the same series of transactions or events — to be attributable to amounts paid or payable on the Canadian security by the issuer of the Canadian security during the term of the agreement as 
  (I) interest, 
  (II) dividends, or 
  (III) income of a trust other than income paid out of the taxable capital gains of the trust, 
  (ii) if the purchase price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, or 
  (iii) an underlying interest that relates to a purchase of currency, if it can reasonably be considered that the purchase is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and 
  (c) in the case of a sale agreement, 
  (i) the difference between the sale price of the property and the fair market value of the property at the time the agreement is entered into by the taxpayer is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than 
  (A) revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property, 
  (B) if the sale price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, or 
  (C) an underlying interest that relates to a sale of currency, if it can reasonably be considered that the sale is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and 
  (ii) the agreement is part of an arrangement that has the effect — or would have the effect if the agreements that are part of the arrangement and that were entered into by persons or partnerships not dealing at arm’s length with the taxpayer were entered into by the taxpayer instead of non-arm’s length persons or partnerships — of eliminating a majority of the taxpayer’s risk of loss and opportunity for gain or profit in respect of the property for a period of more than 180 days; ( contrat dérivé à terme)   
  *designated insurance property* has the meaning assigned by subsection 138(12); (bien d’assurance désigné)   
  *designated stock exchange* means a stock exchange, or that part of a stock exchange, for which a designation by the Minister of Finance under section 262 is in effect; (bourse de valeurs désignée)   
  *disposition* of any property, except as expressly otherwise provided, includes  
  (a) any transaction or event entitling a taxpayer to proceeds of disposition of the property, 
  (b) any transaction or event by which, 
  (i) where the property is a share, bond, debenture, note, certificate, mortgage, hypothecary claim, agreement of sale or similar property, or interest, or for civil law a right, in it, the property is in whole or in part redeemed, acquired or cancelled, 
  (ii) where the property is a debt or any other right to receive an amount, the debt or other right is settled or cancelled, 
  (iii) where the property is a share, the share is converted because of an amalgamation or merger, 
  (iv) where the property is an option to acquire or dispose of property, the option expires, and 
  (v) a trust, that can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property (unless the trust is described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1)), ceases to act as agent for a beneficiary under the trust with respect to any dealing with any of the trust’s property,  
  (b.1) where the property is an interest in a life insurance policy, a disposition within the meaning of section 148, 
  (c) any transfer of the property to a trust or, where the property is property of a trust, any transfer of the property to any beneficiary under the trust, except as provided by paragraph (f) or (k), and 
  (d) where the property is, or is part of, a taxpayer’s capital interest in a trust, except as provided by paragraph (h) or (i), a payment made after 1999 to the taxpayer from the trust that can reasonably be considered to have been made because of the taxpayer’s capital interest in the trust, but does not include 
  (e) any transfer of the property as a consequence of which there is no change in the beneficial ownership of the property, except where the transfer is 
  (i) from a person or a partnership to a trust for the benefit of the person or the partnership, 
  (ii) from a trust to a beneficiary under the trust, or 
  (iii) from one trust maintained for the benefit of one or more beneficiaries under the trust to another trust maintained for the benefit of the same beneficiaries, 
  (f) any transfer of the property as a consequence of which there is no change in the beneficial ownership of the property, where 
  (i) the transferor and the transferee are trusts that are, at the time of the transfer, resident in Canada, 
  (ii)  [Repealed, 2013, c. 34, s. 358]  
  (iii) the transferee does not receive the property in satisfaction of the transferee’s right as a beneficiary under the transferor trust, 
  (iv) the transferee held no property immediately before the transfer (other than property the cost of which is not included, for the purposes of this Act, in computing a balance of undeducted outlays, expenses or other amounts in respect of the transferee), 
  (v) the transferee does not file a written election with the Minister on or before the filing-due date for its taxation year in which the transfer is made (or on such later date as is acceptable to the Minister) that this paragraph not apply, 
  (vi) if the transferor is an amateur athlete trust, a cemetery care trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (in this paragraph having the meaning assigned by section 138.1), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the transferee is the same type of trust, and 
  (vii) the transfer results, or is part of a series of transactions or events that results, in the transferor ceasing to exist and, immediately before the time of the transfer or the beginning of that series, as the case may be, the transferee never held any property or held only property having a nominal value, 
  (g)  [Repealed, 2005, c. 30, s. 17]  
  (h) where the property is part of a capital interest of a taxpayer in a trust (other than a personal trust or a trust prescribed for the purpose of subsection 107(2)) that is described by reference to units issued by the trust, a payment after 1999 from the trust in respect of the capital interest, where the number of units in the trust that are owned by the taxpayer is not reduced because of the payment, 
  (i) where the property is a taxpayer’s capital interest in a trust, a payment to the taxpayer after 1999 in respect of the capital interest to the extent that the payment 
  (i) is out of the income of the trust (determined without reference to subsection 104(6)) for a taxation year or out of the capital gains of the trust for the year, if the payment was made in the year or the right to the payment was acquired by the taxpayer in the year, or 
  (ii) is in respect of an amount designated in respect of the taxpayer by the trust under subsection 104(20), 
  (j) any transfer of the property for the purpose only of securing a debt or a loan, or any transfer by a creditor for the purpose only of returning property that had been used as security for a debt or a loan, 
  (k) any transfer of the property to a trust as a consequence of which there is no change in the beneficial ownership of the property, where the main purpose of the transfer is 
  (i) to effect payment under a debt or loan, 
  (ii) to provide assurance that an absolute or contingent obligation of the transferor will be satisfied, or 
  (iii) to facilitate either the provision of compensation or the enforcement of a penalty, in the event that an absolute or contingent obligation of the transferor is not satisfied, 
  (l) any issue of a bond, debenture, note, certificate, mortgage or hypothecary claim, 
  (m) any issue by a corporation of a share of its capital stock, or any other transaction that, but for this paragraph, would be a disposition by a corporation of a share of its capital stock, and 
  (n) a redemption, an acquisition or a cancellation of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this paragraph as the “security”) of the capital stock of a corporation (referred to in this paragraph as the “issuing corporation”) held by another corporation (referred to in this paragraph as the “disposing corporation”) if 
  (i) the redemption, acquisition or cancellation occurs as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this paragraph as the “new corporation”), 
  (ii) the merger or combination 
  (A) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) does not apply, 
  (B) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) as the parent and the subsidiary, respectively, 
  (C) is a foreign merger (within the meaning assigned by subsection 87(8.1)), or 
  (D) would be a foreign merger (within the meaning assigned by subsection 87(8.1)) if subparagraph 87(8.1)(c)(ii) were read without reference to the words “that was resident in a country other than Canada”, and 
  (iii) either 
  (A) the disposing corporation receives no consideration for the security, or 
  (B) in the case where the merger or combination is described by clause (ii)(C) or (D), the disposing corporation receives no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, becomes property of the new corporation; ( disposition)   
  *dividend* includes a stock dividend (other than a stock dividend that is paid to a corporation or to a mutual fund trust by a non-resident corporation); (dividende)   
  *dividend rental arrangement*, of a person or a partnership (each of which is referred to in this definition as the person), means  
  (a) any arrangement entered into by the person where it can reasonably be considered that 
  (i) the main reason for the person entering into the arrangement was to enable the person to receive a dividend on a share of the capital stock of a corporation, other than a dividend on a prescribed share or on a share described in paragraph (e) of the definition term preferred share in this subsection or an amount deemed by subsection 15(3) to be received as a dividend on a share of the capital stock of a corporation, and  
  (ii) under the arrangement someone other than that person bears the risk of loss or enjoys the opportunity for gain or profit with respect to the share in any material respect, 
  (b) for greater certainty, any arrangement under which 
  (i) a corporation at any time receives on a particular share a taxable dividend that would, if this Act were read without reference to subsection 112(2.3), be deductible in computing its taxable income or taxable income earned in Canada for the taxation year that includes that time, and 
  (ii) the corporation or a partnership of which the corporation is a member is obligated to pay to another person or partnership an amount 
  (A) that is compensation for 
  (I) the dividend described in subparagraph (i), 
  (II) a dividend on a share that is identical to the particular share, or 
  (III) a dividend on a share that, during the term of the arrangement, can reasonably be expected to provide to a holder of the share the same or substantially the same proportionate risk of loss or opportunity for gain as the particular share, and 
  (B) that, if paid, would be deemed by subsection 260(5.1) to have been received by that other person or partnership, as the case may be, as a taxable dividend, 
  (b.1) any specified hedging transaction, in respect of a DRA share of the person, 
  (c) any synthetic equity arrangement (other than a specified hedging transaction), in respect of a DRA share of the person, and 
  (d) one or more agreements or arrangements (other than agreements or arrangements described in paragraph (c)) entered into by the person, the connected person referred to in paragraph (a) of the definition synthetic equity arrangement or, for greater certainty, by any combination of the person and connected persons, if  
  (i) the agreements or arrangements have the effect, or would have the effect if each agreement or arrangement entered into by a connected person were entered into by the person, of eliminating all or substantially all of the person’s risk of loss and opportunity for gain or profit in respect of a DRA share of the person, 
  (ii) as part of a series of transactions that includes these agreements or arrangements, a tax-indifferent investor, or a group of tax-indifferent investors each member of which is affiliated with every other member, obtains all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share or an identical share (as defined in subsection 112(10)), and  
  (iii) it is reasonable to conclude that one of the purposes of the series of transactions is to obtain the result described in subparagraph (ii); ( mécanisme de transfert de dividendes)   
  *DRA share*, of a person or partnership, means a share  
  (a) that is owned by the person or partnership, 
  (b) in respect of which the person or partnership is deemed to have received a dividend under subsection 260(5.1) and is provided with all or substantially all of the risk of loss and opportunity for gain or profit under an agreement or arrangement, 
  (c) that is held by a trust under which the person or partnership is a beneficiary and in respect of which the person or partnership is deemed to have received a dividend as a result of a designation by the trust under subsection 104(19), 
  (d) in respect of which the person or partnership is deemed to have received a dividend under subsection 82(2), or 
  (e) in any other case, in respect of which the person or partnership is (or would be in the absence of subsection 112(2.3)) entitled to a deduction under subsection 112(1) in respect of dividends received on the share; ( action de mécanisme de transfert de dividendes ou AMTD)   
  *eligible capital amount* [Repealed, 2016, c. 12, s. 63]   
  *eligible capital expenditure* [Repealed, 2016, c. 12, s. 63]   
  *eligible capital property* [Repealed, 2016, c. 12, s. 63]   
  *eligible dividend* has the meaning assigned by subsection 89(1); (dividende déterminé)   
  *eligible funeral arrangement* has the meaning assigned by subsection 148.1(1); (arrangement de services funéraires)   
  *eligible relocation* means a relocation of a taxpayer in respect of which the following apply:  
  (a) the relocation occurs to enable the taxpayer 
  (i) to carry on a business or to be employed at a location (in section 62 and this definition referred to as “the new work location”) that is, except if the taxpayer is absent from but resident in Canada, in Canada, or 
  (ii) to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and this definition referred to as “the new work location”), 
  (b) the taxpayer ordinarily resided before the relocation at a residence (in section 62 and this definition referred to as “the old residence”) and ordinarily resided after the relocation at a residence (in section 62 and this definition referred to as “the new residence”), 
  (c) except if the taxpayer is absent from but resident in Canada, both the old residence and the new residence are in Canada, and 
  (d) the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location; ( réinstallation admissible)   
  *emissions allowance* means an allowance, credit or similar instrument that represents a unit of emissions that can be used to satisfy a requirement under the laws of Canada or a province governing emissions of a regulated substance, such as greenhouse gas emissions; (droit d’émissions)   
  *emissions obligation* means an obligation to surrender an emissions allowance, or an obligation that can otherwise be satisfied through the use of an emissions allowance, under a law of Canada or a province governing emissions of a regulated substance; (obligation d’émissions)   
  *employed* means performing the duties of an office or employment; (employé (être))   
  *employee* includes officer; (employé)   
  *employee benefit plan* means an arrangement under which contributions are made by an employer or by any person with whom the employer does not deal at arm’s length to another person (in this Act referred to as the “custodian” of an employee benefit plan) and under which one or more payments are to be made to or for the benefit of employees or former employees of the employer or persons who do not deal at arm’s length with any such employee or former employee (other than a payment that, if section 6 were read without reference to subparagraph 6(1)(a)(ii) and paragraph 6(1)(g), would not be required to be included in computing the income of the recipient or of an employee or former employee), but does not include any portion of the arrangement that is  
  (a) a fund, plan or trust referred to in subparagraph 6(1)(a)(i) or paragraph 6(1)(d) or (f), 
  (b) a trust described in paragraph 149(1)(y), 
  (c) an employee trust, 
  (c.1) a salary deferral arrangement, in respect of a taxpayer, under which deferred amounts are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income, 
  (c.2) a retirement compensation arrangement, 
  (d) an arrangement the sole purpose of which is to provide education or training for employees of the employer to improve their work or work-related skills and abilities, or 
  (e) a prescribed arrangement; ( régime de prestations aux employés)   
  *employee life and health trust* has the meaning assigned by subsection 144.1(2); (fiducie de soins de santé au bénéfice d’employés)   
  *employee trust* means an arrangement (other than an employees profit sharing plan, a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”) established after 1979  
  (a) under which payments are made by one or more employers to a trustee in trust solely to provide to employees or former employees of 
  (i) the employer, or 
  (ii) a person with whom the employer does not deal at arm’s length, benefits the right to which vests at the time of each such payment and the amount of which does not depend on the individual’s position, performance or compensation as an employee, 
  (b) under which the trustee has, since the commencement of the arrangement, each year allocated to individuals who are beneficiaries thereunder, in such manner as is reasonable, the amount, if any, by which the total of all amounts each of which is 
  (i) an amount received under the arrangement by the trustee in the year from an employer or from a person with whom the employer does not deal at arm’s length, 
  (ii) the amount that would, if this Act were read without reference to subsection 104(6), be the income of the trust for the year (other than a taxable capital gain from the disposition of property) from a property or other source other than a business, or 
  (iii) a capital gain of the trust for the year from the disposition of property exceeds the total of all amounts each of which is 
  (iv) the loss of the trust for the year (other than an allowable capital loss from the disposition of property) from a property or other source other than a business, or 
  (v) a capital loss of the trust for the year from the disposition of property, and 
  (c) the trustee of which has elected to qualify the arrangement as an employee trust in its return of income filed within 90 days from the end of its first taxation year; ( fiducie d’employés)   
  *employees profit sharing plan* has the meaning assigned by subsection 144(1); (régime de participation des employés aux bénéfices)   
  *employer*, in relation to an officer, means the person from whom the officer receives the officer’s remuneration; (employeur)   
  *employment* means the position of an individual in the service of some other person (including Her Majesty or a foreign state or sovereign) and 
  *servant* or 
  *employee* means a person holding such a position; (emploi)   
  *estate* has the meaning assigned by subsection 104(1) and includes, for civil law, a succession; (succession)   
  *estate of the bankrupt* has the same meaning as in the Bankruptcy and Insolvency Act ; (actifs du failli)   
  *excessive eligible dividend designation* has the meaning assigned by subsection 89(1); (désignation excessive de dividende déterminé)   
  *exempt income* means property received or acquired by a person in such circumstances that it is, because of any provision of Part I, not included in computing the person’s income, but does not include a dividend on a share or a support amount (as defined in subsection 56.1(4)); (revenu exonéré)   
  *farming* includes tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming; (agriculture)   
  *farm loss* has the meaning assigned by subsection 111(8); (perte agricole)   
  *federal credit union* has the meaning assigned by section 2 of the Bank Act ; (coopérative de crédit fédérale)   
  *filing-due date* for a taxation year of a taxpayer means the day on or before which the taxpayer’s return of income under Part I for the year is required to be filed or would be required to be filed if tax under that Part were payable by the taxpayer for the year; (date d’échéance de production)   
  *first home savings account* or 
  *FHSA* has the same meaning as in subsection 146.6(1); (compte d’épargne libre d’impôt pour l’achat d’une première propriété ou CELIAPP)   
  *fiscal period* [Repealed, 1996, c. 21, s. 60]   
  *fishing* includes fishing for or catching shellfish, crustaceans and marine animals but does not include an office or employment under a person engaged in the business of fishing; (pêche)   
  *flow-through share* has the meaning assigned by subsection 66(15); (action accréditive)   
  *foreign accrual property income* has the meaning assigned by section 95; (revenu étranger accumulé, tiré de biens)   
  *foreign affiliate* has the meaning assigned by subsection 95(1); (société étrangère affiliée)   
  *foreign currency* means currency of a country other than Canada; (monnaie étrangère)   
  *foreign currency debt* has the meaning assigned by subsection 111(8); (dette en monnaie étrangère)   
  *foreign exploration and development expenses* has the meaning assigned by subsection 66(15); (frais d’exploration et d’aménagement à l’étranger)   
  *foreign resource expense* has the meaning assigned by subsection 66.21(1); (frais relatifs à des ressources à l’étranger)   
  *foreign resource pool expenses* of a taxpayer means the taxpayer’s foreign resource expenses in respect of all countries and the taxpayer’s foreign exploration and development expenses; (frais globaux relatifs à des ressources à l’étranger)   
  *foreign resource property* has the meaning assigned by subsection 66(15), and a foreign resource property in respect of a country means a foreign resource property that is  
  (a) a right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in that country, 
  (b) a right, licence or privilege to 
  (i) store underground petroleum, natural gas or related hydrocarbons in that country, or 
  (ii) prospect, explore, drill or mine for minerals in a mineral resource in that country, 
  (c) an oil or gas well in that country or real or immovable property in that country the principal value of which depends on its petroleum or natural gas content (but not including depreciable property), 
  (d) any right to a rental or royalty computed by reference to the amount or value of production from an oil or gas well in that country, or from a natural accumulation of petroleum or natural gas in that country, if the payer of the rental or royalty has an interest in, or for civil law a right in, the well or accumulation, as the case may be, and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the well or accumulation, 
  (e) any right to a rental or royalty computed by reference to the amount or value of production from a mineral resource in that country, if the payer of the rental or royalty has an interest in, or for civil law a right in, the mineral resource and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the mineral resource, 
  (f) a real or immovable property in that country the principal value of which depends upon its mineral resource content (but not including depreciable property), 
  (g) a right to or an interest in — or for civil law a right to or in — any property described in any of paragraphs (a) to (e), other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or 
  (h) an interest in real property described in paragraph (f) or a real right in an immovable described in that paragraph, other than an interest or a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership; ( avoir minier étranger)   
  *foreign retirement arrangement* means a prescribed plan or arrangement; (mécanisme de retraite étranger)   
  *former business property*, in respect of a taxpayer, means a capital property of the taxpayer that was used by the taxpayer or a person related to the taxpayer primarily for the purpose of gaining or producing income from a business, and that was real or immovable property of the taxpayer, an interest of the taxpayer in real property, a right of the taxpayer in an immovable or a property that is the subject of an election under subsection 13(4.2), but does not include  
  (a) a rental property of the taxpayer, 
  (b) land subjacent to a rental property of the taxpayer, 
  (c) land contiguous to land referred to in paragraph (b) that is a parking area, driveway, yard or garden or that is otherwise necessary for the use of the rental property referred to in that paragraph, or 
  (d) a leasehold interest in any property described in paragraphs (a) to (c), and for the purpose of this definition, 
  *rental property* of a taxpayer means real or immovable property owned by the taxpayer, whether jointly with another person or otherwise, and used by the taxpayer in the taxation year in respect of which the expression is being applied principally for the purpose of gaining or producing gross revenue that is rent (other than property leased by the taxpayer to a person related to the taxpayer and used by that related person principally for any other purpose), but, for greater certainty, does not include a property leased by the taxpayer or the related person to a lessee, in the ordinary course of a business of the taxpayer or the related person of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling or promoting the sale of the goods or services of the taxpayer or the related person; (ancien bien d’entreprise)   
  *fully collateralized arrangement* means a securities lending arrangement or a specified securities lending arrangement if, throughout the term of the arrangement, the borrower  
  (a) has provided the lender under the arrangement with money in an amount of, or securities described in paragraph (c) of the definition qualified security in subsection 260(1) that have a fair market value of, not less than 95% of the fair market value of the security that is transferred or lent under the arrangement, and  
  (b) is entitled to enjoy, directly or indirectly, the benefits of all or substantially all income derived from, and opportunity for gain in respect of, the money or securities provided; ( mécanisme entièrement garanti)   
  *functional currency* [Repealed, 2009, c. 2, s. 76]   
  *general rate income pool* has the meaning assigned by subsection 89(1); (compte de revenu à taux général)   
  *goods and services tax* means the tax payable under Part IX of the Excise Tax Act ; (taxe sur les produits et services)   
  *graduated rate estate*, of an individual at any time, means the estate that arose on and as a consequence of the individual’s death if  
  (a) that time is no more than 36 months after the death, 
  (b) the estate is at that time a testamentary trust, 
  (c) the individual’s Social Insurance Number (or if the individual had not, before the death, been assigned a Social Insurance Number, such other information as is acceptable to the Minister) is provided in the estate’s return of income under Part I for the taxation year that includes that time and for each of its earlier taxation years that ended after 2015, 
  (d) the estate designates itself as the graduated rate estate of the individual in its return of income under Part I for its first taxation year that ends after 2015, and 
  (e) no other estate designates itself as the graduated rate estate of the individual in a return of income under Part I for a taxation year that ends after 2015; ( succession assujettie à l’imposition à taux progressifs)   
  *grandfathered share* means  
  (a) a share of the capital stock of a corporation issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 pursuant to an agreement in writing entered into before that time, 
  (b) a share of the capital stock of a corporation issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 and before 1988 as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice filed before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 with a public authority pursuant to and in accordance with the securities legislation of the jurisdiction in which the shares are distributed, 
  (c) a share (in this paragraph referred to as the “new share”) of the capital stock of a corporation that is issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 in exchange for 
  (i) a share of a corporation that was issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 or is a grandfathered share, or 
  (ii) a debt obligation of a corporation that was 
  (A) issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, or 
  (B) issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 under an agreement in writing entered into before that time, or after that time and before 1988 as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice filed before that time with a public authority under and in accordance with the securities legislation of the jurisdiction in which the debt obligation is distributed, where the right to the exchange and all or substantially all the terms and conditions of the new share were established in writing before that time, and 
  (d) a share of a class of the capital stock of a Canadian corporation listed on a designated stock exchange that is issued after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 on the exercise of a right that 
  (i) was issued before that time, that was issued after that time under an agreement in writing entered into before that time or that was issued after that time and before 1988 as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice filed before that time with a public authority under and in accordance with the securities legislation of the jurisdiction in which the rights were distributed, and 
  (ii) was listed on a designated stock exchange, where all or substantially all the terms and conditions of the right and the share were established in writing before that time, except that a share that is deemed under the definition short-term preferred share, taxable preferred share or term preferred share in this subsection or under subsection 112(2.22) to have been issued at any time is deemed after that time not to be a grandfathered share for the purposes of that provision; (action de régime transitoire)   
  *gross revenue* of a taxpayer for a taxation year means the total of  
  (a) all amounts received in the year or receivable in the year (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income) otherwise than as or on account of capital, and 
  (b) all amounts (other than amounts referred to in paragraph (a)) included in computing the taxpayer’s income from a business or property for the year because of subsection 12(3) or (4) or section 12.2 of this Act or subsection 12(8) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952; (revenu brut)   
  *group term life insurance policy* means a group life insurance policy under which the only amounts payable by the insurer are  
  (a) amounts payable on the death or disability of individuals whose lives are insured in respect of, in the course of or because of, their office or employment or former office or employment, and 
  (b) policy dividends or experience rating refunds; ( police d’assurance-vie collective temporaire)   
  *highest individual percentage*, for a taxation year, means the highest percentage referred to in subsection 117(2) for the taxation year; (taux d’imposition supérieur pour l’année)   
  *home relocation loan* means a loan received by an individual or the individual’s spouse or common-law partner in circumstances where the individual has commenced employment at a location in Canada (in this definition referred to as the “new work location”) and by reason thereof has moved from the residence in Canada at which, before the move, the individual ordinarily resided (in this definition referred to as the “old residence”) to a residence in Canada at which, after the move, the individual ordinarily resided (in this definition referred to as the “new residence”) if  
  (a) the distance between the old residence and the new work location is at least 40 kilometres greater than the distance between the new residence and the new work location, 
  (b) the loan is used to acquire a dwelling, or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit a dwelling owned by the corporation, where the dwelling is for the habitation of the individual and is the individual’s new residence, 
  (c) the loan is received in the circumstances described in subsection 80.4(1), or would have been so received if subsection 80.4(1.1) had applied to the loan at the time it was received, and 
  (d) the loan is designated by the individual to be a home relocation loan, but in no case shall more than one loan in respect of a particular move, or more than one loan at any particular time, be designated as a home relocation loan by the individual; ( prêt à la réinstallation)   
  *income-averaging annuity contract* of an individual means, except for the purposes of section 61, a contract  
  (a) that is an income-averaging annuity contract within the meaning assigned by subsection 61(4), and 
  (b) in respect of which the individual has made a deduction under section 61 in computing the individual’s income for a taxation year; ( contrat de rente à versements invariables)   
  *income bond* or 
  *income debenture* of a corporation (in this definition referred to as the “issuing corporation”) means a bond or debenture in respect of which interest or dividends are payable only to the extent that the issuing corporation has made a profit before taking into account the interest or dividend obligation and that was issued  
  (a) before November 17, 1978, 
  (b) after November 16, 1978 and before 1980 pursuant to an agreement in writing to do so made before November 17, 1978 (in this definition referred to as an “established agreement”), or 
  (c) by an issuing corporation resident in Canada for a term that may not, in any circumstances, exceed 5 years, 
  (i) as part of a proposal to or an arrangement with its creditors that had been approved by a court under the Bankruptcy and Insolvency Act,  
  (ii) at a time when all or substantially all of its assets were under the control of a receiver, receiver-manager, sequestrator or trustee in bankruptcy, or 
  (iii) at a time when, by reason of financial difficulty, the issuing corporation or another corporation resident in Canada with which it does not deal at arm’s length was in default, or could reasonably be expected to default, on a debt obligation held by a person with whom the issuing corporation or the other corporation was dealing at arm’s length and the bond or debenture was issued either wholly or in substantial part and either directly or indirectly in exchange or substitution for that obligation or a part thereof, and, in the case of a bond or debenture issued after November 12, 1981, the proceeds from the issue may reasonably be regarded as having been used by the issuing corporation or a corporation with which it was not dealing at arm’s length in the financing of its business carried on in Canada immediately before the bond or debenture was issued, and, for the purposes of this definition, 
  (d) where the terms or conditions of an established agreement were amended after November 16, 1978, the agreement shall be deemed to have been made after that date, and 
  (e) where 
  (i) at any particular time the terms or conditions of a bond or debenture issued pursuant to an established agreement or of any agreement relating to such a bond or debenture have been changed, 
  (ii) under the terms or conditions of a bond or debenture acquired in the ordinary course of the business carried on by a specified financial institution or a partnership or trust (other than a testamentary trust) or under the terms or conditions of any agreement relating to any such bond or debenture (other than an agreement made before October 24, 1979 to which the issuing corporation or any person related thereto was not a party), the owner thereof could at any particular time after November 16, 1978 require, either alone or together with one or more taxpayers, the repayment, acquisition, cancellation or conversion of the bond or debenture otherwise than by reason of a failure or default under the terms or conditions of the bond or debenture or any agreement that related to, and was entered into at the time of, the issuance of the bond or debenture, 
  (iii) at any particular time after November 16, 1978, the maturity date of a bond or debenture was extended or the terms or conditions relating to the repayment of the principal amount thereof were changed, 
  (iv) at a particular time a specified financial institution (or a partnership or trust of which a specified financial institution or a person related to the institution is a member or beneficiary) acquires a bond or debenture that 
  (A) was issued before November 17, 1978 or under an established agreement, 
  (B) was issued to a person other than a corporation that was, at the time of issue, 
  (I) described in any of paragraphs (a) to (e) of the definition specified financial institution, or  
  (II) a corporation that was controlled by one or more corporations described in subclause (I) and, for the purpose of this subclause, one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length, 
  (C) was acquired from a person that was, at the time the person last acquired the bond or debenture and at the particular time, a person other than a corporation described in any of paragraphs (a) to (f) of that definition, and 
  (D) was acquired otherwise than under an agreement in writing made before October 24, 1979, or 
  (v) at a particular time after November 12, 1981, a specified financial institution (or a partnership or trust of which a specified financial institution or a person related to the institution is a member or beneficiary) acquires a bond or debenture that 
  (A) was not a bond or debenture referred to in paragraph (c), 
  (B) was acquired from a person that was, at the particular time, a corporation described in any of paragraphs (a) to (f) of the definition specified financial institution, and  
  (C) was acquired subject to or conditional on a guarantee agreement (within the meaning that would be assigned by subsection 112(2.2) if the reference in that subsection to a “share” were read as a reference to an “income bond” or “income debenture”) that was entered into after November 12, 1981, the bond or debenture shall, for the purposes of determining at any time after the particular time whether it is an income bond or income debenture, be deemed to have been issued at the particular time otherwise than pursuant to an established agreement; ( obligation à intérêt conditionnel)   
  *income interest* of a taxpayer in a trust has the meaning assigned by subsection 108(1); (participation au revenu)   
  *indexed debt obligation* means a debt obligation the terms or conditions of which provide for an adjustment to an amount payable in respect of the obligation for a period during which the obligation was outstanding that is determined by reference to a change in the purchasing power of money; (titre de créance indexé)   
  *individual* means a person other than a corporation; (particulier)   
  *insurance corporation* means a corporation that carries on an insurance business; (compagnie d’assurance)   
  *insurance policy* includes a life insurance policy; (police d’assurance)   
  *insurer* has the meaning assigned by this subsection to the expression insurance corporation ; (assureur)   
  *international shipping* means the operation of a ship owned or leased by a person or partnership (in this definition referred to as the “operator”) that is used, either directly or as part of a pooling arrangement, primarily in transporting passengers or goods in international traffic — determined as if, except where paragraph (c) of the definition international traffic in this subsection applies, any port or other place on the Great Lakes or St. Lawrence River is in Canada — including the chartering of the ship, provided that one or more persons related to the operator (if the operator and each such person is a corporation), or persons or partnerships affiliated with the operator (in any other case), has complete possession, control and command of the ship, and any activity incident to or pertaining to the operation of the ship, but does not include  
  (a) the offshore storing or processing of goods, 
  (b) fishing, 
  (c) laying cable, 
  (d) salvaging, 
  (e) towing, 
  (f) tug-boating, 
  (g) offshore oil and gas activities (other than the transportation of oil and gas), including exploration and drilling activities, 
  (h) dredging, or 
  (i) leasing a ship by a lessor to a lessee that has complete possession, control and command of the ship, unless the lessor or a corporation, trust or partnership affiliated with the lessor has an eligible interest (as defined in subsection 250(6.04)) in the lessee; ( transport maritime international)   
  *international traffic* means, in respect of a person or partnership carrying on the business of transporting passengers or goods, a voyage made in the course of that business if the principal purpose of the voyage is to transport passengers or goods  
  (a) from Canada to a place outside Canada, 
  (b) from a place outside Canada to Canada, or 
  (c) from a place outside Canada to another place outside Canada; ( transport international)   inter vivos trust has the meaning assigned by subsection 108(1); (fiducie non testamentaire)   
  *inventory* means a description of property the cost or value of which is relevant in computing a taxpayer’s income from a business for a taxation year or would have been so relevant if the income from the business had not been computed in accordance with the cash method and includes  
  (a) with respect to a farming business, all of the livestock held in the course of carrying on the business, and 
  (b) an emissions allowance; ( inventaire)   
  *investment corporation* has the meaning assigned by subsection 130(3); (société de placement)   
  *investment tax credit* has the meaning assigned by subsection 127(9); (crédit d’impôt à l’investissement)   
  *joint spousal or common-law partner trust* means a trust to which paragraph 104(4)(a) would apply if that paragraph were read without reference to subparagraph 104(4)(a)(iii) and clause 104(4)(a)(iv)(A); (fiducie mixte au profit de l’époux ou du conjoint de fait)   
  *lawyer* has the meaning assigned by subsection 232(1); (avocat)   
  *legal representative* of a taxpayer means a trustee in bankruptcy, an assignee, a liquidator, a curator, a receiver of any kind, a trustee, an heir, an administrator, an executor, a liquidator of a succession, a committee, or any other like person, administering, winding up, controlling or otherwise dealing in a representative or fiduciary capacity with the property that belongs or belonged to, or that is or was held for the benefit of, the taxpayer or the taxpayer’s estate; (représentant légal)   
  *lending asset* means a bond, debenture, mortgage, hypothecary claim, note, agreement of sale or any other indebtedness or a prescribed share, but does not include a prescribed property; (titre de crédit)   
  *LIA policy* means a life insurance policy (other than an annuity) where  
  (a) a particular person or partnership becomes obligated after March 20, 2013 to repay an amount to another person or partnership (in this definition referred to as the “lender”) at a time determined by reference to the death of a particular individual whose life is insured under the policy, and 
  (b) the lender is assigned an interest in 
  (i) the policy, and 
  (ii) an annuity contract the terms of which provide that payments are to continue for a period that ends no earlier than the death of the particular individual; ( police RAL)   
  *licensed annuities provider* has the meaning assigned by subsection 147(1); (fournisseur de rentes autorisé)   
  *life insurance business* includes  
  (a) an annuities business, and 
  (b) the business of issuing contracts all or any part of the issuer’s reserves for which vary in amount depending on the fair market value of a specified group of assets, carried on by a life insurance corporation or a life insurer; ( entreprise d’assurance-vie)   
  *life insurance capital dividend* has the meaning assigned by subsection 83(2.1); (dividende en capital d’assurance-vie)   
  *life insurance corporation* means a corporation that carries on a life insurance business that is not a business described in paragraph (a) or (b) of the definition 
  *life insurance business* in this subsection, whether or not the corporation also carries on a business described in either of those paragraphs; (compagnie d’assurance-vie)   
  *life insurance policy* has the meaning assigned by subsection 138(12); (police d’assurance-vie)   
  *life insurance policy in Canada* has the meaning assigned by subsection 138(12); (police d’assurance-vie au Canada)   
  *life insurer* has the meaning assigned by this subsection to the expression life insurance corporation ; (assureur sur la vie)   
  *limited partnership loss* has the meaning assigned by subsection 96(2.1); (perte comme commanditaire)   
  *limited-recourse amount* means an amount that is a limited-recourse amount under section 143.2; (montant à recours limité)   
  *listed international agreement* means  
  (a) the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada, or  
  (b) a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction; ( accord international désigné)   
  *listed personal property* has the meaning assigned by section 54; (biens meubles déterminés)   
  *low rate income pool* has the meaning assigned by subsection 89(1); (compte de revenu à taux réduit)   
  *majority-interest partner*, of a particular partnership at any time, means a person or partnership (in this definition referred to as the “taxpayer”)  
  (a) whose share of the particular partnership’s income from all sources for the last fiscal period of the particular partnership that ended before that time (or, if the particular partnership’s first fiscal period includes that time, for that period) would have exceeded 1/2 of the particular partnership’s income from all sources for that period if the taxpayer had held throughout that period each interest in the partnership that the taxpayer or a person affiliated with the taxpayer held at that time, or 
  (b) whose share, if any, together with the shares of every person with whom the taxpayer is affiliated, of the total amount that would be paid to all members of the particular partnership (otherwise than as a share of any income of the partnership) if it were wound up at that time exceeds 1/2 of that amount; ( associé détenant une participation majoritaire)   
  *mineral* includes ammonite gemstone, bituminous sands, calcium chloride, coal, kaolin, oil shale and silica, but does not include petroleum, natural gas or a related hydrocarbon not expressly referred to in this definition; (minéral)   
  *mineral resource* means  
  (a) a base or precious metal deposit, 
  (b) a coal deposit, 
  (c) a bituminous sands deposit or oil shale deposit, or 
  (d) a mineral deposit in respect of which 
  (i) the Minister of Natural Resources has certified that the principal mineral extracted is an industrial mineral contained in a non-bedded deposit, 
  (ii) the principal mineral extracted is ammonite gemstone, calcium chloride, diamond, gypsum, halite, kaolin or sylvite, or 
  (iii) the principal mineral extracted is silica that is extracted from sandstone or quartzite; ( matières minérales ressource minérale)   
  *minerals* [Repealed, 1994, c. 21, s. 109]   
  *mining reclamation trust* [Repealed, 1998, c. 19, s. 66]   
  *Minister* means the Minister of National Revenue; (ministre)   
  *money purchase limit* for a calendar year has the meaning assigned by subsection 147.1(1); (plafond des cotisations déterminées)   
  *mortgage investment corporation* has the meaning assigned by subsection 130.1(6); (société de placement hypothécaire)   
  *motor vehicle* means an automotive vehicle designed or adapted to be used on highways and streets but does not include  
  (a) a trolley bus, or 
  (b) a vehicle designed or adapted to be operated exclusively on rails; ( véhicule à moteur)   
  *mutual fund corporation* has the meaning assigned by subsection 131(8); (société de placement à capital variable)   
  *mutual fund trust* has the meaning assigned by subsection 132(6); (fiducie de fonds commun de placement)   
  *net capital loss* has the meaning assigned by subsection 111(8), except as otherwise expressly provided; (perte en capital nette)   
  *net corporate income tax rate* in respect of a SIFT trust or SIFT partnership for a taxation year means the amount, expressed as a decimal fraction, by which  
  (a) the percentage rate of tax provided under paragraph 123(1)(a) for the taxation year exceeds 
  (b) the total of 
  (i) the percentage that would, if the SIFT trust or SIFT partnership were a corporation, be its general rate reduction percent- age, within the meaning assigned by subsection 123.4(1), for the taxation year, and 
  (ii) the percentage deduction from tax provided under subsection 124(1) for the taxation year; ( taux net d’imposition du revenu des sociétés)   
  *net income stabilization account* means an account of a taxpayer  
  (a) under the net income stabilization account program under the Farm Income Protection Act, or  
  (b) that is a prescribed account; ( compte de stabilisation du revenu net)   
  *Newfoundland offshore area* has the meaning assigned to the expression offshore area by the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act, chapter 3 of the Statutes of Canada, 1987; (zone extracôtière de Terre-Neuve)   
  *NISA Fund No. 2* means the portion of a taxpayer’s net income stabilization account  
  (a) that is described in paragraph 8(2)(b) of the Farm Income Protection Act or is a prescribed fund, and  
  (b) that can reasonably be considered to be attributable to a program that allows the funds in the account to accumulate; ( second fonds du compte de stabilisation du revenu net)   
  *non-capital loss* has the meaning assigned by subsection 111(8); (perte autre qu’une perte en capital)   
  *non-portfolio property* has the same meaning as in subsection 122.1(1); (bien hors portefeuille)   
  *non-resident* means not resident in Canada; (non-résident)   
  *non-resident-owned investment corporation* has the meaning assigned by subsection 133(8); (société de placement appartenant à des non-résidents)   
  *Nova Scotia offshore area* has the meaning assigned to the expression offshore area by the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, chapter 28 of the Statutes of Canada, 1988; (zone extracôtière de la Nouvelle-écosse)   
  *office* means the position of an individual entitling the individual to a fixed or ascertainable stipend or remuneration and includes a judicial office, the office of a minister of the Crown, the office of a member of the Senate or House of Commons of Canada, a member of a legislative assembly or a member of a legislative or executive council and any other office, the incumbent of which is elected by popular vote or is elected or appointed in a representative capacity and also includes the position of a corporation director, and 
  *officer* means a person holding such an office; (charge)   
  *oil or gas well* means any well (other than an exploratory probe or a well drilled from below the surface of the earth) drilled for the purpose of producing petroleum or natural gas or of determining the existence, location, extent or quality of a natural accumulation of petroleum or natural gas, but, for the purpose of applying sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a) in respect of property acquired after March 6, 1996, does not include a well for the extraction of material from a deposit of bituminous sands or oil shales; (puits de pétrole ou de gaz)   
  *OSFI risk-weighting guidelines* means the guidelines, issued by the Superintendent of Financial Institutions under the authority of section 600 of the Bank Act, requiring an authorized foreign bank to provide to the Superintendent on a periodic basis a return of the bank’s risk-weighted on-balance sheet assets and off-balance sheet exposures, that apply as of August 8, 2000; (lignes directrices du BSIF sur la pondération des risques)   
  *overseas Canadian Forces school staff* means personnel employed outside Canada whose services are acquired by the Minister of National Defence under a prescribed order relating to the provision of educational facilities outside Canada; (personnel scolaire des Forces canadiennes d’outre-mer)   
  *paid-up capital* has the meaning assigned by subsection 89(1); (capital versé)   
  *Part VII refund* has the meaning assigned by subsection 192(2); (remboursement de la partie VII)   
  *Part VIII refund* has the meaning assigned by subsection 194(2); (remboursement de la partie VIII)   
  *passenger vehicle* means an automobile  
  (a) acquired after June 17, 1987, other than an automobile that is acquired after that date pursuant to an obligation in writing entered into before June 18, 1987 or that is a zero-emission vehicle, or 
  (b) leased under a lease entered into, extended or renewed after June 17, 1987; ( voiture de tourisme)   
  *past service pension adjustment* of a taxpayer for a calendar year in respect of an employer has the meaning assigned by regulation; (facteur d’équivalence pour services passés)   
  *pension adjustment* of a taxpayer for a calendar year in respect of an employer has the meaning assigned by regulation; (facteur d’équivalence)   
  *person*, or any word or expression descriptive of a person, includes any corporation, and any entity exempt, because of subsection 149(1), from tax under Part I on all or part of the entity’s taxable income and the heirs, executors, liquidators of a succession, administrators or other legal representatives of such a person, according to the law of that part of Canada to which the context extends; (personne)   
  *personal or living expenses* includes  
  (a) the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or common-law partnership or adoption, and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit, 
  (b) the expenses, premiums or other costs of a policy of insurance, annuity contract or other like contract if the proceeds of the policy or contract are payable to or for the benefit of the taxpayer or a person connected with the taxpayer by blood relationship, marriage or common-law partnership or adoption, and 
  (c) expenses of properties maintained by an estate or trust for the benefit of the taxpayer as one of the beneficiaries; ( frais personnels ou de subsistance)   
  *personal services business* has the meaning assigned by subsection 125(7); (entreprise de prestation de services personnels)   
  *personal trust* means a trust (other than a trust that is, or was at any time after 1999, a unit trust) that is  
  (a) a graduated rate estate, or 
  (b) a trust in which no beneficial interest was acquired for consideration payable directly or indirectly to 
  (i) the trust, or 
  (ii) any person or partnership that has made a contribution to the trust by way of transfer, assignment or other disposition of property; ( fiducie personnelle)   
  *personal-use property* has the meaning assigned by section 54; (biens à usage personnel)   
  *pooled pension plan* has the same meaning as in subsection 147.5(1); (régime de pension collectif)   
  *pooled registered pension plan* or 
  *PRPP* has the same meaning as in subsection 147.5(1); (régime de pension agréé collectif ou RPAC)   
  *post-1971 spousal or common-law partner trust* means a trust that would be described in paragraph 104(4)(a) if that paragraph were read without reference to subparagraph 104(4)(a)(iv); (fiducie au profit de l’époux ou du conjoint de fait postérieure à 1971)   
  *preferred share* means a share other than a common share; (action privilégiée)   
  *prescribed* means  
  (a) in the case of a form, the information to be given on a form or the manner of filing a form, authorized by the Minister, 
  (a.1) in the case of the manner of making or filing an election, authorized by the Minister, and 
  (b) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation; ( prescrit)   
  *principal amount*, in relation to any obligation, means the amount that, under the terms of the obligation or any agreement relating thereto, is the maximum amount or maximum total amount, as the case may be, payable on account of the obligation by the issuer thereof, otherwise than as or on account of interest or as or on account of any premium payable by the issuer conditional on the exercise by the issuer of a right to redeem the obligation before the maturity thereof; (principal)   
  *private corporation* has the meaning assigned by subsection 89(1); (société privée)   
  *private foundation* has the meaning assigned by section 149.1; (fondation privée)   
  *private health services plan* means  
  (a) a contract of insurance in respect of hospital expenses, medical expenses or any combination of such expenses, or 
  (b) a medical care insurance plan or hospital care insurance plan or any combination of such plans, except any such contract or plan established by or pursuant to 
  (c) a law of a province that establishes a health care insurance plan as defined in section 2 of the Canada Health Act, or  
  (d) an Act of Parliament or a regulation made thereunder that authorizes the provision of a medical care insurance plan or hospital care insurance plan for employees of Canada and their dependants and for dependants of members of the Royal Canadian Mounted Police and the regular force where such employees or members were appointed in Canada and are serving outside Canada; ( régime privé d’assurance-maladie)   
  *professional corporation* means a corporation that carries on the professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor; (société professionnelle)   
  *profit sharing plan* has the meaning assigned by subsection 147(1); (régime de participation aux bénéfices)   
  *property* means property of any kind whatever whether real or personal, immovable or movable, tangible or intangible, or corporeal or incorporeal and, without restricting the generality of the foregoing, includes  
  (a) a right of any kind whatever, a share or a chose in action, 
  (b) unless a contrary intention is evident, money, 
  (c) a timber resource property, 
  (d) the work in progress of a business that is a profession; and 
  (e) the goodwill of a business, as referred to in subsection 13(34); ( biens)   
  *provincial SIFT tax factor* [Repealed, 2008, c. 28, s. 34]   
  *provincial SIFT tax rate* of a SIFT trust or a SIFT partnership for a taxation year means the prescribed amount determined in respect of the SIFT trust or SIFT partnership for the taxation year; (taux d’imposition provincial des EIPD)   
  *public corporation* has the meaning assigned by subsection 89(1); (société publique)   
  *public foundation* has the meaning assigned by section 149.1; (fondation publique)   
  *public market* has the same meaning as in subsection 122.1(1); (marché public)   
  *qualified Canadian journalism organization*, at any time, means a corporation, partnership or trust that  
  (a) meets the following conditions: 
  (i) in the case of a corporation, 
  (A) it is incorporated under the laws of Canada or a province, 
  (B) the chairperson or other presiding officer, and at least 3/4 of the directors or other similar officers, are citizens of Canada, and 
  (C) it is resident in Canada, 
  (ii) in the case of a partnership, 
  (A) it is formed under the laws of a province, and 
  (B) individuals who are citizens of Canada or persons, or partnerships, described in any of subparagraphs (i) to (iii) hold interests in the partnership 
  (I) representing in value at least 75% of the total value of the partnership property, and 
  (II) that result in at least 75% of each income or loss of the partnership from any source being included in the determination of their incomes, 
  (iii) in the case of a trust, 
  (A) it is formed under the laws of a province, 
  (B) it is resident in Canada, and 
  (C) if interests as a beneficiary under the trust are held by one or more persons or partnerships, at least 75% of the fair market value of all interests as a beneficiary under the trust are held by 
  (I) individuals who are citizens of Canada, or 
  (II) persons or partnerships described in any of subparagraphs (i) to (iii), 
  (iv) it operates in Canada, including that its content is edited, designed and, except in the case of digital content, published in Canada, 
  (v) it is engaged in the production of original news content, which 
  (A) must be primarily focused on matters of general interest and reports of current events, including coverage of democratic institutions and processes, and 
  (B) must not be primarily focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment, 
  (vi) it regularly employs two or more journalists who deal at arm’s length with the organization in the production of its content, 
  (vii) it is not significantly engaged in the production of content 
  (A) to promote the interests, or report on the activities, of an organization, an association or its members, or 
  (B) for a government, Crown corporation or government agency, and 
  (C)  [Repealed, 2021, c. 23, s. 61]  
  (viii) it is not a Crown corporation, municipal corporation or government agency, and 
  (b) is designated at that time by the Minister and, for this purpose, the Minister shall take into account any recommendations of a body established for the purpose of this definition; ( organisation journalistique canadienne qualifiée)   
  *qualified donee* has the meaning assigned by subsection 149.1(1); (donataire reconnu)   
  *qualifying environmental trust* has the meaning assigned by subsection 211.6(1); (fiducie pour l’environnement admissible)   
  *qualifying share* has the meaning assigned by subsection 192(6); (action admissible)   
  *qualifying trust annuity* has the meaning assigned by subsection 60.011(2); (rente admissible de fiducie)   
  *recognized derivatives exchange* means a person or partnership recognized or registered under the securities laws of a province to carry on the business of providing the facilities necessary for the trading of options, swaps, futures contracts or other financial contracts or instruments whose market price, value, delivery obligations, payment obligations or settlement obligations are derived from, referenced to or based on an underlying interest; (bourse reconnue en instruments financiers dérivés)   
  *recognized stock exchange* means  
  (a) a designated stock exchange, and 
  (b) any other stock exchange, if that other stock exchange is located in Canada or in a country that is a member of the Organisation for Economic Co-operation and Development and that has a tax treaty with Canada; ( bourse de valeurs reconnue)   
  *record* includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form; (registre)   
  *refundable Part VII tax on hand* has the meaning assigned by subsection 192(3); (impôt de la partie VII en main remboursable)   
  *refundable Part VIII tax on hand* has the meaning assigned by subsection 194(3); (impôt de la partie VIII en main remboursable)   
  *registered Canadian amateur athletic association* means a Canadian amateur athletic association within the meaning assigned by subsection 149.1(1) that has applied to the Minister in prescribed form for registration, that has been registered and whose registration has not been revoked; (association canadienne enregistrée de sport amateur)   
  *registered charity* at any time means  
  (a) a charitable organization, private foundation or public foundation, within the meanings assigned by subsection 149.1(1), that is resident in Canada and was either created or established in Canada, or 
  (b) a branch, section, parish, congregation or other division of an organization or foundation described in paragraph (a), that is resident in Canada and was either created or established in Canada and that receives donations on its own behalf, that has applied to the Minister in prescribed form for registration and that is at that time registered as a charitable organization, private foundation or public foundation; ( organisme de bienfaisance enregistré)   
  *registered disability savings plan* or 
  *RDSP* has the same meaning as in subsection 146.4(1); (régime enregistré d’épargne-invalidité ou REEI)   
  *registered education savings plan* or 
  *RESP* has the same meaning as in subsection 146.1(1); (régime enregistré d’épargne-études ou REEE)   
  *registered investment* has the meaning assigned by subsection 204.4(1); (placement enregistré)   
  *registered journalism organization* means a qualifying journalism organization (as defined in subsection 149.1(1)) that has applied to the Minister in prescribed form for registration, that has been registered and whose registration has not been revoked; (organisation journalistique enregistrée)   
  *registered labour-sponsored venture capital corporation* means a corporation that was registered under subsection 204.81(1), the registration of which has not been revoked; (société agréée à capital de risque de travailleurs)   
  *registered national arts service organization*, at any time, means a national arts service organization that has been registered by the Minister under subsection 149.1(6.4), which registration has not been revoked; (organisme enregistré de services nationaux dans le domaine des arts)   
  *registered pension plan* means a pension plan (other than a pooled pension plan) that has been registered by the Minister for the purposes of this Act and whose registration has not been revoked; (régime de pension agréé)   
  *registered retirement income fund* or 
  *RRIF* have the same meaning as registered retirement income fund in subsection 146.3(1); (fonds enregistré de revenu de retraite ou FERR)   
  *registered retirement savings plan* or 
  *RRSP* have the same meaning as registered retirement savings plan in subsection 146(1); (régime enregistré d’épargne-retraite ou REER)   
  *registered securities dealer* means a person registered or licensed under the laws of a province to trade in securities, in the capacity of an agent or principal, without any restriction as to the types or kinds of securities in which that person may trade; (courtier en valeurs mobilières inscrit)   
  *registered supplementary unemployment benefit plan* has the meaning assigned by subsection 145(1); (régime enregistré de prestations supplémentaires de chômage)   
  *regulation* means a regulation made by the Governor in Council under this Act; (réglementaire)   
  *relevant factor* means  
  (a) for taxation years that end before 2010, 3, and 
  (b) for taxation years that end after 2009, the amount determined by the formula is the percentage set out in paragraph 123(1)(a), and is the percentage that is the corporation’s general rate reduction percentage (as defined by section 123.4) for the taxation year; ( facteur de référence)   
  *restricted farm loss* has the meaning assigned by subsection 31(1.1); (perte agricole restreinte)   
  *restricted financial institution* means  
  (a) a bank, 
  (b) a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (c) a credit union, 
  (d) an insurance corporation, 
  (e) a corporation whose principal business is the lending of money to persons with whom the corporation is dealing at arm’s length or the purchasing of debt obligations issued by such persons or a combination thereof, 
  (e.1) a corporation described in paragraph (g) of the definition financial institution in subsection 181(1), or  
  (f) a corporation that is controlled by one or more corporations described in any of paragraphs (a) to (e.1); ( institution financière véritable)   
  *retirement compensation arrangement* means a plan or arrangement under which contributions (other than payments made to acquire an interest in a life insurance policy) are made by an employer or former employer of a taxpayer, or by a person with whom the employer or former employer does not deal at arm’s length, to another person or partnership (in this definition and in Part XI.3 referred to as the “custodian”) in connection with benefits that are to be or may be received or enjoyed by any person on, after or in contemplation of any substantial change in the services rendered by the taxpayer, the retirement of the taxpayer or the loss of an office or employment of the taxpayer, but does not include  
  (a) a registered pension plan, 
  (a.1) a pooled registered pension plan, 
  (b) a disability or income maintenance insurance plan under a policy with an insurance corporation, 
  (c) a deferred profit sharing plan, 
  (d) an employees profit sharing plan, 
  (e) a registered retirement savings plan, 
  (f) an employee trust, 
  (f.1) an employee life and health trust, 
  (g) a group sickness or accident insurance plan, 
  (h) a supplementary unemployment benefit plan, 
  (i) a vacation pay trust described in paragraph 149(1)(y), 
  (j) a plan or arrangement established for the purpose of deferring the salary or wages of a professional athlete for his services as such with a team that participates in a league having regularly scheduled games (in this definition referred to as an “athlete’s plan”), where 
  (i) the plan or arrangement would, but for paragraph (j) of the definition salary deferral arrangement in this subsection, be a salary deferral arrangement, and  
  (ii) in the case of a Canadian team, the custodian of the plan or arrangement carries on business through a fixed place of business in Canada and is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (k) a salary deferral arrangement, whether or not deferred amounts thereunder are required to be included as benefits under paragraph 6(1)(a) in computing a taxpayer’s income, 
  (l) a plan or arrangement (other than an athlete’s plan) that is maintained primarily for the benefit of non-residents in respect of services rendered outside Canada, 
  (m) an insurance policy, or 
  (n) a prescribed plan or arrangement, and, for the purposes of this definition, where a particular person holds property in trust under an arrangement that, if the property were held by another person, would be a retirement compensation arrangement, the arrangement shall be deemed to be a retirement compensation arrangement of which the particular person is the custodian; ( convention de retraite)   
  *retirement income fund* has the meaning assigned by subsection 146.3(1); (fonds de revenu de retraite)   
  *retirement savings plan* has the meaning assigned by subsection 146(1); (régime d’épargne-retraite)   
  *retiring allowance* means an amount (other than a superannuation or pension benefit, an amount received as a consequence of the death of an employee or a benefit described in subparagraph 6(1)(a)(iv)) received  
  (a) on or after retirement of a taxpayer from an office or employment in recognition of the taxpayer’s long service, or 
  (b) in respect of a loss of an office or employment of a taxpayer, whether or not received as, on account or in lieu of payment of, damages or pursuant to an order or judgment of a competent tribunal, by the taxpayer or, after the taxpayer’s death, by a dependant or a relation of the taxpayer or by the legal representative of the taxpayer; ( allocation de retraite)   
  *RRSP deduction limit* has the meaning assigned by subsection 146(1); (maximum déductible au titre des REER)   
  *RRSP dollar limit* has the meaning assigned by subsection 146(1); (plafond REER)   
  *salary deferral arrangement*, in respect of a taxpayer, means a plan or arrangement, whether funded or not, under which any person has a right in a taxation year to receive an amount after the year where it is reasonable to consider that one of the main purposes for the creation or existence of the right is to postpone tax payable under this Act by the taxpayer in respect of an amount that is, or is on account or in lieu of, salary or wages of the taxpayer for services rendered by the taxpayer in the year or a preceding taxation year (including such a right that is subject to one or more conditions unless there is a substantial risk that any one of those conditions will not be satisfied), but does not include  
  (a) a registered pension plan, 
  (a.1) a pooled registered pension plan, 
  (b) a disability or income maintenance insurance plan under a policy with an insurance corporation, 
  (c) a deferred profit sharing plan, 
  (d) an employees profit sharing plan, 
  (e) an employee trust, 
  (e.1) an employee life and health trust, 
  (f) a group sickness or accident insurance plan, 
  (g) a supplementary unemployment benefit plan, 
  (h) a vacation pay trust described in paragraph 149(1)(y), 
  (i) a plan or arrangement the sole purpose of which is to provide education or training for employees of an employer to improve their work or work-related skills and abilities, 
  (j) a plan or arrangement established for the purpose of deferring the salary or wages of a professional athlete for the services of the athlete as such with a team that participates in a league having regularly scheduled games, 
  (k) a plan or arrangement under which a taxpayer has a right to receive a bonus or similar payment in respect of services rendered by the taxpayer in a taxation year to be paid within 3 years following the end of the year, or 
  (l) a prescribed plan or arrangement; ( entente d’échelonnement du traitement)   
  *salary or wages*, except in sections 5 and 63 and the definition death benefit in this subsection, means the income of a taxpayer from an office or employment as computed under Subdivision A of Division B of Part I and includes all fees received for services not rendered in the course of the taxpayer’s business but does not include superannuation or pension benefits or retiring allowances; (traitement ou salaire)   
  *scientific research and experimental development* means systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is  
  (a) basic research, namely, work undertaken for the advancement of scientific knowledge without a specific practical application in view, 
  (b) applied research, namely, work undertaken for the advancement of scientific knowledge with a specific practical application in view, or 
  (c) experimental development, namely, work undertaken for the purpose of achieving technological advancement for the purpose of creating new, or improving existing, materials, devices, products or processes, including incremental improvements thereto, and, in applying this definition in respect of a taxpayer, includes 
  (d) work undertaken by or on behalf of the taxpayer with respect to engineering, design, operations research, mathematical analysis, computer programming, data collection, testing or psychological research, where the work is commensurate with the needs, and directly in support, of work described in paragraph (a), (b), or (c) that is undertaken in Canada by or on behalf of the taxpayer, but does not include work with respect to 
  (e) market research or sales promotion, 
  (f) quality control or routine testing of materials, devices, products or processes, 
  (g) research in the social sciences or the humanities, 
  (h) prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas, 
  (i) the commercial production of a new or improved material, device or product or the commercial use of a new or improved process, 
  (j) style changes, or 
  (k) routine data collection; ( activités de recherche scientifique et de développement expérimental)   
  *scientific research and experimental development financing contract* has the meaning assigned by subsection 194(6); (contrat de financement pour des activités de recherche scientifique et de développement expérimental)   
  *scientific research and experimental development tax credit* of a taxpayer for a taxation year has the meaning assigned by subsection 127.3(2); (crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)   
  *securities lending arrangement* has the meaning assigned by subsection 260(1); (mécanisme de prêt de valeurs mobilières)   
  *self-contained domestic establishment* means a dwelling-house, apartment or other similar place of residence in which place a person as a general rule sleeps and eats; (établissement domestique autonome)   
  *separation agreement* includes an agreement by which a person agrees to make payments on a periodic basis for the maintenance of a former spouse or common-law partner, children of the marriage or common-law partnership or both the former spouse or common-law partner and children of the marriage or common-law partnership, after the marriage or common-law partnership has been dissolved, whether the agreement was made before or after the marriage or common-law partnership was dissolved; (accord de séparation)   
  *share*, except as the context otherwise requires, means a share or a fraction of a share of the capital stock of a corporation and, for greater certainty, a share of the capital stock of a corporation includes a share of the capital of a cooperative corporation (within the meaning assigned by subsection 136(2)), a share of the capital of an agricultural cooperative corporation (within the meaning assigned by subsection 135.1(1)) and a share of the capital of a credit union; (action)   
  *shareholder* includes a member or other person entitled to receive payment of a dividend; (actionnaire)   
  *share-purchase tax credit* of a taxpayer for a taxation year has the meaning assigned by subsection 127.2(6); (crédit d’impôt à l’achat d’actions)   
  *short-term preferred share* of a corporation at any particular time means a share, other than a grandfathered share, of the capital stock of the corporation issued after December 15, 1987 that at that particular time  
  (a) is a share where, under the terms and conditions of the share, any agreement relating to the share or any modification of those terms and conditions or that agreement, the corporation or a specified person in relation to the corporation is or may, at any time within 5 years after the date of its issue, be required to redeem, acquire or cancel, in whole or in part, the share (unless the requirement to redeem, acquire or cancel the share arises only in the event of the death of the shareholder or by reason only of a right to convert or exchange the share) or to reduce the paid-up capital of the share, and for the purposes of this paragraph 
  (i) an agreement in respect of a share of the capital stock of a corporation shall be read without reference to that part of the agreement under which a person agrees to acquire the share for an amount 
  (A) in the case of a share (other than a share that would, but for that part of the agreement, be a taxable preferred share) the agreement in respect of which provides that the share is to be acquired within 60 days after the day on which the agreement was entered into, that does not exceed the greater of the fair market value of the share at the time the agreement was entered into, determined without reference to the agreement, and the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or 
  (B) that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or for an amount determined by reference to the assets or earnings of the corporation where that determination may reasonably be considered to be used to determine an amount that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, and 
  (ii)  
  *shareholder* includes a shareholder of a shareholder, or  
  (b) is a share that is convertible or exchangeable at any time within 5 years after the date of its issue, unless 
  (i) it is convertible into or exchangeable for 
  (A) another share of the corporation or a corporation related to the corporation that, if issued, would not be a short-term preferred share, 
  (B) a right or warrant that, if exercised, would allow the person exercising it to acquire only a share of the corporation or a corporation related to the corporation that, if issued, would not be a short-term preferred share, or 
  (C) both a share described in clause (A) and a right or warrant described in clause (B), and 
  (ii) all the consideration receivable for the share on the conversion or exchange is the share described in clause (A) or the right or warrant described in clause (B) or both, as the case may be, and for the purposes of this subparagraph, where a taxpayer may become entitled on the conversion or exchange of a share to receive any particular consideration (other than consideration described in any of clauses (A) to (C)) in lieu of a fraction of a share, the particular consideration shall be deemed not to be consideration unless it may reasonably be considered that the particular consideration was receivable as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of Part IV.1 or VI.1, and, for the purposes of this definition, 
  (c) where at any particular time after December 15, 1987, otherwise than pursuant to a written arrangement to do so entered into before December 16, 1987, the terms or conditions of a share of the capital stock of a corporation that are relevant to any matter referred to in any of paragraphs (a), (b), (f) and (h) are established or modified, or any agreement in respect of any such matter to which the corporation or a specified person in relation to the corporation is a party, is changed or entered into, the share shall be deemed after that particular time to have been issued at that particular time, 
  (d) where at any particular time after December 15, 1987 a particular share of the capital stock of a corporation has been issued or its terms or conditions have been modified or an agreement in respect of the share is modified or entered into, and it may reasonably be considered, having regard to all the circumstances, including the rate of interest on any debt obligation or the dividend provided on any short-term preferred share, that 
  (i) but for the existence at any time of such a debt obligation or such a short-term preferred share, the particular share would not have been issued or its terms or conditions modified or the agreement in respect of the share would not have been modified or entered into, and 
  (ii) one of the main purposes for the issue of the particular share or the modification of its terms or conditions or the modification or entering into the agreement in respect of the share was to avoid or limit the tax payable under subsection 191.1(1), the particular share shall be deemed after that particular time to have been issued at that particular time and to be a short-term preferred share of the corporation, 
  (e) where at any particular time after December 15, 1987, otherwise than pursuant to a written arrangement to do so entered into before December 16, 1987, the terms or conditions of a share of the capital stock of a corporation are modified or established or any agreement in respect of the share has been changed or entered into, and as a consequence thereof the corporation or a specified person in relation to the corporation may reasonably be expected to redeem, acquire or cancel (otherwise than by reason of the death of the shareholder or by reason only of a right to convert or exchange the share that would not cause the share to be a short-term preferred share by reason of paragraph (b)), in whole or in part, the share, or to reduce its paid-up capital, within 5 years after the particular time, the share shall be deemed to have been issued at that particular time and to be a short-term preferred share of the corporation after the particular time until the time that that reasonable expectation ceases to exist and, for the purposes of this paragraph, 
  (i) an agreement in respect of a share of the capital stock of a corporation shall be read without reference to that part of the agreement under which a person agrees to acquire the share for an amount 
  (A) in the case of a share (other than a share that would, but for that part of the agreement, be a taxable preferred share) the agreement in respect of which provides that the share is to be acquired within 60 days after the day on which the agreement was entered into, that does not exceed the greater of the fair market value of the share at the time the agreement was entered into, determined without reference to the agreement, and the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or 
  (B) that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or for an amount determined by reference to the assets or earnings of the corporation where that determination may reasonably be considered to be used to determine an amount that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, and 
  (ii)  
  *shareholder* includes a shareholder of a shareholder,  
  (f) if a share of the capital stock of a corporation was issued after December 15, 1987 and at the time the share was issued the existence of the corporation was, or there was an arrangement under which it could be, limited to a period that was within five years from the date of its issue, the share is deemed to be a short-term preferred share of the corporation unless 
  (i) the share is a grandfathered share and the arrangement is a written arrangement entered into before December 16, 1987, or 
  (ii) the share is issued to an individual after April 14, 2005 under an agreement referred to in subsection 7(1), if when the individual last acquired a right under the agreement to acquire a share of the capital stock of the corporation, the existence of the corporation was not, and no arrangement was in effect under which it could be, limited to a period that was within five years from the date of that last acquisition, 
  (g) where a share of the capital stock of a corporation is acquired at any time after December 15, 1987 by the corporation or a specified person in relation to the corporation and the share is at any particular time after that time acquired by a person with whom the corporation or a specified person in relation to the corporation was dealing at arm’s length if this Act were read without reference to paragraph 251(5)(b), from the corporation or a specified person in relation to the corporation, the share shall be deemed after that particular time to have been issued at that particular time, 
  (h) where at any particular time after December 15, 1987, otherwise than pursuant to a written arrangement to do so entered into before December 16, 1987, as a result of the terms or conditions of a share of the capital stock of a corporation or any agreement entered into by the corporation or a specified person in relation to the corporation, any person (other than the corporation or an individual other than a trust) was obligated, either absolutely or contingently and either immediately or in the future, to effect any undertaking within 5 years after the day on which the share was issued (in this paragraph referred to as a “guarantee agreement”) including any guarantee, covenant or agreement to purchase or repurchase the share, and including the lending of funds or the placing of amounts on deposit with, or on behalf of the shareholder or a specified person in relation to the shareholder given 
  (i) to ensure that any loss that the shareholder or a specified person in relation to the shareholder may sustain, by reason of the ownership, holding or disposition of the share or any other property is limited in any respect, and 
  (ii) as part of a transaction or event or series of transactions or events that included the issuance of the share, the share shall be deemed after that particular time to have been issued at the particular time and to be at and immediately after the particular time a short-term preferred share, and for the purposes of this paragraph, where a guarantee agreement in respect of a share is given at any particular time after December 15, 1987, otherwise than pursuant to a written arrangement to do so entered into before December 16, 1987, the share shall be deemed to have been issued at the particular time and the guarantee agreement shall be deemed to have been given as part of a series of transactions that included the issuance of the share, 
  (i) a share that is, at the time a dividend is paid thereon, a share described in paragraph (e) of the definition term preferred share in this subsection during the applicable time period referred to in that paragraph or a prescribed share shall, notwithstanding any other provision of this definition, be deemed not to be a short-term preferred share at that time, and  
  (j)  
  *specified person* has the meaning assigned by paragraph (h) of the definition taxable preferred share in this subsection; (action privilégiée à court terme)   
  *SIFT partnership* has the meaning assigned by section 197; (société de personnes intermédiaire de placement déterminée)   
  *SIFT partnership balance-due day*, in respect of a taxation year of a SIFT partnership, means the day on or before which the partnership is required to file a return for the taxation year under section 229 of the Income Tax Regulations ; (date d’échéance du solde)   
  *SIFT trust* has the meaning assigned by section 122.1; (fiducie intermédiaire de placement déterminée)   
  *SIFT trust wind-up event* means a distribution by a particular trust resident in Canada of property to a taxpayer in respect of which the following conditions are met:  
  (a) the distribution occurs before 2013, 
  (b) there is a resulting disposition of all of the taxpayer’s interest as a beneficiary under the particular trust, 
  (c) the particular trust is 
  (i) a SIFT wind-up entity, 
  (ii) a trust whose only beneficiary throughout the period (referred to in this definition as the “qualifying period”) that begins on July 14, 2008 and that ends at the time of the distribution is another trust that throughout the qualifying period 
  (A) is resident in Canada, and 
  (B) is a SIFT wind-up entity or a trust described by this subparagraph, or 
  (iii) a trust whose only beneficiary at the time of distribution is another trust that throughout the qualifying period 
  (A) is resident in Canada, 
  (B) is a SIFT wind-up entity or a trust described by subparagraph (ii), and 
  (C) is a majority interest beneficiary (within the meaning that would be assigned by section 251.1 if the references in the definition majority interest beneficiary in subsection 251.1(3) to “50%” were read as references to “25%”) of the particular trust,  
  (d) the particular trust ceases to exist immediately after the distribution or immediately after the last of a series of SIFT trust wind-up events (determined without reference to this paragraph) of the particular trust that includes the distribution, and 
  (e) the property was not acquired by the particular trust as a result of a transfer or an exchange 
  (i) that is 
  (A) a qualifying exchange as defined in subsection 132.2(1) or a qualifying disposition as defined in subsection 107.4(1),  
  (B) made after February 2, 2009, and 
  (C) from any person other than a SIFT wind-up entity, or 
  (ii) to which any of sections 51, 85, 85.1, 86, 87, 88, 107.4 or 132.2 applies, of another property acquired as a result of a transfer or an exchange described by subparagraph (i) or this subparagraph; ( fait lié à la conversion d’une EIPD-fiducie)   
  *SIFT wind-up corporation*, in respect of a SIFT wind-up entity, means at any particular time a corporation  
  (a) that, at any time that is after July 13, 2008 and before the earlier of the particular time and January 1, 2013, owns all of the equity in the SIFT wind-up entity, or 
  (b) shares of the capital stock of which are at or before the particular time distributed on a SIFT trust wind-up event of the SIFT wind-up entity; ( société de conversion d’EIPD)   
  *SIFT wind-up entity* means a trust or partnership that at any time in the period that began on October 31, 2006 and that ends on July 14, 2008 is  
  (a) a SIFT trust (determined without reference to subsection 122.1(2)), 
  (b) a SIFT partnership (determined without reference to subsection 197(8)), or 
  (c) a real estate investment trust (as defined in subsection 122.1(1)); ( EIPD convertible)   
  *SIFT wind-up entity equity*, or equity in a SIFT wind-up entity, means  
  (a) if the SIFT wind-up entity is a trust, a capital interest (determined without reference to subsection (25)) in the trust, and 
  (b) if the SIFT wind-up entity is a partnership, an interest as a member of the partnership where, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, except that if all of the interests described in paragraph (a) or (b), as the case may be, in the SIFT wind-up entity are described by reference to units, it means the part of the interest represented by such a unit; ( intérêt dans une EIPD convertible)   
  *small business bond* [Repealed, 2023, c. 26, s. 73]   
  *small business corporation*, at any particular time, means, subject to subsection 110.6(15), a particular corporation that is a Canadian-controlled private corporation all or substantially all of the fair market value of the assets of which at that time is attributable to assets that are  
  (a) used principally in an active business carried on primarily in Canada by the particular corporation or by a corporation related to it, 
  (b) shares of the capital stock or indebtedness of one or more small business corporations that are at that time connected with the particular corporation (within the meaning of subsection 186(4) on the assumption that the small business corporation is at that time a payer corporation within the meaning of that subsection), or  
  (c) assets described in paragraphs (a) and (b), including, for the purpose of paragraph 39(1)(c), a corporation that was at any time in the 12 months preceding that time a small business corporation, and, for the purpose of this definition, the fair market value of a net income stabilization account shall be deemed to be nil; ( société exploitant une petite entreprise)   
  *small business development bond* [Repealed, 2023, c. 26, s. 73]   
  *specified employee* of a person means an employee of the person who is a specified shareholder of the person or who does not deal at arm’s length with the person; (employé déterminé)   
  *specified financial institution*, at any time, means  
  (a) a bank, 
  (b) a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, 
  (c) a credit union, 
  (d) an insurance corporation, 
  (e) a corporation whose principal business is the lending of money to persons with whom the corporation is dealing at arm’s length or the purchasing of debt obligations issued by such persons or a combination thereof, 
  (e.1) a corporation described in paragraph (g) of the definition financial institution in subsection 181(1),  
  (f) a corporation that is controlled by one or more corporations described in any of paragraphs (a) to (e.1) and, for the purpose of this paragraph, one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length, or 
  (g) a corporation that is related to a particular corporation described in any of paragraphs (a) to (f), other than a particular corporation described in paragraph (e) or (e.1) the principal business of which is the factoring of trade accounts receivable that 
  (i) the particular corporation acquired from a related person, 
  (ii) arose in the course of an active business carried on by a person (in this paragraph referred to as the “business entity”) related at that time to the particular corporation, and 
  (iii) at no particular time before that time were held by a person other than a person who was related to the business entity; ( institution financière déterminée)   
  *specified future tax consequence* for a taxation year means  
  (a) the consequence of the deduction or exclusion of an amount referred to in paragraph 161(7)(a), 
  (b) the consequence of a reduction under subsection 66(12.73) of a particular amount purported to be renounced by a corporation after the beginning of the year to a person or partnership under subsection 66(12.6) or 66(12.601) because of the application of subsection 66(12.66), determined as if the purported renunciation would, but for subsection 66(12.73), have been effective only where 
  (i) the purported renunciation occurred in January, February or March of a calendar year, 
  (ii) the effective date of the purported renunciation was the last day of the preceding calendar year, 
  (iii) the corporation agreed in that preceding calendar year to issue a flow-though share to the person or partnership, 
  (iv) the particular amount does not exceed the amount, if any, by which the consideration for which the share is to be issued exceeds the total of all other amounts purported by the corporation to have been renounced under subsection 66(12.6) or 66(12.601) in respect of that consideration, 
  (v) paragraphs 66(12.66)(c) and 66(12.66)(d) are satisfied with respect to the purported renunciation, and 
  (vi) the form prescribed for the purpose of subsection 66(12.7) in respect of the purported renunciation is filed with the Minister before May of the calendar year, and 
  (c) the consequence of an adjustment or a reduction described in subsection 161(6.1); ( conséquence fiscale future déterminée)   
  *specified hedging transaction*, in respect of a DRA share of a person or partnership (referred to in this definition as the “particular person”), means a transaction (in this definition, as defined in subsection 245(1)) or series of transactions that satisfies the following conditions:  
  (a) it is entered into by 
  (i) the particular person if the particular person is a registered securities dealer or a partnership each member of which is a registered securities dealer, or 
  (ii) a registered securities dealer or a partnership each member of which is a registered securities dealer (in either case, referred to in this definition as the “connected dealer”), if the connected dealer does not deal at arm’s length with, or is affiliated with, the particular person, 
  (b) it has the effect, or would have the effect if the transaction or series were entered into by the particular person, of eliminating all or substantially all of the particular person’s risk of loss and opportunity for gain or profit in respect of the DRA share, determined without regard to any other transaction or series entered into in respect of the DRA share, 
  (c) if paragraph 260(6)(a) were read without reference to subsection 260(6.2), an amount in respect of the transaction or series would be deductible by the particular person or the connected dealer under paragraph 260(6)(a), and 
  (d) if the transaction or series is entered into by the connected dealer, it can reasonably be considered that the particular person or connected dealer knew or ought to have known that the effect described in paragraph (b) would result; ( opération de couverture déterminée)   
  *specified individual* has the meaning assigned by subsection 120.4(1); (particulier déterminé)   
  *specified investment business* has the meaning assigned by subsection 125(7); (entreprise de placement déterminée)   
  *specified member* of a partnership in a fiscal period or taxation year of the partnership, as the case may be, means  
  (a) any member of the partnership who is a limited partner (within the meaning assigned by subsection 96(2.4)) of the partnership at any time in the period or year, and 
  (b) any member of the partnership, other than a member who is 
  (i) actively engaged in those activities of the partnership business that are other than the financing of the partnership business, or 
  (ii) carrying on a similar business as that carried on by the partnership in its taxation year, otherwise than as a member of a partnership, on a regular, continuous and substantial basis throughout that part of the period or year during which the business of the partnership is ordinarily carried on and during which the member is a member of the partnership; ( associé déterminé)   
  *specified mutual fund trust*, at any time, means a mutual fund trust other than a mutual fund trust for which it can reasonably be considered, having regard to all the circumstances, including the terms and conditions of the units of the trust, that the total of all amounts each of which is the fair market value, at that time, of a unit issued by the trust and held by a person exempt from tax under section 149 is all or substantially all of the total of all amounts each of which is the fair market value, at that time, of a unit issued by the trust; (fiducie de fonds commun de placement déterminée)   
  *specified pension plan* means a prescribed arrangement; (régime de pension déterminé)   
  *specified proportion*, of a member of a partnership for a fiscal period of the partnership, means the proportion that the member’s share of the total income or loss of the partnership for the partnership’s fiscal period is of the partnership’s total income or loss for that period and, for the purpose of this definition, where that income or loss for a period is nil, that proportion shall be computed as if the partnership had income for that period in the amount of $1,000,000; (proportion déterminée)   
  *specified securities lending arrangement* has the same meaning as in subsection 260(1); (mécanisme de prêt de valeurs mobilières déterminé)   
  *specified shareholder* of a corporation in a taxation year means a taxpayer who owns, directly or indirectly, at any time in the year, not less than 10% of the issued shares of any class of the capital stock of the corporation or of any other corporation that is related to the corporation and, for the purposes of this definition,  
  (a) a taxpayer shall be deemed to own each share of the capital stock of a corporation owned at that time by a person with whom the taxpayer does not deal at arm’s length, 
  (b) each beneficiary of a trust shall be deemed to own that proportion of all such shares owned by the trust at that time that the fair market value at that time of the beneficial interest of the beneficiary in the trust is of the fair market value at that time of all beneficial interests in the trust, 
  (c) each member of a partnership shall be deemed to own that proportion of all the shares of any class of the capital stock of a corporation that are property of the partnership at that time that the fair market value at that time of the member’s interest in the partnership is of the fair market value at that time of the interests of all members in the partnership, 
  (d) an individual who performs services on behalf of a corporation that would be carrying on a personal services business if the individual or any person related to the individual were at that time a specified shareholder of the corporation shall be deemed to be a specified shareholder of the corporation at that time if the individual, or any person or partnership with whom the individual does not deal at arm’s length, is, or by virtue of any arrangement may become, entitled, directly or indirectly, to not less than 10% of the assets or the shares of any class of the capital stock of the corporation or any corporation related thereto, and 
  (e) notwithstanding paragraph (b), where a beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, the beneficiary shall be deemed to own each share of the capital stock of a corporation owned at that time by the trust; ( actionnaire déterminé)   
  *specified synthetic equity arrangement*, in respect of a DRA share of a person or partnership, means one or more agreements or other arrangements that  
  (a) have the effect of providing to a person or partnership all or any portion of the risk of loss or opportunity for gain or profit in respect of the DRA share and, for greater certainty, opportunity for gain or profit includes rights to, benefits from and distributions on a share, and 
  (b) can reasonably be considered to have been entered into in connection with a synthetic equity arrangement, in respect of the DRA share, or in connection with another specified synthetic equity arrangement, in respect of the DRA share; ( arrangement de capitaux propres synthétiques déterminé)   
  *specified unitholder*, of a partnership or trust (referred to in this definition as the “entity”), the interests in which are described by reference to units, means a taxpayer who would be a specified shareholder of the entity if the entity were a corporation and each unit of the entity were a share of a class of the corporation having the same attributes as the unit; (détenteur d’unité déterminé)   
  *split income* has the meaning assigned by subsection 120.4(1); (revenu fractionné)   
  *stock dividend* includes any dividend (determined without reference to the definition 
  *dividend* in this subsection) paid by a corporation to the extent that it is paid by the issuance of shares of any class of the capital stock of the corporation; (dividende en actions)   
  *subsidiary controlled corporation* means a corporation more than 50% of the issued share capital of which (having full voting rights under all circumstances) belongs to the corporation to which it is subsidiary; (filiale contrôlée)   
  *subsidiary wholly-owned corporation* means a corporation all the issued share capital of which (except directors’ qualifying shares) belongs to the corporation to which it is subsidiary; (filiale à cent pour cent)   
  *superannuation or pension benefit* includes any amount received out of or under a superannuation or pension fund or plan (including, except for the purposes of subparagraph 56(1)(a)(i), a pooled registered pension plan) and, without restricting the generality of the foregoing, includes any payment made to a beneficiary under the fund or plan or to an employer or former employer of the beneficiary under the fund or plan  
  (a) in accordance with the terms of the fund or plan, 
  (b) resulting from an amendment to or modification of the fund or plan, or 
  (c) resulting from the termination of the fund or plan; ( prestation de retraite ou de pension)   
  *supplementary unemployment benefit plan* has the meaning assigned by subsection 145(1); (régime de prestations supplémentaires de chômage)   
  *synthetic disposition arrangement*, in respect of a property owned by a taxpayer, means one or more agreements or other arrangements that  
  (a) are entered into by the taxpayer or by a person or partnership that does not deal at arm’s length with the taxpayer, 
  (b) have the effect, or would have the effect if entered into by the taxpayer instead of the person or partnership, of eliminating all or substantially all the taxpayer’s risk of loss and opportunity for gain or profit in respect of the property for a definite or indefinite period of time, and 
  (c) can, in respect of any agreement or arrangement entered into by a person or partnership that does not deal at arm’s length with the taxpayer, reasonably be considered to have been entered into, in whole or in part, with the purpose of obtaining the effect described in paragraph (b); ( arrangement de disposition factice)   
  *synthetic disposition period*, of a synthetic disposition arrangement, means the definite or indefinite period of time during which the synthetic disposition arrangement has, or would have, the effect described in paragraph (b) of the definition 
  *synthetic disposition arrangement* in this subsection; (période de disposition factice)   
  *synthetic equity arrangement* in respect of a DRA share of a person or partnership (referred to in this definition as the particular person),  
  (a) means one or more agreements or other arrangements that 
  (i) are entered into by the particular person, by a person or partnership that does not deal at arm’s length with, or is affiliated with, the particular person (referred to in this definition as a connected person) or, for greater certainty, by any combination of the particular person and connected persons, with one or more persons or partnerships (referred to in this definition as a counterparty and in subsection 112(2.32) as a counterparty or an affiliated counterparty as appropriate),  
  (ii) have the effect, or would have the effect, if each agreement entered into by a connected person were entered into by the particular person, of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share to a counterparty or a group of counterparties each member of which is affiliated with every other member and, for greater certainty, opportunity for gain or profit includes rights to, benefits from and distributions on a share, and 
  (iii) if entered into by a connected person, can reasonably be considered to have been entered into with the knowledge, or where there ought to have been the knowledge, that the effect described in subparagraph (ii) would result, and 
  (b) does not include 
  (i) an agreement that is traded on a recognized derivatives exchange unless it can reasonably be considered that, at the time the agreement is entered into, 
  (A) the particular person or the connected person, as the case may be, knows or ought to know that the agreement is part of a series of transactions that has the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share to a tax-indifferent investor, or a group of tax-indifferent investors each member of which is affiliated with every other member, or 
  (B) one of the main reasons for entering into the agreement is to obtain the benefit of a deduction in respect of a payment, or a reduction of an amount that would otherwise have been included in income, under the agreement, that corresponds to an expected or actual dividend in respect of a DRA share, 
  (ii) one or more agreements or other arrangements that, but for this subparagraph, would be a synthetic equity arrangement, in respect of a share owned by the particular person (in this subparagraph referred to as the synthetic short position), if  
  (A) the particular person has entered into one or more other agreements or other arrangements (other than, for greater certainty, an agreement under which the share is acquired or an agreement or arrangement under which the particular person receives a deemed dividend and is provided with all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share) that have the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share to the particular person (in this subparagraph referred to as the synthetic long position),  
  (B) the synthetic short position has the effect of offsetting all amounts included or deducted in computing the income of the particular person with respect to the synthetic long position, and 
  (C) the synthetic short position was entered into for the purpose of obtaining the effect referred to in clause (B), and 
  (iii) an agreement to purchase the shares of a corporation, or a purchase agreement that is part of a series of agreements to purchase the shares of a corporation, under which a counterparty or a group of counterparties each member of which is affiliated with every other member acquires control of the corporation that has issued the shares being purchased, unless the main reason for establishing, incorporating or operating the corporation is to have this subparagraph apply; ( arrangement de capitaux propres synthétiques)   
  *synthetic equity arrangement chain*, in respect of a share owned by a person or partnership, means a synthetic equity arrangement — or a synthetic equity arrangement in combination with one or more specified synthetic equity arrangements — where  
  (a) no party to the synthetic equity arrangement or a specified synthetic equity arrangement, if any, is a tax-indifferent investor, and 
  (b) each other party to these agreements or arrangements is affiliated with the person or partnership; ( chaîne d’arrangements de capitaux propres synthétiques)   
  *tar sands* means bituminous sands or oil shales extracted, otherwise than by a well, from a mineral resource, but, for the purpose of applying sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a) in respect of property acquired after March 6, 1996, includes material extracted by a well from a deposit of bituminous sands or oil shales; (sables asphaltiques)   
  *taxable Canadian corporation* has the meaning assigned by subsection 89(1); (société canadienne imposable)   
  *taxable Canadian property* of a taxpayer at any time in a taxation year means a property of the taxpayer that is  
  (a) real or immovable property situated in Canada, 
  (b) property used or held by the taxpayer in, property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of, or property described in an inventory of, a business carried on in Canada, other than  
  (i) property used in carrying on an insurance business, and 
  (ii) where the taxpayer is non-resident, ships and aircraft used principally in international traffic and personal or movable property pertaining to their operation if the country in which the taxpayer is resident does not impose tax on gains of persons resident in Canada from dispositions of such property, 
  (c) if the taxpayer is an insurer, its designated insurance property for the year, 
  (d) a share of the capital stock of a corporation (other than a mutual fund corporation) that is not listed on a designated stock exchange, an interest in a partnership or an interest in a trust (other than a unit of a mutual fund trust or an income interest in a trust resident in Canada), if, at any particular time during the 60-month period that ends at that time, more than 50% of the fair market value of the share or interest, as the case may be, was derived directly or indirectly (otherwise than through a corporation, partnership or trust the shares or interests in which were not themselves taxable Canadian property at the particular time) from one or any combination of 
  (i) real or immovable property situated in Canada, 
  (ii) Canadian resource properties, 
  (iii) timber resource properties, and 
  (iv) options in respect of, or interests in, or for civil law rights in, property described in any of subparagraphs (i) to (iii), whether or not the property exists, 
  (e) a share of the capital stock of a corporation that is listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation or a unit of a mutual fund trust, if, at any particular time during the 60-month period that ends at that time, 
  (i) 25% or more of the issued shares of any class of the capital stock of the corporation, or 25% or more of the issued units of the trust, as the case may be, were owned by or belonged to one or any combination of 
  (A) the taxpayer, 
  (B) persons with whom the taxpayer did not deal at arm’s length, and 
  (C) partnerships in which the taxpayer or a person referred to in clause (B) holds a membership interest directly or indirectly through one or more partnerships, and 
  (ii) more than 50% of the fair market value of the share or unit, as the case may be, was derived directly or indirectly from one or any combination of properties described under subparagraphs (d)(i) to (iv), or 
  (f) an option in respect of, or an interest in, or for civil law a right in, a property described in any of paragraphs (a) to (e), whether or not the property exists, and, for the purposes of section 2, subsection 107(2.001) and sections 128.1 and 150, and for the purpose of applying paragraphs 85(1)(i) and 97(2)(c) to a disposition by a non-resident person, includes 
  (g) a Canadian resource property, 
  (h) a timber resource property, 
  (i) an income interest in a trust resident in Canada, 
  (j) a right to a share of the income or loss under an agreement referred to in paragraph 96(1.1)(a), and 
  (k) a life insurance policy in Canada; ( bien canadien imposable)   
  *taxable capital gain* has the meaning assigned by section 38; (gain en capital imposable)   
  *taxable dividend* has the meaning assigned by subsection 89(1); (dividende imposable)   
  *taxable income* has the meaning assigned by subsection 2(2), except that in no case may a taxpayer’s taxable income be less than nil; (revenu imposable)   
  *taxable income earned in Canada* means a taxpayer’s taxable income earned in Canada determined in accordance with Division D of Part I, except that in no case may a taxpayer’s taxable income earned in Canada be less than nil; (revenu imposable gagné au Canada)   
  *taxable net gain* from dispositions of listed personal property has the meaning assigned by section 41; (gain net imposable)   
  *taxable preferred share* at any particular time means  
  (a) a share issued after December 15, 1987 that is a short-term preferred share at that particular time, or 
  (b) a share (other than a grandfathered share) of the capital stock of a corporation issued after 8:00 p.m Eastern Daylight Saving Time, June 18, 1987 where, at that particular time by reason of the terms or conditions of the share or any agreement in respect of the share or its issue to which the corporation, or a specified person in relation to the corporation, is a party, 
  (i) it may reasonably be considered, having regard to all the circumstances, that the amount of the dividends that may be declared or paid on the share (in this definition referred to as the “dividend entitlement”) is, by way of a formula or otherwise 
  (A) fixed, 
  (B) limited to a maximum, or 
  (C) established to be not less than a minimum (including any amount determined on a cumulative basis) and with respect to the dividend that may be declared or paid on the share there is a preference over any other dividend that may be declared or paid on any other share of the capital stock of the corporation, 
  (ii) it may reasonably be considered, having regard to all the circumstances, that the amount that the shareholder is entitled to receive in respect of the share on the dissolution, liquidation or winding-up of the corporation or on the redemption, acquisition or cancellation of the share (unless the requirement to redeem, acquire or cancel the share arises only in the event of the death of the shareholder or by reason only of a right to convert or exchange the share) or on a reduction of the paid-up capital of the share by the corporation or by a specified person in relation to the corporation (in this definition referred to as the “liquidation entitlement”) is, by way of a formula or otherwise 
  (A) fixed, 
  (B) limited to a maximum, or 
  (C) established to be not less than a minimum, and, for the purposes of this subparagraph, 
  *shareholder* includes a shareholder of a shareholder,  
  (iii) the share is convertible or exchangeable at any time, unless 
  (A) it is convertible into or exchangeable for 
  (I) another share of the corporation or a corporation related to the corporation that, if issued, would not be a taxable preferred share, 
  (II) a right or warrant that, if exercised, would allow the person exercising it to acquire only a share of the corporation or a corporation related to the corporation that, if issued, would not be a taxable preferred share, or 
  (III) both a share described in subclause (I) and a right or warrant described in subclause (II), and 
  (B) all the consideration receivable for the share on the conversion or exchange is the share described in subclause (I) or the right or warrant described in subclause (II) or both, as the case may be, and, for the purposes of this clause, where a taxpayer may become entitled on the conversion or exchange of a share to receive any particular consideration (other than consideration described in any of subclauses (I) to (III)) in lieu of a fraction of a share, the particular consideration shall be deemed not to be consideration unless it may reasonably be considered that the particular consideration was receivable as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of Part IV.1 or VI.1, or 
  (iv) any person (other than the corporation) was, at or immediately before that particular time, obligated, either absolutely or contingently, and either immediately or in the future, to effect any undertaking (in this subparagraph referred to as a “guarantee agreement”), including any guarantee, covenant or agreement to purchase or repurchase the share, and including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the shareholder or any specified person in relation to the shareholder given 
  (A) to ensure that any loss that the shareholder or a specified person in relation to the shareholder may sustain by reason of the ownership, holding or disposition of the share or any other property is limited in any respect, or 
  (B) to ensure that the shareholder or a specified person in relation to the shareholder will derive earnings by reason of the ownership, holding or disposition of the share or any other property, and the guarantee agreement was given as part of a transaction or event or a series of transactions or events that included the issuance of the share and, for the purposes of this paragraph, where a guarantee agreement in respect of a share is given at any particular time after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, otherwise than pursuant to a written arrangement to do so entered into before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, the share shall be deemed to have been issued at the particular time and the guarantee agreement shall be deemed to have been given as part of a series of transactions that included the issuance of the share, but does not include a share that is at the particular time a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection during the applicable time period referred to in that paragraph and, for the purposes of this definition,  
  (c) the dividend entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all dividends on the share are determined solely by reference to the dividend entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if 
  (i) this definition were read without reference to paragraph (f), 
  (ii) the other share were issued after June 18, 1987, and 
  (iii) the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection,  
  (d) the liquidation entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all the liquidation entitlement is determinable solely by reference to the liquidation entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if 
  (i) this definition were read without reference to paragraph (f), 
  (ii) the other share were issued after June 18, 1987, and 
  (iii) the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection,  
  (e) where at any particular time after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, otherwise than pursuant to a written arrangement to do so entered into before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987, the terms or conditions of a share of the capital stock of a corporation that are relevant to any matter referred to in any of subparagraphs (b)(i) to (b)(iv) are established or modified or any agreement in respect of any such matter, to which the corporation or a specified person in relation to the corporation is a party, is changed or entered into, the share shall, for the purpose of determining after the particular time whether it is a taxable preferred share, be deemed to have been issued at that particular time, unless 
  (i) the share is a share described in paragraph (b) of the definition grandfathered share in this subsection, and  
  (ii) the particular time is before December 16, 1987 and before the time at which the share is first issued, 
  (f) an agreement in respect of a share of the capital stock of a corporation shall be read without reference to that part of the agreement under which a person agrees to acquire the share for an amount 
  (i) in the case of a share the agreement in respect of which provides that the share is to be acquired within 60 days after the day on which the agreement was entered into, that does not exceed the greater of the fair market value of the share at the time the agreement was entered into, determined without reference to the agreement, and the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or 
  (ii) that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or for an amount determined by reference to the assets or earnings of the corporation where that determination may reasonably be considered to be used to determine an amount that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, 
  (g) where 
  (i) it may reasonably be considered that the dividends that may be declared or paid to a shareholder at any time on a share (other than a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection during the applicable time period referred to in that paragraph) of the capital stock of a corporation issued after December 15, 1987 or acquired after June 15, 1988 are derived primarily from dividends received on taxable preferred shares of the capital stock of another corporation, and  
  (ii) it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of Part IV.1 or VI.1, the share shall be deemed at that time to be a taxable preferred share, and 
  (h)  
  *specified person*, in relation to any particular person, means another person with whom the particular person does not deal at arm’s length or any partnership or trust of which the particular person or the other person is a member or beneficiary, respectively; (action privilégiée imposable)   
  *taxable RFI share* at any particular time means a share of the capital stock of a corporation issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 or a grandfathered share of the capital stock of a corporation, where at the particular time under the terms or conditions of the share or any agreement in respect of the share,  
  (a) it may reasonably be considered, having regard to all the circumstances, that the amount of the dividends that may be declared or paid on the share (in this definition referred to as the “dividend entitlement”) is, by way of a formula or otherwise 
  (i) fixed, 
  (ii) limited to a maximum, or 
  (iii) established to be not less than a minimum, or 
  (b) it may reasonably be considered, having regard to all the circumstances, that the amount that the shareholder is entitled to receive in respect of the share on the dissolution, liquidation or winding-up of the corporation (in this definition referred to as the “liquidation entitlement”) is, by way of formula or otherwise 
  (i) fixed, 
  (ii) limited to a maximum, or 
  (iii) established to be not less than a minimum, but does not include a share that is at the particular time a prescribed share, a term preferred share, a share described in paragraph (e) of the definition term preferred share in this subsection during the applicable time period referred to in that paragraph or a taxable preferred share and, for the purposes of this definition,  
  (c) the dividend entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all dividends on the share are determined solely by reference to the dividend entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if 
  (i) the definition taxable preferred share in this subsection were read without reference to paragraph (f) of that definition,  
  (ii) the other share were issued after June 18, 1987, and 
  (iii) the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection,  
  (d) the liquidation entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all the liquidation entitlement is determinable solely by reference to the liquidation entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if 
  (i) the definition taxable preferred share in this subsection were read without reference to paragraph (f) of that definition,  
  (ii) the other share were issued after June 18, 1987, and 
  (iii) the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection, and  
  (e) where 
  (i) it may reasonably be considered that the dividends that may be declared or paid to a shareholder at any time on a share (other than a prescribed share or a share described in paragraph (e) of the definition term preferred share in this subsection during the applicable time period referred to in that paragraph) of the capital stock of a corporation issued after December 15, 1987 or acquired after June 15, 1988 are derived primarily from dividends received on taxable RFI shares of the capital stock of another corporation, and  
  (ii) it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of Part IV.1, the share shall be deemed at that time to be a taxable RFI share; ( action particulière à une institution financière)   
  *tax-indifferent investor*, at any time, means a person or partnership that is at that time  
  (a) a person exempt from tax under section 149, 
  (b) a non-resident person, other than a person to which all amounts paid or credited under a derivative forward agreement, a synthetic equity arrangement or a specified synthetic equity arrangement, as the case may be, may reasonably be attributed to the business carried on by the person in Canada through a permanent establishment (as defined in section 8201 of the Income Tax Regulations) in Canada,  
  (c) a trust resident in Canada (other than a specified mutual fund trust) if any of the interests as a beneficiary under the trust is not a fixed interest (as defined in subsection 251.2(1)) in the trust (in this definition referred to as a discretionary trust),  
  (d) a partnership more than 10% of the fair market value of all interests in which can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraphs (a) to (c), or 
  (e) a trust resident in Canada (other than a specified mutual fund trust or a discretionary trust) if more than 10% of the fair market value of all interests as beneficiaries under the trust can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraph (a) or (c); ( investisseur indifférent relativement à l’impôt)   
  *taxpayer* includes any person whether or not liable to pay tax; (contribuables)   
  *tax shelter* has the meaning assigned by subsection 237.1(1); (abri fiscal)   
  *tax treaty* with a country at any time means a comprehensive agreement or convention for the elimination of double taxation on income, between the Government of Canada and the government of the country, which has the force of law in Canada at that time; (traité fiscal)   
  *10/8 policy* means a life insurance policy (other than an annuity) where  
  (a) an amount is or may become 
  (i) payable, under the terms of a borrowing, to a person or partnership that has been assigned an interest in the policy or in an investment account in respect of the policy, or 
  (ii) payable (within the meaning assigned by the definition amount payable in subsection 138(12)) under a policy loan (as defined in subsection 148(9)) made in accordance with the terms and conditions of the policy, and  
  (b) either 
  (i) the return credited to an investment account in respect of the policy 
  (A) is determined by reference to the rate of interest on the borrowing or policy loan, as the case may be, described in paragraph (a), and 
  (B) would not be credited to the account if the borrowing or policy loan, as the case may be, were not in existence, or 
  (ii) the maximum amount of an investment account in respect of the policy is determined by reference to the amount of the borrowing or policy loan, as the case may be, described in paragraph (a); ( police 10/8)   
  *term preferred share* of a corporation (in this definition referred to as the issuing corporation) means a share of a class of the capital stock of the issuing corporation if the share was issued or acquired after June 28, 1982 and, at the time the share was issued or acquired, the existence of the issuing corporation was, or there was an arrangement under which it could be, limited or, in the case of a share issued after November 16, 1978 if  
  (a) under the terms or conditions of the share, any agreement relating to the share or any modification of those terms or conditions or that agreement, 
  (i) the owner thereof may cause the share to be redeemed, acquired or cancelled (unless the owner of the share may cause the share to be redeemed, acquired or cancelled by reason only of a right to convert or exchange the share) or cause its paid-up capital to be reduced, 
  (ii) the issuing corporation or any other person or partnership is or may be required to redeem, acquire or cancel, in whole or in part, the share (unless the requirement to redeem, acquire or cancel the share arises by reason only of a right to convert or exchange the share) or to reduce its paid-up capital, 
  (iii) the issuing corporation or any other person or partnership provides or may be required to provide any form of guarantee, security or similar indemnity or covenant (including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the holder thereof or any person related thereto) with respect to the share, or 
  (iv) the share is convertible or exchangeable unless 
  (A) it is convertible into or exchangeable for 
  (I) another share of the issuing corporation or a corporation related to the issuing corporation that, if issued, would not be a term preferred share, 
  (II) a right or warrant that, if exercised, would allow the person exercising it to acquire only a share of the issuing corporation or a corporation related to the issuing corporation that, if issued, would not be a term preferred share, or 
  (III) both a share described in subclause (I) and a right or warrant described in subclause (II), and 
  (B) all the consideration receivable for the share on the conversion or exchange is the share described in subclause (A)(I) or the right or warrant described in subclause (A)(II) or both, as the case may be, and, for the purposes of this clause, where a taxpayer may become entitled on the conversion or exchange of a share to receive any particular consideration (other than consideration described in any of subclauses (A)(I) to (A)(III)) in lieu of a fraction of a share, the particular consideration shall be deemed not to be consideration unless it may reasonably be considered that the particular consideration was receivable as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.1) or 258(3), or 
  (b) the owner thereof acquired the share after October 23, 1979 and is 
  (i) a corporation described in any of paragraphs (a) to (e.1) of the definition specified financial institution,  
  (ii) a corporation that is controlled by one or more corporations described in subparagraph (i), 
  (iii) a corporation that acquired the share after December 11, 1979 and is related to a corporation referred to in subparagraph (i) or (ii), or 
  (iv) a partnership or trust of which a corporation referred to in subparagraph (i) or (ii) or a person related thereto is a member or a beneficiary, that (either alone or together with any of such corporations, partnerships or trusts) controls or has an absolute or contingent right to control or to acquire control of the issuing corporation, but does not include a share of the capital stock of a corporation 
  (c) that was issued after November 16, 1978 and before 1980 pursuant to an agreement in writing to do so made before November 17, 1978 (in this definition referred to as an “established agreement”), 
  (d) that was issued as a stock dividend 
  (i) before April 22, 1980 on a share of the capital stock of a public corporation that was not a term preferred share, or 
  (ii) after April 21, 1980 on a share that was, at the time the stock dividend was paid, a share prescribed for the purposes of paragraph (f), 
  (d.1) that is listed on a designated stock exchange in Canada and was issued before April 22, 1980 by 
  (i) a corporation referred to in any of paragraphs (a) to (d) of the definition specified financial institution in this subsection,  
  (ii) a corporation whose principal business is the lending of money or the purchasing of debt obligations or a combination thereof, or 
  (iii) an issuing corporation associated with a corporation described in subparagraph (i) or (ii), 
  (e) for a period not exceeding ten years and, in the case of a share issued after November 12, 1981, for a period not exceeding five years, from the date of its issuance, which share was issued by a corporation resident in Canada, 
  (i) as part of a proposal to, or an arrangement with, its creditors that had been approved by a court under the Bankruptcy and Insolvency Act,  
  (ii) at a time when all or substantially all of its assets were under the control of a receiver, receiver-manager, sequestrator or trustee in bankruptcy, or 
  (iii) at a time when, by reason of financial difficulty, the issuing corporation or another corporation resident in Canada with which it does not deal at arm’s length was in default, or could reasonably be expected to default, on a debt obligation held by a person with whom the issuing corporation or the other corporation was dealing at arm’s length and the share was issued either wholly or in substantial part and either directly or indirectly in exchange or substitution for that obligation or a part thereof, and, in the case of a share issued after November 12, 1981, the proceeds from the issue may reasonably be regarded as having been used by the issuing corporation or a corporation with which it was not dealing at arm’s length in the financing of its business carried on in Canada immediately before the share was issued, 
  (f) that is a prescribed share, or 
  (f.1) that is a taxable preferred share held by a specified financial institution that acquired the share 
  (i) before December 16, 1987, or 
  (ii) before 1989 pursuant to an agreement in writing entered into before December 16, 1987, other than a share deemed by paragraph (c) of the definition short-term preferred share in this subsection or by paragraph (i.2) to have been issued after December 15, 1987 or a share that would be deemed by paragraph (e) of the definition taxable preferred share in this subsection to have been issued after December 15, 1987 if the references therein to “8:00 p.m. Eastern Daylight Saving Time, June 18, 1987” were read as references to “December 15, 1987”,  and, for the purposes of this definition, 
  (g) where the terms or conditions of an established agreement were amended after November 16, 1978, the agreement shall be deemed to have been made after that date, 
  (h) where 
  (i) at any particular time the terms or conditions of a share issued pursuant to an established agreement or of any agreement relating to such a share have been changed, 
  (ii) under the terms or conditions of 
  (A) a share of a class of the capital stock of the issuing corporation issued before November 17, 1978 (other than a share that was listed on November 16, 1978 on a prescribed stock exchange in Canada), 
  (B) a share issued pursuant to an established agreement, 
  (C) any agreement between the issuing corporation and the owner of a share described in clause (A) or (B), or 
  (D) any agreement relating to a share described in clause (A) or (B) made after October 23, 1979, the owner thereof could at any particular time after November 16, 1978 require, either alone or together with one or more taxpayers, the redemption, acquisition, cancellation, conversion or reduction of the paid-up capital of the share otherwise than by reason of a failure or default under the terms or conditions of the share or any agreement that related to, and was entered into at the time of, the issuance of the share, 
  (iii) in respect of a share issued before November 17, 1978, at any particular time after November 16, 1978 the redemption date was extended or the terms or conditions relating to its redemption, acquisition, cancellation, conversion or reduction of its paid-up capital were changed, 
  (iv) at a particular time after October 23, 1979 and before November 13, 1981, a specified financial institution (or a partnership or trust of which a specified financial institution or a person related to the institution is a member or beneficiary) acquired a share that 
  (A) was issued before November 17, 1978 or under an established agreement, 
  (B) was issued to a person other than a corporation that was, at the time of issue, 
  (I) described in any of paragraphs (a) to (e) of the definition specified financial institution, or  
  (II) a corporation that was controlled by one or more corporations described in subclause (I) and, for the purpose of this subclause, one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length, 
  (C) was acquired from a person that was, at the particular time, a person other than a corporation described in subclause (B)(I) or (II), and 
  (D) was acquired otherwise than under an agreement in writing made before October 24, 1979, 
  (v) at any particular time after November 12, 1981 
  (A) in respect of 
  (I) a share (other than a share referred to in paragraph (e) or a share listed on November 13, 1981 on a prescribed stock exchange in Canada) issued after November 16, 1978 and before November 13, 1981, or 
  (II) a share issued after November 12, 1981 and before 1983 pursuant to an agreement in writing to do so made before November 13, 1981 (in this definition referred to as a “specified agreement”) the owner thereof could require, either alone or together with one or more taxpayers, the redemption, acquisition, cancellation, conversion or reduction of the paid-up capital of the share otherwise than by reason of a failure or default under the terms or conditions of the share or any agreement that related to, and was entered into at the time of, the issuance of the share, or 
  (B) the redemption date of 
  (I) a share issued after November 16, 1978 and before November 13, 1981 or 
  (II) a share issued pursuant to a specified agreement was extended or the terms or conditions relating to its redemption, acquisition, cancellation, conversion or reduction of its paid-up capital were changed, or 
  (vi) at a particular time after November 12, 1981, a specified financial institution (or a partnership or trust of which a specified financial institution or a person related to the institution is a member or beneficiary) acquired a share (other than a share referred to in paragraph (e)) that 
  (A) was issued before November 13, 1981 or under a specified agreement, 
  (B) was acquired from a partnership or person, other than a person that was, at the particular time, a corporation described in any of paragraphs (a) to (f) of the definition specified financial institution in this subsection,  
  (C) was acquired in an acquisition that was not subject to nor conditional on a guarantee agreement, within the meaning assigned by subsection 112(2.2), entered into after November 12, 1981, and 
  (D) was acquired otherwise than under an agreement in writing made before October 24, 1979 or a specified agreement, the share shall, for the purposes of determining at any time after the particular time whether it is a term preferred share, be deemed to have been issued at the particular time otherwise than pursuant to an established or specified agreement, 
  (i) where the terms or conditions of a share of the capital stock of the issuing corporation are modified or established after June 28, 1982 and as a consequence thereof the issuing corporation, any person related thereto or any partnership or trust of which the issuing corporation or a person related thereto is a member or a beneficiary may reasonably be expected at any time to redeem, acquire or cancel, in whole or in part, the share or to reduce its paid-up capital, the share shall be deemed as from the date of the modification or as from the date of the establishment, as the case may be, to be a share described in paragraph (a), 
  (i.1) where 
  (i) it may reasonably be considered that the dividends that may be declared or paid at any time on a share (other than a prescribed share or a share described in paragraph (e) during the applicable time period referred to in that paragraph) of the capital stock of a corporation issued after December 15, 1987 or acquired after June 15, 1988 are derived primarily from dividends received on term preferred shares of the capital stock of another corporation, and 
  (ii) it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.1), 138(6) or 258(3), the share shall be deemed at that time to be a term preferred share acquired in the ordinary course of business, 
  (i.2) where at any particular time after December 15, 1987, otherwise than pursuant to a written arrangement to do so entered into before December 16, 1987, the terms or conditions of a taxable preferred share of the capital stock of a corporation relating to any matter referred to in subparagraphs (a)(i) to (iv) have been modified or established, or any agreement in respect of the share relating to any such matter has been changed or entered into by the corporation or a specified person (within the meaning assigned by paragraph (h) of the definition taxable preferred share in this subsection) in relation to the corporation, the share shall be deemed after that particular time to have been issued at that particular time, and,  
  (j) where a particular share of the capital stock of a corporation has been issued or its terms and conditions have been modified and it may reasonably be considered, having regard to all circumstances (including the rate of interest on any debt or the dividend provided on any term preferred share), that 
  (i) but for the existence at any time of the debt or the term preferred share, the particular share would not have been issued or its terms or conditions modified, and 
  (ii) one of the main purposes for the issue of the particular share or for the modification of its terms or conditions was to avoid a limitation provided by subsection 112(2.1) or 138(6) in respect of a deduction or to avoid or limit the application of subsection 258(3), the particular share shall be deemed after December 31, 1982 to be a term preferred share of the corporation; ( action privilégiée à terme)   
  *testamentary trust* has the meaning assigned by subsection 108(1); (fiducie testamentaire)   
  *TFSA*, being a tax-free savings account, has the meaning assigned by subsection 146.2(5); (compte d’épargne libre d’impôt)   
  *timber resource property* has the meaning assigned by subsection 13(21); (avoir forestier)   
  *total pension adjustment reversal* of a taxpayer for a calendar year has the meaning assigned by regulation; (facteur d’équivalence rectifié total)   
  *Treasury Board* means the Treasury Board established by section 5 of the Financial Administration Act ; (Conseil du Trésor)   
  *treaty-protected business* of a taxpayer at any time means a business in respect of which any income of the taxpayer for a period that includes that time would, because of a tax treaty with another country, be exempt from tax under Part I; (entreprise protégée par traité)   
  *treaty-protected property* of a taxpayer at any time means property any income or gain from the disposition of which by the taxpayer at that time would, because of a tax treaty with another country, be exempt from tax under Part I; (bien protégé par traité)   
  *trust* has the meaning assigned by subsection 104(1) and, unless the context otherwise requires, includes an estate; (fiducie)   
  *trust account number* means the number (other than a business number)  
  (a) used by the Minister to identify a trust, and 
  (b) of which the Minister has notified the trust; ( numéro de compte en fiducie)   
  *undepreciated capital cost* to a taxpayer of depreciable property of a prescribed class has the meaning assigned by subsection 13(21); (fraction non amortie du coût en capital)   
  *unit trust* has the meaning assigned by subsection 108(2); (fiducie d’investissement à participation unitaire)   
  *unused RRSP deduction room* of a taxpayer at the end of a taxation year has the meaning assigned by subsection 146(1); (déductions inutilisées au titre des REER)   
  *unused scientific research and experimental development tax credit* of a taxpayer for a taxation year has the meaning assigned by subsection 127.3(2); (partie inutilisée du crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)   
  *unused share-purchase tax credit* of a taxpayer for a taxation year has the meaning assigned by subsection 127.2(6); (partie inutilisée du crédit d’impôt à l’achat d’actions)   
  *zero-emission passenger vehicle*, of a taxpayer, means an automobile of the taxpayer that is included in Class 54 of Schedule II to the Income Tax Regulations ; (voiture de tourisme zéro émission)   
  *zero-emission vehicle*, of a taxpayer, means a motor vehicle that  
  (a) is a plug-in hybrid that meets prescribed conditions or is fully 
  (i) electric, or 
  (ii) powered by hydrogen, 
  (b) is acquired, and becomes available for use, by the taxpayer after March 18, 2019 and before 2028, 
  (c) does not meet any of the following conditions: 
  (i) it is a vehicle in respect of which the taxpayer has, at any time, made an election under subsection 1103(2j) of the Income Tax Regulations,  
  (ii) it is a vehicle in respect of which assistance has been paid by the Government of Canada under a prescribed program, and 
  (iii) if the vehicle was acquired before March 2, 2020, either 
  (A) it has been used, or acquired for use, for any purpose before it was acquired by the taxpayer, or 
  (B) it is a vehicle in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) by another person or partnership, and 
  (d) would be an accelerated investment incentive property of the taxpayer if subsection 1104(4) of the Income Tax Regulations were read without its exclusions for property included in Class 54 or Class 55 of Schedule II to those Regulations. (véhicule zéro émission)  
  
  ### Non-disposition before December 24, 1998
  
  (1.1) A redemption, an acquisition or a cancellation, at any particular time after 1971 and before December 24, 1998, of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this subsection as the “security”) of the capital stock of a corporation (referred to in this subsection as the “issuing corporation”) held by another corporation (referred to in this subsection as the “disposing corporation”) is not a disposition (within the meaning of the definition disposition in section 54 as that section read in its application to transactions and events that occurred at the particular time) of the security if  
  (a) the redemption, acquisition or cancellation occurred as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this subsection as the “new corporation”); 
  (b) the merger or combination 
  (i) is an amalgamation (within the meaning assigned by subsection 87(1) as it read at the particular time) to which subsection 87(11) if in force, and as it read, at the particular time did not apply, 
  (ii) is an amalgamation (within the meaning assigned by subsection 87(1) as it read at the particular time) to which subsection 87(11) if in force, and as it read, at the particular time applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) (if in force, and as it read, at the particular time) as the parent and the subsidiary, respectively, 
  (iii) occurred before November 13, 1981 and is a merger of corporations that is described by subsection 87(8) (as it read in respect of the merger or combination), or 
  (iv) occurred after November 12, 1981 and 
  (A) is a foreign merger (within the meaning assigned by subsection 87(8.1) as it read in respect of the merger or combination), or 
  (B) all of the following conditions are met: 
  (I) the merger or combination is not a foreign merger (within the meaning assigned by subsection 87(8.1) as it read in respect of the merger or combination), 
  (II) subsection 87(8.1), as it read in respect of the merger or combination, contained a subparagraph (c)(ii), and 
  (III) the merger or combination would be a foreign merger (within the meaning of subsection 87(8.1), as it read in respect of the merger or combination) if that subparagraph 87(8.1)(c)(ii) were read as follows: 
  “(ii) if, immediately after the merger, the new foreign corporation was controlled by another foreign corporation (in this subsection referred to as the “parent corporation”), shares of the capital stock of the parent corporation,”; and 
  (c) either 
  (i) the disposing corporation received no consideration for the security, or 
  (ii) in the case where the merger or combination is described by subparagraph (b)(iv), the disposing corporation received no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, became property of the new corporation. 
  
  ### Tax payable
  
  (2) In this Act, the tax payable by a taxpayer under any Part of this Act by or under which provision is made for the assessment of tax means the tax payable by the taxpayer as fixed by assessment or reassessment subject to variation on objection or on appeal, if any, in accordance with the provisions of that Part. 
  
  ### Property subject to certain Quebec institutions and arrangements
  
  (3) For the purposes of this Act, if property is subject to an institution or arrangement that is described by this subsection and that is governed by the laws of the Province of Quebec, the following rules apply in respect of the property: 
  (a) if at any time property is subject to a usufruct, right of use or habitation, or substitution, 
  (i) the usufruct, right of use or habitation, or substitution, as the case may be, is deemed to be at that time 
  (A) a trust, and 
  (B) where the usufruct, right of use or habitation, or substitution, as the case may be, is created by will, a trust created by will, 
  (ii) the property is deemed 
  (A) where the usufruct, right of use or habitation, or substitution, as the case may be, arises on the death of a testator, to have been transferred to the trust on and as a consequence of the death of the testator, and not otherwise, and 
  (B) where the usufruct, right of use or habitation, or substitution, as the case may be, arises otherwise, to have been transferred (at the time it first became subject to the usufruct, right of use or habitation, or substitution, as the case may be) to the trust by the person that granted the usufruct, right of use or habitation, or substitution, and 
  (iii) the property is deemed to be, throughout the period in which it is subject to the usufruct, right of use or habitation, or substitution, as the case may be, held by the trust, and not otherwise; 
  (b) an arrangement (other than a partnership, a qualifying arrangement or an arrangement that is a trust determined without reference to this paragraph) is deemed to be a trust and property subject to rights and obligations under the arrangement is, if the arrangement is deemed by this paragraph to be a trust, deemed to be held in trust and not otherwise, where the arrangement 
  (i) is established before October 31, 2003 by or under a written contract that 
  (A) is governed by the laws of the Province of Quebec, and 
  (B) provides that, for the purposes of this Act, the arrangement shall be considered to be a trust, and 
  (ii) creates rights and obligations that are substantially similar to the rights and obligations under a trust (determined without reference to this subsection); 
  (c) if the arrangement is a qualifying arrangement, 
  (i) the arrangement is deemed to be a trust, 
  (ii) any property contributed at any time to the arrangement by an annuitant, a holder or a subscriber of the arrangement, as the case may be, is deemed to have been transferred, at that time, to the trust by the contributor, and 
  (iii) property subject to rights and obligations under the arrangement is deemed to be held in trust and not otherwise; 
  (d) a person who has a right (whether immediate or future and whether absolute or contingent) to receive all or part of the income or capital in respect of property that is referred to in paragraph (a) or (b) is deemed to be beneficially interested in the trust; and 
  (e) notwithstanding that a property is at any time subject to a servitude, the property is deemed to be beneficially owned by a person at that time if, at that time, the person has in relation to the property 
  (i) the right of ownership, 
  (ii) a right as a lessee under an emphyteusis, or 
  (iii) a right as a beneficiary in a trust. 
  
  ### Gift of bare ownership of immovables
  
  (3.1) Subsection (3) does not apply in respect of a usufruct or a right of use of an immovable in circumstances where a taxpayer disposes of the bare ownership of the immovable by way of a gift to a qualified donee and retains, for life, the usufruct or the right of use. 
  
  ### Qualifying arrangement
  
  (3.2) For the purposes of paragraphs 248(3)(b) and (c), an arrangement is a qualifying arrangement if it is 
  (a) entered into with a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee; 
  (b) established by or under a written contract that is governed by the laws of the Province of Quebec; 
  (c) presented as a declaration of trust or provides that, for the purposes of this Act, it shall be considered to be a trust; and 
  (d) presented as an arrangement in respect of which the corporation is to take action for the arrangement to become a registered disability savings plan, a registered education savings plan, a registered retirement income fund, a registered retirement savings plan or a TFSA. 
  
  ### Interest in real property
  
  (4) In this Act, an interest in real property includes a leasehold interest in real property but does not include an interest as security only derived by virtue of a mortgage, agreement for sale or similar obligation. 
  
  ### Real right in immovables
  
  (4.1) In this Act, a real right in an immovable includes a lease but does not include a security right derived by virtue of a hypothec, agreement for sale or similar obligation. 
  
  ### Substituted property
  
  (5) For the purposes of this Act, other than paragraph 98(1)(a), 
  (a) where a person has disposed of or exchanged a particular property and acquired other property in substitution therefor and subsequently, by one or more further transactions, has effected one or more further substitutions, the property acquired by any such transaction shall be deemed to have been substituted for the particular property; and 
  (b) any share received as a stock dividend on another share of the capital stock of a corporation shall be deemed to be property substituted for that other share. 
  
  ### “Class” of shares issued in series
  
  (6) In its application in relation to a corporation that has issued shares of a class of its capital stock in one or more series, a reference in this Act to the “class” shall be read, with such modifications as the circumstances require, as a reference to a “series of the class.” 
  
  ### Receipt of things mailed
  
  (7) For the purposes of this Act, 
  (a) anything (other than a remittance or payment described in paragraph 248(7)(b)) sent by first class mail or its equivalent shall be deemed to have been received by the person to whom it was sent on the day it was mailed; and 
  (b) the remittance or payment of an amount 
  (i) deducted or withheld, or 
  (ii) payable by a corporation, as required by this Act or a regulation shall be deemed to have been made on the day on which it is received by the Receiver General. 
  
  ### Occurrences as a consequence of death
  
  (8) For the purpose of this Act, 
  (a) a transfer, distribution or acquisition of property under or as a consequence of the terms of the will or other testamentary instrument of a taxpayer or the taxpayer’s spouse or common-law partner or as a consequence of the law governing the intestacy of a taxpayer or the taxpayer’s spouse or common-law partner shall be considered to be a transfer, distribution or acquisition of the property as a consequence of the death of the taxpayer or the taxpayer’s spouse or common-law partner, as the case may be; 
  (b) a transfer, distribution or acquisition of property as a consequence of a disclaimer, release or surrender by a person who was a beneficiary under the will or other testamentary instrument or on the intestacy of a taxpayer or the taxpayer’s spouse or common-law partner shall be considered to be a transfer, distribution or acquisition of the property as a consequence of the death of the taxpayer or the taxpayer’s spouse or common-law partner, as the case may be; and 
  (c) a release or surrender by a beneficiary under the will or other testamentary instrument or on the intestacy of a taxpayer with respect to any property that was property of the taxpayer immediately before the taxpayer’s death shall be considered not to be a disposition of the property by the beneficiary. 
  
  ### Definitions
  
  (9) In subsection 248(8),  
  *disclaimer* includes a renunciation of a succession made under the laws of the Province of Quebec that is not made in favour of any person, but does not include any disclaimer made after the period ending 36 months after the death of the taxpayer unless written application therefor has been made to the Minister by the taxpayer’s legal representative within that period and the disclaimer is made within such longer period as the Minister considers reasonable in the circumstances; (renonciation)   
  *release or surrender* means  
  (a) a release or surrender made under the laws of a province (other than the Province of Quebec) that does not direct in any manner who is entitled to benefit therefrom, or 
  (b) a gift inter vivos made under the laws of the Province of Quebec of an interest in, or right to property of, a succession that is made to the person or persons who would have benefited if the donor had made a renunciation of the succession that was not made in favour of any person,  and that is made within the period ending 36 months after the death of the taxpayer or, where written application therefor has been made to the Minister by the taxpayer’s legal representative within that period, within such longer period as the Minister considers reasonable in the circumstances. ( abandon)  
  
  ### How trust created
  
  (9.1) For the purposes of this Act, a trust shall be considered to be created by a taxpayer’s will if the trust is created 
  (a) under the terms of the taxpayer’s will; or 
  (b) by an order of a court in relation to the taxpayer’s estate made under any law of a province that provides for the relief or support of dependants. 
  
  ### Vested indefeasibly
  
  (9.2) For the purposes of this Act, property shall be deemed not to have vested indefeasibly 
  (a) in a trust under which a taxpayer’s spouse or common-law partner is a beneficiary, where the trust is created by the will of the taxpayer, unless the property vested indefeasibly in the trust before the death of the spouse or common-law partner; and 
  (b) in an individual (other than a trust), unless the property vested indefeasibly in the individual before the death of the individual. 
  
  ### Series of transactions
  
  (10) For the purposes of this Act, where there is a reference to a series of transactions or events, the series shall be deemed to include any related transactions or events completed in contemplation of the series. 
  
  ### Compound interest
  
  (11) Interest computed at a prescribed rate under any of subsections 129(2.1) and (2.2), 131(3.1) and (3.2), 132(2.1) and (2.2), 133(7.01) and (7.02), 159(7), 160.1(1), 161(1), (2) and (11), 161.1(5), 164(3) to (4), 181.8(1) and (2) (as those two subsections read in their application to the 1991 and earlier taxation years), 185(2), 187(2) and 189(7), section 190.23 (as it read in its application to the 1991 and earlier taxation years) and subsections 193(3), 195(3), 202(5) and 227(8.3), (9.2) and (9.3) of this Act and subsection 182(2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952 (as that subsection read in its application to taxation years beginning before 1986) and subsection 191(2) of that Act (as that subsection read in its application to the 1984 and earlier taxation years) shall be compounded daily and, where interest is computed on an amount under any of those provisions and is unpaid or unapplied on the day it would, but for this subsection, have ceased to be computed under that provision, interest at the prescribed rate shall be computed and compounded daily on the unpaid or unapplied interest from that day to the day it is paid or applied and shall be paid or applied as would be the case if interest had continued to be computed under that provision after that day.  
  
  ### Identical properties
  
  (12) For the purposes of this Act, one bond, debenture, bill, note or similar obligation issued by a debtor is identical to another such obligation issued by that debtor if both are identical in respect of all rights (in equity or otherwise, either immediately or in the future and either absolutely or contingently) attaching thereto, except as regards the principal amount thereof. 
  
  ### Interests in trusts and partnerships
  
  (13) Where after November 12, 1981 a person has an interest in a trust or partnership, whether directly or indirectly through an interest in any other trust or partnership or in any manner whatever, the person shall, for the purposes of the definitions income bond, income debenture and term preferred share in subsection 248(1), paragraph (h) of the definition taxable preferred share in that subsection, subsections 84(4.2) and 84(4.3) and 112(2.6) and section 258, be deemed to be a beneficiary of the trust or a member of the partnership, as the case may be.  
  
  ### Related corporations
  
  (14) For the purpose of paragraph (g) of the definition specified financial institution in subsection 248(1), where in the case of 2 or more corporations it can reasonably be considered, having regard to all the circumstances, that one of the main reasons for the separate existence of those corporations in a taxation year is to limit or avoid the application of subsection 112(2.1) or 112(2.2) or 138(6), the 2 or more corporations shall be deemed to be related to each other and to each other corporation to which any such corporation is related.  
  
  ### Goods and services tax — change of use
  
  (15) For the purposes of this Act, where a liability for the goods and services tax is incurred in respect of a change of use at any time of a property, the liability so incurred shall be deemed to have been incurred immediately after that time in respect of the acquisition of the property. 
  
  ### Goods and services tax — input tax credit and rebate
  
  (16) For the purposes of this Act, other than this subsection and subsection 6(8), an amount claimed by a taxpayer as an input tax credit or rebate with respect to the goods and services tax in respect of a property or service is deemed to be assistance from a government in respect of the property or service that is received by the taxpayer 
  (a) where the amount was claimed by the taxpayer as an input tax credit in a return under Part IX of the Excise Tax Act for a reporting period under that Act,  
  (i) at the particular time that is the earlier of the time that the goods and services tax in respect of the input tax credit was paid and the time that it became payable, 
  (A) if the particular time is in the reporting period, or 
  (B) if, 
  (I) the taxpayer’s threshold amount, determined in accordance with subsection 249(1) of the Excise Tax Act, is greater than $500,000 for the taxpayer’s fiscal year (within the meaning assigned by that Act) that includes the particular time, and  
  (II) the taxpayer claimed the input tax credit at least 120 days before the end of the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer in respect of the taxation year that includes the particular time, 
  (ii) at the end of the reporting period, if 
  (A) subparagraph (i) does not apply, and 
  (B) the taxpayer’s threshold amount, determined in accordance with subsection 249(1) of the Excise Tax Act, is $500,000 or less for the fiscal year (within the meaning assigned by that Act) of the taxpayer that includes the particular time, and  
  (iii) in any other case, on the last day of the taxpayer’s earliest taxation year 
  (A) that begins after the taxation year that includes the particular time, and 
  (B) for which the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer ends at least 120 days after the time that the input tax credit was claimed; or 
  (b) where the amount was claimed as a rebate with respect to the goods and services tax, at the time the amount was received or credited. 
  
  ### Quebec input tax refund and rebate
  
  (16.1) For the purpose of this Act, other than this subsection and subsection 6(8), an amount claimed by a taxpayer as an input tax refund or a rebate with respect to the Quebec sales tax in respect of a property or service is deemed to be assistance from a government in respect of the property or service that is received by the taxpayer 
  (a) where the amount was claimed by the taxpayer as an input tax refund in a return under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, for a reporting period under that Act,  
  (i) at the particular time that is the earlier of the time that the Quebec sales tax in respect of the input tax refund was paid and the time that it became payable, 
  (A) if the particular time is in the reporting period, or 
  (B) if, 
  (I) the taxpayer’s threshold amount, determined in accordance with section 462 of that Act is greater than $500,000 for the taxpayer’s fiscal year (within the meaning assigned by that Act) that includes the particular time, and 
  (II) the taxpayer claimed the input tax refund at least 120 days before the end of the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer in respect of the taxation year that includes the particular time, 
  (ii) at the end of the reporting period, if 
  (A) subparagraph (i) does not apply, and 
  (B) the taxpayer’s threshold amount, determined in accordance with section 462 of that Act is $500,000 or less for the fiscal year (within the meaning assigned by that Act) of the taxpayer that includes the particular time, and 
  (iii) in any other case, on the last day of the taxpayer’s earliest taxation year 
  (A) that begins after the taxation year that includes the particular time, and 
  (B) for which the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer ends at least 120 days after the time that the input tax refund was claimed; or 
  (b) where the amount was claimed as a rebate with respect to the Quebec sales tax, at the time the amount was received or credited. 
  
  ### Application of subsection (16) to certain vehicles and aircraft
  
  (17) If the input tax credit of a taxpayer under Part IX of the Excise Tax Act in respect of a passenger vehicle, zero-emission passenger vehicle or aircraft is determined with reference to subsection 202(4) of that Act, subparagraphs (16)(a)(i) to (iii) are to be read as they apply in respect of the vehicle or aircraft, as the case may be, as follows:  
  (i) at the beginning of the first taxation year or fiscal period of the taxpayer commencing after the end of the taxation year or fiscal period, as the case may be, in which the goods and services tax in respect of such property was considered for the purposes of determining the input tax credit to be payable, if the tax was considered for the purposes of determining the input tax credit to have become payable in the reporting period, or 
  (ii) if no such tax was considered for the purposes of determining the input tax credit to have become payable in the reporting period, at the end of the reporting period; or 
  
  ### Application of subsection (16.1) to certain vehicles and aircraft
  
  (17.1) If the input tax refund of a taxpayer under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, in respect of a passenger vehicle, zero-emission passenger vehicle or aircraft is determined with reference to section 252 of that Act, subparagraphs (16.1)(a)(i) to (iii) are to be read as they apply in respect of the vehicle or aircraft, as the case may be, as follows:  
  (i) at the beginning of the first taxation year or fiscal period of the taxpayer that begins after the end of the taxation year or fiscal period, as the case may be, in which the Quebec sales tax in respect of such property was considered for the purposes of determining the input tax refund to be payable, if the tax was considered for the purposes of determining the input tax refund to have become payable in the reporting period, or 
  (ii) if no such tax was considered for the purposes of determining the input tax refund to have become payable in the reporting period, at the end of the reporting period; or 
  
  ### Input tax credit on assessment
  
  (17.2) An amount in respect of an input tax credit that is deemed by subsection 296(5) of the Excise Tax Act to have been claimed in a return or application filed under Part IX of that Act is deemed to have been so claimed for the reporting period under that Act that includes the time when the Minister makes the assessment referred to in that subsection.  
  
  ### Quebec input tax refund on assessment
  
  (17.3) An amount in respect of an input tax refund that is deemed by section 30.5 of the Tax Administration Act, R.S.Q., c. A-6.002, to have been claimed is deemed to have been so claimed for the reporting period under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, that includes the day on which an assessment is issued to the taxpayer indicating that the refund has been allocated under that section 30.5.  
  
  ### Goods and services tax — repayment of input tax credit
  
  (18) For the purposes of this Act, where an amount is added at a particular time in determining the net tax of a taxpayer under Part IX of the Excise Tax Act in respect of an input tax credit relating to property or a service that had been previously deducted in determining the net tax of the taxpayer, that amount shall be deemed to be assistance repaid at the particular time in respect of the property or service pursuant to a legal obligation to repay all or part of that assistance.  
  
  ### Repayment of Quebec input tax refund
  
  (18.1) For the purposes of this Act, if an amount is added at a particular time in determining the net tax of a taxpayer under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, in respect of an input tax refund relating to property or service that had been previously deducted in determining the net tax of the taxpayer, that amount is deemed to be assistance repaid at the particular time in respect of the property or service under a legal obligation to repay all or part of that assistance.  
  
  ### When property available for use
  
  (19) Except as otherwise provided, property shall be considered to have become available for use for the purposes of this Act at the time at which it has, or would have if it were depreciable property, become available for use for the purpose of subsection 13(26). 
  
  ### Partition of property
  
  (20) Subject to subsections (21) to (23), for the purposes of this Act, if at any time a property owned by two or more persons is the subject of a partition, the following rules apply, notwithstanding any retroactive or declaratory effect of the partition: 
  (a) each such person who had, immediately before that time, an interest in, or for civil law a right in, the property (which interest or right in the property is referred to in this subsection and subsection (21) as an “interest” or a “right”, as the case may be) is deemed not to have disposed at that time of that proportion, not exceeding 100%, of the interest or right that the fair market value of that person’s interest or right in the property immediately after that time is of the fair market value of that person’s interest or right in the property immediately before that time, 
  (b) each such person who has an interest or a right in the property immediately after that time is deemed not to have acquired at that time that proportion of the interest or right that the fair market value of that person’s interest or right in the property immediately before that time is of the fair market value of that person’s interest or right in the property immediately after that time, 
  (c) each such person who had an interest or a right in the property immediately before that time is deemed to have had until that time, and to have disposed at that time of, that proportion of the person’s interest or right to which paragraph (a) does not apply, 
  (d) each such person who has an interest or a right in the property immediately after that time is deemed not to have had before that time, and to have acquired at that time, that proportion of the person’s interest or right to which paragraph (b) does not apply, and 
  (e) paragraphs (a) to (d) do not apply if the interest or right of the person is an interest or a right in fungible tangible property, or for civil law fungible corporeal property described in that person’s inventory, and, for the purposes of this subsection, if an interest or a right in the property is an undivided interest or right, the fair market value of the interest or right at any time is deemed to be equal to that proportion of the fair market value of the property at that time that the interest or right is of all the undivided interests or rights in the property. 
  
  ### Subdivision of property
  
  (21) If a property that was owned by two or more persons is the subject of a partition among those persons and, as a consequence of it, each such person has, in the property, a new interest or right the fair market value of which immediately after the partition, expressed as a percentage of the fair market value of all the new interests or rights in the property immediately after the partition, is equal to the fair market value of that person’s undivided interest or right immediately before the partition, expressed as a percentage of the fair market value of all the undivided interests or rights in the property immediately before the partition, 
  (a) subsection (20) does not apply to the property, and 
  (b) the new interest or right of each such person is deemed to be a continuation of that person’s undivided interest or right in the property immediately before the partition, and, for the purposes of this subsection, 
  (c) subdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are co-owned by the same persons who co-owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and 
  (d) if an interest or a right in the property is or includes an undivided interest or right, the fair market value of the interest or right shall be determined without regard to any discount or premium that applies to a minority or majority interest or right in the property. 
  
  ### Matrimonial regimes
  
  (22) Where at any time property could, as a consequence of the dissolution of a matrimonial regime between 2 spouses or common-law partners, be the subject of a partition, for the purposes of this Act 
  (a) where that property was owned by one of the spouses or common-law partners immediately before it became subject to that regime and had not subsequently been disposed of before that time, it shall be deemed to be owned at that time by that spouse or common-law partner and not by the other spouse or common-law partner; and 
  (b) in any other case, the property shall be deemed to be owned by the spouse or common-law partner who has the administration of that property at that time and not by the other spouse or common-law partner. 
  
  ### Dissolution of a matrimonial regime
  
  (23) Where, immediately after the dissolution of a matrimonial regime (other than a dissolution occurring as a consequence of death), the owner of a property that was subject to that regime is not the person, or the estate of the person, who is deemed by subsection 248(22) to have been the owner of the property immediately before the dissolution, the person shall be deemed for the purposes of this Act to have transferred the property to the person’s spouse or common-law partner immediately before the dissolution. 
  
  ### Transfers after death
  
  (23.1) If, as a consequence of the laws of a province relating to spouses’ or common-law partners’ interests or rights in respect of property as a result of marriage or common-law partnership, property is, after the death of a taxpayer, 
  (a) transferred or distributed to a person who was the taxpayer’s spouse or common-law partner at the time of the death, or acquired by that person, the property shall be deemed to have been so transferred, distributed or acquired, as the case may be, as a consequence of the death; or 
  (b) transferred or distributed to the taxpayer’s estate, or acquired by the taxpayer’s estate, the property shall be deemed to have been so transferred, distributed or acquired, as the case may be, immediately before the time that is immediately before the death. 
  
  ### Accounting methods
  
  (24) For greater certainty, it is hereby declared that, unless specifically required, neither the equity nor the consolidation method of accounting shall be used to determine any amount for the purposes of this Act. 
  
  ### Beneficially interested
  
  (25) For the purposes of this Act, 
  (a) a person or partnership beneficially interested in a particular trust includes any person or partnership that has any right (whether immediate or future, whether absolute or contingent or whether conditional on or subject to the exercise of any discretion by any person or partnership) as a beneficiary under a trust to receive any of the income or capital of the particular trust either directly from the particular trust or indirectly through one or more trusts or partnerships; 
  (b) except for the purpose of this paragraph, a particular person or partnership is deemed to be beneficially interested in a particular trust at a particular time where 
  (i) the particular person or partnership is not beneficially interested in the particular trust at the particular time, 
  (ii) because of the terms or conditions of the particular trust or any arrangement in respect of the particular trust at the particular time, the particular person or partnership might, because of the exercise of any discretion by any person or partnership, become beneficially interested in the particular trust at the particular time or at a later time, and 
  (iii) at or before the particular time, either 
  (A) the particular trust has acquired property, directly or indirectly in any manner whatever, from 
  (I) the particular person or partnership, 
  (II) another person with whom the particular person or partnership, or a member of the particular partnership, does not deal at arm’s length, 
  (III) a person or partnership with whom the other person referred to in subclause 248(25)(b)(iii)(A)(II) does not deal at arm’s length, 
  (IV) a controlled foreign affiliate of the particular person or of another person with whom the particular person or partnership, or a member of the particular partnership, does not deal at arm’s length, or 
  (V) a non-resident corporation that would, if the particular partnership were a corporation resident in Canada, be a controlled foreign affiliate of the particular partnership, or 
  (B) a person or partnership described in any of subclauses 248(25)(b)(iii)(A)(I) to 248(25)(b)(iii)(A)(V) has given a guarantee on behalf of the particular trust or provided any other financial assistance whatever to the particular trust; and 
  (c) a member of a partnership that is beneficially interested in a trust is deemed to be beneficially interested in the trust. 
  
  ### Trust-to-trust transfers
  
  (25.1) If, at any time, a particular trust transfers property to another trust (other than a trust governed by a registered retirement savings plan or by a registered retirement income fund) in circumstances to which paragraph (f) of the definition disposition in subsection (1) applies, without affecting the personal liabilities under this Act of the trustees of either trust or the application of subsection 104(5.8),  
  (a) the other trust is deemed to be after that time the same trust as, and a continuation of, the particular trust; and 
  (b) for greater certainty, if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the particular trust by any of paragraphs 51(1)(f), 85(1)(i) and 85.1(1)(a), subsection 85.1(5), paragraph 85.1(8)(b), subsections 87(4) and (5) and paragraphs 97(2)(c) and 107(3.1)(d), the property is also deemed to be, at any time that is within 60 months after the transaction or event, taxable Canadian property of the other trust. 
  
  ### Trusts to ensure obligations fulfilled
  
  (25.2) Except for the purpose of this subsection, where at any time property is transferred to a trust in circumstances to which paragraph (k) of the definition disposition in subsection (1) applies, the trust is deemed to deal with the property as agent for the transferor throughout the period that begins at the time of the transfer and ends at the time of the first change after that time in the beneficial ownership of the property.  
  
  ### Cost of trust interest
  
  (25.3) The cost to a taxpayer of a particular unit of a trust is deemed to be equal to the amount described in paragraph (a) where 
  (a) the trust issues the particular unit to the taxpayer directly in satisfaction of a right to enforce payment of an amount by the trust in respect of the taxpayer’s capital interest in the trust; 
  (b) at the time that the particular unit is issued, the trust is neither a personal trust nor a trust prescribed for the purpose of subsection 107(2); and 
  (c) either 
  (i) the particular unit is capital property and the amount is not proceeds of disposition of a capital interest in the trust, or 
  (ii) the particular unit is not capital property and subparagraph 53(2)(h)(i.1) does not apply in respect of the amount described in paragraph (a) but would so apply if that subparagraph were read without reference to clauses 53(2)(h)(i.1)(A) and (B). 
  
  ### Where acquisition by another of right to enforce
  
  (25.4) If at a particular time a taxpayer’s capital interest in a trust includes a right to enforce payment of an amount by the trust, the amount shall be added at the particular time to the cost otherwise determined to the taxpayer of the capital interest where 
  (a) immediately after the particular time there is a disposition by the taxpayer of the capital interest; 
  (b) as a consequence of the disposition, the right to enforce payment of the amount is acquired by another person or partnership; and 
  (c) if the right to enforce payment of the amount had been satisfied by a payment to the taxpayer by the trust, there would have been no disposition of that right for the purposes of this Act because of the application of paragraph (i) of the definition disposition in subsection (1).  
  
  ### Debt obligations
  
  (26) For greater certainty, where at any time a person or partnership (in this subsection referred to as the “debtor”) becomes liable to repay money borrowed by the debtor or becomes liable to pay an amount (other than interest) 
  (a) as consideration for any property acquired by the debtor or services rendered to the debtor, or 
  (b) that is deductible in computing the debtor’s income, for the purposes of applying the provisions of this Act relating to the treatment of the debtor in respect of the liability, the liability shall be considered to be an obligation, issued at that time by the debtor, that has a principal amount at that time equal to the amount of the liability at that time. 
  
  ### Parts of debt obligations
  
  (27) For greater certainty, 
  (a) unless the context requires otherwise, an obligation issued by a debtor includes any part of a larger obligation that was issued by the debtor; 
  (b) the principal amount of that part shall be considered to be the portion of the principal amount of that larger obligation that relates to that part; and 
  (c) the amount for which that part was issued shall be considered to be the portion of the amount for which that larger obligation was issued that relates to that part. 
  
  ### Limitation respecting inclusions, deductions and tax credits
  
  (28) Unless a contrary intention is evident, no provision of this Act shall be read or construed 
  (a) to require the inclusion or permit the deduction, either directly or indirectly, in computing a taxpayer’s income, taxable income or taxable income earned in Canada, for a taxation year or in computing a taxpayer’s income or loss for a taxation year from a particular source or from sources in a particular place, of any amount to the extent that the amount has already been directly or indirectly included or deducted, as the case may be, in computing such income, taxable income, taxable income earned in Canada or loss, for the year or any preceding taxation year; 
  (b) to permit the deduction, either directly or indirectly, in computing a taxpayer’s tax payable under any Part of this Act for a taxation year of any amount to the extent that the amount has already been directly or indirectly deducted in computing such tax payable for the year or any preceding taxation year; or 
  (c) to consider an amount to have been paid on account of a taxpayer’s tax payable under any Part of this Act for a taxation year to the extent that the amount has already been considered to have been paid on account of such tax payable for the year or any preceding taxation year. 
  
  ### Farming or fishing business
  
  (29) For the purposes of subsection 40(1.1) and sections 70, 73 and 110.6, if at any time a person or partnership carries on a farming business and a fishing business, a property used at that time principally in a combination of the activities of the farming business and the fishing business is deemed to be used at that time principally in the course of carrying on a farming or fishing business. 
  
  ### Intention to give
  
  (30) The existence of an amount of an advantage in respect of a transfer of property does not in and by itself disqualify the transfer from being a gift to a qualified donee if 
  (a) the amount of the advantage does not exceed 80% of the fair market value of the transferred property; or 
  (b) the transferor of the property establishes to the satisfaction of the Minister that the transfer was made with the intention to make a gift. 
  
  ### Eligible amount of gift or monetary contribution
  
  (31) The eligible amount of a gift or monetary contribution is the amount by which the fair market value of the property that is the subject of the gift or monetary contribution exceeds the amount of the advantage, if any, in respect of the gift or monetary contribution. 
  
  ### Amount of advantage
  
  (32) The amount of the advantage in respect of a gift or monetary contribution by a taxpayer is the total of 
  (a) the total of all amounts, other than an amount referred to in paragraph (b), each of which is the value, at the time the gift or monetary contribution is made, of any property, service, compensation, use or other benefit that the taxpayer, or a person or partnership who does not deal at arm’s length with the taxpayer, has received, obtained or enjoyed, or is entitled, either immediately or in the future and either absolutely or contingently, to receive, obtain, or enjoy 
  (i) that is consideration for the gift or monetary contribution, 
  (ii) that is in gratitude for the gift or monetary contribution, or 
  (iii) that is in any other way related to the gift or monetary contribution, and 
  (b) the limited-recourse debt, determined under subsection 143.2(6.1), in respect of the gift or monetary contribution at the time the gift or monetary contribution is made. 
  
  ### Cost of property acquired by donor
  
  (33) The cost to a taxpayer of a property, acquired by the taxpayer in circumstances where subsection (32) applies to include the value of the property in computing the amount of the advantage in respect of a gift or monetary contribution, is equal to the fair market value of the property at the time the gift or monetary contribution is made. 
  
  ### Repayment of limited-recourse debt
  
  (34) If at any time in a taxation year a taxpayer has paid an amount (in this subsection referred to as the “repaid amount”) on account of the principal amount of an indebtedness which was, before that time, an unpaid principal amount that was a limited-recourse debt referred to in subsection 143.2(6.1) (in this subsection referred to as the “former limited-recourse debt”) in respect of a gift or monetary contribution (in this subsection referred to as the “original gift” or “original monetary contribution”, respectively, as the case may be) of the taxpayer (otherwise than by way of an assignment or transfer of a guarantee, security or similar indemnity or covenant, or by way of a payment in respect of which any taxpayer referred to in subsection 143.2(6.1) has incurred an indebtedness that would be a limited-recourse debt referred to in that subsection if that indebtedness were in respect of a gift or monetary contribution made at the time that that indebtedness was incurred), the following rules apply: 
  (a) if the former limited-recourse debt is in respect of the original gift, for the purposes of sections 110.1 and 118.1, the taxpayer is deemed to have made in the taxation year a gift to a qualified donee, the eligible amount of which deemed gift is the amount, if any, by which 
  (i) the amount that would have been the eligible amount of the original gift, if the total of all such repaid amounts paid at or before that time were paid immediately before the original gift was made, exceeds 
  (ii) the total of 
  (A) the eligible amount of the original gift, and 
  (B) the eligible amount of all other gifts deemed by this paragraph to have been made before that time in respect of the original gift; and 
  (b) if the former limited-recourse debt is in respect of the original monetary contribution, for the purposes of subsection 127(3), the taxpayer is deemed to have made in the taxation year a monetary contribution referred to in that subsection, the eligible amount of which is the amount, if any, by which 
  (i) the amount that would have been the eligible amount of the original monetary contribution, if the total of all such repaid amounts paid at or before that time were paid immediately before the original monetary contribution was made, exceeds 
  (ii) the total of 
  (A) the eligible amount of the original monetary contribution, and 
  (B) the eligible amount of all other monetary contributions deemed by this paragraph to have been made before that time in respect of the original monetary contribution. 
  
  ### Deemed fair market value
  
  (35) For the purposes of subsection (31), paragraph 69(1)(b) and subsections 110.1(2.1) and (3) and 118.1(5.4), (6) and (13.2), the fair market value of a property that is the subject of a gift made by a taxpayer to a qualified donee is deemed to be the lesser of the fair market value of the property otherwise determined and the cost or, in the case of capital property, the adjusted cost base or, in the case of a life insurance policy in respect of which the taxpayer is a policyholder, the adjusted cost basis (as defined in subsection 148(9)), of the property to the taxpayer immediately before the gift is made if 
  (a) the taxpayer acquired the property under a gifting arrangement that is a tax shelter as defined in subsection 237.1(1); or 
  (b) except where the gift is made as a consequence of the taxpayer’s death, 
  (i) the taxpayer acquired the property less than three years before the day that the gift is made, or 
  (ii) the taxpayer acquired the property less than 10 years before the day that the gift is made and it is reasonable to conclude that, at the time the taxpayer acquired the property, one of the main reasons for the acquisition was to make a gift of the property to a qualified donee. 
  
  ### Non-arm’s length transaction
  
  (36) If a taxpayer acquired a property, otherwise than by reason of the death of an individual, that is the subject of a gift to which subsection (35) applies because of subparagraph (35)(b)(i) or (ii) and the property was, at any time within the 3-year or 10-year period, respectively, that ends when the gift was made, acquired by a person or partnership with whom the taxpayer does not deal at arm’s length, for the purpose of applying subsection (35) to the taxpayer, the cost, or in the case of capital property, the adjusted cost base, of the property to the taxpayer immediately before the gift is made is deemed to be equal to the lowest amount that is the cost, or in the case of capital property, the adjusted cost base, to the taxpayer or any of those persons or partnerships immediately before the property was disposed of by that person or partnership. 
  
  ### Non-application of subsection (35)
  
  (37) Subsection (35) does not apply to a gift 
  (a) of inventory; 
  (b) of real property or an immovable situated in Canada; 
  (c) of an object referred to in subparagraph 39(1)(a)(i.1), other than an object acquired under a gifting arrangement (as defined in subsection 237.1(1)) that is a tax shelter; 
  (d) of property to which paragraph 38(a.1) or (a.2) applies; 
  (e) of a share of the capital stock of a corporation if 
  (i) the share was issued by the corporation to the donor, 
  (ii) immediately before the gift, the corporation was controlled by the donor, a person related to the donor or a group of persons each of whom is related to the donor, and 
  (iii) subsection (35) would not have applied in respect of the consideration for which the share was issued had that consideration been donated by the donor to the qualified donee when the share was so donated; 
  (f) by a corporation of property if 
  (i) the property was acquired by the corporation in circumstances to which subsection 85(1) or (2) applied, 
  (ii) immediately before the gift, the shareholder from whom the corporation acquired the property controlled the corporation or was related to a person or each member of a group of persons that controlled the corporation, and 
  (iii) subsection (35) would not have applied in respect of the property had the property not been transferred to the corporation and had the shareholder made the gift to the qualified donee when the corporation so made the gift; or 
  (g) of a property that was acquired in circumstances where subsection 70(6) or (9) or 73(1), (3) or (4) applied, unless subsection (36) would have applied if this subsection were read without reference to this paragraph. 
  
  ### Artificial transactions
  
  (38) The eligible amount of a particular gift of property by a taxpayer is nil if it can reasonably be concluded that the particular gift relates to a transaction or series of transactions 
  (a) one of the purposes of which is to avoid the application of subsection (35) to a gift of any property; or 
  (b) that would, if this Act were read without reference to this paragraph, result in a tax benefit to which subsection 245(2) applies. 
  
  ### Substantive gift
  
  (39) If a taxpayer disposes of a property (in this subsection referred to as the substantive gift) that is a capital property of the taxpayer, to a recipient that is a registered party, a registered association or a candidate, as those terms are defined in the Canada Elections Act, or that is a qualified donee, subsection (35) would have applied in respect of the substantive gift if it had been the subject of a gift by the taxpayer to a qualified donee, and all or a part of the proceeds of disposition of the substantive gift are (or are substituted, directly or indirectly in any manner whatever, for) property that is the subject of a gift or monetary contribution by the taxpayer to the recipient or any person dealing not at arm’s length with the recipient, the following rules apply:  
  (a) for the purpose of subsection (31), the fair market value of the property that is the subject of the gift or monetary contribution made by the taxpayer is deemed to be that proportion of the lesser of the fair market value of the substantive gift and the cost, or if the substantive gift is capital property of the taxpayer, the adjusted cost base, of the substantive gift to the taxpayer immediately before the disposition to the recipient, that the fair market value otherwise determined of the property that is the subject of the gift or monetary contribution is of the proceeds of disposition of the substantive gift; and 
  (b) if the substantive gift is capital property of the taxpayer, for the purpose of the definitions proceeds of disposition of property in subsection 13(21) and section 54, the sale price of the substantive gift is to be reduced by the amount by which the fair market value of the property that is the subject of the gift (determined without reference to this section) exceeds the fair market value determined under paragraph (a).  
  (c)  [Repealed, 2016, c. 12, s. 63]  
  
  ### Inter-charity gifts
  
  (40) Subsection (30) does not apply in respect of a gift received by a qualified donee from a registered charity. 
  
  ### Information not provided
  
  (41) Notwithstanding subsection (31), the eligible amount of a gift or monetary contribution made by a taxpayer is nil if the taxpayer does not — before a receipt referred to in subsection 110.1(2), 118.1(2) or 127(3), as the case may be, is issued in respect of the gift or monetary contribution — inform the qualified donee or the recipient, as the case may be, of any circumstances in respect of which subsection (31), (35), (36), (38) or (39) requires that the eligible amount of the gift or monetary contribution be less than the fair market value, determined without reference to subsections (35), 110.1(3) and 118.1(6), of the property that is the subject of the gift or monetary contribution. 
  
  ### Synthetic equity arrangements — disaggregation
  
  (42) For the purposes of the definition synthetic equity arrangement in subsection (1), paragraphs (c) and (d) of the definition dividend rental arrangement in subsection (1) and subsections 112(2.31), (2.32) and (10), an arrangement that reflects the fair market value of more than one type of identical share (as defined in subsection 112(10)) is considered to be a separate arrangement with respect to each type of identical share the value of which the arrangement reflects.  
  
  ### Definition of 
  *taxation year* 
  
  249 (1) In this Act, except as expressly otherwise provided, a 
  *taxation year* is  
  (a) in the case of a corporation or Canadian resident partnership, a fiscal period; 
  (b) in the case of a graduated rate estate, the period for which the accounts of the estate are made up for purposes of assessment under this Act; and 
  (c) in any other case, a calendar year. 
  
  ### References to calendar year
  
  (1.1) When a taxation year is referred to by reference to a calendar year, the reference is to the taxation year or taxation years that coincide with, or that end in, that calendar year. 
  
  ### References to certain taxation years and fiscal periods
  
  (2) For the purposes of this Act, 
  (a) a reference to a taxation year ending in another year includes a reference to a taxation year ending coincidentally with that other year; and 
  (b) a reference to a fiscal period ending in a taxation year includes a reference to a fiscal period ending coincidentally with that year. 
  
  ### Fiscal period exceeding 365 days
  
  (3) If a fiscal period of a corporation exceeds 365 days and for that reason the corporation does not have a taxation year that ends in a particular calendar year, for the purposes of this Act, 
  (a) the corporation’s first taxation year that would otherwise end in the immediately following calendar year is deemed to end on the last day of the particular calendar year and its next taxation year is deemed to commence on the first day of the immediately following calendar year; and 
  (b) the corporation’s first fiscal period that would otherwise end in the immediately following calendar year is deemed to end on the last day of the particular calendar year and its next fiscal period is deemed to commence on the first day of the immediately following calendar year. 
  
  ### Year end on status change
  
  (3.1) If at any time a corporation becomes or ceases to be a Canadian-controlled private corporation, otherwise than because of an acquisition of control to which subsection (4) would, if this Act were read without reference to this subsection, apply, 
  (a) subject to paragraph (c), the corporation’s taxation year that would, if this Act were read without reference to this subsection, include that time is deemed to end immediately before that time; 
  (b) a new taxation year of the corporation is deemed to begin at that time; 
  (c) notwithstanding subsections (1) and (3), the corporation’s taxation year that would, if this Act were read without reference to this subsection, have been its last taxation year that ended before that time is deemed instead to end immediately before that time if 
  (i) were this Act read without reference to this paragraph, that taxation year would, otherwise than because of paragraph 128(1)(d), section 128.1 and paragraphs 142.6(1)(a) or 149(10)(a), have ended within the 7-day period that ended immediately before that time, 
  (ii) within that 7-day period no person or group of persons acquired control of the corporation, and the corporation did not become or cease to be a Canadian-controlled private corporation, and 
  (iii) the corporation elects, in its return of income under Part I for that taxation year to have this paragraph apply; and 
  (d) for the purpose of determining the corporation’s fiscal period after that time, the corporation is deemed not to have established a fiscal period before that time. 
  
  ### Loss restriction event  —  year end
  
  (4) If at any time a taxpayer is subject to a loss restriction event (other than a foreign affiliate, of a taxpayer resident in Canada, that did not carry on a business in Canada at any time in its last taxation year that began before that time), then for the purposes of this Act, 
  (a) subject to paragraph (b), the taxpayer’s taxation year that would, but for this paragraph, have included that time is deemed to end immediately before that time, a new taxation year of the taxpayer is deemed to begin at that time and, for the purpose of determining the taxpayer’s fiscal period after that time, the taxpayer is deemed not to have established a fiscal period before that time; and 
  (b) subject to paragraph 128(1)(d), section 128.1 and paragraphs 142.6(1)(a) and 149(10)(a), and notwithstanding subsections (1) and (3), if the taxpayer is a corporation and the taxpayer’s taxation year that would, but for this subsection, have been its last taxation year that ended before that time, would, but for this paragraph, have ended within the seven-day period that ended immediately before that time, that taxation year is, except if the taxpayer is subject to a loss restriction event within that period, deemed to end immediately before that time, provided that the taxpayer so elects in its return of income under Part I for that taxation year. 
  
  ### Trust transition from graduated rate estate
  
  (4.1) For a particular trust that is a testamentary trust, 
  (a) its taxation year that otherwise includes a particular time is deemed to end immediately before the particular time if 
  (i) the particular trust is an estate and the particular time is the first time after 2015 at which the estate is not a graduated rate estate, or 
  (ii) the particular trust is not an estate and the particular time is immediately after 2015; and 
  (b) if the particular trust exists at the particular time, 
  (i) a new taxation year of the particular trust is deemed to begin at the particular time, and 
  (ii) for the purpose of determining the particular trust’s fiscal period after the particular time, the particular trust is deemed not to have established a fiscal period before that time. 
  
  ### Graduated rate estate
  
  (5) The period for which the accounts of a graduated rate estate are made up for the purposes of an assessment under this Act may not exceed 12 months, and no change in the time when that period ends may be made for the purposes of this Act without the concurrence of the Minister. 
  (6)  [Repealed, 2014, c. 39, s. 72]  
  
  ### Definition of 
  *fiscal period* 
  
  249.1 (1) For the purposes of this Act, a 
  *fiscal period* of a business or a property of a person or partnership means the period for which the person’s or partnership’s accounts in respect of the business or property are made up for purposes of assessment under this Act, but no fiscal period may end  
  (a) in the case of a corporation, more than 53 weeks after the period began, 
  (b) in the case of 
  (i) an individual (other than an individual to whom section 149 or 149.1 applies or a trust), 
  (i.1) a trust (other than a mutual fund trust if the fiscal period is one to which paragraph 132.11(1)(c) applies or a graduated rate estate), 
  (ii) a partnership of which 
  (A) an individual (other than an individual to whom section 149 or 149.1 applies or a graduated rate estate), 
  (B) a professional corporation, or 
  (C) a partnership to which this subparagraph applies, would, if the fiscal period ended at the end of the calendar year in which the period began, be a member of the partnership in the period, or 
  (iii) a professional corporation that would, if the fiscal period ended at the end of the calendar year in which the period began, be in the period a member of a partnership to which subparagraph 249.1(1)(b)(ii) applies, after the end of the calendar year in which the period began unless, in the case of a business, the business is not carried on in Canada, 
  (c) in the case of a partnership (other than a partnership to which subparagraph (b)(ii) or subsection (9) applies) that is a member of a partnership or has a member that is a partnership, after the end of the calendar year in which it began, if at the end of the calendar year 
  (i) a corporation has a significant interest, as defined in section 34.2, in the partnership, 
  (ii) the partnership is a member of another partnership in which a corporation has a significant interest as defined in section 34.2, 
  (iii) a membership interest in the partnership is held directly, or indirectly through one or more partnerships, by a partnership described in subparagraph (i) or (ii), or 
  (iv) the partnership holds directly, or indirectly through one or more partnerships, a membership interest in a partnership described in any of subparagraphs (i) to (iii), or 
  (d) in any other case, more than 12 months after the period began, and, for the purpose of this subsection, the activities of a person to whom section 149 or 149.1 applies are deemed to be a business. 
  
  ### Not a member of a partnership
  
  (2) For the purpose of subparagraph 249.1(1)(b)(ii) and subsection 249.1(4), a person or partnership that would not have a share of any income or loss of a partnership for a fiscal period of the partnership, if the period ended at the end of the calendar year in which the period began, is deemed not to be a member of the partnership in that fiscal period. 
  
  ### Subsequent fiscal periods
  
  (3) Where a fiscal period of a business or a property of a person or partnership ends at any time, the subsequent fiscal period, if any, of the business or property of the person or partnership is deemed to begin immediately after that time. 
  
  ### Alternative method
  
  (4) Paragraph 249.1(1)(b) does not apply to a fiscal period of a business carried on, throughout the period of time that began at the beginning of the fiscal period and ended at the end of the calendar year in which the fiscal period began, 
  (a) by an individual (otherwise than as a member of a partnership), or 
  (b) by an individual as a member of a partnership, where throughout that period 
  (i) each member of the partnership is an individual, and 
  (ii) the partnership is not a member of another partnership, where 
  (c) in the case of an individual 
  (i) who is referred to in paragraph 249.1(4)(a), or 
  (ii) who is a member of a partnership no member of which is a graduated rate estate, an election in prescribed form to have paragraph 249.1(1)(b) not apply is filed with the Minister by the individual on or before the individual’s filing-due date, and with the individual’s return of income under Part I, for the taxation year that includes the first day of the first fiscal period of the business that begins after 1994, and 
  (d) in the case of an individual who is a member of a partnership a member of which is a graduated rate estate, an election in prescribed form to have paragraph (1)(b) not apply is filed with the Minister by the individual on or before the earliest of the filing-due dates of the members of the partnership for a taxation year that includes the first day of the first fiscal period of the business that begins after 1994. 
  
  ### Alternative method not applicable to tax shelter investments
  
  (5) Subsection 249.1(4) does not apply to a particular fiscal period of a business where, in a preceding fiscal period or throughout the period of time that began at the beginning of the particular period and ended at the end of the calendar year in which the particular period began, the expenditures made in the course of carrying on the business were primarily the cost or capital cost of tax shelter investments (as defined in subsection 143.2(1)). 
  
  ### Revocation of election
  
  (6) Subsection 249.1(4) does not apply to fiscal periods of a business carried on by an individual that begin after the beginning of a particular taxation year of the individual where 
  (a) an election in prescribed form to revoke an election filed under subsection 249.1(4) in respect of the business is filed with the Minister; and 
  (b) the election to revoke is filed 
  (i) in the case of an individual 
  (A) who is not a member of a partnership, or 
  (B) who is a member of a partnership no member of which is a graduated rate estate, by the individual on or before the individual’s filing-due date, and with the individual’s return of income under Part I, for the particular taxation year, and 
  (ii) in the case of an individual who is a member of a partnership a member of which is a graduated rate estate, by the individual on or before the earliest of the filing-due dates of the members of the partnership for a taxation year that includes the first day of the first fiscal period of the business that begins after the beginning of the particular year. 
  
  ### Change of fiscal period
  
  (7) No change in the time when a fiscal period ends may be made for the purposes of this Act without the concurrence of the Minister. 
  
  ### Single-tier fiscal period alignment
  
  (8) The members of a partnership that has a fiscal period that begins before March 22, 2011 and that would, if this Act were read without reference to this subsection and subsection (10), end on a day after March 22, 2011, may elect to end that fiscal period on a particular day that is before the day on which the fiscal period would otherwise end (in this subsection and subsection (10) referred to as a “single-tier alignment election”) if 
  (a) each member of the partnership is, on the particular day, a corporation that is not a professional corporation; 
  (b) the partnership is not, on the particular day, a member of another partnership; 
  (c) at least one member of the partnership is, on the particular day, a corporation that has a significant interest, as defined in section 34.2, in the partnership; 
  (d) at least one member of the partnership referred to in paragraph (c) has a taxation year that ends on a day that differs from the day on which the fiscal period of the partnership would end if this Act were read without reference to this subsection and subsection (10); 
  (e) the particular day is after March 22, 2011 and no later than the latest day that is the last day of the first taxation year that ends after March 22, 2011 of any corporation that has been a member of the partnership continuously since March 21, 2011; and 
  (f) subsection (10) applies to the single-tier alignment election. 
  
  ### Multi-tier fiscal period alignment — one-time election
  
  (9) The members of a partnership to which paragraph (1)(c) would apply if it were read without reference to this subsection may elect (in this subsection and subsections (10) and (11) referred to as a “multi-tier alignment election”) to end a fiscal period of the partnership on a particular day if 
  (a) as a consequence of the multi-tier alignment election, the fiscal period of the partnership, and of each other partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), ends on the particular day; 
  (b) the particular day is before March 22, 2012; and 
  (c) subsection (10) applies to the multi-tier alignment election. 
  
  ### When subsection (9) ceases to apply
  
  (9.1) If paragraph (1)(c) did not apply to end the fiscal period of a partnership on December 31 of a calendar year (in this subsection referred to as the “preceding year”) because subsection (9) applies to the partnership, and to each other partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), (in this subsection referred to collectively as the “aligned multi-tier partnerships” and each individually as an “aligned multi-tier partnership”), 
  (a) subsection (9) ceases to apply — for the purpose of applying paragraph (1)(c) to each of the aligned multi-tier partnerships — in the calendar year following the preceding year (in this subsection referred to as the “current year”) if another partnership (in this subsection referred to as the “new partnership”) becomes in the current year a member of any of the aligned multi-tier partnerships, or any of the aligned multi-tier partnerships becomes in the current year a member of the new partnership, unless 
  (i) the fiscal period of the new partnership, and each other partnership described in relation to the new partnership by any of subparagraphs (1)(c)(ii) to (iv), ends in the current year on the same day as the fiscal period of each of the aligned multi-tier partnerships, and 
  (ii) each member (other than a partnership) of each aligned multi-tier partnership — or a subsidiary wholly-owned corporation of such a member — has been a member of the aligned multi-tier partnership from the end of the last fiscal period ending in the preceding year until the time at which the new partnership becomes a member of an aligned multi-tier partnership, or any of the aligned multi-tier partnerships becomes a member of the new partnership, as the case may be; and 
  (b) if paragraph (a) does not apply because the conditions in subparagraphs (a)(i) and (ii) are met, the new partnership is deemed — for the purpose of applying paragraph (1)(c) to each of the aligned multi-tier partnerships and the new partnership in the current year and subsequent years — to have made the multi-tier alignment election referred to in subsection (9). 
  
  ### Conditions to align a partnership fiscal period
  
  (10) This subsection applies to a single-tier alignment election or a multi-tier alignment election, as the case may be, for a partnership if 
  (a) the election is filed in writing and in prescribed form with the Minister 
  (i) in the case of a single-tier alignment election, by a corporation that is a member of the partnership on or before the day that is the earliest filing-due date of any corporation that is a member of the partnership for its first taxation year ending after March 22, 2011, and 
  (ii) in the case of a multi-tier alignment election, 
  (A) by a corporation that is a member of the partnership, or of a partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), and 
  (B) on or before the day that is the earliest filing-due date of any corporation that is a member of a partnership referred to in clause (A) for the first taxation year of the corporation ending after March 22, 2011; 
  (b) as a consequence of the election, the fiscal period of each partnership to which the election applies is 12 months or less; 
  (c) the election was made by a corporation that has the authority to act for the members of the partnership and each member of any other partnership described in relation to the partnership in subparagraph (1)(c)(ii) to (iv); and 
  (d) no other election is filed with the Minister to end the fiscal period of the partnership, or of any other partnership described in relation to the partnership in subparagraph (1)(c)(ii) to (iv), on a day other than the particular day referred to in subsection (8) or (9), as the case may be. 
  
  ### Deemed multi-tier alignment election
  
  (11) For the purposes of this Act, if paragraph (1)(c) applies to end the fiscal period of a partnership on December 31, 2011, a multi-tier alignment election under subsection (9) is deemed to have been made to end the fiscal period of the partnership on December 31, 2011. 
  
  ### Person deemed resident
  
  250 (1) For the purposes of this Act, a person shall, subject to subsection 250(2), be deemed to have been resident in Canada throughout a taxation year if the person 
  (a) sojourned in Canada in the year for a period of, or periods the total of which is, 183 days or more; 
  (b) was, at any time in the year, a member of the Canadian Forces; 
  (c) was, at any time in the year, 
  (i) an ambassador, minister, high commissioner, officer or servant of Canada, or 
  (ii) an agent-general, officer or servant of a province, and was resident in Canada immediately prior to appointment or employment by Canada or the province or received representation allowances in respect of the year; 
  (d) performed services, at any time in the year, in a country other than Canada under a prescribed international development assistance program of the Government of Canada and was resident in Canada at any time in the 3 month period preceding the day on which those services commenced; 
  (d.1) was, at any time in the year, a member of the overseas Canadian Forces school staff who filed his or her return for the year on the basis that the person was resident in Canada throughout the period during which the person was such a member; 
  (e)  [Repealed, 1999, c. 22, s. 82(1)]  
  (f) was at any time in the year a child of, and dependent for support on, an individual to whom paragraph (b), (c), (d) or (d.1) applies and the person’s income for the year did not exceed the amount determined for F in subsection 118(1.1) for the year; or 
  (g) was at any time in the year, under an agreement or a convention with one or more other countries that has the force of law in Canada, entitled to an exemption from an income tax otherwise payable in any of those countries in respect of income from any source (unless all or substantially all of the person’s income from all sources was not so exempt), because at that time the person was related to or a member of the family of an individual (other than a trust) who was resident in Canada. 
  
  ### Idem
  
  (2) Where at any time in a taxation year a person described in paragraph (1)b), (c) or (d) ceases to be a person so described, or a person described in paragraph (1)(d.1) ceases to be a member of the overseas Canadian Forces school staff, that person shall be deemed to have been resident in Canada throughout the part of the year preceding that time and the spouse or common-law partner and child of that person who by reason of paragraph (1)(e) or (f) would, but for this subsection, be deemed to have been resident in Canada throughout the year shall be deemed to have been resident in Canada throughout that part of the year. 
  
  ### Ordinarily resident
  
  (3) In this Act, a reference to a person resident in Canada includes a person who was at the relevant time ordinarily resident in Canada. 
  
  ### Corporation deemed resident
  
  (4) For the purposes of this Act, a corporation shall be deemed to have been resident in Canada throughout a taxation year if 
  (a) in the case of a corporation incorporated after April 26, 1965, it was incorporated in Canada; 
  (b) in the case of a corporation that 
  (i) was incorporated before April 9, 1959, 
  (ii) was, on June 18, 1971, a foreign business corporation (within the meaning of section 71 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1971 taxation year) that was controlled by a corporation resident in Canada,  
  (iii) throughout the 10 year period ending on June 18, 1971, carried on business in any one particular country other than Canada, and 
  (iv) during the period referred to in subparagraph 250(4)(b)(iii), paid dividends to its shareholders resident in Canada on which its shareholders paid tax to the government of the country referred to in that subparagraph, it was incorporated in Canada and, at any time in the taxation year or at any time in any preceding taxation year commencing after 1971, it was resident in Canada or carried on business in Canada; and 
  (c) in the case of a corporation incorporated before April 27, 1965 (other than a corporation to which subparagraphs 250(4)(b)(i) to 250(4)(b)(iv) apply), it was incorporated in Canada and, at any time in the taxation year or at any time in any preceding taxation year of the corporation ending after April 26, 1965, it was resident in Canada or carried on business in Canada. 
  
  ### Deemed non-resident
  
  (5) Notwithstanding any other provision of this Act (other than paragraph 126(1.1)(a)), a person is deemed not to be resident in Canada at a time if, at that time, the person would, but for this subsection and any tax treaty, be resident in Canada for the purposes of this Act but is, under a tax treaty with another country, resident in the other country and not resident in Canada. 
  
  ### Continued corporation
  
  (5.1) Where a corporation is at any time (in this subsection referred to as the “time of continuation”) granted articles of continuance (or similar constitutional documents) in a particular jurisdiction, the corporation shall 
  (a) for the purposes of applying this Act (other than subsection 250(4)) in respect of all times from the time of continuation until the time, if any, of continuation in a different jurisdiction, be deemed to have been incorporated in the particular jurisdiction and not to have been incorporated in any other jurisdiction; and 
  (b) for the purpose of applying subsection 250(4) in respect of all times from the time of continuation until the time, if any, of continuation in a different jurisdiction, be deemed to have been incorporated in the particular jurisdiction at the time of continuation and not to have been incorporated in any other jurisdiction. 
  
  ### Residence of international shipping corporation
  
  (6) For the purposes of this Act, a corporation that was incorporated or otherwise formed under the laws of a country other than Canada or of a state, province or other political subdivision of such a country is deemed to be resident in that country throughout a taxation year and not to be resident in Canada at any time in the year, if 
  (a) the corporation 
  (i) has international shipping as its principal business in the year, or 
  (ii) holds eligible interests in one or more eligible entities throughout the year and at no time in the year is the total of the cost amounts to it of all those eligible interests and of all debts owing to it by an eligible entity in which an eligible interest is held by it, by a person related to it or by a partnership affiliated with it less than 50% of the total of the cost amounts to it of all its property; 
  (b) all or substantially all the corporation’s gross revenue for the year consists of any one or more of 
  (i) gross revenue from international shipping, 
  (ii) gross revenue from an eligible interest held by it in an eligible entity, and 
  (iii) interest on a debt owing by an eligible entity in which an eligible interest is held by it, by a person related to it or by a partnership affiliated with it; and 
  (c) the corporation was not granted articles of continuance in Canada before the end of the year. 
  
  ### Partner’s gross revenue
  
  (6.01) For the purposes of paragraph (6)(b), an amount of profit allocated from a partnership to a member of the partnership for a taxation year is deemed to be gross revenue of the member from member’s interest in the partnership for the year. 
  
  ### Service providers
  
  (6.02) Subsection (6.03) applies to a corporation, trust or partnership (in this subsection and subsection (6.03) referred to as the “relevant entity”) for a taxation year if 
  (a) the relevant entity does not satisfy the condition in subparagraph (6)(a)(i), determined without reference to subsection (6.03); 
  (b) all or substantially all the gross revenue of the relevant entity for the year consists of any one or more of 
  (i) gross revenue from the provision of services to one or more eligible entities, other than services described in any of paragraphs (a) to (h) of the definition 
  *international shipping* in subsection 248(1),  
  (ii) gross revenue from international shipping, 
  (iii) gross revenue from an eligible interest held by it in an eligible entity, and 
  (iv) interest on a debt owing by an eligible entity in which an eligible interest is held by it or a person related to it; 
  (c) either the relevant entity is a subsidiary wholly-owned corporation (as defined in subsection 87(1.4)) of the eligible entity referred to in paragraph (b) or an eligible interest in each eligible entity referred to in paragraph (b) is held throughout the year by 
  (i) the relevant entity, 
  (ii) one or more persons related to the relevant entity (if the relevant entity and each such person is a corporation), or persons or partnerships affiliated with the relevant entity (in any other case), or 
  (iii) any combination of the relevant entity and persons or partnerships described in subparagraph (ii); and 
  (d) all or substantially all the shares of the capital stock of, or interests in, the relevant entity are held, directly or indirectly through one or more subsidiary wholly-owned corporations (as defined in subsection 87(1.4)), throughout the year by one or more corporations, trusts or partnerships that would be eligible entities if they did not own shares of, or interests in, the relevant entity. 
  
  ### Service providers
  
  (6.03) If this subsection applies for a taxation year, then for the purposes of subsection (6) and paragraph 81(1)(c), 
  (a) the relevant entity is deemed to have international shipping as its principal business in the year; and 
  (b) the gross revenue described in subparagraph (6.02)(b)(i) is deemed to be gross revenue from international shipping. 
  
  ### Definitions
  
  (6.04) The following definitions apply in this subsection and subsections (6) to (6.03).  
  *eligible entity*, for a taxation year, means  
  (a) a corporation that is deemed by subsection (6) to be resident in a country other than Canada for the year; or 
  (b) a partnership or trust, if 
  (i) it satisfies the conditions in subparagraph (6)(a)(i) or (ii), and 
  (ii) all or substantially all its gross revenue for the year consists of any combination of amounts described in any of subparagraphs (6)(b)(i) to (iii). ( entité admissible)   
  *eligible interest* means  
  (a) in respect of a corporation, shares of the capital stock of the corporation that 
  (i) give the holders of those shares not less than 25% of the votes that could be cast at an annual meeting of the shareholders of the corporation, and 
  (ii) have a fair market value that is not less than 25% of the fair market value of all the issued and outstanding shares of the capital stock of the corporation; 
  (b) in respect of a trust, an interest as a beneficiary (as defined in subsection 108(1)) under the trust with a fair market value that is not less than 25% of the fair market value of all the interests of all beneficiaries under the trust; and 
  (c) in respect of a partnership, an interest as a member of the partnership with a fair market value that is not less than 25% of the fair market value of all the membership interests in the partnership. ( participation admissible)  
  
  ### Holdings in eligible entities
  
  (6.05) For the purpose of determining whether a person or partnership (in this subsection referred to as the “holder”) holds an eligible interest in an eligible entity in subsections (6) to (6.04), the holder is deemed to hold all of the shares or interests, as the case may be, in the eligible entity held by 
  (a) the holder; 
  (b) if the holder is a corporation, 
  (i) each corporation related to the holder, and 
  (ii) each person, other than a corporation, or partnership that is affiliated with the holder; and 
  (c) if the holder is not a corporation, each person or partnership affiliated with the holder. 
  
  ### Residence of inter vivos trusts 
  
  (6.1) For the purposes of provisions of this Act that apply to a trust for a taxation year only where the trust has been resident in Canada throughout the year, where a particular trust ceases at any time to exist and the particular trust was resident in Canada immediately before that time, the particular trust is deemed to be resident in Canada throughout the period that begins at that time and ends at the end of the year. 
  (7)  [Repealed, 2011, c. 24, s. 74]  
  
  ### Non-resident person’s taxation year and income
  
  250.1 For greater certainty, unless the context requires otherwise 
  (a) a taxation year of a non-resident person shall be determined, except as otherwise permitted by the Minister, in the same manner as the taxation year of a person resident in Canada; and 
  (b) a person for whom income for a taxation year is determined in accordance with this Act includes a non-resident person. 
  
  ### Arm’s length
  
  251 (1) For the purposes of this Act, 
  (a) related persons shall be deemed not to deal with each other at arm’s length; 
  (b) a taxpayer and a personal trust (other than a trust described in any of paragraphs (a) to (e.1) of the definition 
  *trust* in subsection 108(1)) are deemed not to deal with each other at arm’s length if the taxpayer, or any person not dealing at arm’s length with the taxpayer, would be beneficially interested in the trust if subsection 248(25) were read without reference to subclauses 248(25)(b)(iii)(A)(II) to (IV); and  
  (c) in any other case, it is a question of fact whether persons not related to each other are, at a particular time, dealing with each other at arm’s length. 
  
  ### Definition of 
  *related persons* 
  
  (2) For the purpose of this Act, 
  *related persons*, or persons related to each other, are  
  (a) individuals connected by blood relationship, marriage or common-law partnership or adoption; 
  (b) a corporation and 
  (i) a person who controls the corporation, if it is controlled by one person, 
  (ii) a person who is a member of a related group that controls the corporation, or 
  (iii) any person related to a person described in subparagraph 251(2)(b)(i) or 251(2)(b)(ii); and 
  (c) any two corporations 
  (i) if they are controlled by the same person or group of persons, 
  (ii) if each of the corporations is controlled by one person and the person who controls one of the corporations is related to the person who controls the other corporation, 
  (iii) if one of the corporations is controlled by one person and that person is related to any member of a related group that controls the other corporation, 
  (iv) if one of the corporations is controlled by one person and that person is related to each member of an unrelated group that controls the other corporation, 
  (v) if any member of a related group that controls one of the corporations is related to each member of an unrelated group that controls the other corporation, or 
  (vi) if each member of an unrelated group that controls one of the corporations is related to at least one member of an unrelated group that controls the other corporation. 
  
  ### Corporations related through a third corporation
  
  (3) Where two corporations are related to the same corporation within the meaning of subsection 251(2), they shall, for the purposes of subsections 251(1) and 251(2), be deemed to be related to each other. 
  
  ### Relation where amalgamation or merger
  
  (3.1) Where there has been an amalgamation or merger of two or more corporations and the new corporation formed as a result of the amalgamation or merger and any predecessor corporation would have been related immediately before the amalgamation or merger if the new corporation were in existence at that time, and if the persons who were the shareholders of the new corporation immediately after the amalgamation or merger were the shareholders of the new corporation at that time, the new corporation and any such predecessor corporation shall be deemed to have been related persons. 
  
  ### Amalgamation of related corporations
  
  (3.2) Where there has been an amalgamation or merger of 2 or more corporations each of which was related (otherwise than because of a right referred to in paragraph 251(5)(b)) to each other immediately before the amalgamation or merger, the new corporation formed as a result of the amalgamation or merger and each of the predecessor corporations is deemed to have been related to each other. 
  
  ### Definitions concerning groups
  
  (4) In this Act,  
  *related group* means a group of persons each member of which is related to every other member of the group; (groupe lié)   
  *unrelated group* means a group of persons that is not a related group. (groupe non lié)  
  
  ### Control by related groups, options, etc.
  
  (5) For the purposes of subsection 251(2) and the definition 
  *Canadian-controlled private corporation* in subsection 125(7),  
  (a) where a related group is in a position to control a corporation, it shall be deemed to be a related group that controls the corporation whether or not it is part of a larger group by which the corporation is in fact controlled; 
  (b) where at any time a person has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, 
  (i) to, or to acquire, shares of the capital stock of a corporation or to control the voting rights of such shares, the person shall, except where the right is not exercisable at that time because the exercise thereof is contingent on the death, bankruptcy or permanent disability of an individual, be deemed to have the same position in relation to the control of the corporation as if the person owned the shares at that time, 
  (ii) to cause a corporation to redeem, acquire or cancel any shares of its capital stock owned by other shareholders of the corporation, the person shall, except where the right is not exercisable at that time because the exercise thereof is contingent on the death, bankruptcy or permanent disability of an individual, be deemed to have the same position in relation to the control of the corporation as if the shares were so redeemed, acquired or cancelled by the corporation at that time; 
  (iii) to, or to acquire or control, voting rights in respect of shares of the capital stock of a corporation, the person is, except where the right is not exercisable at that time because its exercise is contingent on the death, bankruptcy or permanent disability of an individual, deemed to have the same position in relation to the control of the corporation as if the person could exercise the voting rights at that time, or 
  (iv) to cause the reduction of voting rights in respect of shares, owned by other shareholders, of the capital stock of a corporation, the person is, except where the right is not exercisable at that time because its exercise is contingent on the death, bankruptcy or permanent disability of an individual, deemed to have the same position in relation to the control of the corporation as if the voting rights were so reduced at that time; and 
  (c) where a person owns shares in two or more corporations, the person shall as shareholder of one of the corporations be deemed to be related to himself, herself or itself as shareholder of each of the other corporations. 
  
  ### Blood relationship, etc.
  
  (6) For the purposes of this Act, persons are connected by 
  (a) blood relationship if one is the child or other descendant of the other or one is the brother or sister of the other; 
  (b) marriage if one is married to the other or to a person who is so connected by blood relationship to the other; 
  (b.1) common-law partnership if one is in a common-law partnership with the other or with a person who is connected by blood relationship to the other; and 
  (c) adoption if one has been adopted, either legally or in fact, as the child of the other or as the child of a person who is so connected by blood relationship (otherwise than as a brother or sister) to the other. 
  
  ### Definition of 
  *affiliated persons* 
  
  251.1 (1) For the purposes of this Act, 
  *affiliated persons*, or persons affiliated with each other, are  
  (a) an individual and a spouse or common-law partner of the individual; 
  (b) a corporation and 
  (i) a person by whom the corporation is controlled, 
  (ii) each member of an affiliated group of persons by which the corporation is controlled, and 
  (iii) a spouse or common-law partner of a person described in subparagraph (i) or (ii); 
  (c) two corporations, if 
  (i) each corporation is controlled by a person, and the person by whom one corporation is controlled is affiliated with the person by whom the other corporation is controlled, 
  (ii) one corporation is controlled by a person, the other corporation is controlled by a group of persons, and each member of that group is affiliated with that person, or 
  (iii) each corporation is controlled by a group of persons, and each member of each group is affiliated with at least one member of the other group; 
  (d) a corporation and a partnership, if the corporation is controlled by a particular group of persons each member of which is affiliated with at least one member of a majority-interest group of partners of the partnership, and each member of that majority-interest group is affiliated with at least one member of the particular group; 
  (e) a partnership and a majority-interest partner of the partnership; 
  (f) two partnerships, if 
  (i) the same person is a majority-interest partner of both partnerships, 
  (ii) a majority-interest partner of one partnership is affiliated with each member of a majority-interest group of partners of the other partnership, or 
  (iii) each member of a majority-interest group of partners of each partnership is affiliated with at least one member of a majority-interest group of partners of the other partnership; 
  (g) a person and a trust, if the person 
  (i) is a majority-interest beneficiary of the trust, or 
  (ii) would, if this subsection were read without reference to this paragraph, be affiliated with a majority-interest beneficiary of the trust; and 
  (h) two trusts, if a contributor to one of the trusts is affiliated with a contributor to the other trust and 
  (i) a majority-interest beneficiary of one of the trusts is affiliated with a majority-interest beneficiary of the other trust, 
  (ii) a majority-interest beneficiary of one of the trusts is affiliated with each member of a majority-interest group of beneficiaries of the other trust, or 
  (iii) each member of a majority-interest group of beneficiaries of each of the trusts is affiliated with at least one member of a majority-interest group of beneficiaries of the other trust. 
  
  ### Affiliation where amalgamation or merger
  
  (2) Where at any time 2 or more corporations (in this subsection referred to as the “predecessors”) amalgamate or merge to form a new corporation, the new corporation and any predecessor are deemed to have been affiliated with each other where they would have been affiliated with each other immediately before that time if 
  (a) the new corporation had existed immediately before that time; and 
  (b) the persons who were the shareholders of the new corporation immediately after that time had been the shareholders of the new corporation immediately before that time. 
  
  ### Definitions
  
  (3) The definitions in this subsection apply in this section.  
  *affiliated group of persons* means a group of persons each member of which is affiliated with every other member. (groupe de personnes affiliées)   
  *beneficiary*, under a trust, includes a person beneficially interested in the trust. (bénéficiaire)   
  *contributor*, to a trust, means a person who has at any time made a loan or transfer of property, either directly or indirectly, in any manner whatever, to or for the benefit of the trust other than, if the person deals at arm’s length with the trust at that time and is not immediately after that time a majority-interest beneficiary of the trust,  
  (a) a loan made at a reasonable rate of interest; or 
  (b) a transfer made for fair market value consideration. ( cotisant)   
  *controlled* means controlled, directly or indirectly in any manner whatever. (contrôlé)   
  *majority-interest beneficiary*, of a trust at any time, means a person whose interest as a beneficiary, if any, at that time  
  (a) in the income of the trust has, together with the interests as a beneficiary in the income of the trust of all persons with whom the person is affiliated, a fair market value that is greater than 50% of the fair market value of all the interests as a beneficiary in the income of the trust; or 
  (b) in the capital of the trust has, together with the interests as a beneficiary in the capital of the trust of all persons with whom the person is affiliated, a fair market value that is greater than 50% of the fair market value of all the interests as a beneficiary in the capital of the trust. ( bénéficiaire détenant une participation majoritaire)   
  *majority-interest group of beneficiaries*, of a trust at any time, means a group of persons each of whom is a beneficiary under the trust at that time such that  
  (a) if one person held the interests as a beneficiary of all of the members of the group, that person would be a majority-interest beneficiary of the trust; and 
  (b) if any member of the group were not a member, the test described in paragraph (a) would not be met. ( groupe de bénéficiaires détenant une participation majoritaire)   
  *majority-interest group of partners* of a partnership means a group of persons each of whom has an interest in the partnership such that  
  (a) if one person held the interests of all members of the group, that person would be a majority-interest partner of the partnership; and 
  (b) if any member of the group were not a member, the test described in paragraph (a) would not be met. ( groupe d’associés détenant une participation majoritaire)  
  
  ### Interpretation
  
  (4) For the purposes of this section, 
  (a) persons are affiliated with themselves; 
  (b) a person includes a partnership; 
  (c) notwithstanding subsection 104(1), a reference to a trust does not include a reference to the trustee or other persons who own or control the trust property; and 
  (d) in determining whether a person is affiliated with a trust, 
  (i) if the amount of income or capital of the trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be, 
  (ii) the interest of a person in a trust as a beneficiary is disregarded in determining whether the person deals at arm’s length with the trust if the person would, in the absence of the interest as a beneficiary, be considered to deal at arm’s length with the trust, 
  (iii) a trust is not a majority interest beneficiary of another trust unless the trust has an interest as a beneficiary in the income or capital, as the case may be, of the other trust, and 
  (iv) in determining whether a contributor to one trust is affiliated with a contributor to another trust, individuals connected by blood relationship, marriage, common-law partnership or adoption are deemed to be affiliated with one another. 
  
  ### Definitions
  
  251.2 (1) The following definitions apply in this section.  
  *beneficiary* has the same meaning as in subsection 251.1(3). (bénéficiaire)   
  *equity* has the same meaning as in subsection 122.1(1) read without reference to paragraph (e) of the definition 
  *equity* in that subsection. (capitaux propres)   
  *equity value* has the same meaning as in subsection 122.1(1). (valeur des capitaux propres)   
  *fixed interest*, at any time of a person in a trust, means an interest of the person as a beneficiary (in this definition, determined without reference to subsection 248(25)) under the trust provided that no amount of the income or capital of the trust to be distributed at any time in respect of any interest in the trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, other than a power in respect of which it is reasonable to conclude that  
  (a) the power is consistent with normal commercial practice; 
  (b) the power is consistent with terms that would be acceptable to the beneficiaries under the trust if the beneficiaries were dealing with each other at arm’s length; and 
  (c) the exercise of, or failure to exercise, the power will not materially affect the value of an interest as a beneficiary under the trust relative to the value of other such interests under the trust. ( participation fixe)   
  *investment fund*, at any time, means a trust, if  
  (a) at all times throughout the period that begins at the later of March 21, 2013 and the end of the calendar year in which it is created and that ends at that time, the trust has a class of units outstanding that complies with the conditions prescribed for the purposes of paragraph 132(6)(c) determined without reference to paragraph 4801(b) of the Income Tax Regulations ; and  
  (b) at all times throughout the period that begins at the later of March 21, 2013 and the time of its creation and that ends at that time, the trust 
  (i) is resident in Canada, 
  (ii) has no beneficiaries who may for any reason receive directly from the trust any of the income or capital of the trust, other than beneficiaries whose interests as beneficiaries under the trust are fixed interests described by reference to units of the trust, 
  (iii) follows a reasonable policy of investment diversification, 
  (iv) limits its undertaking to the investing of its funds in property, 
  (v) does not alone, or as a member of a group of persons, control a corporation, and 
  (vi) does not hold 
  (A) property that the trust, or a person with which the trust does not deal at arm’s length, uses in carrying on a business, 
  (B) real or immovable property, an interest in real property or an immovable, or a real right in an immovable, 
  (C) Canadian resource property, foreign resource property, or an interest or right in Canadian resource property or foreign resource property, or 
  (D) more than 20% of the securities of any class of securities of a person (other than an investment fund or a mutual fund corporation that would meet the conditions in this paragraph, other than in subparagraph (ii), if it were a trust), unless at that time 
  (I) the securities (other than liabilities) of the person held by the trust have a total fair market value that is no more than 10% of the equity value of the person, and 
  (II) the liabilities of the person held by the trust have a total fair market value that is no more than 10% of the fair market value of all of the liabilities of the person. ( fiducie de placement déterminée)   
  *majority-interest beneficiary* has the same meaning as in subsection 251.1(3) read without reference to the expression “, if any,” in the definition majority-interest beneficiary in that subsection. (bénéficiaires détenant une participation majoritaire)   
  *majority-interest group of beneficiaries* has the same meaning as in subsection 251.1(3). (groupe de bénéficiaires détenant une participation majoritaire)   
  *majority-interest group of partners* has the same meaning as in subsection 251.1(3). (groupe d’associés détenant une participation majoritaire)   
  *person* includes a partnership. (personne)   
  *portfolio investment fund* [Repealed, 2016, c. 12, s. 65]   
  *specified right*, held at any time by a person in respect of a trust, means a right under a contract, in equity or otherwise, to acquire, either immediately or in the future and either absolutely or contingently, equity of the trust, or to cause the trust to redeem or cancel equity of the trust, unless the right is not exercisable at that time because its exercise is contingent on the death, bankruptcy or permanent disability of an individual. (droit déterminé)   
  *subsidiary*, of a particular person at any time, means a corporation, partnership or trust (in this definition referred to as the “subject entity”) where  
  (a) the particular person holds at that time property 
  (i) that is equity of the subject entity, or 
  (ii) that derives all or part of its fair market value, directly or indirectly, from equity of the subject entity; and 
  (b) the total of the following amounts is at that time equal to more than 50% of the equity value of the subject entity: 
  (i) each amount that is the fair market value at that time of equity of the subject entity that is held at that time by the particular person or a person with whom the particular person is affiliated, and 
  (ii) each amount (other than an amount described in subparagraph (i)) that is the portion of the fair market value at that time — derived directly or indirectly from equity of the subject entity — of a property that is held at that time by the particular person or a person with whom the particular person is affiliated. ( filiale)  
  
  ### Loss restriction event
  
  (2) For the purposes of this Act, a taxpayer is at any time subject to a loss restriction event if 
  (a) the taxpayer is a corporation and at that time control of the corporation is acquired by a person or group of persons; or 
  (b) the taxpayer is a trust and 
  (i) that time is after March 20, 2013 and after the time at which the trust is created, and 
  (ii) at that time a person becomes a majority-interest beneficiary, or a group of persons becomes a majority-interest group of beneficiaries, of the trust. 
  
  ### Trusts — exceptions
  
  (3) For the purposes of paragraph (2)(b), a person is deemed not to become a majority-interest beneficiary, and a group of persons is deemed not to become a majority-interest group of beneficiaries, as the case may be, of a particular trust solely because of 
  (a) the acquisition of equity of the particular trust by 
  (i) a particular person from another person with whom the particular person was affiliated immediately before the acquisition, 
  (ii) a particular person who was affiliated with the particular trust immediately before the acquisition, 
  (iii) an estate from an individual, if the estate arose on and as a consequence of the death of the individual and the estate acquired the equity from the individual as a consequence of the death, or 
  (iv) a particular person from an estate that arose on and as a consequence of the death of an individual, if the estate acquired the equity from the individual as a consequence of the death and the individual was affiliated with the particular person immediately before the death; 
  (b) a variation in the terms of the particular trust, the satisfaction of, or failure to satisfy, a condition under the terms of the particular trust, the exercise by any person of, or the failure by any person to exercise, a power, or (without limiting the generality of the foregoing) the redemption, surrender or termination of equity of the particular trust at any time, if each majority-interest beneficiary, and each member of a majority-interest group of beneficiaries, of the particular trust immediately after that time was affiliated with the particular trust immediately before 
  (i) that time, or 
  (ii) in the case of the redemption or surrender of equity of the particular trust that was held, immediately before that time, by an estate and that was acquired by the estate from an individual as described in subparagraph (a)(iii), the individual’s death; 
  (c) the transfer at any time of all the equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if 
  (i) the only consideration for the transfer is equity (determined without reference to paragraph (d) of the definition 
  *equity* in subsection 122.1(1)) of the acquirer,  
  (ii) at all times before that time the acquirer held no property or held only property having a nominal value, and 
  (iii) immediately after that time the acquirer is neither 
  (A) a subsidiary of any person, nor 
  (B) a corporation controlled, directly or indirectly in any manner whatever, by a person or group of persons; 
  (d) the transfer at any time of equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if 
  (i) immediately before that time a person was a majority-interest beneficiary, or a group of persons was a majority-interest group of beneficiaries, of the particular trust, 
  (ii) immediately after that time the person, or group of persons, as the case may be, described in subparagraph (i) in respect of the particular trust, and no other person or group of persons, is 
  (A) if the acquirer is a corporation, a person by whom, or a group of persons by which, the corporation is controlled directly or indirectly in any manner whatever, 
  (B) if the acquirer is a partnership, a majority-interest partner, or a majority-interest group of partners, of the partnership, and 
  (C) if the acquirer is a trust, a majority-interest beneficiary, or a majority-interest group of beneficiaries, of the trust, and 
  (iii) at no time during a series of transactions or events that includes the transfer does the person or group of persons, as the case may be, described in subparagraph (i) in respect of the particular trust, cease to be a person or group of persons described in any of clauses (ii)(A) to (C) in respect of the acquirer; 
  (e) a transaction (other than a transaction one or more of the parties to which may be excused from completing as a result of changes to this Act) the parties to which are obligated to complete under the terms of an agreement in writing between the parties entered into before March 21, 2013; or 
  (f) the acquisition or disposition of equity of the particular trust at any time if 
  (i) the particular trust is an investment fund immediately before that time, and 
  (ii) the acquisition or disposition, as the case may be, is not part of a series of transactions or events that includes the particular trust ceasing to be an investment fund. 
  
  ### Trusts — additional cases
  
  (4) For the purposes of paragraph (2)(b) and subject to subsection (3), a person is deemed to become at a particular time a majority-interest beneficiary of a particular trust if 
  (a) a particular person is at and immediately before the particular time a majority-interest beneficiary, or a member of a majority-interest group of beneficiaries, of the particular trust, and the particular person is at the particular time, but is not immediately before the particular time, a subsidiary of another person (in this paragraph referred to as the “acquirer”), unless 
  (i) the acquirer is immediately before the particular time affiliated with the particular trust, or 
  (ii) this paragraph previously applied to deem a person to become a majority-interest beneficiary of the particular trust because the particular person became, as part of a series of transactions or events that includes the particular person becoming at the particular time a subsidiary of the acquirer, a subsidiary of another person that is at the particular time a subsidiary of the acquirer; or 
  (b) at the particular time, as part of a series of transactions or events, two or more persons acquire equity of the particular trust in exchange for or upon a redemption or surrender of equity of, or as a consequence of a distribution from, a corporation, partnership or another trust, unless 
  (i) a person affiliated with the corporation, partnership or other trust was immediately before the particular time a majority-interest beneficiary of the particular trust, 
  (ii) if all the equity of the particular trust that was acquired at or before the particular time as part of the series were acquired by one person, the person would not at the particular time be a majority-interest beneficiary of the particular trust, or 
  (iii) this paragraph previously applied to deem a person to become a majority-interest beneficiary of the particular trust because of an acquisition of equity of the particular trust that was part of the series. 
  
  ### Trusts — special rules of application
  
  (5) For the purposes of this section, 
  (a) in determining whether persons are affiliated with each other 
  (i) except for the purposes of paragraph (b) of the definition 
  *subsidiary* in subsection (1), section 251.1 is to be read without reference to the definition 
  *controlled* in subsection 251.1(3),  
  (ii) in determining whether an individual (other than a trust) is affiliated with another individual (other than a trust), individuals connected by blood relationship, marriage or common-law partnership or adoption are deemed to be affiliated with one another, and 
  (iii) if, at any time as part of a series of transactions or events a person acquires equity of a corporation, partnership or trust, and it can reasonably be concluded that one of the reasons for the acquisition, or for making any agreement or undertaking in respect of the acquisition, is to cause a condition in paragraph (3)(a) or (b) or subparagraph (4)(a)(i) or (b)(i) regarding affiliation to be satisfied at a particular time, the condition is deemed not to be satisfied at the particular time; 
  (b) in determining whether a particular person becomes at any time a majority-interest beneficiary, or a particular group of persons becomes at any time a majority-interest group of beneficiaries, of a trust, the fair market value of each person’s equity of the trust is to be determined at and immediately before that time 
  (i) without reference to the portion of that fair market value that is attributable to property acquired if it can reasonably be concluded that one of the reasons for the acquisition is to cause paragraph (2)(b), or any provision that applies by reference to a trust being subject to a loss restriction event at any time, not to apply, 
  (ii) without reference to the portion of that fair market value that is attributable to a change in the fair market value of all or part of any equity of the trust if it can reasonably be concluded that one of the reasons for the change is to cause paragraph (2)(b), or any provision that applies by reference to a trust being subject to a loss restriction event at any time, not to apply, and 
  (iii) as if each specified right held immediately before that time by the particular person, or by a member of the particular group, in respect of the trust is at that time exercised if it can reasonably be concluded that one of the reasons for the acquisition of the right is to cause paragraph (2)(b), or any provision that applies by reference to a trust being subject to a loss restriction event at any time, not to apply; and 
  (c) if, at any time as part of a series of transactions or events a person acquires a 
  *security* (as defined in subsection 122.1(1)) and it can reasonably be concluded that one of the reasons for the acquisition, or for making any agreement or undertaking in respect of the acquisition, is to cause a condition in subparagraph (b)(v) or clause (b)(vi)(D) of the definition 
  *investment fund* in subsection (1) to be satisfied at a particular time in respect of a trust, the condition is deemed not to be satisfied at the particular time in respect of the trust.  
  
  ### Trusts — time of day
  
  (6) For the purposes of this Act, if a trust is subject to a loss restriction event at a particular time during a day, the trust is deemed to be subject to the loss restriction event at the beginning of that day and not at the particular time unless the trust elects in its return of income under Part I filed for its taxation year that ends immediately before the loss restriction event to have this subsection not apply. 
  
  ### Filing and other deadlines
  
  (7) If at any time a trust is subject to a loss restriction event, in respect of the trust for its taxation year that ends immediately before that time, 
  (a) the reference in paragraph 132(2.1)(a) to “the day that is 90 days after the end of the year” is to be read as “the balance-due day of the trust for the year”; 
  (b) the reference in subsection 132(6.1) to “before the 91st day after the end of” is to be read as “on or before the balance-due day of the trust for”; 
  (c) the reference in paragraph 150(1)(c) to “within 90 days from the end of” is to be read as “on or before the balance-due day of the trust for”; 
  (d) the reference in subsection 204.7(1) to “Within 90 days from the end of each taxation year commencing after 1980” is to be read as “On or before the balance-due day of the trust for each taxation year”; 
  (e) the reference in subsection 210.2(5), and in subsection 221(2) of the Income Tax Regulations, to “within 90 days after the end of” is to be read as “on or before the balance-due day of the trust for”; and  
  (f) the references in subsections 202(8) and 204(2) of the Income Tax Regulations to “within 90 days from the end of” are to be read as “on or before the balance-due day of the trust for”.  
  
  ### Extended meaning of 
  *child* 
  
  252 (1) In this Act, words referring to a child of a taxpayer include 
  (a) a person of whom the taxpayer is the legal parent; 
  (b) a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before the person attained the age of 19 years had, in law or in fact, the custody and control; 
  (c) a child of the taxpayer’s spouse or common-law partner; and 
  (d)  [Repealed, 2005, c. 33, s. 12]  
  (e) a spouse or common-law partner of a child of the taxpayer. 
  
  ### Relationships
  
  (2) In this Act, words referring to 
  (a) a parent of a taxpayer include a person 
  (i) whose child the taxpayer is, 
  (ii) whose child the taxpayer had previously been within the meaning of paragraph 252(1)(b), or 
  (iii) who is a parent of the taxpayer’s spouse or common-law partner; 
  (b) a brother of a taxpayer include a person who is 
  (i) the brother of the taxpayer’s spouse or common-law partner, or 
  (ii) the spouse or common-law partner of the taxpayer’s sister; 
  (c) a sister of a taxpayer include a person who is 
  (i) the sister of the taxpayer’s spouse or common-law partner, or 
  (ii) the spouse or common-law partner of the taxpayer’s brother; 
  (d) a grandparent of a taxpayer include a person who is 
  (i) the grandfather or grandmother of the taxpayer’s spouse or common-law partner, or 
  (ii) the spouse or common-law partner of the taxpayer’s grandfather or grandmother; 
  (e) an aunt or uncle of a taxpayer include the spouse or common-law partner of the taxpayer’s aunt or uncle, as the case may be; 
  (f) a great-aunt or great-uncle of a taxpayer include the spouse or common-law partner of the taxpayer’s great-aunt or great-uncle, as the case may be; and 
  (g) a niece or nephew of a taxpayer include the niece or nephew, as the case may be, of the taxpayer’s spouse or common-law partner. 
  
  ### Extended meaning of spouse and former spouse 
  
  (3) For the purposes of paragraph 56(1)(b), section 56.1, paragraphs 60(b) and (j), section 60.1, subsections 70(6) and (6.1), 73(1) and (5) and 104(4) and (5.1), the definition pre-1972 spousal trust in subsection 108(1), subsection 146(16), the definition survivor in subsection 146.2(1), subparagraph 146.3(2)(f)(iv), subsection 146.3(14), section 146.5, subsections 147(19) and 147.3(5) and (7), section 147.5, subsections 148(8.1) and (8.2), the definition qualifying transfer in subsection 207.01(1), and subsections 210(1) and 248(22) and (23), 
  *spouse* and 
  *former spouse* of a particular individual include another individual who is a party to a void or voidable marriage with the particular individual.  
  (4)  [Repealed, 2000, c. 12, s. 141(2)]  
  
  ### Union employer
  
  252.1 All the structural units of a trade union, including each local, branch, national and international unit, shall be deemed to be a single employer and a single entity for the purposes of the provisions of this Act and the regulations relating to 
  (a) pension adjustments and past service pension adjustments for years after 1994; 
  (b) the determination of whether a pension plan is, in a year after 1994, a multi-employer plan or a specified multi-employer plan (within the meanings assigned by subsection 147.1(1)); 
  (c) the determination of whether a contribution made under a plan or arrangement is a resident’s contribution (within the meaning assigned by subsection 207.6(5.1)); and 
  (d) the deduction or withholding and the remittance of any amount as required by subsection 153(1) in respect of a contribution made after 1991 under a retirement compensation arrangement. 
  
  ### Extended meaning of 
  *carrying on business* 
  
  253 For the purposes of this Act, where in a taxation year a person who is a non-resident person or a trust to which Part XII.2 applies 
  (a) produces, grows, mines, creates, manufactures, fabricates, improves, packs, preserves or constructs, in whole or in part, anything in Canada whether or not the person exports that thing without selling it before exportation, 
  (b) solicits orders or offers anything for sale in Canada through an agent or servant, whether the contract or transaction is to be completed inside or outside Canada or partly in and partly outside Canada, or 
  (c) disposes of 
  (i) Canadian resource property, except where an amount in respect of the disposition is included under paragraph 66.2(1)(a) or 66.4(1)(a), 
  (ii) property (other than depreciable property) that is a timber resource property, an option in respect of a timber resource property or an interest in, or for civil law a right in, a timber resource property, or 
  (iii) property (other than capital property) that is real or immovable property situated in Canada, including an option in respect of such property or an interest in, or for civil law a real right in, such property, whether or not the property is in existence, the person shall be deemed, in respect of the activity or disposition, to have been carrying on business in Canada in the year. 
  
  ### Investments in limited partnerships
  
  253.1 (1) For the purposes of subparagraph 108(2)(b)(ii), paragraphs 130.1(6)(b), 131(8)(b), 132(6)(b) and 146.1(2.1)(c), subsection 146.2(6), paragraph 146.4(5)(b), subsections 146.6(3) and 147.5(8), paragraph 149(1)(o.2), the definition private holding corporation in subsection 191(1), the definition investment fund in subsection 251.2(1) and regulations made for the purposes of paragraphs 149(1)(o.3) and (o.4), if a trust or corporation holds an interest as a member of a partnership and, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business or other activity of the partnership.  
  
  ### Investments in limited partnerships
  
  (2) For the purposes of section 149.1 and subsections 188.1(1) and (2), if a registered charity, a registered Canadian amateur athletic association or a registered journalism organization holds an interest as a member of a partnership, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business of the partnership if 
  (a) by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited; 
  (b) the member deals at arm’s length with each general partner of the partnership; and 
  (c) the member, or the member together with persons and partnerships with which it does not deal at arm’s length, holds interests in the partnership that have a fair market value of not more than 20% of the fair market value of the interests of all members in the partnership. 
  
  ### Contract under pension plan
  
  254 Where a document has been issued or a contract has been entered into before July 31, 1997 purporting to create, to establish, to extinguish or to be in substitution for, a taxpayer’s right to an amount or amounts, immediately or in the future, out of or under a superannuation or pension fund or plan, 
  (a) if the rights provided for in the document or contract are rights provided for by the superannuation or pension plan or are rights to a payment or payments out of the superannuation or pension fund, and the taxpayer acquired an interest under the document or in the contract before that day, any payment under the document or contract is deemed to be a payment out of or under the superannuation or pension fund or plan and the taxpayer is deemed not to have received, by the issuance of the document or entering into the contract, an amount out of or under the superannuation or pension fund or plan; and 
  (b) if the rights created or established by the document or contract are not rights provided for by the superannuation or pension plan or a right to payments out of the superannuation or pension fund, an amount equal to the value of the rights created or established by the document or contract shall be deemed to have been received by the taxpayer out of or under the superannuation or pension fund or plan when the document was issued or the contract was entered into. 
  
  ###  
  *Canada* 
  
  255 For the purposes of this Act, 
  *Canada* is hereby declared to include and to have always included  
  (a) the sea bed and subsoil of the submarine areas adjacent to the coasts of Canada in respect of which the Government of Canada or of a province grants a right, licence or privilege to explore for, drill for or take any minerals, petroleum, natural gas or any related hydrocarbons; and 
  (b) the seas and airspace above the submarine areas referred to in paragraph 255(a) in respect of any activities carried on in connection with the exploration for or exploitation of the minerals, petroleum, natural gas or hydrocarbons referred to in that paragraph. 
  
  ### Associated corporations
  
  256 (1) For the purposes of this Act, one corporation is associated with another in a taxation year if, at any time in the year, 
  (a) one of the corporations controlled, directly or indirectly in any manner whatever, the other; 
  (b) both of the corporations were controlled, directly or indirectly in any manner whatever, by the same person or group of persons; 
  (c) each of the corporations was controlled, directly or indirectly in any manner whatever, by a person and the person who so controlled one of the corporations was related to the person who so controlled the other, and either of those persons owned, in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class, of the capital stock thereof; 
  (d) one of the corporations was controlled, directly or indirectly in any manner whatever, by a person and that person was related to each member of a group of persons that so controlled the other corporation, and that person owned, in respect of the other corporation, not less than 25% of the issued shares of any class, other than a specified class, of the capital stock thereof; or 
  (e) each of the corporations was controlled, directly or indirectly in any manner whatever, by a related group and each of the members of one of the related groups was related to all of the members of the other related group, and one or more persons who were members of both related groups, either alone or together, owned, in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class, of the capital stock thereof. 
  
  ### Definition of 
  *specified class* 
  
  (1.1) For the purposes of subsection 256(1), 
  *specified class* means a class of shares of the capital stock of a corporation where, under the terms or conditions of the shares or any agreement in respect thereof,  
  (a) the shares are not convertible or exchangeable; 
  (b) the shares are non-voting; 
  (c) the amount of each dividend payable on the shares is calculated as a fixed amount or by reference to a fixed percentage of an amount equal to the fair market value of the consideration for which the shares were issued; 
  (d) the annual rate of the dividend on the shares, expressed as a percentage of an amount equal to the fair market value of the consideration for which the shares were issued, cannot in any event exceed, 
  (i) where the shares were issued before 1984, the rate of interest prescribed for the purposes of subsection 161(1) at the time the shares were issued, and 
  (ii) where the shares were issued after 1983, the prescribed rate of interest at the time the shares were issued; and 
  (e) the amount that any holder of the shares is entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm’s length cannot exceed the total of an amount equal to the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends thereon. 
  
  ### Control, etc.
  
  (1.2) For the purposes of this subsection and subsections 256(1), 256(1.1) and 256(1.3) to 256(5), 
  (a) a group of persons in respect of a corporation means any two or more persons each of whom owns shares of the capital stock of the corporation; 
  (b) for greater certainty, 
  (i) a corporation that is controlled by one or more members of a particular group of persons in respect of that corporation shall be considered to be controlled by that group of persons, and 
  (ii) a corporation may be controlled by a person or a particular group of persons notwithstanding that the corporation is also controlled or deemed to be controlled by another person or group of persons; 
  (c) a corporation shall be deemed to be controlled by another corporation, a person or a group of persons at any time where 
  (i) shares of the capital stock of the corporation having a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the capital stock of the corporation, or 
  (ii) common shares of the capital stock of the corporation having a fair market value of more than 50% of the fair market value of all the issued and outstanding common shares of the capital stock of the corporation are owned at that time by the other corporation, the person or the group of persons, as the case may be; 
  (d) where shares of the capital stock of a corporation are owned, or deemed by this subsection to be owned, at any time by another corporation (in this paragraph referred to as the “holding corporation”), those shares shall be deemed to be owned at that time by any shareholder of the holding corporation in a proportion equal to the proportion of all those shares that 
  (i) the fair market value of the shares of the capital stock of the holding corporation owned at that time by the shareholder is of 
  (ii) the fair market value of all the issued shares of the capital stock of the holding corporation outstanding at that time; 
  (e) where, at any time, shares of the capital stock of a corporation are property of a partnership, or are deemed by this subsection to be owned by the partnership, those shares shall be deemed to be owned at that time by each member of the partnership in a proportion equal to the proportion of all those shares that 
  (i) the member’s share of the income or loss of the partnership for its fiscal period that includes that time is of 
  (ii) the income or loss of the partnership for its fiscal period that includes that time and for this purpose, where the income and loss of the partnership for its fiscal period that includes that time are nil, that proportion shall be computed as if the partnership had had income for that period in the amount of $1,000,000; 
  (f) where shares of the capital stock of a corporation are owned, or deemed by this subsection to be owned, at any time by a trust, 
  (i)  [Repealed, 2014, c. 39, s. 76]  
  (ii) where a beneficiary’s share of the accumulating income or capital therefrom depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, those shares are deemed to be owned at that time by the beneficiary, 
  (iii) in any case where subparagraph (ii) does not apply, a beneficiary is deemed at that time to own the proportion of those shares that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, and 
  (iv) in the case of a trust referred to in subsection 75(2), the person referred to in that subsection from whom property of the trust or property for which it was substituted was directly or indirectly received shall be deemed to own those shares at that time; and 
  (g) in determining the fair market value of a share of the capital stock of a corporation, all issued and outstanding shares of the capital stock of the corporation shall be deemed to be non-voting. 
  
  ### Parent deemed to own shares
  
  (1.3) Where at any time shares of the capital stock of a corporation are owned by a child who is under 18 years of age, for the purpose of determining whether the corporation is associated at that time with any other corporation that is controlled, directly or indirectly in any manner whatever, by a parent of the child or by a group of persons of which the parent is a member, the shares shall be deemed to be owned at that time by the parent unless, having regard to all the circumstances, it can reasonably be considered that the child manages the business and affairs of the corporation and does so without a significant degree of influence by the parent. 
  
  ### Options and rights
  
  (1.4) For the purpose of determining whether a corporation is associated with another corporation with which it is not otherwise associated, where a person or any partnership in which the person has an interest has a right at any time under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, 
  (a) to, or to acquire, shares of the capital stock of a corporation, or to control the voting rights of shares of the capital stock of a corporation, the person or partnership shall, except where the right is not exercisable at that time because the exercise thereof is contingent on the death, bankruptcy or permanent disability of an individual, be deemed to own the shares at that time, and the shares shall be deemed to be issued and outstanding at that time; or 
  (b) to cause a corporation to redeem, acquire or cancel any shares of its capital stock owned by other shareholders of a corporation, the person or partnership shall, except where the right is not exercisable at that time because the exercise thereof is contingent on the death, bankruptcy or permanent disability of an individual, be deemed at that time to have the same position in relation to control of the corporation and ownership of shares of its capital stock as if the shares were redeemed, acquired or cancelled by the corporation. 
  
  ### Person related to himself, herself or itself
  
  (1.5) For the purposes of subsections 256(1) to 256(1.4) and 256(1.6) to 256(5), where a person owns shares in two or more corporations, the person shall as shareholder of one of the corporations be deemed to be related to himself, herself or itself as shareholder of each of the other corporations. 
  
  ### Exception
  
  (1.6) For the purposes of subsection 256(1.2) and notwithstanding subsection 256(1.4), any share that is 
  (a) described in paragraph (e) of the definition 
  *term preferred share* in subsection 248(1) during the applicable time referred to in that paragraph, or  
  (b) a share of a specified class within the meaning of subsection 256(1.1) shall be deemed not to have been issued and outstanding and not to be owned by any shareholder and an amount equal to the greater of the paid-up capital of the share and the amount, if any, that any holder of the share is entitled to receive on the redemption, cancellation or acquisition of the share by the corporation shall be deemed to be a liability of the corporation. 
  
  ### Corporations associated through a third corporation
  
  (2) For the purposes of 
  (a) this Act, subject to paragraph (b), two corporations are deemed to be associated with each other at a particular time if 
  (i) they would, but for this subsection, not be associated with each other at the particular time, and 
  (ii) each corporation is associated with, or is deemed by this subsection to be associated with, the same corporation (in this subsection referred to as the 
  *third corporation*) at the particular time; and  
  (b) section 125, 
  (i) if the third corporation is not a Canadian-controlled private corporation at the particular time, the two corporations are deemed not to be associated with each other at the particular time, and 
  (ii) if the third corporation is a Canadian-controlled private corporation that elects in prescribed form to apply this subparagraph in its taxation year that includes the particular time, the two corporations are deemed not to be associated with each other at the particular time and the business limit of the third corporation for its taxation year that includes the particular time is deemed to be nil. 
  
  ### Anti-avoidance
  
  (2.1) For the purposes of this Act, where, in the case of two or more corporations, it may reasonably be considered that one of the main reasons for the separate existence of those corporations in a taxation year is to reduce the amount of taxes that would otherwise be payable under this Act or to increase the amount of refundable investment tax credit under section 127.1, the two or more corporations shall be deemed to be associated with each other in the year. 
  
  ### Saving provision
  
  (3) Where one corporation (in this subsection referred to as the “controlled corporation”) would, but for this subsection, be associated with another corporation in a taxation year by reason of being controlled, directly or indirectly in any manner whatever, by the other corporation or by reason of both of the corporations being controlled, directly or indirectly in any manner whatever, by the same person at a particular time in the year (which corporation or person so controlling the controlled corporation is in this subsection referred to as the “controller”) and it is established to the satisfaction of the Minister that 
  (a) there was in effect at the particular time an agreement or arrangement enforceable according to the terms thereof, under which, on the satisfaction of a condition or the happening of an event that it is reasonable to expect will be satisfied or happen, the controlled corporation will 
  (i) cease to be controlled, directly or indirectly in any manner whatever, by the controller, and 
  (ii) be or become controlled, directly or indirectly in any manner whatever, by a person or group of persons, with whom or with each of the members of which, as the case may be, the controller was at the particular time dealing at arm’s length, and 
  (b) the purpose for which the controlled corporation was at the particular time so controlled was the safeguarding of rights or interests of the controller in respect of 
  (i) any indebtedness owing to the controller the whole or any part of the principal amount of which was outstanding at the particular time, or 
  (ii) any shares of the capital stock of the controlled corporation that were owned by the controller at the particular time and that were, under the agreement or arrangement, to be redeemed by the controlled corporation or purchased by the person or group of persons referred to in subparagraph 256(3)(a)(ii), the controlled corporation and the other corporation with which it would otherwise be so associated in the year shall be deemed, for the purpose of this Act, not to be associated with each other in the year. 
  
  ### Saving provision
  
  (4) Where one corporation would, but for this subsection, be associated with another corporation in a taxation year by reason of both of the corporations being controlled by the same executor, liquidator of a succession or trustee and it is established to the satisfaction of the Minister 
  (a) that the executor, liquidator or trustee did not acquire control of the corporations as a result of one or more estates or trusts created by the same individual or two or more individuals not dealing with each other at arm’s length, and 
  (b) that the estate or trust under which the executor, liquidator or trustee acquired control of each of the corporations arose only on the death of the individual creating the estate or trust, the two corporations are deemed, for the purposes of this Act, not to be associated with each other in the year. 
  
  ### Idem
  
  (5) Where one corporation would, but for this subsection, be associated with another corporation in a taxation year, by reason only that the other corporation is a trustee under a trust pursuant to which the corporation is controlled, the two corporations shall be deemed, for the purposes of this Act, not to be associated with each other in the year unless, at any time in the year, a settlor of the trust controlled or is a member of a related group that controlled the other corporation that is the trustee under the trust. 
  
  ### Control in fact
  
  (5.1) For the purposes of this Act, where the expression “controlled, directly or indirectly in any manner whatever,” is used, a corporation shall be considered to be so controlled by another corporation, person or group of persons (in this subsection referred to as the “controller”) at any time where, at that time, the controller has any direct or indirect influence that, if exercised, would result in control in fact of the corporation, except that, where the corporation and the controller are dealing with each other at arm’s length and the influence is derived from a franchise, licence, lease, distribution, supply or management agreement or other similar agreement or arrangement, the main purpose of which is to govern the relationship between the corporation and the controller regarding the manner in which a business carried on by the corporation is to be conducted, the corporation shall not be considered to be controlled, directly or indirectly in any manner whatever, by the controller by reason only of that agreement or arrangement. 
  
  ### Factual control — interpretation
  
  (5.11) For the purposes of the Act, the determination of whether a taxpayer has, in respect of a corporation, any direct or indirect influence that, if exercised, would result in control in fact of the corporation, shall 
  (a) take into consideration all factors that are relevant in the circumstances; and 
  (b) not be limited to, and the relevant factors need not include, whether the taxpayer has a legally enforceable right or ability to effect a change in the board of directors of the corporation, or its powers, or to exercise influence over the shareholder or shareholders who have that right or ability. 
  
  ### Idem
  
  (6) For the purposes of this Act, where a corporation (in this subsection referred to as the “controlled corporation”) would, but for this subsection, be regarded as having been controlled or controlled, directly or indirectly in any manner whatever, by a person or partnership (in this subsection referred to as the “controller”) at a particular time and it is established that 
  (a) there was in effect at the particular time an agreement or arrangement enforceable according to the terms thereof, under which, on the satisfaction of a condition or the happening of an event that it is reasonable to expect will be satisfied or happen, the controlled corporation will 
  (i) cease to be controlled, or controlled, directly or indirectly in any manner whatever, as the case may be, by the controller, and 
  (ii) be or become controlled, or controlled, directly or indirectly in any manner whatever, as the case may be, by a person or group of persons, with whom or with each of the members of which, as the case may be, the controller was at the particular time dealing at arm’s length, and 
  (b) the purpose for which the controlled corporation was at the particular time so controlled, or controlled, directly or indirectly in any manner whatever, as the case may be, was the safeguarding of rights or interests of the controller in respect of 
  (i) any indebtedness owing to the controller the whole or any part of the principal amount of which was outstanding at the particular time, or 
  (ii) any shares of the capital stock of the controlled corporation that were owned by the controller at the particular time and that were, under the agreement or arrangement, to be redeemed by the controlled corporation or purchased by the person or group of persons referred to in subparagraph 256(6)(a)(ii), the controlled corporation is deemed not to have been controlled by the controller at the particular time. 
  
  ### Simultaneous control
  
  (6.1) For the purposes of this Act and for greater certainty, 
  (a) where a corporation (in this paragraph referred to as the “subsidiary”) would be controlled by another corporation (in this paragraph referred to as the “parent”) if the parent were not controlled by any person or group of persons, the subsidiary is controlled by 
  (i) the parent, and 
  (ii) any person or group of persons by whom the parent is controlled; and 
  (b) where a corporation (in this paragraph referred to as the “subject corporation”) would be controlled by a group of persons (in this paragraph referred to as the “first-tier group”) if no corporation that is a member of the first-tier group were controlled by any person or group of persons, the subject corporation is controlled by 
  (i) the first-tier group, and 
  (ii) any group of one or more persons comprised of, in respect of every member of the first-tier group, either the member, or a person or group of persons by whom the member is controlled. 
  
  ### Application to control in fact
  
  (6.2) In its application to subsection (5.1), subsection (6.1) shall be read as if the references in subsection (6.1) to “controlled” were references to “controlled, directly or indirectly in any manner whatever,”. 
  
  ### Acquiring control
  
  (7) For the purposes of this subsection, of section 55, subsections 66(11), 66.5(3), 66.7(10) and (11), 85(1.2), 88(1.1) and (1.2), 110.1(1.2) and 111(5.4) and paragraph 251.2(2)(a) and of subsection 5905(5.2) of the Income Tax Regulations,  
  (a) control of a particular corporation shall be deemed not to have been acquired solely because of 
  (i) the acquisition at any time of shares of any corporation by 
  (A) a particular person who acquired the shares from a person to whom the particular person was related (otherwise than because of a right referred to in paragraph 251(5)(b)) immediately before that time, 
  (B) a particular person who was related to the particular corporation (otherwise than because of a right referred to in paragraph 251(5)(b)) immediately before that time, 
  (C) an estate that acquired the shares because of the death of a person, 
  (D) a particular person who acquired the shares from an estate that arose on and as a consequence of the death of an individual, if the estate acquired the shares from the individual as a consequence of the death and the individual was related to the particular person immediately before the death, 
  (E) a corporation on a distribution (within the meaning assigned by subsection 55(1)) by a specified corporation (within the meaning assigned by that subsection) if a dividend, to which subsection 55(2) does not apply because of paragraph 55(3)(b), is received in the course of the reorganization in which the distribution occurs, 
  (ii) the redemption or cancellation at any particular time of, or a change at any particular time in the rights, privileges, restrictions or conditions attaching to, shares of the particular corporation or of a corporation controlling the particular corporation, where each person and each member of each group of persons that controls the particular corporation immediately after the particular time was related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the corporation 
  (A) immediately before the particular time, or 
  (B) immediately before the death of a person, where the shares were held immediately before the particular time by an estate that acquired the shares because of the person’s death, or 
  (iii) the acquisition at any time of shares of the particular corporation if 
  (A) the acquisition of those shares would otherwise result in the acquisition of control of the particular corporation at that time by a related group of persons, and 
  (B) each member of each group of persons that controls the particular corporation at that time was related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the particular corporation immediately before that time; 
  (b) where at any time 2 or more corporations (each of which is referred to in this paragraph as a “predecessor corporation”) have amalgamated to form one corporate entity (in this paragraph referred to as the “new corporation”), 
  (i) control of a corporation is deemed not to have been acquired by any person or group of persons solely because of the amalgamation unless it is deemed by subparagraph 256(7)(b)(ii) or 256(7)(b)(iii) to have been so acquired, 
  (ii) a person or group of persons that controls the new corporation immediately after the amalgamation and did not control a predecessor corporation immediately before the amalgamation is deemed to have acquired immediately before the amalgamation control of the predecessor corporation and of each corporation it controlled immediately before the amalgamation (unless the person or group of persons would not have acquired control of the predecessor corporation if the person or group of persons had acquired all the shares of the predecessor corporation immediately before the amalgamation), and 
  (iii) control of a predecessor corporation and of each corporation it controlled immediately before the amalgamation is deemed to have been acquired immediately before the amalgamation by a person or group of persons 
  (A) unless the predecessor corporation was related (otherwise than because of a right referred to in paragraph 251(5)(b)) immediately before the amalgamation to each other predecessor corporation, 
  (B) unless, if one person had immediately after the amalgamation acquired all the shares of the new corporation’s capital stock that the shareholders of the predecessor corporation, or of another predecessor corporation that controlled the predecessor corporation, acquired on the amalgamation in consideration for their shares of the predecessor corporation or of the other predecessor corporation, as the case may be, the person would have acquired control of the new corporation as a result of the acquisition of those shares, or 
  (C) unless this subparagraph would, but for this clause, deem control of each predecessor corporation to have been acquired on the amalgamation where the amalgamation is an amalgamation of 
  (I) two corporations, or 
  (II) two corporations (in this subclause referred to as the “parents”) and one or more other corporations (each of which is in this subclause referred to as a “subsidiary”) that would, if all the shares of each subsidiary’s capital stock that were held immediately before the amalgamation by the parents had been held by one person, have been controlled by that person; 
  (c) subject to paragraph 256(7)(a), where 2 or more persons (in this paragraph referred to as the “transferors”) dispose of shares of the capital stock of a particular corporation in exchange for shares of the capital stock of another corporation (in this paragraph referred to as the “acquiring corporation”), control of the acquiring corporation and of each corporation controlled by it immediately before the exchange is deemed to have been acquired at the time of the exchange by a person or group of persons unless 
  (i) the particular corporation and the acquiring corporation were related (otherwise than because of a right referred to in paragraph 251(5)(b)) to each other immediately before the exchange, or 
  (ii) if all the shares of the acquiring corporation’s capital stock that were acquired by the transferors on the exchange were acquired at the time of the exchange by one person, the person would not control the acquiring corporation; 
  (c.1) subject to paragraph (a), if, at any particular time, as part of a series of transactions or events, two or more persons acquire shares of a corporation (in this paragraph referred to as the “acquiring corporation”) in exchange for or upon a redemption or surrender of interests in, or as a consequence of a distribution from, a SIFT trust (determined without reference to subsection 122.1(2)), SIFT partnership (determined without reference to subsection 197(8)) or real estate investment trust (as defined in subsection 122.1(1)), control of the acquiring corporation and of each corporation controlled by it immediately before the particular time is deemed to have been acquired by a person or group of persons at the particular time unless 
  (i) in respect of each of the corporations, a person (in this subparagraph referred to as a “relevant person”) affiliated (within the meaning assigned by section 251.1 read without reference to the definition 
  *controlled* in subsection 251.1(3)) with the SIFT trust, SIFT partnership or real estate investment trust owned shares of the particular corporation having a total fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the particular corporation at all times during the period that  
  (A) begins on the latest of July 14, 2008, the date the particular corporation came into existence and the time of the last acquisition of control, if any, of the particular corporation by a relevant person, and 
  (B) ends immediately before the particular time, 
  (ii) if all the securities (in this subparagraph as defined in subsection 122.1(1)) of the acquiring corporation that were acquired as part of the series of transactions or events at or before the particular time were acquired by one person, the person would 
  (A) not at the particular time control the acquiring corporation, and 
  (B) have at the particular time acquired securities of the acquiring corporation having a fair market value of not more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation, or 
  (iii) this paragraph previously applied to deem an acquisition of control of the acquiring corporation upon an acquisition of shares that was part of the same series of transactions or events; 
  (c.2) subject to paragraph (a), if, at any particular time, as part of a series of transactions or events, two or more persons acquire shares of a corporation (in this paragraph referred to as the “acquiring corporation”) in exchange for or upon a redemption or surrender of interests in, or as a consequence of a distribution from, a partnership or trust, control of the acquiring corporation and of each corporation controlled by it immediately before the particular time is deemed to have been acquired by a person or group of persons at the particular time unless 
  (i) in respect of each of the corporations, a person affiliated with the partnership or trust owned immediately before the particular time shares of the particular corporation having a total fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the particular corporation immediately before the particular time, 
  (ii) if all the securities (in this subparagraph as defined in subsection 122.1(1)) of the acquiring corporation that were acquired at or before the particular time as part of the series were acquired by one person, the person would  
  (A) not at the particular time control the acquiring corporation, and 
  (B) have at the particular time acquired securities of the acquiring corporation having a fair market value of not more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation, or 
  (iii) paragraph (c.1) applies, or this paragraph or paragraph (c.1) previously applied, to deem an acquisition of control of the acquiring corporation upon an acquisition of shares that was part of the same series of transactions or events; 
  (d) where at any time shares of the capital stock of a particular corporation are disposed of to another corporation (in this paragraph referred to as the “acquiring corporation”) for consideration that includes shares of the acquiring corporation’s capital stock and, immediately after that time, the acquiring corporation and the particular corporation are controlled by a person or group of persons who 
  (i) controlled the particular corporation immediately before that time, and 
  (ii) did not, as part of the series of transactions or events that includes the disposition, cease to control the acquiring corporation, control of the particular corporation and of each corporation controlled by it immediately before that time is deemed not to have been acquired by the acquiring corporation solely because of the disposition; 
  (e) control of a particular corporation and of each corporation controlled by it immediately before a particular time is deemed not to have been acquired at the particular time by a corporation (in this paragraph referred to as the “acquiring corporation”) if at the particular time, the acquiring corporation acquires shares of the particular corporation’s capital stock for consideration that consists solely of shares of the acquiring corporation’s capital stock, and if 
  (i) immediately after the particular time 
  (A) the acquiring corporation owns all the shares of each class of the particular corporation’s capital stock (determined without reference to shares of a specified class, within the meaning assigned by paragraph 88(1)(c.8)), 
  (B) the acquiring corporation is not controlled by any person or group of persons, and 
  (C) the fair market value of the shares of the particular corporation’s capital stock that are owned by the acquiring corporation is not less than 95% of the fair market value of all of the assets of the acquiring corporation, or 
  (ii) any of clauses (i)(A) to (C) do not apply and the acquisition occurs as part of a plan of arrangement that, on completion, results in 
  (A) the acquiring corporation (or a new corporation that is formed on an amalgamation of the acquiring corporation and a subsidiary wholly-owned corporation of the acquiring corporation) owning all the shares of each class of the particular corporation’s capital stock (determined without reference to shares of a specified class, within the meaning assigned by paragraph 88(1)(c.8)), 
  (B) the acquiring corporation (or the new corporation) not being controlled by any person or group of persons, and 
  (C) the fair market value of the shares of the particular corporation’s capital stock that are owned by the acquiring corporation (or the new corporation) being not less than 95% of the fair market value of all of the assets of the acquiring corporation (or the new corporation); 
  (f) if a particular trust is the only beneficiary of another trust, the particular trust is described in paragraph (c) of the definition 
  *SIFT trust wind-up event*, the particular trust would, in the absence of this paragraph, acquire control of a corporation solely because of a SIFT trust wind-up event that is a distribution of shares of the capital stock of the corporation by the other trust, and the other trust controlled the corporation immediately before the distribution, the particular trust is deemed not to acquire control of the corporation because of the distribution;  
  (g) a corporation (in this paragraph referred to as the “acquiring corporation”) that acquires shares of another corporation on a distribution that is a SIFT trust wind-up event of a SIFT wind-up entity is deemed not to acquire control of the other corporation because of that acquisition if the following conditions are met: 
  (i) the SIFT wind-up entity is a trust whose only beneficiary immediately before the distribution is the acquiring corporation, 
  (ii) the SIFT wind-up entity controlled the other corporation immediately before the distribution, 
  (iii) as part of a series of transactions or events under which the acquiring corporation became the only beneficiary under the trust, two or more persons acquired shares in the acquiring corporation in exchange for their interests as beneficiaries under the trust, and 
  (iv) if all the shares described in subparagraph (iii) had been acquired by one person, the person would 
  (A) control the acquiring corporation, and 
  (B) have acquired shares of the acquiring corporation having a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation; 
  (h) if at any time after September 12, 2013 a trust is subject to a loss restriction event and immediately before that time the trust, or a group of persons a member of which is the trust, controls a corporation, control of the corporation and of each corporation controlled by it immediately before that time is deemed to have been acquired at that time by a person or group of persons; and 
  (i) if at any time after September 12, 2013 a trust controls a corporation, control of the corporation is deemed not to be acquired solely because of a change in the trustee or legal representative having ownership or control of the trust’s property if 
  (i) the change is not part of a series of transactions or events that includes a change in the beneficial ownership of the trust’s property, and 
  (ii) no amount of income or capital of the trust to be distributed, at any time at or after the change, in respect of any interest in the trust depends upon the exercise by any person or partnership, or the failure of any person or partnership, to exercise any discretionary power. 
  
  ### Deemed exercise of right
  
  (8) Where at any time a taxpayer acquires a right referred to in paragraph 251(5)(b) in respect of a share and it can reasonably be concluded that one of the main purposes of the acquisition is 
  (a) to avoid any limitation on the deductibility of any non-capital loss, net capital loss, farm loss or any expense or other amount referred to in subsection 66(11), 66.5(3) or 66.7(10) or 66.7(11), 
  (b) to avoid the application of subsection 10(10) or 13(24), paragraph 37(1)(h) or subsection 55(2) or 66(11.4) or (11.5), paragraph 88(1)(c.3) or subsection 111(4), (5.1) or (5.3), 181.1(7), 190.1(6) or 251.2(2), 
  (c) to avoid the application of paragraph (j) or (k) of the definition 
  *investment tax credit* in subsection 127(9),  
  (d) to avoid the application of section 251.1, or 
  (e) to affect the application of section 80, the taxpayer is deemed to be in the same position in relation to the control of the corporation as if the right were immediate and absolute and as if the taxpayer had exercised the right at that time for the purpose of determining whether control of a corporation has been acquired for the purposes of subsections 10(10) and 13(24), section 37, subsections 55(2), 66(11), (11.4) and (11.5), 66.5(3), 66.7(10) and (11), section 80, paragraph 80.04(4)(h), subparagraph 88(1)(c)(vi), paragraph 88(1)(c.3), subsections 88(1.1) and (1.2), sections 111 and 127, subsections 181.1(7), 190.1(6) and 249(4) and paragraph 251.2(2)(a) and in determining for the purposes of section 251.1, paragraph (b) of the definition 
  *investment fund* in subsection 251.2(1) and paragraphs 251.2(3)(c) and (d) and 256(7)(i) whether a corporation is controlled by any other person or group of persons.  
  
  ### Corporations without share capital
  
  (8.1) For the purposes of subsections 256(7) and 256(8), 
  (a) a corporation incorporated without share capital is deemed to have a capital stock of a single class; 
  (b) each member, policyholder and other participant in the corporation is deemed to be a shareholder of the corporation; and 
  (c) the membership, policy or other interest in the corporation of each of those participants is deemed to be the number of shares of the corporation’s capital stock that the Minister considers reasonable in the circumstances, having regard to the total number of participants in the corporation and the nature of their participation. 
  
  ### Date of acquisition of control
  
  (9) For the purposes of this Act, other than for the purposes of determining if a corporation is, at any time, a small business corporation or a Canadian-controlled private corporation, where control of a corporation is acquired by a person or group of persons at a particular time on a day, control of the corporation shall be deemed to have been acquired by the person or group of persons, as the case may be, at the beginning of that day and not at the particular time unless the corporation elects in its return of income under Part I filed for its taxation year that ends immediately before the acquisition of control not to have this subsection apply. 
  
  ### Definitions
  
  256.1 (1) The following definitions apply in this section.  
  *attribute trading restriction* means a restriction on the use of a tax attribute arising on the application, either alone or in combination with other provisions, of any of this section, subsections 10(10) and 13(24), section 37, subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 88(1.1) and (1.2), sections 111 and 127, subsections 181.1(7), 190.1(6) and 249(4), section 251.2 and subsection 256(7). (restriction au commerce d’attributs)   
  *person* includes a partnership. (personne)   
  *specified provision* means any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4) to (5.3), paragraphs (j) and (k) of the definition investment tax credit in subsection 127(9), subsections 181.1(7) and 190.1(6), section 251.2 and any provision of similar effect. (dispositions déterminées)  
  
  ### Application of subsection (3)
  
  (2) Subsection (3) applies at a particular time in respect of a corporation if 
  (a) shares of the capital stock of the corporation held by a person, or the total of all shares of the capital stock of the corporation held by members of a group of persons, as the case may be, have at the particular time a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of the corporation; 
  (b) shares, if any, of the capital stock of the corporation held by the person, or the total of all shares, if any, of the capital stock of the corporation held by members of the group, have immediately before the particular time a fair market value that does not exceed 75% of the fair market value of all the shares of the capital stock of the corporation; 
  (c) the person or group does not control the corporation at the particular time; and 
  (d) it is reasonable to conclude that one of the main reasons that the person or group does not control the corporation is to avoid the application of one or more specified provisions. 
  
  ### Deemed acquisition of control
  
  (3) If this subsection applies at a particular time in respect of a corporation, then for the purposes of the attribute trading restrictions, 
  (a) the person or group referred to in subsection (2) 
  (i) is deemed to acquire control of the corporation, and each corporation controlled by the corporation, at the particular time, and 
  (ii) is not deemed to have control of the corporation, and each corporation controlled by the corporation, at any time after the particular time solely because this paragraph applied at the particular time; and 
  (b) during the period that the condition in paragraph (2)(a) is satisfied, each corporation referred to in paragraph (a) — and any corporation incorporated or otherwise formed subsequent to that time and controlled by that corporation — is deemed not to be related to, or affiliated with, any person to which it was related to, or affiliated with, immediately before paragraph (a) applies. 
  
  ### Special rules
  
  (4) For the purpose of applying paragraph (2)(a) in respect of a person or group of persons, 
  (a) if it is reasonable to conclude that one of the reasons that one or more transactions or events occur is to cause a person or group of persons not to hold shares having a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of a corporation, the paragraph is to be applied without reference to those transactions or events; and 
  (b) the person, or each member of the group, is deemed to have exercised each right that is held by the person or a member of the group and that is referred to in paragraph 251(5)(b) in respect of a share of the corporation referred to in paragraph (2)(a). 
  
  ### Deeming rules — if share value nil
  
  (5) For the purposes of subsections (2) to (4), if the fair market value of the shares of the capital stock of a corporation is nil at any time, then for the purpose of determining the fair market value of those shares, the corporation is deemed, at that time, to have assets net of liabilities equal to $100,000 and to have $100,000 of income for the taxation year that includes that time. 
  
  ### Deemed acquisition of control
  
  (6) If, at any time as part of a transaction or event or series of transactions or events, control of a particular corporation is acquired by a person or group of persons and it can reasonably be concluded that one of the main reasons for the transaction or event or any transaction or event in the series of transactions or events is so that a specified provision does not apply to one or more corporations, the attribute trading restrictions are deemed to apply to each of those corporations as if control of each of those corporations were acquired at that time. 
  
  ### Negative amounts
  
  257 Except as specifically otherwise provided, where an amount or a number is required under this Act to be determined or calculated by or in accordance with an algebraic formula, if the amount or number when so determined or calculated would, but for this section, be a negative amount or number, it shall be deemed to be nil. 
  
  ### Deemed dividend on term preferred share
  
  258 (2) Notwithstanding subsection 15(3), an amount paid or payable after 1978 as interest on or as an amount in lieu of interest in respect of 
  (a) any interest or dividend payable after November 16, 1978 on an income bond or an income debenture issued before November 17, 1978 or pursuant to an agreement in writing made before that date, or 
  (b) a dividend that became payable or in arrears after November 16, 1978 on a share of the capital stock of a corporation that is not a term preferred share by reason of having been issued before November 17, 1978 or pursuant to an agreement in writing made before that date, shall, for the purposes of subsections 112(2.1) and 138(6), be deemed to be a dividend received on a term preferred share. 
  
  ### Deemed interest on preferred shares
  
  (3) Subject to subsection 258(4), for the purposes of paragraphs 12(1)(c) and 12(1)(k) and sections 113 and 126, each amount that is a dividend received in a taxation year on 
  (a) a term preferred share by a specified financial institution resident in Canada from a corporation not resident in Canada, or 
  (b) any other share that 
  (i) is a grandfathered share, or 
  (ii) was issued before 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 and is not deemed by subsection 112(2.22) to have been issued after that time by a corporation from a corporation not resident in Canada, if the dividend would have been a dividend in respect of which no deduction could have been made under subsection 112(1) or 112(2) or 138(6) because of subsection 112(2.2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read on June 17, 1987, if the corporation that paid the dividend were a taxable Canadian corporation  shall be deemed to be interest received in the year and not a dividend received on a share of the capital stock of a corporation. 
  
  ### Exception
  
  (4) Subsection (3) does not apply to a dividend described in paragraph (3)(a) 
  (a) if the share on which the dividend was paid was not acquired in the ordinary course of the business carried on by the corporation; or 
  (b) to the extent that the dividend would be described by subparagraph 53(2)(b)(ii) if the corporation not resident in Canada were not a foreign affiliate of the corporation. 
  
  ### Deemed interest on certain shares
  
  (5) For the purposes of paragraphs 12(1)(c) and 12(1)(k) and sections 113 and 126, a dividend received after June 18, 1987 and in a taxation year from a corporation not resident in Canada, other than a corporation in which the recipient had or would have, if the corporation were a taxable Canadian corporation, a substantial interest (within the meaning assigned by section 191), on a share, if the dividend would have been a dividend in respect of which no deduction could have been made under subsection 112(1) or 112(2) or 138(6) by reason of subsection 112(2.2) or 112(2.4) if the corporation that paid the dividend were a taxable Canadian corporation, shall be deemed to be interest received in the year and not a dividend received on a share of the capital stock of the payer corporation. 
  
  ### Exception
  
  (6) Subsection (5) does not apply to a dividend described in that subsection to the extent that the dividend would be described by subparagraph 53(2)(b)(ii) if the corporation not resident in Canada were not a foreign affiliate of the recipient. 
  
  ### Proportional holdings in trust property
  
  259 (1) For the purposes of designated provisions, if at any time a specified taxpayer acquires, holds or disposes of a particular unit in a qualified trust and the qualified trust elects for any period that includes that time to have this subsection apply, 
  (a) the taxpayer shall be deemed not to acquire, hold or dispose of at that time, as the case may be, the particular unit; 
  (b) where the taxpayer holds the particular unit at that time, the taxpayer shall be deemed to hold at that time that proportion (referred to in this subsection as the “specified portion”) of each property (in this subsection referred to as a “relevant property”) held by the trust at that time that one (or, where the particular unit is a fraction of a whole unit, that fraction) is of the number of units of the trust outstanding at that time; 
  (c)  [Repealed, 2005, c. 30, s. 18]  
  (d) where that time is the later of 
  (i) the time the trust acquires the relevant property, and 
  (ii) the time the taxpayer acquires the particular unit, the taxpayer shall be deemed to acquire the specified portion of a relevant property at that time; 
  (e) where that time is the time the specified portion of a relevant property is deemed by paragraph 259(1)(d) to have been acquired, the fair market value of the specified portion of the relevant property at that time shall be deemed to be the specified portion of the fair market value of the relevant property at the time of its acquisition by the trust; 
  (f) where that time is the time immediately before the time the trust disposes of a particular relevant property, the taxpayer shall be deemed to dispose of, immediately after that time, the specified portion of the particular relevant property for proceeds equal to the specified portion of the proceeds of disposition to the trust of the particular relevant property; 
  (g) where that time is the time immediately before the time the taxpayer disposes of the particular unit, the taxpayer shall be deemed to dispose of, immediately after that time, the specified portion of each relevant property for proceeds equal to the specified portion of the fair market value of that relevant property at that time; and 
  (h) where the taxpayer is deemed because of this subsection 
  (i) to have acquired a portion of a relevant property as a consequence of the acquisition of the particular unit by the taxpayer and the acquisition of the relevant property by the trust, and 
  (ii) subsequently to have disposed of the specified portion of the relevant property, the specified portion of the relevant property shall, for the purposes of determining the consequences under this Act of the disposition and without affecting the proceeds of disposition of the specified portion of the relevant property, be deemed to be the portion of the relevant property referred to in subparagraph 259(1)(h)(i). 
  (2)  [Repealed, 2005, c. 30, s. 18]  
  
  ### Election
  
  (3) An election by a qualified trust under subsection (1) shall be made by the qualified trust filing a prescribed form with the Minister and shall apply for the period 
  (a) that begins on the later of 
  (i) the day that is 15 months before the day on which the election is filed, and 
  (ii) the day, if any, that is designated by the qualified trust in the election; and 
  (b) that ends on the earlier of 
  (i) the day on which the qualified trust files with the Minister a notice of revocation of the election, and 
  (ii) the day, if any, that is designated by the qualified trust in the notice of revocation and that is not before the day that is 15 months before the day on which the notice of revocation is filed. 
  
  ### Requirement to provide information
  
  (4) Where a qualified trust elects under subsection (1), 
  (a) it shall provide notification of the election 
  (i) within 30 days after making the election, to each person who held a unit in the qualified trust at any time in the period before the election was made and during which the election is applicable, and 
  (ii) at the time of acquisition, to each person who acquires a unit in the qualified trust at any time in the period after the election was made and during which the election is applicable; and 
  (b) if a person who holds a unit in the qualified trust at any time in the period during which the election is applicable makes a written request to the qualified trust for information that is necessary for the purpose of determining the consequences under this Act of the election for that person, the qualified trust shall provide to the person that information within 30 days after receiving the request. 
  
  ### Definitions
  
  (5) In this section,  
  *designated provisions* means sections 146 and 146.1 to 146.4 and Parts X, XI.01 and XI.1, as they apply in respect of investments that are not qualified investments for a trust, and Part X.2; (dispositions désignées)   
  *qualified corporation* [Repealed, 2005, c. 30, s. 18]   
  *qualified trust* at any time means a trust (other than a registered investment or a trust that is prescribed to be a small business investment trust) where  
  (a) each trustee of the trust at that time is a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee or a person who is a trustee of a trust governed by a registered pension plan, 
  (b) all the interests of the beneficiaries under the trust at that time are described by reference to units of the trust all of which are at that time identical to each other, 
  (c) it has never before that time borrowed money except where the borrowing was for a term not exceeding 90 days and the borrowing was not part of a series of loans or other transactions and repayments, and 
  (d) it has never before that time accepted deposits; ( fiducie admissible)   
  *specified taxpayer* means a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u) to (u.2) and (x). (contribuable déterminé)  
  
  ### Definitions
  
  260 (1) In this section  
  *dealer compensation payment* means an amount received by a taxpayer as compensation, for an underlying payment,  
  (a) from a registered securities dealer resident in Canada who paid the amount in the ordinary course of a business of trading in securities, or 
  (b) in the ordinary course of the taxpayer’s business of trading in securities, where the taxpayer is a registered securities dealer resident in Canada; ( paiement compensatoire (courtier))   
  *qualified security* means  
  (a) a share of a class of the capital stock of a corporation that is listed on a stock exchange or of a class of the capital stock of a corporation that is a public corporation by reason of the designation of the class by the corporation in an election made under subparagraph (b)(i) of the definition 
  *public corporation* in subsection 89(1) or by the Minister in a notice to the corporation under subparagraph (b)(ii) of that definition,  
  (b) a bond, debenture, note or similar obligation of a corporation described in paragraph (a) or of a corporation that is controlled by such a corporation, 
  (c) a bond, debenture, note or similar obligation of or guaranteed by the government of any country, province, state, municipality or other political subdivision, or a corporation, commission, agency or association controlled by any such person, 
  (d) a warrant, right, option or similar instrument with respect to a share described in paragraph (a), or 
  (e) a qualified trust unit; ( titre admissible)   
  *qualified trust unit* means an interest, as a beneficiary under a trust, that is listed on a stock exchange; (unité de fiducie déterminée)   
  *securities lending arrangement* means an arrangement under which  
  (a) a person (in this section referred to as the “lender”) transfers or lends at any particular time a qualified security to another person (in this section referred to as the “borrower”), 
  (b) it may reasonably be expected, at the particular time, that the borrower will transfer or return after the particular time to the lender a security (in this section referred to as an “identical security”) that is identical to the security so transferred or lent, 
  (c) the borrower is obligated to pay to the lender amounts equal to and as compensation for all amounts, if any, paid on the security that would have been received by the borrower if the borrower had held the security throughout the period that begins after the particular time and that ends at the time an identical security is transferred or returned to the lender, 
  (d) the lender’s risk of loss or opportunity for gain or profit with respect to the security is not changed in any material respect, and 
  (e) if the lender and the borrower do not deal with each other at arm’s length, it is intended that neither the arrangement nor any series of securities lending arrangements, loans or other transactions of which the arrangement is a part be in effect for more than 270 days, but does not include an arrangement one of the main purposes of which may reasonably be considered to be to avoid or defer the inclusion in income of any gain or profit with respect to the security. ( mécanisme de prêt de valeurs mobilières)   
  *security distribution* means an amount that is  
  (a) an underlying payment, or 
  (b) an SLA compensation payment, or a dealer compensation payment, that is deemed by subsection (5.1) to be an amount received as an amount described by any of paragraphs (5.1)(a) to (c); ( paiement de titre)   
  *SLA compensation payment* means an amount paid pursuant to  
  (a) a securities lending arrangement as compensation for an underlying payment; or 
  (b) a specified securities lending arrangement as compensation for an underlying payment, including, if the property transferred or lent is described in subparagraph (a)(ii) of the definition specified securities lending arrangement, as compensation for a taxable dividend paid on a share described in subparagraph (a)(i) of that definition; (paiement compensatoire (MPVM))   
  *specified securities lending arrangement* means an arrangement, other than a securities lending arrangement, under which  
  (a) a particular person (referred to in this definition as a “transferor”) transfers or lends at any particular time a property to another person (referred to in this definition as a “transferee”) and the property is 
  (i) a particular share described in paragraph (a) of the definition qualified security, or  
  (ii) a property in respect of which the following conditions are met: 
  (A) the property is 
  (I) an interest in a partnership, or 
  (II) an interest as a beneficiary under a trust, and 
  (B) all or any part of the fair market value of the property, immediately before the particular time, is derived, directly or indirectly, from a share described in subparagraph (i), 
  (b) it may reasonably be expected, at the particular time, that the transferee — or a person that does not deal at arm’s length with, or is affiliated with, the transferee — will transfer or return after the particular time to the transferor — or a person that does not deal at arm’s length with, or is affiliated with, the transferor (referred to in this definition as a “substitute transferor”) — a property that is identical or substantially identical to the property so transferred or lent, and 
  (c) the transferor’s (together with any substitute transferor’s) risk of loss or opportunity for gain or profit with respect to the particular property is not changed in any material respect; ( mécanisme de prêt de valeurs mobilières déterminé)   
  *underlying payment* means an amount paid on a qualified security by the issuer of the security. (paiement sous-jacent)  
  
  ### Eligible dividend
  
  (1.1) This subsection applies to an amount if the amount is received by a person who is resident in Canada, the amount is deemed under subsection (5.1) to be a taxable dividend, and the amount is either 
  (a) received as compensation for an eligible dividend, within the meaning assigned by subsection 89(1); or 
  (b) received as compensation for a taxable dividend (other than an eligible dividend) paid by a corporation to a non-resident shareholder in circumstances where it is reasonable to consider that the corporation would, if that shareholder were resident in Canada, have designated the dividend to be an eligible dividend under subsection 89(14). 
  
  ### References — borrower and lender
  
  (1.2) For the purposes of subsections (8), (8.1), (8.2), (8.3) and (9.1) and 212(2.1) and (3), in respect of a specified securities lending arrangement, 
  (a) a reference to a borrower includes a transferee; and 
  (b) a reference to a lender includes a transferor. 
  
  ### Non-disposition
  
  (2) Subject to subsections 260(3) and 260(4), for the purposes of this Act, any transfer or loan by a lender of a security under a securities lending arrangement shall be deemed not to be a disposition of the security and the security shall be deemed to continue to be property of the lender and, for the purposes of this subsection, a security shall be deemed to include an identical security that has been transferred or returned to the lender under the arrangement. 
  
  ### Disposition of right
  
  (3) Where, at any time, a lender receives property (other than an identical security or an amount deemed by subsection 260(4) to have been received as proceeds of disposition) in satisfaction of or in exchange for the lender’s right under a securities lending arrangement to receive the transfer or return of an identical security, for the purposes of this Act the lender shall be deemed to have disposed at that time of the security that was transferred or lent for proceeds of disposition equal to the fair market value of the property received for the disposition of the right (other than any portion thereof that is deemed to have been received by the lender as a taxable dividend), except that section 51, 85.1, 86 or 87, as the case may be, shall apply in computing the income of the lender with respect to any such disposition as if the security transferred or lent had continued to be the lender’s property and the lender had received the property directly. 
  
  ### Idem
  
  (4) Where, at any time, it may reasonably be considered that a lender would have received proceeds of disposition for a security that was transferred or lent under a securities lending arrangement, if the security had not been transferred or lent, the lender shall be deemed to have disposed of the security at that time for those proceeds of disposition. 
  
  ### Where subsection (5.1) applies
  
  (5) Subsection (5.1) applies to a taxpayer for a taxation year in respect of a particular amount (other than an amount received as proceeds of disposition or an amount received by a person under an arrangement where it may reasonably be considered that one of the main reasons for the person entering into the arrangement was to enable the person to receive an SLA compensation payment pursuant to a securities lending arrangement, or a dealer compensation payment, that would be deductible in computing the taxable income, or not included in computing the income, for any taxation year of the person) received by the taxpayer in the taxation year 
  (a) as an SLA compensation payment, 
  (i) from a person resident in Canada, or 
  (ii) from a non-resident person who paid the particular amount in the course of carrying on business in Canada through a permanent establishment as defined by regulation; or 
  (b) as a dealer compensation payment. 
  
  ### Deemed character of compensation payments
  
  (5.1) If this subsection applies in respect of a particular amount received by a taxpayer in a taxation year as an SLA compensation payment or as a dealer compensation payment, the particular amount is deemed, to the extent of the underlying payment to which the amount relates, to have been received by the taxpayer in the taxation year as, 
  (a) where the underlying payment is a taxable dividend paid on a share of the capital stock of a public corporation (other than an underlying payment to which paragraph (b) applies), a taxable dividend on the share and, if subsection (1.1) applies to the particular amount, an eligible dividend on the share; 
  (b) where the underlying payment is paid by a trust on a qualified trust unit issued by the trust, 
  (i) an amount of the trust’s income that was, to the extent that subsection 104(13) applied to the underlying payment, 
  (A) paid by the trust to the taxpayer as a beneficiary under the trust, and 
  (B) designated by the trust in respect of the taxpayer to the extent of a valid designation, if any, by the trust under this Act in respect of the recipient of the underlying payment, and 
  (ii) to the extent that the underlying payment is a distribution of a property from the trust, a distribution of that property from the trust; or 
  (c) in any other case, interest. 
  
  ### Deductibility
  
  (6) In computing the income of a taxpayer under Part I from a business or property for a taxation year, there may be deducted a particular amount, paid by the taxpayer in the year as an SLA compensation payment or as a dealer compensation payment, that is equal to 
  (a) if the taxpayer is a registered securities dealer and the particular amount is deemed by subsection (5.1) to have been received as a taxable dividend, no more than 2/3 of the particular amount (unless, for greater certainty, the particular amount is an amount for which a deduction in computing income may be claimed under subsection (6.1) or (6.2) by the taxpayer); or 
  (b) if the particular amount is in respect of an amount other than an amount that is, or is deemed by subsection (5.1) to have been, received as a taxable dividend, 
  (i) where the taxpayer disposes of the borrowed security and includes the gain or loss, if any, from the disposition in computing its income from a business, the particular amount, or 
  (ii) in any other case, the lesser of 
  (A) the particular amount, and 
  (B) the amount, if any, in respect of the security distribution to which the SLA compensation payment or dealer compensation payment relates that is included in computing the income, and not deducted in computing the taxable income, for any taxation year of the taxpayer or of any person to whom the taxpayer is related. 
  
  ### Deductible amount
  
  (6.1) There may be deducted in computing a corporation’s income under Part I from a business or property for a taxation year an amount equal to the lesser of 
  (a) the total of all amounts each of which is an amount that the corporation becomes obligated in the taxation year to pay to another person under an arrangement described in paragraph (b) of the definition 
  *dividend rental arrangement* in subsection 248(1) that, if paid, would be deemed by subsection (5.1) to have been received by another person as a taxable dividend, and  
  (b) the amount of the dividends received by the corporation under the arrangement that were identified in its return of income under Part I for the year as an amount in respect of which no amount was deductible because of subsection 112(2.3) in computing the taxpayer’s taxable income or taxable income earned in Canada. 
  
  ### Deductible amount for registered securities dealer
  
  (6.2) If a registered securities dealer enters into a specified hedging transaction in respect of a DRA share of the registered securities dealer or a person that does not deal at arm’s length with, or is affiliated with, the registered securities dealer, there may be deducted in computing the income of the registered securities dealer under Part I from a business or property for a taxation year an amount (other than any portion of the amount for which a deduction in computing income may be claimed under subsection (6.1) by the registered securities dealer) equal to the lesser of 
  (a) the total of all amounts each of which is an amount that the registered securities dealer becomes obligated in the taxation year to pay to another person as compensation for a dividend under the specified hedging transaction that, if paid, would be deemed by subsection (5.1) to have been received by another person as a taxable dividend, and 
  (b) the amount of the dividends that were received in respect of the DRA share by the registered securities dealer or the person that does not deal at arm’s length with, or is affiliated with, the registered securities dealer (as the case may be, referred to as the “dividend recipient” in this paragraph) and that were identified in the dividend recipient’s return of income under Part I for the year as an amount in respect of which no amount was deductible because of subsection 112(2.3) in computing the dividend recipient’s taxable income or taxable income earned in Canada. 
  
  ### Dividend refund
  
  (7) For the purpose of section 129, if a corporation pays an amount for which no deduction in computing the corporation’s income may be claimed under subsection (6.1) or (6.2) and subsection (5.1) deems the amount to have been received by another person as a taxable dividend, 
  (a) the corporation is deemed to have paid the amount as a taxable dividend, where the corporation is not a registered securities dealer; and 
  (b) the corporation is deemed to have paid 1/3 of the amount as a taxable dividend, where the corporation is a registered securities dealer. 
  
  ### Non-resident withholding tax
  
  (8) For the purpose of Part XIII, any amount paid or credited under a securities lending arrangement or a specified securities lending arrangement by or on behalf of the borrower to the lender 
  (a) as an SLA compensation payment in respect of a security that is not a qualified trust unit is, subject to paragraph (c), deemed 
  (i) to the extent of the amount of the interest paid in respect of the security, to be a payment made by the borrower to the lender of interest, and 
  (ii) to the extent of the amount of the dividend paid in respect of the security, to be a payment made by the borrower, as a corporation, to the lender of a dividend payable on the security; 
  (b) as an SLA compensation payment in respect of a security that is a qualified trust unit, is deemed, to the extent of the amount of the underlying payment to which the SLA compensation payment relates, to be an amount paid by the trust and having the same character and composition as the underlying payment; 
  (c) as an SLA compensation payment is deemed to be a payment of interest made by the borrower to the lender, if 
  (i) the security that is transferred or lent to the borrower under the arrangement is a share of a class of the capital stock of a non-resident corporation, 
  (ii) the borrower and the lender are not dealing at arm’s length, and 
  (iii) the arrangement is not a fully collateralized arrangement; and 
  (d) as, on account of, in lieu of payment of or in satisfaction of, a fee for the use of the security is deemed to be a payment of interest made by the borrower to the lender. 
  
  ### Deemed fee for borrowed security
  
  (8.1) For the purpose of paragraph (8)(d), if under a securities lending arrangement or a specified securities lending arrangement the borrower has at any time provided the lender with money, either as collateral or consideration for the security, and the borrower does not, under the arrangement, pay or credit a reasonable amount to the lender as, on account of, in lieu of payment of or in satisfaction of, a fee for the use of the security, the borrower is deemed to have, at the time that an identical or substantially identical security is or can reasonably be expected to be transferred or returned to the lender, paid to the lender under the arrangement an amount as a fee for the use of the security equal to the amount, if any, by which 
  (a) the interest on the money computed at the prescribed rates in effect during the term of the arrangement exceeds 
  (b) the amount, if any, by which any amount that the lender pays or credits to the borrower under the arrangement exceeds the amount of the money. 
  
  ### Effect for tax treaties — interest
  
  (8.2) In applying subparagraph (8)(a)(i), if a securities lending arrangement or specified securities lending arrangement is a fully collateralized arrangement, any SLA compensation payment deemed to be a payment made by the borrower to the lender of interest is deemed for the purposes of any tax treaty to be payable on the security. 
  
  ### Effect for tax treaties — dividend
  
  (8.3) In applying subparagraph (8)(a)(ii), if the security is a share of a class of the capital stock of a corporation resident in Canada (in this subsection referred to as the “Canadian share”), for the purposes of determining the rate of tax that Canada may impose on a dividend because of the dividend article of a tax treaty, 
  (a) any SLA compensation payment deemed to be a payment made by the borrower to the lender of a dividend is deemed to be paid by the issuer of the Canadian share and not by the borrower; 
  (b) the lender is deemed to be the beneficial owner of the Canadian share; and 
  (c) the shares of the capital stock of the issuer owned by the lender are deemed to give it less than 10% of the votes that could be cast at an annual meeting of the shareholders of the issuer and have less than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the issuer, if 
  (i) the securities lending arrangement or the specified securities lending arrangement is not a fully collateralized arrangement, and 
  (ii) the borrower and the lender are not dealing at arm’s length. 
  
  ### Restricted financial institution
  
  (9) For the purposes of subsection 187.3(1), where at any time a dividend is received by a restricted financial institution on a share that was last acquired before that time pursuant to an obligation of a borrower to return or transfer a share under a securities lending arrangement, an acquisition of the share under the arrangement shall be deemed at and after that time not to be an acquisition of the share. 
  
  ### Non-arm’s length compensation payment
  
  (9.1) For the purpose of Part XIII, if the lender under a securities lending arrangement or a specified securities lending arrangement is not dealing at arm’s length with either the borrower under the arrangement or the issuer of the security that is transferred or lent under the arrangement, or both, and subsection (8) deems an amount to be a payment of interest by a person to the lender, the lender is deemed, in respect of that payment, not to be dealing at arm’s length with that person. 
  
  ### Partnerships
  
  (10) For the purpose of this section, 
  (a) a person includes a partnership; and 
  (b) a partnership is deemed to be a registered securities dealer if each member of the partnership is a registered securities dealer. 
  
  ### Corporate members of partnerships
  
  (11) A corporation that is, in a taxation year, a member of a partnership is deemed 
  (a) for the purpose of applying subsection (5) in respect of the taxation year, 
  (i) to receive its specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount received by the partnership in that fiscal period, and 
  (ii) in respect of the receipt of its specified proportion of that amount, to be the same person as the partnership; 
  (b) for the purpose of applying paragraphs (6.1)(a) and (6.2)(a) in respect of the taxation year, to become obligated to pay its specified proportion, for each fiscal period of the partnership that ends in the taxation year, of the amount the partnership becomes, in that fiscal period, obligated to pay to another person under the arrangement described in that paragraph; and 
  (c) for the purpose of applying section 129 in respect of the taxation year, to have paid 
  (i) if the partnership is not a registered securities dealer, the corporation’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount paid by the partnership (other than an amount for which a deduction in computing income may be claimed under subsection (6.1) or (6.2) by the corporation), and 
  (ii) if the partnership is a registered securities dealer, 1/3 of the corporation’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount paid by the partnership (other than an amount for which a deduction in computing income may be claimed under subsection (6.1) or (6.2) by the corporation). 
  
  ### Individual members of partnerships
  
  (12) An individual that is, in a taxation year, a member of a partnership is deemed 
  (a) for the purpose of applying subsection (5) in respect of the taxation year, 
  (i) to receive the individual’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount received by the partnership in that fiscal period, and 
  (ii) in respect of the receipt of the individual’s specified proportion of that amount, to be the same person as the partnership; and 
  (b) for the purpose of subsection 82(1), to have paid the individual’s specified proportion, for each fiscal period of the partnership that ends in the year, of each amount paid by the partnership in that fiscal period that is deemed by subsection (5.1) to have been received by another person as a taxable dividend. 
  
  ### Definitions
  
  261 (1) The following definitions apply in this section.  
  *Canadian currency year* of a taxpayer means a taxation year that precedes the first functional currency year of the taxpayer. (année de déclaration en monnaie canadienne)   
  *Canadian tax results* of a taxpayer for a taxation year means  
  (a) the amount of the income, taxable income or taxable income earned in Canada of the taxpayer for the taxation year; 
  (b) the amount (other than an amount payable on behalf of another person under subsection 153(1) or section 215) of tax or other amount payable under this Act by the taxpayer in respect of the taxation year; 
  (c) the amount (other than an amount refundable on behalf of another person in respect of amounts payable on behalf of that person under subsection 153(1) or section 215) of tax or other amount refundable under this Act to the taxpayer in respect of the taxation year; and 
  (d) any amount that is relevant in determining the amounts described in respect of the taxpayer under paragraphs (a) to (c). ( résultats fiscaux canadiens)   
  *elected functional currency* of a taxpayer means the currency of a country other than Canada that was the functional currency of the taxpayer for its first taxation year in respect of which it made an election under paragraph (3)(b). (monnaie fonctionnelle choisie)   
  *functional currency* of a taxpayer for a taxation year means the currency of a country other than Canada if that currency is, throughout the taxation year,  
  (a) a qualifying currency; and 
  (b) the primary currency in which the taxpayer maintains its records and books of account for financial reporting purposes. ( monnaie fonctionnelle)   
  *functional currency year* of a taxpayer means a taxation year in respect of which subsection (5) applies to the taxpayer. (année de déclaration en monnaie fonctionnelle)   
  *pre-reversion debt* of a taxpayer means a debt obligation of the taxpayer that was issued by the taxpayer before the beginning of the taxpayer’s first reversionary year. (créance pré-rétablissement)   
  *pre-transition debt* of a taxpayer means a debt obligation of the taxpayer that was issued by the taxpayer before the beginning of the taxpayer’s first functional currency year. (créance pré-transition)   
  *qualifying currency* at any time means each of  
  (a) the currency of the United States of America; 
  (b) the currency of the European Monetary Union; 
  (c) the currency of the United Kingdom; 
  (c.1) the currency of Japan; 
  (d) the currency of Australia; and 
  (e) a prescribed currency. ( monnaie admissible)   
  *relevant spot rate*, for a particular day, means, in respect of a conversion of an amount from a particular currency to another currency,  
  (a) if the particular currency or the other currency is Canadian currency, the rate quoted by the Bank of Canada on the particular day (or, if the Bank of Canada ordinarily quotes such a rate, but there is no such rate quoted for the particular day, the closest preceding day for which such a rate is quoted) for the exchange of the particular currency for the other currency, or, in applying paragraphs (2)(b) and (5)(c), another rate of exchange that is acceptable to the Minister; and 
  (b) if neither the particular currency nor the other currency is Canadian currency, the rate — calculated by reference to the rates quoted by the Bank of Canada on the particular day (or, if the Bank of Canada ordinarily quotes such rates, but either of such rates is not quoted for the particular day, the closest preceding day for which both such rates are quoted) for the exchange of Canadian currency for each of those currencies — for the exchange of the particular currency for the other currency, or, in applying paragraphs (2)(b) and (5)(c), another rate of exchange that is acceptable to the Minister. ( taux de change au comptant)   
  *reversionary year* of a taxpayer means a taxation year that begins after the last functional currency year of the taxpayer. (année de rétablissement)   
  *tax reporting currency* of a taxpayer for a taxation year, and at any time in the taxation year, means the currency in which the taxpayer’s Canadian tax results for the taxation year are to be determined. (monnaie de déclaration)  
  
  ### Canadian currency requirement
  
  (2) In determining the Canadian tax results of a taxpayer for a particular taxation year, 
  (a) subject to this section, other than this subsection, Canadian currency is to be used; and 
  (b) subject to this section, other than this subsection, subsections 20(14.2) and 79(7) and paragraphs 80(2)(k) and 142.7(8)(b), if a particular amount that is relevant in computing those Canadian tax results is expressed in a currency other than Canadian currency, the particular amount is to be converted to an amount expressed in Canadian currency using the relevant spot rate for the day on which the particular amount arose. 
  
  ### Application of subsection (5)
  
  (3) Subsection (5) applies to a taxpayer in respect of a particular taxation year if 
  (a) the taxpayer is, throughout the particular taxation year, a corporation (other than an investment corporation, a mortgage investment corporation or a mutual fund corporation) resident in Canada; 
  (b) the taxpayer has elected that subsection (5) apply to the taxpayer and has filed that election with the Minister in prescribed form and manner on or before the day that is 60 days after the first day of the particular taxation year; 
  (c) there is a functional currency of the taxpayer for the first taxation year of the taxpayer in respect of which subsection (5) would, if this subsection were read without reference to this paragraph, apply; 
  (d) the taxpayer has not filed another election under paragraph (b); and 
  (e) a revocation by the taxpayer under subsection (4) does not apply to the particular taxation year. 
  
  ### Revocation of election
  
  (4) A taxpayer may revoke its election under paragraph (3)(b) by filing, on a day that is in a functional currency year of the taxpayer (other than its first functional currency year), a notice of revocation in prescribed form and manner. The revocation applies to each taxation year of the taxpayer that begins on or after the day that is six months after that day. 
  
  ### Functional currency tax reporting
  
  (5) If this subsection applies to a taxpayer in respect of a particular taxation year, 
  (a) the taxpayer’s Canadian tax results for the particular taxation year are to be determined using the taxpayer’s elected functional currency; 
  (b) unless the context otherwise requires, each reference in this Act or the regulations to an amount (other than in respect of a penalty or fine) that is described as a particular number of Canadian dollars is to be read, in respect of the taxpayer and the particular taxation year, as a reference to that amount expressed in the taxpayer’s elected functional currency using the relevant spot rate for the first day of the particular taxation year; 
  (c) subject to paragraph (9)(b), subsection (15), subsections 20(14.2) and 79(7) and paragraphs 80(2)(k) and 142.7(8)(b), if a particular amount that is relevant in computing the taxpayer’s Canadian tax results for the particular taxation year is expressed in a currency other than the taxpayer’s elected functional currency, the particular amount is to be converted to an amount expressed in the taxpayer’s elected functional currency using the relevant spot rate for the day on which the particular amount arose; 
  (d) the definition 
  *exchange rate* in subsection 111(8) is, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, to be read as follows:   
  *exchange rate* at any time in respect of a particular currency other than the taxpayer’s elected functional currency means the relevant spot rate, for the day that includes that time, in respect of the conversion of an amount from the particular currency to the taxpayer’s elected functional currency, or a rate of exchange acceptable to the Minister;  
  (e) except in applying paragraph 95(2)(f.15) in respect of a taxation year, of a foreign affiliate of the taxpayer, that is a functional currency year of the foreign affiliate within the meaning of subsection (6.1), each reference in subsection 39(2) to “Canadian currency” is to be read, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, as a reference to “the taxpayer’s elected functional currency”; 
  (f) each reference in 
  (i) section 76.1, subsections 20(14.2) and 79(7), paragraph 80(2)(k), subsections 80.01(11), 80.1(8), 93(2.01) to (2.31), 142.4(1) and 142.7(8) and the definition 
  *amortized cost* in subsection 248(1), and subparagraph 231(6)(a)(iv) of the Income Tax Regulations, to “Canadian currency” is, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, to be read as “the taxpayer’s elected functional currency”, and  
  (ii) subparagraph 94.1(1)(b)(vii), the definition 
  *foreign currency debt* in subsection 111(8), subsection 142.4(1), and the definition 
  *amortized cost* in subsection 248(1) to “currency of a country other than Canada” is, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, to be read as a reference to “currency other than the taxpayer’s elected functional currency”;  
  (g) the definition 
  *foreign currency* in subsection 248(1) is, in respect of the taxpayer and the taxation year, and with such modifications as the context requires, to be read as follows:   
  *foreign currency* in respect of a taxpayer, at any time in a taxation year, means a currency other than the taxpayer’s elected functional currency;  
  (h) where a taxation year, of a foreign affiliate of the taxpayer, is a functional currency year of the foreign affiliate within the meaning of subsection (6.1), 
  (i) the references in section 95 (other than paragraph 95(2)(f.15)) and the references in regulations made for the purposes of section 95 or 113 to 
  (A) “Canadian currency” are to be read, in respect of the foreign affiliate and the taxation year, and with such modifications as the context requires, as references to “the taxpayer’s elected functional currency”, and 
  (B) “currency of a country other than Canada” are to be read, in respect of the foreign affiliate and the taxation year, and with such modifications as the context requires, as references to “currency other than the taxpayer’s elected functional currency”, and 
  (ii) the reference in paragraph 95(2)(f.13) to “the rate of exchange quoted by the Bank of Canada on” is to be read, in respect of the foreign affiliate and the taxation year, and with such modifications as the context requires, as a reference to “the relevant spot rate for”. 
  
  ### Partnerships
  
  (6) For the purposes of computing the Canadian tax results of a particular taxpayer for each taxation year that is a functional currency year or a reversionary year of the particular taxpayer, this section is to be applied as if each partnership of which the particular taxpayer is a member at any time in the taxation year were a taxpayer that 
  (a) had as its first functional currency year its first fiscal period, if any, that 
  (i) is a fiscal period at any time during which the particular taxpayer is a member of the partnership, 
  (ii) begins after December 13, 2007, and 
  (iii) begins on or after the first day of the particular taxpayer’s first functional currency year; 
  (b) had as its last Canadian currency year its last fiscal period, if any, that ends before its first functional currency year; 
  (c) had as its first reversionary year its first fiscal period, if any, that begins after the particular taxpayer’s last functional currency year; 
  (d) is subject to subsection (5) for each of its fiscal periods that is, or begins after, its first functional currency year and that ends before its first reversionary year; 
  (e) had as its elected functional currency in respect of each fiscal period described in paragraph (d) the elected functional currency of the particular taxpayer; and 
  (f) had as its last functional currency year its last fiscal period, if any, that ends before its first reversionary year. 
  
  ### Foreign affiliates
  
  (6.1) For the purposes of computing the foreign accrual property income of a foreign affiliate of a particular taxpayer, in respect of the particular taxpayer, for each taxation year that is a functional currency year or a reversionary year of the particular taxpayer, this section is to be applied as if 
  (a) the foreign affiliate were a taxpayer that 
  (i) had, as its first functional currency year, its first taxation year that 
  (A) is a taxation year at any time during which the foreign affiliate is a foreign affiliate of the particular taxpayer, 
  (B) begins after December 13, 2007, and 
  (C) begins on or after the first day of the particular taxpayer’s first functional currency year, 
  (ii) had as its last Canadian currency year its last taxation year, if any, that ends before its first functional currency year, 
  (iii) had as its first reversionary year its first taxation year, if any, that begins after the particular taxpayer’s last functional currency year, 
  (iv) is subject to subsection (5) for each of its taxation years that is, or begins after, its first functional currency year and that ends before its first reversionary year, 
  (v) had as its elected functional currency in respect of each taxation year described in subparagraph (iv) the elected functional currency of the particular taxpayer, and 
  (vi) had as its last functional currency year its last taxation year, if any, that ends before its first reversionary year; and 
  (b) the Canadian tax results of the foreign affiliate for each taxation year that is a functional currency year or a reversionary year of the foreign affiliate, within the meaning of paragraph (a), were its foreign accrual property income, in respect of the particular taxpayer, for that taxation year and any amount that is relevant in determining such foreign accrual property income. 
  
  ### Converting Canadian currency amounts
  
  (7) In applying this Act to a taxpayer for a particular functional currency year of the taxpayer, the following amounts are to be converted from Canadian currency to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year: 
  (a) each particular amount that 
  (i) is, or is relevant to the determination of, an amount that may be deducted under subsection 37(1) or 66(4), variable F or F.1 in the definition 
  *foreign accrual property income* in subsection 95(1), section 110.1 or 111 or subsection 126(2), 127(5), 129(1), 181.1(4) or 190.1(3), in the particular functional currency year, and  
  (ii) was determined for a Canadian currency year of the taxpayer; 
  (b) the cost to the taxpayer of a property that was acquired by the taxpayer in a Canadian currency year of the taxpayer; 
  (c) an amount that was required by section 53 to be added or deducted in computing, at any time in a Canadian currency year of the taxpayer, the adjusted cost base to the taxpayer of a capital property that was acquired by the taxpayer in such a year; 
  (d) an amount that 
  (i) is in respect of the taxpayer’s undepreciated capital cost of depreciable property of a prescribed class, 
  *cumulative Canadian exploration expense* (as defined in subsection 66.1(6)), 
  *cumulative Canadian development expense* (as defined in subsection 66.2(5)), 
  *cumulative foreign resource expense* in respect of a country other than Canada (as defined in subsection 66.21(1)) or 
  *cumulative Canadian oil and gas property expense* (as defined in subsection 66.4(5)) (each of which is referred to in this paragraph as a 
  *pool amount*), and  
  (ii) was added to or deducted from a pool amount of the taxpayer in respect of a Canadian currency year of the taxpayer; 
  (e) an amount that has been deducted or claimed as a reserve in computing the income of the taxpayer for its last Canadian currency year; 
  (f) an outlay or expense referred to in subsection 18(9) that was made or incurred by the taxpayer in respect of a Canadian currency year of the taxpayer, and any amount that was deducted in respect of the outlay or expense in computing the income of the taxpayer for such a year; 
  (g) an amount that was added or deducted in computing the taxpayer’s paid-up capital in respect of a class of shares of its capital stock in a Canadian currency year of the taxpayer; and 
  (h) any amount (other than an amount referred to in any of paragraphs (a) to (g) or any of subsections (6), (6.1) and (8)) determined under the provisions of this Act in or in respect of a Canadian currency year of the taxpayer that is relevant in determining the Canadian tax results of the taxpayer for the particular functional currency year. 
  
  ### Converting pre-transition debts
  
  (8) In determining, at any time in a particular functional currency year of a taxpayer, the amount for which a pre-transition debt of the taxpayer (other than a pre-transition debt denominated in the taxpayer’s elected functional currency) was issued and its principal amount at the beginning of the taxpayer’s first functional currency year, 
  (a) where the pre-transition debt is denominated in Canadian currency, those amounts are to be converted to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year; and 
  (b) where the pre-transition debt is denominated in a currency (referred to in this paragraph as the “debt currency”) that is neither Canadian currency nor the taxpayer’s elected functional currency, those amounts are to be converted from the debt currency to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year. 
  
  ### Pre-transition debts
  
  (9) A pre-transition debt of a taxpayer that is denominated in a currency other than the taxpayer’s elected functional currency is deemed to have been issued immediately before the taxpayer’s first functional currency year for the purposes of 
  (a) determining the amount of the taxpayer’s income, gain or loss, for a functional currency year of the taxpayer (other than an amount that subsection (10) deems to arise), that is attributable to a fluctuation in the value of a currency; and 
  (b) applying paragraph 80(2)(k) in respect of a functional currency year of the taxpayer. 
  
  ### Deferred amounts relating to pre-transition debts
  
  (10) If a taxpayer has, at any time in a taxation year that is a functional currency year or a reversionary year of the taxpayer, made a particular payment on account of the principal amount of a pre-transition debt of the taxpayer: 
  (a) where the taxpayer would have made a gain — or, if the pre-transition debt was not on account of capital, would have had income — (referred to in this paragraph as the “hypothetical gain or income”) attributable to a fluctuation in the value of a currency if the pre-transition debt had been settled by the taxpayer’s having paid, immediately before the end of its last Canadian currency year, an amount equal to the principal amount (expressed in the currency in which the pre-transition debt is denominated, which currency is referred to in this subsection as the “debt currency”) at that time, the taxpayer is deemed to make a gain or to have income, as the case may be, for the taxation year equal to the amount determined by the formula is 
  (i) if the taxation year is a functional currency year of the taxpayer, the amount of the hypothetical gain or income converted to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year, and 
  (ii) if the taxation year is a reversionary year of the taxpayer, the amount determined under subparagraph (i) converted to Canadian currency using the relevant spot rate for the last day of the taxpayer’s last functional currency year, is the amount of the particular payment (expressed in the debt currency), and is the principal amount of the pre-transition debt at the beginning of the taxpayer’s first functional currency year (expressed in the debt currency); and 
  (b) where the taxpayer would have sustained a loss — or, if the pre-transition debt was not on account of capital, would have had a loss — (referred to in this paragraph as the “hypothetical loss”) attributable to a fluctuation in the value of a currency if the pre-transition debt had been settled by the taxpayer’s having paid, immediately before the end of its last Canadian currency year, an amount equal to the principal amount (expressed in the debt currency) at that time, the taxpayer is deemed to sustain or to have a loss in respect of the particular payment for the taxation year equal to the amount that would be determined by the formula in paragraph (a) if the reference in the description of A in that paragraph to “hypothetical gain or income” were read as a reference to “hypothetical loss”. 
  
  ### Debt parking — foreign exchange
  
  (10.1) For the purposes of determining a taxpayer’s gain under subsection (10), if at a particular time a pre-transition debt of the taxpayer (referred to in this subsection as the 
  *debtor*) that is denominated in a currency other than Canadian currency becomes a parked obligation (within the meaning assigned by subsection 39(2.02)), the debtor is deemed to have made, at that time, a particular payment on account of the principal amount of the debt equal to  
  (a) if the debt has become a parked obligation at that particular time as a result of its acquisition by the holder of the debt, the portion of the amount paid by the holder to acquire the debt that can reasonably be considered to relate to the principal amount of the debt at the particular time; and 
  (b) in any other case, the portion of the fair market value of the debt that can reasonably be considered to relate to the principal amount of the debt at the particular time. 
  
  ### Determination of amounts payable
  
  (11) Notwithstanding subsections (5) and (7), for the purposes of applying this Act in respect of a functional currency year (referred to in this subsection as the “particular taxation year”) of a taxpayer, 
  (a) for the purposes of determining the taxpayer’s payment obligations under paragraph 157(1)(a) or (1.1)(a), 
  (i) the estimated amounts, each of which is described in subparagraph 157(1)(a)(i) or (1.1)(a)(i), that are payable by the taxpayer for the particular taxation year are to be determined by converting those amounts, as determined in the taxpayer’s elected functional currency, to Canadian currency using the relevant spot rate for the day on which those amounts are due, 
  (ii) the taxpayer’s first instalment base (within the meaning assigned by subsection 157(4)) for the particular taxation year is to be determined 
  (A) if the particular taxation year is the taxpayer’s first functional currency year, without reference to this section, and 
  (B) in any other case, as if the taxes payable by the taxpayer for the taxpayer’s functional currency year (referred to in this paragraph as the “first base year”) immediately preceding the particular taxation year were the total of 
  (I) the total of the taxpayer’s payment obligations under paragraph 157(1)(a) or (1.1)(a), as determined with reference to this subparagraph or subparagraph (i) or (iii), as the case may be, in respect of the first base year, and 
  (II) the amount, if any, of the remainder of the taxes payable by the taxpayer under paragraph 157(1)(b) or (1.1)(b), as determined under paragraph (b), in respect of the first base year, and 
  (iii) the taxpayer’s second instalment base (within the meaning assigned by subsection 157(4)) for the particular taxation year is to be determined 
  (A) if the particular taxation year is the taxpayer’s first functional currency year or its taxation year that immediately follows its first functional currency year, without reference to this section, and 
  (B) in any other case, as if the taxes payable by the taxpayer for the taxpayer’s functional currency year (referred to in this subparagraph as the “second base year”) immediately preceding the first base year were the total of 
  (I) the total of the taxpayer’s payment obligations under paragraph 157(1)(a) or (1.1)(a), as determined with reference to this subparagraph or subparagraph (i) or (ii), as the case may be, in respect of the second base year, and 
  (II) the amount, if any, of the remainder of the taxes payable by the taxpayer under paragraph 157(1)(b) or (1.1)(b), as determined under paragraph (b), in respect of the second base year; 
  (b) the remainder of the taxes payable by the taxpayer under paragraph 157(1)(b) or (1.1)(b) for the particular taxation year is the amount, if any, determined by 
  (i) computing the amount, if any, by which 
  (A) the total of the taxes payable by the taxpayer under Parts I, VI, VI.1 and XIII.1 for the particular taxation year, as determined in the taxpayer’s elected functional currency exceeds 
  (B) the total of all amounts each of which is the amount determined by converting the amount of a payment obligation — determined by paragraph 157(1)(a) or (1.1)(a), as the case may be, with reference to subparagraph (a)(i), (ii) or (iii), as the case may be — of the taxpayer in respect of the particular taxation year to the taxpayer’s elected functional currency using the relevant spot rate for the day on which the payment obligation was due, and 
  (ii) converting the amount, if any, determined by subparagraph (i) to Canadian currency using the relevant spot rate for the taxpayer’s balance-due day for the partic-ular taxation year; 
  (c) for the purposes of determining any amount (other than tax) that is payable by the taxpayer under Part I, VI, VI.1 or XIII.1 for the particular taxation year, the taxpayer’s tax payable under the Part for the particular taxation year is deemed to be equal to the total of 
  (i) the total of the taxpayer’s payment obligations under paragraph 157(1)(a) or (1.1)(a), in respect of the Part, as determined with reference to subparagraph (a)(i), (ii) or (iii), as the case may be, in respect of the particular taxation year, and 
  (ii) the amount, if any, of the remainder of the taxes payable by the taxpayer under paragraph 157(1)(b) or (1.1)(b), in respect of the Part, as determined under paragraph (b), in respect of the particular taxation year; 
  (d) amounts of tax that are payable under this Act (except under Parts I, VI, VI.1 and XIII.1) by the taxpayer for the particular taxation year are to be determined by converting those amounts, as determined in the taxpayer’s elected functional currency, to Canadian currency using the relevant spot rate for the day on which those amounts are due; 
  (e) if a particular amount that is determined in the taxpayer’s elected functional currency is deemed to be paid at any time on account of an amount payable by the taxpayer under this Act for the particular taxation year, the particular amount is to be converted to Canadian currency using the relevant spot rate for the day that includes that time; 
  (f) the following amounts are to be determined in the taxpayer’s elected functional currency and converted to Canadian currency using the relevant spot rate for the taxpayer’s balance-due day for the particular taxation year: 
  (i) amounts described in paragraph 163(1)(a) in respect of the particular taxation year, and 
  (ii) the amount of the taxpayer’s taxable capital employed in Canada, for the purpose of applying section 235; and 
  (g) for greater certainty, all amounts payable by the taxpayer under this Act in respect of the particular taxation year are to be paid in Canadian currency. 
  
  ### Application of subsections (7) and (8) to reversionary years
  
  (12) In applying this Act to a reversionary year of a taxpayer, subsections (7) and (8) are to be read as if the references in those subsections to 
  (a) “Canadian currency” were references to “the taxpayer’s elected functional currency”; 
  (b) “Canadian currency year” were references to “functional currency year”; 
  (c) “functional currency year” were references to “reversionary year”; 
  (d) “first functional currency year” were references to “first reversionary year”; 
  (e) “last Canadian currency year” were references to “last functional currency year”; 
  (f) “pre-transition debt” were references to “pre-reversion debt”; and 
  (g) “the taxpayer’s elected functional currency” were references to “Canadian currency”. 
  
  ### Pre-reversion debts
  
  (13) A pre-reversion debt of a taxpayer that is denominated in a currency other than Canadian currency is deemed to have been issued immediately before the taxpayer’s first reversionary year for the purposes of 
  (a) determining the amount of the taxpayer’s income, gain or loss, for a reversionary year of the taxpayer (other than an amount that subsection (14) deems to arise), that is attributable to a fluctuation in the value of a currency; and 
  (b) applying paragraph 80(2)(k) in respect of a reversionary year of the taxpayer. 
  
  ### Deferred amounts relating to pre-reversion debts
  
  (14) If a taxpayer has, at any time in a reversionary year of the taxpayer, made a particular payment on account of the principal amount of a pre-reversion debt of the taxpayer: 
  (a) where the taxpayer would have made a gain — or, if the pre-reversion debt was not on account of capital, would have had income — (referred to in this paragraph as the “hypothetical gain or income”) attributable to a fluctuation in the value of a currency if the pre-reversion debt had been settled by the taxpayer’s having paid, immediately before the end of its last functional currency year, an amount equal to the principal amount (expressed in the currency in which the pre-reversion debt is denominated, which currency is referred to in this subsection as the “debt currency”) at that time, the taxpayer is deemed to make a gain or to have income, as the case may be, for the reversionary year equal to the amount determined by the formula is the amount of the hypothetical gain or income converted to Canadian currency using the relevant spot rate for the last day of the taxpayer’s last functional currency year, is the amount of the particular payment (expressed in the debt currency), and is the principal amount of the pre-reversion debt at the beginning of the taxpayer’s first reversionary year (expressed in the debt currency); and 
  (b) where the taxpayer would have sustained a loss — or, if the pre-reversion debt was not on account of capital, would have had a loss — (referred to in this paragraph as the “hypothetical loss”) attributable to a fluctuation in the value of a currency if the pre-reversion debt had been settled by the taxpayer’s having paid, immediately before the end of its last functional currency year, an amount equal to the principal amount (expressed in the debt currency) at that time, the taxpayer is deemed to sustain or to have a loss in respect of the particular payment for the reversionary year equal to the amount that would be determined by the formula in paragraph (a) if the reference in the description of A in that paragraph to “hypothetical gain or income” were read as a reference to “hypothetical loss”. 
  
  ### Debt parking — foreign exchange
  
  (14.1) For the purposes of determining a taxpayer’s gain under subsection (14), if at a particular time a pre-reversion debt of the taxpayer (referred to in this subsection as the 
  *debtor*) that is denominated in a currency other than the taxpayer’s elected functional currency becomes a parked obligation (within the meaning assigned by subsection 39(2.02)), the debtor is deemed to have made, at that time, a particular payment on account of the principal amount of the debt equal to  
  (a) if the debt has become a parked obligation at that particular time as a result of its acquisition by the holder of the debt, the portion of the amount paid by the holder to acquire the debt that can reasonably be considered to relate to the principal amount of the debt at the particular time; and 
  (b) in any other case, the portion of the fair market value of the debt that can reasonably be considered to relate to the principal amount of the debt at the particular time. 
  
  ### Amounts carried back
  
  (15) For the purposes of determining the amount that may be deducted, in respect of a particular amount that arises in a taxation year (referred to in this subsection as the “later year”) of a taxpayer, under section 111 or subsection 126(2), 127(5), 181.1(4) or 190.1(3) in computing the taxpayer’s Canadian tax results for a taxation year (referred to in this subsection as the “current year”) that ended before the later year, and for the purposes of determining the amount by which the amount included under subsection 91(1) for the current year is reduced because of a reduction referred to in paragraph 152(6.1)(b) in respect of the later year, 
  (a) if the later year is a functional currency year of the taxpayer and the current year is a Canadian currency year of the taxpayer, the following amounts (expressed in the taxpayer’s elected functional currency) are to be converted to Canadian currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year: 
  (i) the particular amount, and 
  (ii) any amount so deducted in computing the taxpayer’s Canadian tax results for another functional currency year of the taxpayer; 
  (b) if the later year is a reversionary year of the taxpayer and the current year is a functional currency year of the taxpayer, 
  (i) the following amounts (expressed in Canadian currency) are to be converted to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last functional currency year: 
  (A) the particular amount, and 
  (B) any amount so deducted in computing the taxpayer’s Canadian tax results for another reversionary year of the taxpayer, and 
  (ii) any amount (expressed in Canadian currency) so deducted in computing the taxpayer’s Canadian tax results for a Canadian currency year of the taxpayer is to be converted to the taxpayer’s elected functional currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year; 
  (c) if the later year is a reversionary year of the taxpayer and the current year is a Canadian currency year of the taxpayer, the following amounts (expressed in the taxpayer’s elected functional currency) are to be converted to Canadian currency using the relevant spot rate for the last day of the taxpayer’s last Canadian currency year: 
  (i) the amount that would be determined under clause (b)(i)(A) in respect of the particular amount if the current year were a functional currency year of the taxpayer, and 
  (ii) any amount so deducted in computing the taxpayer’s Canadian tax results for a functional currency year of the taxpayer; and 
  (d) in any other case, this subsection does not apply. 
  
  ### Windings-up
  
  (16) If a winding-up described in subsection 88(1) commences at any time (referred to in this subsection as the “commencement time”) and the parent and the subsidiary referred to in that subsection would, in the absence of this subsection, have different tax reporting currencies at the commencement time, the following rules apply for the purposes of determining the subsidiary’s Canadian tax results for its taxation years that end after the commencement time: 
  (a) where the subsidiary’s tax reporting currency is Canadian currency, 
  (i) notwithstanding subsection (3), subsection (5) is deemed to apply to the subsidiary in respect of its taxation year that includes the commencement time and each of its subsequent taxation years, if any, 
  (ii) the subsidiary is deemed to have as its elected functional currency the parent’s tax reporting currency, and 
  (iii) if the subsidiary’s taxation year that includes the commencement time would, in the absence of this subsection, be a reversionary year of the subsidiary, this section is to be read with any modifications that the circumstances require; and 
  (b) where the subsidiary’s tax reporting currency is not Canadian currency, 
  (i) the subsidiary is deemed to have filed, at the time that is six months and one day before the beginning of its taxation year that includes the commencement time, in prescribed form and manner, a notice of revocation described in subsection (4), and 
  (ii) if the parent’s tax reporting currency is not Canadian currency, 
  (A) the subsidiary’s first reversionary year is deemed to have ended at the particular time that is immediately after the time at which it began, 
  (B) a new taxation year of the subsidiary is deemed to have begun immediately after the particular time, 
  (C) notwithstanding subsection (3), subsection (5) is deemed to apply to the subsidiary in respect of its taxation year that includes the commencement time and each of its subsequent taxation years, if any, and 
  (D) the subsidiary is deemed to have as its elected functional currency the parent’s tax reporting currency. 
  
  ### Amalgamations
  
  (17) If a predecessor corporation and the new corporation, in respect of an amalgamation within the meaning of subsection 87(1), have different tax reporting currencies for their last and first taxation years, respectively, paragraphs (16)(a) and (b) apply, for the purposes of determining the predecessor corporation’s Canadian tax results for its last taxation year, as if the tax reporting currencies referred to in those paragraphs were the tax reporting currencies referred to in this subsection and as if the references in those paragraphs to 
  (a) “subsidiary” were references to “predecessor corporation”; 
  (b) “parent” were references to “new corporation”; and 
  (c) “taxation year that includes the commencement time” were references to “last taxation year”. 
  
  ### Amalgamation — deemed application of subsection (5)
  
  (17.1) Notwithstanding subsection (3), if each predecessor corporation in respect of an amalgamation (within the meaning assigned by subsection 87(1)) has the same elected functional currency for its last taxation year, then, unless a predecessor corporation has filed a notice of revocation under subsection (4) on or before the day that is six months before the end of its last taxation year, 
  (a) the new corporation formed as a result of the amalgamation is deemed to have made an election under paragraph (3)(b) and to have filed that election on the first day of its first taxation year; and 
  (b) that elected functional currency is deemed to be the new corporation’s functional currency for its first taxation year. 
  
  ### Anti-avoidance
  
  (18) The Canadian tax results of a corporation for any one or more taxation years shall be determined using a particular currency if 
  (a) at any time (referred to in this subsection as the “transfer time”) one or more properties are directly or indirectly transferred 
  (i) by the corporation to another corporation (referred to in this subsection as the “transferor” and the “transferee”, respectively), or 
  (ii) by another corporation to the corporation (referred to in this subsection as the “transferor” and the “transferee”, respectively); 
  (b) the transferor and the transferee are related at the transfer time or become related in the course of a series of transactions or events that includes the transfer; 
  (c) the transfer time 
  (i) is, or would in the absence of subsections (16) and (17) be, in a functional currency year of the transferor or the transferee and the transferor and the transferee have, or would in the absence of those subsections have, different tax reporting currencies at the transfer time, or 
  (ii) is, or would in the absence of those subsections be, in a reversionary year of the transferor and is not in a reversionary year of the transferee; 
  (d) it can reasonably be considered that one of the main purposes of the transfer or of any portion of a series of transactions or events that includes the transfer is to change, or to enable the changing of, the currency in which the Canadian tax results in respect of the property, or property substituted for it, for a taxation year would otherwise be determined; and 
  (e) the Minister directs that those Canadian tax results be determined in the particular currency. 
  
  ### Mergers
  
  (19) For the purposes of subsection (18), if one corporate entity (referred to in this subsection as the “new corporation”) is formed at a particular time by the amalgamation or other merger of two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”), 
  (a) the predecessor corporation is deemed to have transferred to the new corporation at the time (referred to in this subsection as the “merger transfer time”) that is immediately before the particular time each property that was held at the merger transfer time by the predecessor corporation and at the particular time by the new corporation; 
  (b) the new corporation is deemed to exist, and to be related to the predecessor corporation, at the merger transfer time; and 
  (c) the new corporation is deemed to have as its tax reporting currency at the merger transfer time its tax reporting currency at the particular time. 
  
  ### Application of subsection (21)
  
  (20) Subsection (21) applies in determining a taxpayer’s income, gain or loss for a taxation year in respect of a transaction (referred to in this subsection and subsection (21) as a “specified transaction”) if 
  (a) the specified transaction was entered into, directly or indirectly, at any time by the taxpayer and a person (referred to in this subsection as the “related person”) to which the taxpayer is at that time related; 
  (b) the taxpayer and the related person had different tax reporting currencies at any time during the period (referred to in this subsection as the “accrual period”) in which the income, gain or loss accrued; and 
  (c) it would, in the absence of this subsection and subsection (21), be reasonable to consider that a fluctuation at any time in the accrual period in the value of the taxpayer’s tax reporting currency relative to the value of the related person’s tax reporting currency 
  (i) increased the taxpayer’s loss in respect of the specified transaction, 
  (ii) reduced the taxpayer’s income or gain in respect of the specified transaction, or 
  (iii) caused the taxpayer to have a loss, instead of income or a gain, in respect of the specified transaction. 
  
  ### Income, gain or loss determinations
  
  (21) If this subsection applies, each fluctuation in value referred to in paragraph (20)(c) is, for the purposes of determining the taxpayer’s income, gain or loss in respect of the specified transaction and notwithstanding any other provision of this Act, deemed not to have occurred. 
  
  ### Partnership transactions
  
  (22) For the purposes of this subsection and subsections (18) to (21), 
  (a) if a property is directly or indirectly transferred to or by a partnership, the property is deemed to have been transferred to or by (as the case may be) each member of the partnership; and 
  (b) if a partnership is a party to a transaction, each member of the partnership is deemed to be that party to that transaction. 
  
  ### Authority to designate stock exchange
  
  262 (1) The Minister of Finance may designate a stock exchange, or a part of a stock exchange, for the purposes of this Act. 
  
  ### Revocation of designation
  
  (2) The Minister of Finance may revoke the designation of a stock exchange, or a part of a stock exchange, designated under subsection (1). 
  
  ### Timing
  
  (3) A designation under subsection (1) or a revocation under subsection (2) shall specify the time at and after which it is in effect, which time may, for greater certainty, precede the time at which the designation or revocation is made. 
  
  ### Publication
  
  (4) The Minister of Finance shall cause to be published, by posting on the Internet website of the Department of Finance or by any other means that the Minister of Finance considers appropriate, the names of those stock exchanges, or parts of stock exchanges, as the case may be, that are or at any time were designated under subsection (1). 
  
  ### Transition
  
  (5) The Minister of Finance is deemed to have designated under subsection (1) each stock exchange and each part of a stock exchange that was, immediately before the day on which this section came into force, a prescribed stock exchange, with effect on and after that day. 
  
  # PART XVIII 
  
  ## Enhanced International Information Reporting 
  
  ### Definitions
  
  263 (1) The following definitions apply in this Part.  
  *agreement* has the same meaning as in section 2 of the Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act. (accord)   
  *electronic filing* means using electronic media in a manner specified by the Minister. (transmission électronique)   
  *listed financial institution* means a financial institution that is  
  (a) an authorized foreign bank within the meaning of section 2 of the Bank Act in respect of its business in Canada, or a bank to which that Act applies;  
  (b) a cooperative credit society, a savings and credit union or a caisse populaire regulated by a provincial Act; 
  (c) an association regulated by the Cooperative Credit Associations Act ;  
  (d) a central cooperative credit society, as defined in section 2 of the Cooperative Credit Associations Act, or a credit union central or a federation of credit unions or caisses populaires that is regulated by a provincial Act other than one enacted by the legislature of Quebec;  
  (e) a financial services cooperative regulated by An Act respecting financial services cooperatives, R.S.Q., c. C-67.3, or An Act respecting the Mouvement Desjardins, S.Q. 2000, c. 77;  
  (f) a life company or a foreign life company to which the Insurance Companies Act applies or a life insurance company regulated by a provincial Act;  
  (g) a company to which the Trust and Loan Companies Act applies;  
  (h) a trust company regulated by a provincial Act; 
  (i) a loan company regulated by a provincial Act; 
  (j) an entity authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments, or to provide portfolio management, investment advising, fund administration, or fund management, services; 
  (k) an entity that is represented or promoted to the public as a collective investment vehicle, mutual fund, exchange traded fund, private equity fund, hedge fund, venture capital fund, leveraged buyout fund or similar investment vehicle that is established to invest or trade in financial assets and that is managed by an entity referred to in paragraph (j); 
  (l) an entity that is a clearing house or clearing agency; or 
  (m) a department or an agent of Her Majesty in right of Canada or of a province that is engaged in the business of accepting deposit liabilities. ( institution financière particulière)   
  *non-reporting Canadian financial institution* means any Canadian financial institution or other entity resident in Canada that  
  (a) is described in any of paragraphs C, D and G to J of section III of Annex II to the agreement; 
  (b) makes a reasonable determination that it is described in any of paragraphs A, B, E and F of section III of Annex II to the agreement; 
  (c) qualifies as an exempt beneficial owner under relevant U.S. Treasury Regulations in effect on the date of signature of the agreement; or 
  (d) makes a reasonable determination that it qualifies as a deemed-compliant FFI under relevant U.S. Treasury Regulations in effect on the date of signature of the agreement. ( institution financière canadienne non déclarante)   
  *U.S. reportable account* means a financial account that, under the agreement, is to be treated as a U.S. reportable account. (compte déclarable américain)  
  
  ### Financial institution
  
  (2) For the purposes of this Part, 
  *Canadian financial institution* and 
  *reporting Canadian financial institution* each have the meaning that would be assigned by the agreement, and the definition 
  *non-reporting Canadian financial institution* in subsection (1) has the meaning that would be assigned by that subsection, if the definition 
  *Financial Institution* in subparagraph 1(g) of Article 1 of the agreement were read as follows:  
  g) The term Financial Institution means any Entity that is a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company, and that is a listed financial institution within the meaning of Part XVIII of the Income Tax Act.  
  
  ### Financial account
  
  (3) For the purposes of this Part, the agreement is to be read as if the definition 
  *Financial Account* in subparagraph 1(s) of Article 1 of the agreement included the following subparagraph after subparagraph (1):  
  (1.1) an account that is a client name account maintained by a person or entity that is authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments, or to provide portfolio management or investment advising services. 
  
  ### Identification number
  
  (4) For the purposes of this Part, a reference in the agreement to “Canadian TIN” or “taxpayer identification number” is to be read as including a reference to Social Insurance Number. 
  
  ### Term defined in agreement
  
  (5) In this Part, a term has the meaning that is defined in, or assigned by, the agreement unless the term is defined in this Part. 
  
  ### Amending instrument
  
  (6) No person shall be liable for a failure to comply with a duty or obligation imposed by this Act that results from an amendment to the agreement unless at the date of the alleged failure, 
  (a) the text of the instrument that effected the amendment had been published in the Canada Gazette ; or  
  (b) reasonable steps had been taken to bring the purport of the amendment to the notice of those persons likely to be affected by it. 
  
  ### Designation of account
  
  264 (1) Subject to subsection (2), a reporting Canadian financial institution may designate a financial account to not be a U.S. reportable account for a calendar year if the account is 
  (a) a preexisting individual account described in paragraph A of section II of Annex I to the agreement; 
  (b) a new individual account described in paragraph A of section III of Annex I to the agreement; 
  (c) a preexisting entity account described in paragraph A of section IV of Annex I to the agreement; or 
  (d) a new entity account described in paragraph A of section V of Annex I to the agreement. 
  
  ### U.S. reportable account
  
  (2) A reporting Canadian financial institution may not designate a financial account for a calendar year unless the account is part of a clearly identifiable group of accounts all of which are designated for the year. 
  
  ### Applicable rules
  
  (3) The rules in paragraph C of section VI of Annex I to the agreement apply in determining whether a financial account is described in any of paragraphs (1)(a) to (d). 
  
  ### Identification obligation — financial accounts
  
  265 (1) Every reporting Canadian financial institution shall establish, maintain and document the due diligence procedures set out in subsections (2) and (3). 
  
  ### Due diligence — general
  
  (2) Every reporting Canadian financial institution shall have the following due diligence procedures: 
  (a) for preexisting individual accounts that are lower value accounts, other than accounts described in paragraph A of section II of Annex I to the agreement, the procedures described in paragraphs B and C of that section, subject to paragraph F of that section; 
  (b) for preexisting individual accounts that are high value accounts, other than accounts described in paragraph A of section II of Annex I to the agreement, the procedures described in paragraphs D and E of that section, subject to paragraph F of that section; 
  (c) for new individual accounts, other than accounts described in paragraph A of section III of Annex I to the agreement, the procedures described in paragraph B of section III of Annex I to the agreement; 
  (d) for preexisting entity accounts, other than accounts described in paragraph A of section IV of Annex I to the agreement, the procedures described in paragraphs D and E of that section; and 
  (e) for new entity accounts, other than accounts described in paragraph A of section V of Annex I to the agreement, the procedures described in paragraphs B to E of that section. 
  
  ### Due diligence — no designation
  
  (3) If a reporting Canadian financial institution does not designate a financial account under subsection 264(1) for a calendar year, the institution shall have the following due diligence procedures with respect to the account: 
  (a) if the account is a preexisting individual account described in paragraph A of section II of Annex I to the agreement, the procedures described in paragraphs B and C of that section, subject to paragraph F of that section; 
  (b) if the account is a new individual account described in paragraph A of section III of Annex I to the agreement, the procedures described in paragraph B of section III of Annex I to the agreement; 
  (c) if the account is a preexisting entity account described in paragraph A of section IV of Annex I to the agreement, the procedures described in paragraphs D and E of that section; and 
  (d) if the account is a new entity account described in paragraph A of section V of Annex I to the agreement, the procedures described in paragraphs B to E of that section. 
  
  ### Rules and definitions
  
  (4) For the purposes of subsections (2) and (3), subparagraphs B(1) to (3) of section I, and section VI, of Annex I to the agreement apply except that 
  (a) in applying paragraph C of that section VI, an account balance that has a negative value is deemed to be nil; and 
  (b) the definition NFFE in subparagraph B(2) of that section VI is to be read as follows:  
  2  NFFE  An 
  *NFFE* means any Non-U.S. Entity that is not an FFI as defined in relevant U.S. Treasury Regulations or is an Entity described in subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity  
  a) that is resident in Canada and is not a listed financial institution within the meaning of Part XVIII of the Income Tax Act ; or  
  b) that is resident in a Partner Jurisdiction other than Canada and is not a Financial Institution. 
  
  ### U.S. indicia
  
  (5) For the purposes of paragraphs (2)(a) and (b), subparagraph (2)(c)(ii), paragraph (3)(a) and subparagraph (3)(b)(ii), subparagraph B(3) of section II of Annex I to the agreement is to be read as follows: 
  3 If any of the U.S indicia listed in subparagraph B(1) of this section are discovered in the electronic search, or if there is a change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Canadian Financial Institution must seek to obtain or review the information described in the portion of subparagraph B(4) of this section that is relevant in the circumstances and must treat the account as a U.S. Reportable Account unless one of the exceptions in subparagraph B(4) applies with respect to that account. 
  
  ### Financial institution
  
  (6) For the purpose of applying the procedures referred to in paragraphs (2)(d) and (e) and (3)(c) and (d) to a financial account of an account holder that is resident in Canada, the definition Financial Institution in subparagraph 1(g) of Article 1 of the agreement is to be read as follows:  
  g) The term Financial Institution means any Entity that is a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company, and that is a listed financial institution within the meaning of Part XVIII of the Income Tax Act.  
  
  ### Dealer accounts
  
  (7) Subsection (8) applies to a reporting Canadian financial institution in respect of a client name account maintained by the institution if 
  (a) property recorded in the account is also recorded in a financial account (in this subsection and subsection (8) referred to as the “related account”) maintained by a financial institution (in this subsection and subsection (8) referred to as the “dealer”) that is authorized under provincial legislation to engage in the business of dealing in securities or any other financial instrument, or to provide portfolio management or investment advising services; and 
  (b) the dealer has advised the institution whether the related account is a U.S. reportable account. However, subsection (8) does not apply if it can reasonably be concluded by the institution that the dealer has failed to comply with its obligations under this section. 
  
  ### Dealer accounts
  
  (8) If this subsection applies to a reporting Canadian financial institution in respect of a client name account, 
  (a) subsections (1) to (4) do not apply to the institution in respect of the account; and 
  (b) the institution shall rely on the determination of the dealer in respect of the related account in determining whether the account is a U.S. reportable account. 
  
  ### Reporting  — U.S. reportable accounts
  
  266 (1) Every reporting Canadian financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to each U.S. reportable account maintained by the institution at any time during the immediately preceding calendar year and after June 29, 2014. 
  
  ### Reporting  — nonparticipating financial institutions
  
  (2) Every reporting Canadian financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to payments, to a nonparticipating financial institution that is the holder of a financial account maintained by the reporting Canadian financial institution, during the immediately preceding calendar year if the immediately preceding year is 2015 or 2016. 
  
  ### Filing of return
  
  (3) An information return required under subsection (1) or (2) shall be filed by way of electronic filing. 
  
  ### Record keeping
  
  267 (1) Every reporting Canadian financial institution shall keep, at the institution’s place of business or at such other place as may be designated by the Minister, records that the institution obtains or creates for the purpose of complying with this Part, including self-certifications and records of documentary evidence. 
  
  ### Form of records
  
  (2) Every reporting Canadian financial institution required by this Part to keep records that does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection (3). 
  
  ### Retention of records
  
  (3) Every reporting Canadian financial institution that is required to keep, obtain, or create records under this Part shall retain those records for a period of at least six years following 
  (a) in the case of a self-certification, the last day on which a related financial account is open; and 
  (b) in any other case, the end of the last calendar year in respect of which the record is relevant. 
  
  ### Anti-avoidance
  
  268 If a person enters into an arrangement or engages in a practice, the primary purpose of which can reasonably be considered to be to avoid an obligation under this Part, the person is subject to the obligation as if the person had not entered into the arrangement or engaged in the practice. 
  
  ### Deemed-compliant FFI
  
  269 If a Canadian financial institution makes a reasonable determination that it is to be treated as a deemed-compliant FFI under Annex II to the agreement, this Part applies to the institution, with such modifications as the circumstances require, to the extent that the agreement imposes due diligence and reporting obligations on the institution. 
  
  # PART XIX 
  
  ## Common Reporting Standard 
  
  ### Definitions
  
  270 (1) The following definitions apply in this Part.  
  *account holder* means  
  (a) the person listed or identified as the holder of a financial account by the financial institution that maintains the account, other than a person (other than a financial institution) holding a financial account for the benefit of, or on behalf of, another person as agent, custodian, nominee, signatory, investment advisor or intermediary; and 
  (b) in the case of a cash value insurance contract or an annuity contract, 
  (i) any person entitled to access the cash value or change the beneficiary, 
  (ii) if no person can access the cash value or change the beneficiary, 
  (A) any person named as the owner in the contract, and 
  (B) any person with a vested entitlement to payment under the terms of the contract, and 
  (iii) upon maturity of the cash value insurance contract or annuity contract, each person entitled to receive a payment under the contract. ( titulaire de compte)   
  *active NFE* means, at any time, a non-financial entity that meets any of the following criteria:  
  (a) less than 50% of the NFE’s gross income for the preceding fiscal period is passive income and less than 50% of the assets held by the NFE during the preceding fiscal period are assets that produce or are held for the production of passive income; 
  (b) either 
  (i) interests in the NFE are regularly traded on an established securities market, or 
  (ii) the NFE is a related entity of an entity interests in which are regularly traded on an established securities market; 
  (c) the NFE is 
  (i) a governmental entity, 
  (ii) an international organization, 
  (iii) a central bank, or 
  (iv) an entity wholly owned by one or more entities described in subparagraphs (i) to (iii); 
  (d) both 
  (i) all or substantially all of the activities of the NFE consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more of its subsidiaries that engage in trades or businesses other than the business of a financial institution, and 
  (ii) the NFE does not function as (and is not represented or promoted to the public as) an investment fund, including 
  (A) a private equity fund, 
  (B) a venture capital fund, 
  (C) a leveraged buyout fund, and 
  (D) an investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes; 
  (e) the NFE 
  (i) is not yet operating a business, 
  (ii) has no prior operating history, 
  (iii) is investing capital into assets with the intent to operate a business other than that of a financial institution, and 
  (iv) was initially organized no more than 24 months prior to that time; 
  (f) the NFE has not been a financial institution in any of the past five years and is in the process of liquidating its assets or is reorganizing with the intent to continue or recommence operations in a business other than that of a financial institution; 
  (g) the NFE primarily engages in financing and hedging transactions with, or for, related entities that are not financial institutions, and does not provide financing or hedging services to any entity that is not a related entity, provided that the group of those related entities is primarily engaged in a business other than that of a financial institution; and 
  (h) the NFE meets all of the following requirements: 
  (i) it 
  (A) is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic or educational purposes, or 
  (B) is established and operated in its jurisdiction of residence and it is a professional organization, business league, chamber of commerce, labour organization, agricultural or horticultural organization, civic league or an organization operated exclusively for the promotion of social welfare, 
  (ii) it is exempt from income tax in its jurisdiction of residence, 
  (iii) it has no shareholders or members who have a proprietary or beneficial interest in its income or assets, 
  (iv) the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents do not permit any income or assets of the NFE to be distributed to, or applied for the benefit of, a private person or non-charitable entity other than pursuant to the conduct of the NFE’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the NFE has purchased, and 
  (v) the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents require that, upon the NFE’s liquidation or dissolution, all of its assets be distributed to a governmental entity or other non-profit organization, or escheat to the government of the NFE’s jurisdiction of residence or any political subdivision thereof. ( ENF active)   
  *annuity contract* means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals and includes a contract  
  (a) that is considered to be an annuity contract in accordance with the law, regulation or practice of the jurisdiction in which the contract was issued; and 
  (b) under which the issuer agrees to make payments for a term of years. ( contrat de rente)   
  *anti-money laundering and know your customer procedures* or 
  *AML/KYC procedures* means the record keeping, verification of identity, reporting of suspicious transactions and registration requirements required of a reporting financial institution under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. (procédures de connaissance de la clientèle et de lutte contre le blanchiment d’argent ou procédures AML/KYC)   
  *broad participation retirement fund* means a fund that is established to provide retirement, disability or death benefits to beneficiaries that are current or former employees (or persons designated by those employees) of one or more employers in consideration for services rendered, if the fund  
  (a) does not have a single beneficiary with a right to more than 5% of the fund’s assets; 
  (b) is subject to government regulation and provides information reporting to the Minister; and 
  (c) satisfies at least one of the following requirements: 
  (i) the fund is generally exempt from tax on investment income, or taxation of investment income is deferred or taxed at a reduced rate, due to its status as a retirement or pension plan, 
  (ii) the fund receives at least 50% of its total contributions (other than transfers of assets from broad participation retirement funds, narrow participation retirement funds or from retirement and pension accounts described in paragraph (a) of the definition excluded account) from the sponsoring employers,  
  (iii) distributions or withdrawals from the fund are 
  (A) allowed only upon the occurrence of specified events related to retirement, disability or death (except rollover distributions to broad participation retirement funds, narrow participation retirement funds and pension funds of a governmental entity, international organization or central bank or retirement and pension accounts described in paragraph (a) of the definition excluded account), or  
  (B) subject to penalties if they are made before such specified events, and 
  (iv) contributions (other than permitted make-up contributions) by an employee to the fund 
  (A) are limited by reference to the employee’s remuneration, or 
  (B) must not exceed 50,000 USD annually, applying the rules set forth in subsection 277(3). ( fonds de retraite à large participation)   
  *Canadian financial institution* means a financial institution that is  
  (a) either 
  (i) resident in Canada, but excluding any branch of the financial institution that is located outside Canada, or 
  (ii) a branch of a financial institution that is not resident in Canada, if the branch is located in Canada; and 
  (b) a listed financial institution as defined in subsection 263(1). (institution financière canadienne)   
  *cash value*, in respect of a contract held by a policyholder, means the greater of the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan) and the amount the policyholder can borrow under or with regard to the contract, but does not include an amount payable under an insurance contract  
  (a) solely by reason of the death of an individual insured under a life insurance contract; 
  (b) as a personal injury or sickness benefit, or other benefit, providing indemnification of an economic loss incurred upon the occurrence of an event insured against; 
  (c) as a refund of a previously paid premium (less any cost of insurance charges whether or not actually imposed) under an insurance contract (other than an investment-linked life insurance or annuity contract) due to the cancellation or termination of the contract, a decrease in risk exposure during the effective period of the contract or arising from the correction of a posting or similar error with regard to the premium for the contract; 
  (d) as a policyholder dividend (other than a termination dividend) if the dividend relates to an insurance contract under which the only benefits payable are described in paragraph (b); or 
  (e) as a return of an advance premium or premium deposit for an insurance contract for which the premium is payable at least annually, if the amount of the advance premium or premium deposit does not exceed the next annual premium that will be payable under the contract. ( valeur de rachat)   
  *cash value insurance contract* means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value. (contrat d’assurance avec valeur de rachat)   
  *central bank* means an institution that is, by law or government sanction, the principal authority, other than the government of the jurisdiction itself, issuing instruments intended to circulate as currency and may include an instrumentality that is separate from the government of the jurisdiction, whether or not owned in whole or in part by the jurisdiction. (banque centrale)   
  *controlling persons*, in respect of an entity, means the natural persons who exercise control over the entity (interpreted in a manner consistent with the Financial Action Task Force Recommendations — International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, adopted in February 2012 and as amended from time to time) and includes  
  (a) in the case of a trust, 
  (i) its settlors, 
  (ii) its trustees, 
  (iii) its protectors (if any), 
  (iv) its beneficiaries (for this purpose, a discretionary beneficiary of a trust will only be considered a beneficiary of the trust in a calendar year if a distribution has been paid or made payable to the discretionary beneficiary in the calendar year), and 
  (v) any other natural persons exercising ultimate effective control over the trust; and 
  (b) in the case of a legal arrangement other than a trust, persons in equivalent or similar positions to those described in paragraph (a). ( personnes détenant le contrôle)   
  *custodial account* means an account (other than an insurance contract or annuity contract) that holds one or more financial assets for the benefit of another person. (compte de dépositaire)   
  *custodial institution* means an entity, if the entity’s gross income attributable to the holding of financial assets for the account of others and related financial services equals or exceeds 20% of the entity’s gross income during the shorter of  
  (a) the three-year period that ends at the end of the entity’s last fiscal period, and 
  (b) the period during which the entity has been in existence. ( établissement de garde de valeurs)   
  *depository account* includes  
  (a) any commercial, chequing, savings, time or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness or other similar instrument maintained by a financial institution in the ordinary course of a banking or similar business; and 
  (b) an amount held by an insurance company under a guaranteed investment contract or similar agreement to pay or credit interest on the contract. ( compte de dépôt)   
  *depository institution* means any entity that accepts deposits in the ordinary course of a banking or similar business. (établissement de dépôt)   
  *documentary evidence* includes  
  (a) a certificate of residence issued by an authorized government body (such as a government or agency thereof, or a municipality) of the jurisdiction in which the payee claims to be a resident; 
  (b) with respect to an individual (other than a trust), any valid identification issued by an authorized government body that includes the individual’s name and is typically used for identification purposes; 
  (c) with respect to an entity, any official documentation issued by an authorized government body that includes the name of the entity and either the address of its principal office in the jurisdiction in which it claims to be resident or the jurisdiction in which the entity was incorporated or organized; and 
  (d) any audited financial statement, third-party credit report, bankruptcy filing or securities regulator’s report. ( preuve documentaire)   
  *entity* means a person (other than a natural person) or a legal arrangement, such as a corporation, partnership, trust or foundation. (entité)   
  *equity or debt interest* includes, in the case of a partnership that is a financial institution, either a capital or profits interest in the partnership. (titre de participation ou d’intérêt)   
  *established securities market* means an exchange that  
  (a) is officially recognized and supervised by a governmental authority in which the market is located; and 
  (b) has an annual value of shares traded on the exchange (or a predecessor exchange) exceeding one billion USD during each of the three calendar years immediately preceding the calendar year in which the determination is being made. For this purpose, if an exchange has more than one tier of market level on which stock may be separately listed or traded, each of those tiers must be treated as a separate exchange. ( marché boursier réglementé)   
  *excluded account* means  
  (a) a retirement or pension account that satisfies the following requirements: 
  (i) the account is 
  (A) subject to regulation as a personal retirement account, or 
  (B) part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits (including disability or death benefits), 
  (ii) the account is tax-favoured in that 
  (A) contributions to the account that would otherwise be subject to tax are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or 
  (B) taxation of investment income within the account is deferred or investment income within the account is taxed at a reduced rate, 
  (iii) information reporting to the Minister is required with respect to the account, 
  (iv) withdrawals are 
  (A) conditioned on reaching a specified retirement age, disability or death, or 
  (B) subject to penalties if made before the events specified in clause (A), and 
  (v) after applying the rules in subsection 277(3) to all similar accounts, annual contributions to the account are limited to 50,000 USD or less or there is a maximum lifetime contribution limit to the account of 1,000,000 USD or less (and an account that otherwise satisfies this requirement will not fail to satisfy this requirement solely because the account may receive assets or funds transferred from one or more accounts that meet the requirements of this paragraph or paragraph (b) or from one or more broad participation retirement funds, narrow participation retirement funds or pension funds of a governmental entity, international organization or central bank); 
  (b) an account that satisfies the following requirements: 
  (i) the account is 
  (A) both 
  (I) subject to regulation as an investment vehicle for purposes other than for retirement, and 
  (II) regularly traded on an established securities market, or 
  (B) subject to regulation as a savings vehicle for purposes other than for retirement, 
  (ii) the account is tax-favoured in that 
  (A) contributions to the account that would otherwise be subject to tax are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or 
  (B) taxation of investment income within the account is deferred or investment income within the account is taxed at a reduced rate, 
  (iii) withdrawals are 
  (A) conditioned on meeting specific criteria related to the purpose of the investment or savings account (including the provision of educational or medical benefits), or 
  (B) subject to penalties if made before the criteria in clause (A) are met, and 
  (iv) annual contributions are, after applying the rules in subsection 277(3) to all similar accounts, limited to 50,000 USD or less (and an account that otherwise satisfies this requirement will not fail to satisfy this requirement solely because the account may receive assets or funds transferred from one or more accounts that meet the requirements of paragraph (a) or this paragraph or from one or more broad participation retirement funds, narrow participation retirement funds or pension funds of a governmental entity, international organization or central bank); 
  (c) a life insurance contract with a coverage period that ends before the insured individual attains age 90, if the contract satisfies the following requirements: 
  (i) periodic premiums, which do not decrease over time, are payable at least annually until the earlier of 
  (A) the end of the period in which the contract is in existence, and 
  (B) the date that the insured attains age 90, 
  (ii) the contract has no contract value that any person can access (by withdrawal, loan or otherwise) without terminating the contract, 
  (iii) the amount (other than a death benefit) payable upon cancellation or termination of the contract must not exceed the amount determined by the formula is the aggregate premiums paid for the contract, is the total of all mortality, morbidity and expense charges (whether or not actually imposed) for the period or periods of the contract’s existence, and is the total of all amounts paid prior to the cancellation or termination of the contract, and 
  (iv) the contract has not been acquired by a transferee for value; 
  (d) an account held solely by an estate of a deceased individual, if the documentation for the account includes a copy of the will or death certificate of the individual; 
  (e) an account established in connection with any of the following: 
  (i) a court order or judgement, 
  (ii) a sale, exchange or lease of property, if the account satisfies the following requirements: 
  (A) the account is funded 
  (I) solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction or a similar payment, or 
  (II) with a financial asset that is deposited in the account in connection with the sale, exchange or lease of the property, 
  (B) the account is established and used solely to secure the obligation of 
  (I) the purchaser to pay the purchase price for the property, 
  (II) the seller to pay any contingent liability, or 
  (III) the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease, 
  (C) the assets of the account, including the income earned on the account, will be paid or otherwise distributed for the benefit of the purchaser, seller, lessor or lessee (including to satisfy such person’s obligation) when the property is sold, exchanged or surrendered or the lease terminates, 
  (D) the account is not a margin or similar account established in connection with a sale or exchange of a financial asset, and 
  (E) the account is not associated with an account described in paragraph (f), 
  (iii) an obligation of a financial institution servicing a loan secured by real or immovable property to set aside a portion of a payment solely to facilitate the payment of taxes or insurance related to the property at a later time, or 
  (iv) an obligation of a financial institution solely to facilitate the payment of taxes at a later time; 
  (f) a depository account that satisfies the following requirements: 
  (i) the account exists solely because a customer makes a payment in excess of a balance due with respect to a credit card or other revolving credit facility and the overpayment is not immediately returned to the customer, and 
  (ii) after June 2017, policies and procedures are in effect relating to overpayments (for this purpose, a customer overpayment does not include credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns) to either 
  (A) prevent a customer from making an overpayment in excess of 50,000 USD, or 
  (B) ensure that any customer overpayment in excess of 50,000 USD is refunded to the customer within 60 days; and 
  (g) a prescribed account. ( compte exclu)   
  *exempt collective investment vehicle* means an investment entity that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle are held by or through individuals or entities (other than a passive NFE with a controlling person who is a reportable person) that are not reportable persons. (mécanisme de placement collectif dispensé)   
  *financial account* means an account maintained by a financial institution, and  
  (a) includes 
  (i) a depository account, 
  (ii) a custodial account, 
  (iii) in the case of an investment entity, any equity or debt interest in the financial institution, except that it does not include any equity or debt interest in an entity that is an investment entity solely because it, 
  (A) renders investment advice to, and acts on behalf of, a customer for the purpose of investing, managing or administering financial assets deposited in the name of the customer with a financial institution other than such entity, or 
  (B) manages portfolios for, and acts on behalf of, a customer for the purpose of investing, managing, or administering financial assets deposited in the name of the customer with a financial institution other than such entity, 
  (iv) any equity or debt interest in the financial institution if one of the purposes of establishing the class of interests was to avoid reporting in accordance with section 271, except that it does not include any equity or debt interest in an entity that is an investment entity solely because it meets the conditions described in clauses (iii)(A) or (B), 
  (v) any cash value insurance contract and any annuity contract issued or maintained by a financial institution, other than a non-investment-linked, non-transferable immediate life annuity that is issued to an individual and monetizes a pension or disability benefit provided under an account that is an excluded account, and 
  (vi) an account that is a client name account maintained by a person or entity that is authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments, or to provide portfolio management or investment advising services; and 
  (b) despite paragraph (a), does not include an excluded account. ( compte financier)   
  *financial asset*  
  (a) includes 
  (i) a security, such as 
  (A) a share of the capital stock of a corporation, 
  (B) an income or capital interest in a widely held or publicly traded trust, or 
  (C) a note, bond, debenture or other evidence of indebtedness, 
  (ii) a partnership interest, 
  (iii) a commodity, 
  (iv) a swap (such as interest rate swaps, currency swaps, basis swaps, interest rate caps, interest rate floors, commodity swaps, equity swaps, equity index swaps and similar agreements), 
  (v) an insurance contract or annuity contract, and 
  (vi) any interest (including a futures or forward contract or option) in a security, partnership interest, commodity, swap, insurance contract or annuity contract; and 
  (b) does not include a non-debt, direct interest in real or immovable property. ( actif financier)   
  *financial institution* means an entity, other than a passive NFE, that is a custodial institution, a depository institution, an investment entity or a specified insurance company. (institution financière)   
  *governmental entity* means the government of a jurisdiction, any political subdivision of a jurisdiction (which, for greater certainty, includes a state, province, county or municipality), a public body performing a function of government in a jurisdiction or any agency or instrumentality of a jurisdiction wholly owned by one or more of the foregoing, unless it is not an integral part or a controlled entity of a jurisdiction (or a political subdivision of a jurisdiction) and for these purposes  
  (a) an integral part of a jurisdiction means any person, organization, agency, bureau, fund, instrumentality or other body, however designated, that constitutes a governing authority of a jurisdiction and where the net earnings of the governing authority are credited to its own account or to other accounts of the jurisdiction, with no portion inuring to the benefit of any private person, except that an integral part does not include any individual who is a sovereign, official or administrator acting in a private or personal capacity; 
  (b) a controlled entity means an entity that is separate in form from the jurisdiction or that otherwise constitutes a separate juridical entity, provided that 
  (i) the entity is wholly owned and controlled by one or more governmental entities directly or indirectly through one or more controlled entities, 
  (ii) the entity’s net earnings are credited to its own account or to the accounts of one or more governmental entities, with no portion of its income inuring to the benefit of any private person, and 
  (iii) the entity’s assets vest in one or more governmental entities upon liquidation and dissolution; and 
  (c) for the purposes of paragraphs (a) and (b), 
  (i) income is deemed not to inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program and the program activities are performed for the general public with respect to the common welfare or relate to the administration of government, and 
  (ii) income is deemed to inure to the benefit of private persons if the income is derived from the use of a governmental entity to conduct a commercial business that provides financial services to private persons. ( entité gouvernementale)   
  *group annuity contract* means an annuity contract under which the obligees are individuals who are associated through an employer, trade association, labour union or other association or group. (contrat de rente de groupe)   
  *group cash value insurance contract* means a cash value insurance contract that  
  (a) provides coverage on individuals who are associated through an employer, trade association, labour union or other association or group; and 
  (b) charges a premium for each member of the group (or member of a class within the group) that is determined without regard to the individual health characteristics other than age, gender and smoking habits of the member (or class of members) of the group. ( contrat d’assurance de groupe avec valeur de rachat)   
  *high value account* means a preexisting individual account with an aggregate balance or value that exceeds 1 million USD on June 30, 2017 or on December 31 of any subsequent year. (compe de valeur élevée)   
  *insurance contract* means a contract (other than an annuity contract) under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability or property risk. (contrat d’assurance)   
  *international organization* means any intergovernmental organization (or wholly owned agency or instrumentality thereof), including a supranational organization  
  (a) that is comprised primarily of governments; 
  (b) that has in effect a headquarters or substantially similar agreement with a jurisdiction; and 
  (c) the income of which does not inure to the benefit of private persons. ( organisation internationale)   
  *investment entity* means any entity (other than an entity that is an active NFE because of any of paragraphs (d) to (g) of that definition)  
  (a) that primarily carries on as a business one or more of the following activities or operations for or on behalf of a customer: 
  (i) trading in money market instruments (such as cheques, bills, certificates of deposit and derivatives), foreign exchange, transferable securities or commodity futures, exchange, interest rate and index instruments, 
  (ii) individual and collective portfolio management, or 
  (iii) otherwise investing, administering or managing financial assets or money on behalf of other persons; or 
  (b) the gross income of which is primarily attributable to investing, reinvesting or trading in financial assets, if the entity is managed by another entity that is a depository institution, a custodial institution, a specified insurance company or an investment entity described in paragraph (a). ( entité d’investissement)   
  *lower value account* means a preexisting individual account with an aggregate balance or value as of June 30, 2017 that does not exceed 1 million USD. (compte de faible valeur)   
  *narrow participation retirement fund* means a fund that is established to provide retirement, disability or death benefits to beneficiaries who are current or former employees (or persons designated by those employees) of one or more employers in consideration for services rendered, if  
  (a) the fund has fewer than 50 participants; 
  (b) the fund is sponsored by one or more employers that are not investment entities or passive NFEs; 
  (c) the employee and employer contributions to the fund (other than transfers of assets from retirement and pension accounts described in paragraph (a) of the definition excluded account) are limited by reference to the employee’s remuneration;  
  (d) participants that are not resident in Canada are not entitled to more than 20% of the fund’s assets; and 
  (e) the fund is subject to government regulation and provides information reporting to the Minister. ( fonds de retraite à participation étroite)   
  *natural person* means an individual other than a trust. (personne physique)   
  *new account* means a financial account maintained by a reporting financial institution opened after June 2017. (nouveau compte)   
  *new entity account* means a new account held by one or more entities. (nouveau compte d’entité)   
  *new individual account* means a new account held by one or more individuals (other than trusts). (nouveau compte de particulier)   
  *non-financial entity* or 
  *NFE* means an entity if  
  (a) in the case of an entity that is resident in Canada, it is not a Canadian financial institution; and 
  (b) in the case of a non-resident entity, it is not a financial institution. ( entité non financière ou ENF)   
  *non-reporting financial institution* means a Canadian financial institution that is  
  (a) the Bank of Canada; 
  (b) a governmental entity or international organization, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a specified insurance company, custodial institution or depository institution; 
  (c) a broad participation retirement fund, a narrow participation retirement fund, a pension fund of a governmental entity, international organization or central bank, or a qualified credit card issuer; 
  (d) an exempt collective investment vehicle; 
  (e) a trust if a trustee of the trust is a reporting financial institution and reports all information required to be reported under this Part with respect to all reportable accounts of the trust; or 
  (f) a prescribed entity. ( institution financière non déclarante)   
  *participating jurisdiction* means  
  (a) Canada; and 
  (b) each jurisdiction identified as a participating jurisdiction by the Minister on the Internet website of the Canada Revenue Agency or by any other means that the Minister considers appropriate. ( juridiction partenaire)   
  *participating jurisdiction financial institution* means  
  (a) a financial institution that is resident in a participating jurisdiction, but excludes a branch of that financial institution that is located outside a participating jurisdiction; and 
  (b) a branch of a financial institution that is not resident in a participating jurisdiction, if that branch is located in a participating jurisdiction. ( institution financière d’une jurisdiction partenaire)   
  *passive NFE* means  
  (a) a non-financial entity that is not an active NFE; and 
  (b) an entity that is 
  (i) described in paragraph (b) of the definition investment entity, and  
  (ii) not a participating jurisdiction financial institution. ( ENF passive)   
  *pension fund of a governmental entity, international organization or central bank* means a fund that is established by a governmental entity, international organization or central bank to provide retirement, disability or death benefits to beneficiaries or participants  
  (a) that are current or former employees (or persons designated by those employees); or 
  (b) that are not current or former employees, if the benefits provided to them are in consideration of personal services performed for the governmental entity, international organization or central bank. ( fonds de pension désigné)   
  *preexisting account* means  
  (a) a financial account maintained by a reporting financial institution on June 30, 2017; and 
  (b) a financial account of an account holder (other than a financial account described in paragraph (a)) maintained by a reporting financial institution if 
  (i) the account holder also holds with the reporting financial institution (or with a related entity within Canada) a financial account that is a preexisting account under paragraph (a), 
  (ii) the reporting financial institution (and, as applicable, the related entity within Canada) treats both of the aforementioned financial accounts, and any other financial accounts of the account holder that are preexisting accounts under this paragraph, as a single financial account for the purposes of 
  (A) satisfying the standards and knowledge requirements set forth under this Part, and 
  (B) determining the balance or value of any of the financial accounts, when applying any of the account thresholds, 
  (iii) with respect to a financial account that is subject to AML/KYC procedures, the reporting financial institution is permitted to satisfy those AML/KYC procedures for the financial account by relying upon the AML/KYC procedures performed for the preexisting account described in paragraph (a), and 
  (iv) the opening of the financial account does not require the provision of new, additional or amended customer information by the account holder other than for purposes of this Part. ( compte préexistant)   
  *preexisting entity account* means a preexisting account held by one or more entities. (compte d’entité préexistant)   
  *preexisting individual account* means a preexisting account held by one or more individuals (other than trusts). (compte de particulier préexistant)   
  *qualified credit card issuer* means a financial institution that satisfies the following requirements:  
  (a) the financial institution is a financial institution solely because it is an issuer of credit cards that accepts deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and 
  (b) the financial institution has policies and procedures either to prevent a customer from making an overpayment in excess of 50,000 USD or to ensure that any customer overpayment in excess of 50,000 USD is refunded to the customer within 60 days, in each case applying the rules set forth in subsection 277(3) for account aggregation, and, for the purposes of this paragraph, a customer overpayment does not refer to credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns. ( émetteur de carte de crédit déterminé)   
  *related entity*, in respect of an entity, means an entity if either entity controls the other entity or the two entities are controlled by the same entity or individual (and in the case of two entities that are investment entities described under paragraph (b) of the definition investment entity, the two entities are under common management and such management fulfils the due diligence obligations of the investment entities). For this purpose, control includes direct or indirect ownership of  
  (a) in the case of a corporation, shares of the capital stock of a corporation that 
  (i) give their holders more than 50% of the votes that could be cast at the annual meeting of the shareholders of the corporation, and 
  (ii) have a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the capital stock of the corporation; 
  (b) in the case of a partnership, an interest as a member of the partnership that entitles the member to more than 50% of 
  (i) the income or loss of the partnership, or 
  (ii) the assets (net of liabilities) of the partnership if it were to cease to exist; and 
  (c) in the case of a trust, an interest as a beneficiary under the trust with a fair market value that is greater than 50% of the fair market value of all interests as a beneficiary under the trust. ( entité liée)   
  *reportable account* means an account that  
  (a) is held by 
  (i) one or more reportable persons, or 
  (ii) by a passive NFE, if one or more controlling persons of the passive NFE is a reportable person; and 
  (b) has been identified as meeting the conditions in paragraph (a) in accordance with the due diligence procedures described in sections 272 to 277. ( compte déclarable)   
  *reportable jurisdiction* means a jurisdiction other than Canada and the United States of America. (juridiction soumise à déclaration)   
  *reportable jurisdiction person* means a natural person or entity that is resident in a reportable jurisdiction under the tax laws of that jurisdiction, or an estate of an individual who was a resident of a reportable jurisdiction under the tax laws of that jurisdiction immediately before death. For this purpose, an entity that has no residence for tax purposes is deemed to be resident in the jurisdiction in which its place of effective management is situated. (personne d’une juridiction soumise à déclaration)   
  *reportable person* means a reportable jurisdiction person other than  
  (a) a corporation the stock of which is regularly traded on one or more established securities markets; 
  (b) any corporation that is a related entity of a corporation described in paragraph (a); 
  (c) a governmental entity; 
  (d) an international organization; 
  (e) a central bank; or 
  (f) a financial institution. ( personne devant faire l’objet d’une déclaration)   
  *reporting financial institution* means a Canadian financial institution that is not a non-reporting financial institution. (institution financière déclarante)   
  *specified insurance company* means any entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, cash value insurance contracts or annuity contracts. (compagnie d’assurance particulière)   
  *TIN* means  
  (a) the number used by the Minister to identify an individual or entity, including 
  (i) a social insurance number, 
  (ii) a business number, and 
  (iii) an account number issued to a trust; and 
  (b) in respect of a jurisdiction other than Canada, a taxpayer identification number used in that jurisdiction to identify an individual or entity (or a functional equivalent in the absence of a taxpayer identification number). ( NIF)   
  *USD* means dollars of the United States of America. (USD)  
  
  ### Interpretation
  
  (2) This Part relates to the implementation of the Common Reporting Standard set out in the Standard for Automatic Exchange of Financial Account Information in Tax Matters approved by the Council of the Organisation for Economic Co-operation and Development and, unless the context otherwise requires, the provisions in this Part are to be interpreted consistently with the Common Reporting Standard, as amended from time to time.  
  
  ### Interpretation — investment entity
  
  (3) For the purposes of the definition investment entity in subsection (1), an entity is considered to be primarily carrying on as a business one or more of the activities described in paragraph (a) of that definition, or an entity’s gross income is primarily attributable to investing, reinvesting or trading in financial assets for the purposes of paragraph (b) of that definition, if the entity’s gross income attributable to the relevant activities equals or exceeds 50% of the entity’s gross income during the shorter of  
  (a) the three-year period that ends at the end of the entity’s last fiscal period, and 
  (b) the period during which the entity has been in existence. 
  
  ### Equity or debt interest – deeming rule
  
  (4) In the case of a trust that is a financial institution, 
  (a) an equity interest is deemed to be held by any person treated as a settlor or beneficiary of all or a portion of the trust or any other natural person exercising ultimate effective control over the trust, and 
  (b) a reportable person is treated as a beneficiary of a trust if the reportable person has the right to receive directly or indirectly (such as through a nominee) a mandatory distribution from the trust or may receive, directly or indirectly, a discretionary distribution from the trust. 
  
  ### General reporting requirements
  
  271 (1) Subject to subsections (3) and (4), each reporting financial institution must report the following information to the Minister with respect to each of its reportable accounts: 
  (a) the name, address, jurisdiction of residence, TIN and date of birth (in the case of a natural person) of each reportable person that is an account holder of the account; 
  (b) in the case of any entity that is an account holder of the account and that, after applying the due diligence procedures in sections 275 to 277, is identified as having one or more controlling persons that is a reportable person, 
  (i) the name, address, jurisdiction of residence and TIN of the entity, and 
  (ii) the name, address, jurisdiction of residence, TIN and date of birth of each of those controlling persons; 
  (c) the account number (or functional equivalent in the absence of an account number) of the account; 
  (d) the name and identifying number (if any) of the reporting financial institution; 
  (e) the account balance or value (including, in the case of a cash value insurance contract or annuity contract, the cash value or surrender value) 
  (i) at the end of the relevant calendar year or other appropriate reporting period, or 
  (ii) if the account was closed during the relevant calendar year or period, on closure of the account; 
  (f) in the case of any custodial account, 
  (i) the total gross amount of interest, the total gross amount of dividends and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period, and 
  (ii) the total gross proceeds from the sale or redemption of financial assets paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the reporting financial institution acted as a custodian, broker, nominee or otherwise as an agent for the account holder; 
  (g) in the case of any depository account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period; and 
  (h) in the case of any account not described in paragraph (f) or (g), the total gross amount paid or credited to the account holder with respect to the account during the calendar year or other appropriate reporting period with respect to which the reporting financial institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the account holder during the calendar year or other appropriate reporting period. 
  
  ### Currrency
  
  (2) The information reported must identify the currency in which each amount is denominated. 
  
  ### TIN and date of birth
  
  (3) With respect to each reportable account that is a preexisting account, 
  (a) notwithstanding paragraphs (1)(a) and (b), the TIN or date of birth are not required to be reported if the TIN or the date of birth (as appropriate) 
  (i) are not in the records of the reporting financial institution, and 
  (ii) are not otherwise required to be collected by the reporting financial institution under the Act; and 
  (b) a reporting financial institution is required to use reasonable efforts to obtain the TIN and the date of birth with respect to a preexisting account by the end of the second calendar year following the year in which the preexisting account is identified as a reportable account. 
  
  ### Exceptions
  
  (4) Notwithstanding paragraphs (1)(a) and (b), a TIN of a reportable person is not required to be reported if 
  (a) the relevant reportable jurisdiction does not issue TINs; or 
  (b) the domestic law of the relevant reportable jurisdiction does not require the collection of the TIN issued by such reportable jurisdiction. 
  
  ### General due diligence rules
  
  272 (1) An account is treated as a reportable account as of the date it is identified as a reportable account under the due diligence procedures set out in this section and in sections 273 to 277. 
  
  ### Timing — determination of balance or value
  
  (2) The balance or value of an account is determined on the last day of the calendar year or other appropriate reporting period. 
  
  ### Determination — balance or value
  
  (3) For the purpose of determining whether the balance or value of an account exceeds a particular threshold on the last day of a calendar year, the balance or value must be determined on the last day of the last reporting period that ends on or before the end of the calendar year. 
  
  ### Service provider
  
  (4) A reporting financial institution may use service providers to fulfil its reporting and due diligence obligations imposed, but these obligations shall remain the responsibility of the reporting financial institution. 
  
  ### Optional due diligence procedures
  
  (5) A reporting financial institution may, either with respect to all preexisting accounts or, separately, with respect to any clearly identified group of those accounts, apply the due diligence procedures 
  (a) for new accounts to preexisting accounts (with the other rules for preexisting accounts continuing to apply); and 
  (b) for high value accounts to lower value accounts. 
  
  ### Documentation of due diligence procedures
  
  (6) Every reporting financial institution shall establish, maintain and document the due diligence procedures set out in this section and sections 273 to 277. 
  
  ### Due diligence for preexisting individual accounts
  
  273 (1) A preexisting individual account that is a cash value insurance contract or an annuity contract is not required to be reviewed, identified or reported, if the reporting financial institution is effectively prevented by law from selling those contracts to residents of a reportable jurisdiction. 
  
  ### Lower value accounts
  
  (2) The following review procedures apply with respect to lower value accounts that are preexisting individual accounts: 
  (a) if the reporting financial institution has in its records the address of the individual account holder’s current residence (in this section, their 
  *current residence address*) based on documentary evidence, the reporting financial institution may treat the individual account holder as being a resident for tax purposes of the jurisdiction in which the address is located for purposes of determining whether the individual account holder is a reportable person;  
  (b) if the reporting financial institution does not rely on a current residence address for the individual account holder based on documentary evidence as described in paragraph (a), the reporting financial institution must review electronically searchable data maintained by the reporting financial institution for any of the following indicia and apply paragraphs (c) to (f): 
  (i) identification of the account holder as a resident of a reportable jurisdiction, 
  (ii) current mailing or residence address (including post office box) in a reportable jurisdiction, 
  (iii) one or more telephone numbers in a reportable jurisdiction and no telephone number in the jurisdiction of the reporting financial institution, 
  (iv) standing instructions (other than with respect to a depository account) to transfer funds to an account maintained in a reportable jurisdiction, 
  (v) currently effective power of attorney or signatory authority granted to a person with an address in a reportable jurisdiction, and 
  (vi) a hold mail instruction or in-care-of address in a reportable jurisdiction if the reporting financial institution does not have any other address on file for the account holder; 
  (c) if none of the indicia listed in paragraph (b) are discovered in the electronic search, then no further review is required until the earlier of 
  (i) a change in circumstances that results in one or more of the indicia referred to in paragraph (b) being associated with the account, and 
  (ii) the account becoming a high value account; 
  (d) if any of the indicia listed in subparagraphs (b)(i) to (v) are discovered in the electronic search or if there is a change in circumstances that results in one or more of the indicia in paragraph (b) being associated with the account, then the reporting financial institution must treat the account holder as a resident for tax purposes of each reportable jurisdiction for which an indicium is identified, unless one of the exceptions in paragraph (f) applies with respect to that account; 
  (e) if a hold mail instruction or in-care-of address in a reportable jurisdiction is discovered in the electronic search and no other address and none of the other indicia listed in subparagraphs (b)(i) to (v) are identified for the account holder, then 
  (i) the reporting financial institution must do one (if the relevant information is obtained) or both (in the order most appropriate to the circumstances) of the following: 
  (A) apply the paper record search described in paragraph (3)(b), and 
  (B) seek to obtain from the account holder a self-certification or documentary evidence to establish the residence for tax purposes of the account holder, and 
  (ii) if the paper record search referred to in clause (i)(A) fails to establish an indicium and the attempt to obtain the self-certification or documentary evidence referred to in clause (i)(B) is not successful, then the reporting financial institution must report the account as an undocumented account; and 
  (f) notwithstanding the discovery of indicia under paragraph (b), a reporting financial institution is not required to treat an account holder as a resident of a reportable jurisdiction if 
  (i) both 
  (A) the account holder information contains 
  (I) a current mailing or residence address in the reportable jurisdiction, 
  (II) one or more telephone numbers in the reportable jurisdiction (and no telephone number in the jurisdiction of the reporting financial institution), or 
  (III) standing instructions (with respect to financial accounts other than depository accounts) to transfer funds to an account maintained in a reportable jurisdiction, and 
  (B) the reporting financial institution obtains, or has previously reviewed and currently maintains a record of, 
  (I) a self-certification from the account holder of the jurisdictions of residence of the account holder that does not include the reportable jurisdiction, and 
  (II) documentary evidence establishing the account holder’s non-reportable status in relation to that jurisdiction, or 
  (ii) both 
  (A) the account holder information contains a currently effective power of attorney or signatory authority granted to a person with an address in the reportable jurisdiction, and 
  (B) the reporting financial institution obtains, or has previously reviewed and currently maintains a record of, 
  (I) a self-certification from the account holder of the jurisdictions of residence of the account holder that does not include the reportable jurisdiction, or 
  (II) documentary evidence establishing the account holder’s non-reportable status in relation to that jurisdiction. 
  
  ### Enhanced review procedure – high value accounts
  
  (3) The following enhanced review procedures apply with respect to high value accounts that are preexisting individual accounts: 
  (a) the reporting financial institution must review electronically searchable data maintained by the reporting financial institution for any of the indicia described in paragraph (2)(b); 
  (b) subject to paragraph (c), the reporting financial institution must review for any of the indicia described in paragraph (2)(b) 
  (i) the current customer master file, and 
  (ii) the following documents associated with the account, and obtained by the reporting financial institution within the last five years, to the extent that they are not contained in the current customer master file: 
  (A) the most recent documentary evidence collected with respect to the account, 
  (B) the most recent account opening contract or documentation, 
  (C) the most recent documentation obtained by the reporting financial institution in accordance with AML/KYC procedures or for other regulatory purposes, 
  (D) any power of attorney or signature authority forms currently in effect, and 
  (E) any standing instructions (other than with respect to a depository account) to transfer funds currently in effect; 
  (c) a reporting financial institution is not required to perform the paper record search described in paragraph (b) to the extent that the reporting financial institution’s electronically searchable information includes the following: 
  (i) the account holder’s residence status, 
  (ii) the account holder’s residence address and mailing address currently on file with the reporting financial institution, 
  (iii) the account holder’s telephone number currently on file, if any, with the reporting financial institution, 
  (iv) in the case of financial accounts other than depository accounts, whether there are standing instructions to transfer funds in the account to another account (including an account at another branch of the reporting financial institution or at another financial institution), 
  (v) whether there is a hold mail instruction or current in-care-of address for the account holder, and 
  (vi) whether there is any power of attorney or signatory authority for the account; 
  (d) in addition to the electronic and paper record searches described in paragraphs (a) to (c), the reporting financial institution must treat as a reportable account any high value account assigned to a relationship manager (including any financial accounts aggregated with that high value account under section 277) if the relationship manager has actual knowledge that the account holder is a reportable person; 
  (e) with respect to the enhanced review of high value accounts described in paragraphs (a) to (d), 
  (i) if none of the indicia listed in paragraph (2)(b) are discovered in the enhanced review and the account is not identified as being held by a reportable person in paragraph (d), then further action is not required until there is a change in circumstances that results in one or more indicia being associated with the account, 
  (ii) if any of the indicia listed in subparagraphs (2)(b)(i) through (v) are discovered in the enhanced review, or if there is a subsequent change in circumstances that results in one or more indicia being associated with the account, then the reporting financial institution must treat the account as a reportable account with respect to each reportable jurisdiction for which an indicium is identified unless one of the exceptions in paragraph (2)(f) applies with respect to that account, and 
  (iii) if a hold mail instruction or in-care-of address is discovered in the enhanced review and no other address or other indicia listed in subparagraphs (2)(b)(i) to (v) are identified for the account holder, then the reporting financial institution must 
  (A) obtain from the account holder a self-certification or documentary evidence to establish the residence for tax purposes of the account holder, and 
  (B) if the reporting financial institution cannot obtain a self-certification or documentary evidence, report the account as an undocumented account; 
  (f) if a preexisting individual account is not a high value account on June 30, 2017, but becomes a high value account as of the last day of a subsequent calendar year, 
  (i) the reporting financial institution must complete the enhanced review procedures described in this subsection with respect to the account within the calendar year following the year in which the account becomes a high value account, and 
  (ii) if the account is identified as a reportable account based on the review in subparagraph (i), the reporting financial institution must report the required information about the account with respect to the year in which it is identified as a reportable account (and subsequent years on an annual basis, unless the account holder ceases to be a reportable person); 
  (g) if a reporting financial institution applies the enhanced review procedures described in this subsection to a high value account in a year, then the reporting financial institution is not required to reapply those procedures – other than the relationship manager inquiry described in paragraph (d) – to the same high value account in any subsequent year unless the account is undocumented, in which case the reporting financial institution must re-apply them annually until the account ceases to be undocumented; 
  (h) if there is a change of circumstances with respect to a high value account that results in one or more indicia described in paragraph (2)(b) being associated with the account, then the reporting financial institution must treat the account as a reportable account with respect to each reportable jurisdiction for which an indicium is identified unless one of the exceptions in paragraph (2)(f) applies with respect to that account; and 
  (i) a reporting financial institution must implement procedures to ensure that a relationship manager identifies any change in circumstances of an account. 
  
  ### Timing of review
  
  (4) Each preexisting individual account must be reviewed in accordance with subsection (2) or (3) before 
  (a) 2019, if the account is a high value account; or 
  (b) 2020, if the account is a lower value account. 
  
  ### Reportable preexisting individual accounts
  
  (5) Any preexisting individual account that has been identified as a reportable account under this section must be treated as a reportable account in all subsequent years, unless the account holder ceases to be a reportable person. 
  
  ### Due diligence – new individual accounts
  
  274 (1) Upon opening a new individual account, the reporting financial institution must obtain a self-certification (which may be a part of the account opening documentation) that allows the reporting financial institution to 
  (a) determine the account holder’s residence for tax purposes; and 
  (b) confirm the reasonableness of the self-certification taking into account information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with the AML/KYC procedures. 
  
  ### Determination of reportable account
  
  (2) If the self-certification for a new individual account establishes that the account holder is resident for tax purposes in a reportable jurisdiction, then 
  (a) the reporting financial institution must treat the account as a reportable account; and 
  (b) the self-certification must also include the account holder’s TIN with respect to the reportable jurisdiction (subject to subsection 271(4)) and the account holder’s date of birth. 
  
  ### Requirement to obtain new self-certification
  
  (3) If there is a change in circumstances with respect to a new individual account that causes the reporting financial institution to know, or have reason to know, that the original self-certification is incorrect or unreliable, then the reporting financial institution 
  (a) cannot rely on the original self-certification; and 
  (b) must obtain a valid self-certification that establishes the residence for tax purposes of the account holder. 
  
  ### Due diligence – preexisting entity accounts
  
  275 (1) Unless the reporting financial institution elects otherwise — either with respect to all preexisting entity accounts or, separately, with respect to any clearly identified group of those accounts — a preexisting entity account with an aggregate account balance or value that does not exceed 250,000 USD on June 30, 2017 is not required to be reviewed, identified or reported as a reportable account until the aggregate account balance or value exceeds 250,000 USD on the last day of any subsequent calendar year. 
  
  ### Application of subsection (4)
  
  (2) The review procedures set forth in subsection (4) apply to a preexisting entity account if it has an aggregate account balance or value that exceeds 250,000 USD on 
  (a) June 30, 2017; or 
  (b) the last day of any subsequent calendar year. 
  
  ### Determination of reportable accounts
  
  (3) With respect to preexisting entity accounts described in subsection (2), the only accounts that shall be treated as reportable accounts are accounts that are held by 
  (a) one or more entities that are reportable persons; or 
  (b) passive NFEs with one or more controlling persons who are reportable persons. 
  
  ### Review procedures — preexisting entity account
  
  (4) If this subsection applies to a preexisting entity account, a reporting financial institution must apply the following review procedures to determine whether the account is held by one or more reportable persons or by passive NFEs with one or more controlling persons who are reportable persons: 
  (a) review information maintained for regulatory or customer relationship purposes (including information collected in accordance with AML/KYC procedures) to determine whether the information indicates that the account holder is resident in a reportable jurisdiction and, if so, the reporting financial institution must treat the account as a reportable account unless it 
  (i) obtains a self-certification from the account holder to establish that the account holder is not a reportable person, or 
  (ii) reasonably determines, based on information in its possession or that is publicly available, that the account holder is not a reportable person; and 
  (b) with respect to an account holder of a preexisting account (including an entity that is a reportable person), the reporting financial institution must determine whether the account holder is a passive NFE with one or more controlling persons who are reportable persons and for the purposes of 
  (i) determining whether the account holder is a passive NFE, the reporting financial institution must obtain a self-certification from the account holder to establish its status, unless it has information in its possession or information is publicly available, based on which it can reasonably determine that the account holder is 
  (A) an active NFE, or 
  (B) a financial institution other than an entity described in paragraph (b) of the definition 
  *investment entity* that is not a participating jurisdiction financial institution,  
  (ii) determining the controlling persons of an account holder, a reporting financial institution may rely on information collected and maintained in accordance with AML/KYC procedures, and 
  (iii) determining whether a controlling person of a passive NFE is a reportable person, a reporting financial institution may rely on 
  (A) information collected and maintained in accordance with AML/KYC procedures in the case of a preexisting entity account held by one or more NFEs with an aggregate account balance or value that does not exceed 1 million USD, or 
  (B) a self-certification from the account holder or the controlling person indicating the jurisdiction in which the controlling person is resident for tax purposes. 
  
  ### Timing of review
  
  (5) Each preexisting entity account must be reviewed in accordance with subsection (4) before 
  (a) 2020, if the account has an aggregate account balance or value that exceeds 250,000 USD on June 30, 2017; or 
  (b) the end of the calendar year following the year in which the aggregate account balance or value exceeds 250,000 USD on December 31, if paragraph (a) does not apply. 
  
  ### Change of circumstances
  
  (6) If there is a change of circumstances with respect to a preexisting entity account that causes the reporting financial institution to know, or have reason to know, that the self-certification or other documentation associated with the account is incorrect or unreliable, the reporting financial institution must redetermine the status of the account in accordance with subsection (4). 
  
  ### Due diligence for new entity accounts
  
  276 For new entity accounts, a reporting financial institution must apply the following review procedures to determine whether the account is held by one or more reportable persons or by passive NFEs with one or more controlling persons who are reportable persons: 
  (a) the reporting financial institution must 
  (i) obtain a self-certification (which may be part of the account opening documentation) that allows the reporting financial institution to determine the account holder’s residence for tax purposes and confirm the reasonableness of the self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with AML/KYC procedures, and 
  (ii) if the self-certification referred to in subparagraph (i) indicates that the account holder is resident in a reportable jurisdiction, treat the account as a reportable account unless it reasonably determines, based on information in its possession or information that is publicly available, that the account holder is not a reportable person with respect to the reportable jurisdiction; and 
  (b) with respect to an account holder of a new entity account (including an entity that is a reportable person), the reporting financial institution must determine whether the account holder is a passive NFE with one or more controlling persons who are reportable persons and, if so, treat the account as a reportable account and, for the purposes of 
  (i) determining whether the account holder is a passive NFE, the reporting financial institution must obtain a self-certification from the account holder to establish its status, unless it has information in its possession or information is publicly available, based on which it can reasonably determine that the account holder is 
  (A) an active NFE, or 
  (B) a financial institution other than an entity that 
  (I) is an investment entity because of paragraph (b) of that definition, and  
  (II) is not a participating jurisdiction financial institution, 
  (ii) determining the controlling persons of an account holder, a reporting financial institution may rely on information collected and maintained in accordance with AML/KYC procedures, and 
  (iii) determining whether a controlling person of a passive NFE is a reportable person, a reporting financial institution may rely on a self-certification from the account holder or the controlling person. 
  
  ### Special due diligence rules
  
  277 (1) A reporting financial institution may not rely on a self-certification or documentary evidence if the reporting financial institution knows or has reason to know that the self-certification or documentary evidence is incorrect or unreliable. 
  
  ### Exception — individual beneficiary receiving death benefit
  
  (2) A reporting financial institution may presume that an individual beneficiary (other than the owner) of a cash value insurance contract or an annuity contract receiving a death benefit is not a reportable person and may treat the financial account as other than a reportable account unless it has actual knowledge, or reason to know, that the beneficiary is a reportable person. 
  
  ### Aggregation rules
  
  (3) For the purposes of 
  (a) determining the aggregate balance or value of financial accounts held by an individual or entity, 
  (i) a reporting financial institution is required to aggregate all financial accounts maintained by the reporting financial institution, or by a related entity, but only to the extent that the reporting financial institution’s computerized systems 
  (A) link the financial accounts by reference to a data element such as a client number or TIN, and 
  (B) allow account balances or values to be aggregated, and 
  (ii) each holder of a jointly held financial account shall be attributed the entire balance or value of the jointly held financial account; and 
  (b) determining the aggregate balance or value of financial accounts held by an individual in order to determine whether a financial account is a high value account, a reporting financial institution is also required — in the case of any financial accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same individual — to aggregate all such accounts. 
  
  ### Dealer accounts
  
  (4) Subsection (5) 
  (a) applies to a reporting financial institution in respect of a client name account maintained by the institution if 
  (i) property recorded in the account is also recorded in a financial account (in this subsection and subsection (5) referred to as the related account) maintained by a financial institution (in this subsection and subsection (5) referred to as the dealer) that is authorized under provincial legislation  
  (A) to engage in the business of dealing in securities or any other financial instrument, or 
  (B) to provide portfolio management or investment advising services, and 
  (ii) the dealer has advised the institution whether the related account is a reportable account; and 
  (b) does not apply, despite paragraph (a), if it can reasonably be concluded by the institution that the dealer has failed to comply with its obligations under this Part. 
  
  ### Dealer accounts
  
  (5) If this subsection applies to a reporting financial institution in respect of a client name account, 
  (a) sections 272 to 276 do not apply to the institution in respect of the account; and 
  (b) the institution shall rely on the determination of the dealer in respect of the related account in determining whether the account is a reportable account. 
  
  ### Group insurance and annuities
  
  (6) A reporting financial institution may treat a financial account that is a member’s interest in a group cash value insurance contract or group annuity contract as a financial account that is not a reportable account until the day on which an amount becomes payable to the employee, certificate holder or beneficiary, if the financial account meets the following requirements: 
  (a) the group cash value insurance contract or group annuity contract is issued to an employer and covers 25 or more employees or certificate holders; 
  (b) the employees or certificate holders are entitled to 
  (i) receive any contract value related to their interest, and 
  (ii) name beneficiaries for the benefit payable upon the employee’s or certificate holder’s death; and 
  (c) the aggregate amount payable to any employee or certificate holder or beneficiary does not exceed 1 million USD. 
  
  ### Reporting
  
  278 (1) Every reporting financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to each reportable account maintained by the institution at any time during the immediately preceding calendar year and after June 30, 2017. 
  
  ### Electronic filing
  
  (2) The information return required under subsection (1) shall be filed by way of electronic filing. 
  
  ### Record keeping
  
  279 (1) Every reporting financial institution shall keep, at the institution’s place of business or at such other place as may be designated by the Minister, records that the institution obtains or creates for the purpose of complying with this Part, including self-certifications and records of documentary evidence. 
  
  ### Form of records
  
  (2) Every reporting financial institution required by this Part to keep records that does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection (3). 
  
  ### Retention of records
  
  (3) Every reporting financial institution that is required to keep, obtain or create records under this Part shall retain those records for a period of at least six years following 
  (a) in the case of a self-certification, the last day on which a related financial account is open; and 
  (b) in any other case, the end of the last calendar year in respect of which the record is relevant. 
  
  ### Anti-avoidance
  
  280 If a person enters into an arrangement or engages in a practice, the primary purpose of which can reasonably be considered to be to avoid an obligation under this Part, the person is subject to the obligation as if the person had not entered into the arrangement or engaged in the practice. 
  
  ### Production of TIN
  
  281 (1) Every reportable person shall provide their TIN at the request of a reporting financial institution that is required under this Part to make an information return requiring the TIN. 
  
  ### Confidentiality of TIN
  
  (2) A person required to make an information return referred to in subsection (1) shall not knowingly use, communicate or allow to be communicated, otherwise than as required or authorized under this Act or a regulation, the TIN without the written consent of the reportable person. 
  
  ### Penalty for failure to provide TIN
  
  (3) Every reportable person who fails to provide on request their TIN to a reporting financial institution that is required under this Part to make an information return requiring the TIN is liable to a penalty of $500 for each such failure, unless 
  (a) an application for the assignment of the TIN is made to the relevant reportable jurisdiction not later than 90 days after the request was made and the TIN is provided to the reporting financial institution that requested it within 15 days after the reportable person received it; or 
  (b) the reportable person is not eligible to obtain a TIN from the relevant reportable jurisdiction (including because the relevant reportable jurisdiction does not issue TINs). 
  
  ### Assessment
  
  (4) The Minister may at any time assess any amount payable under subsection (3) by any person and, if the Minister sends a notice of assessment to the person, sections 150 to 163, subsections 164(1) and (1.4) to (7), sections 165 to 167 and Division J of Part I apply with such modifications as the circumstances require. 
  
  # PART XX 
  
  ## Reporting Rules for Digital Platform Operators 
  
  ### Definitions
  
  282 (1) The following definitions apply in this Part.  
  *active seller* means a seller that either provides relevant services or sells goods during the reportable period or is paid or credited consideration in connection with relevant activities during the reportable period. (vendeur actif)   
  *consideration* means compensation in any form that is paid or credited to a seller in connection with relevant activities, the amount of which is known or reasonably knowable by the platform operator. (rémunération)   
  *entity* has the same meaning as in subsection 270(1). (entité)   
  *excluded platform operator* means a platform operator that demonstrates to the satisfaction of the Minister that the platform’s entire business model is such that it does not  
  (a) allow sellers to derive a profit from the consideration; or 
  (b) have reportable sellers. ( opérateur de platforme exclu)   
  *excluded seller* means a seller  
  (a) that is an entity for which the platform operator facilitated more than 2,000 relevant services for the rental of immovable property in respect of a property listing during the reportable period; 
  (b) that is a governmental entity (as defined in subsection 270(1));  
  (c) that is an entity the stock of which is regularly traded on an established securities market (as defined in subsection 270(1)) or a related entity (as defined in subsection 270(1)) of an entity the stock of which is regularly traded on an established securities market; or  
  (d) for which the platform operator solely facilitated less than 30 relevant activities for the sale of goods and for which the total amount of consideration paid or credited did not exceed $2,800 during the reportable period. ( vendeur exclu)   
  *fiat currency* means a currency that is used by a country and is designated as legal tender in that country. (monnaie fiduciaire)   
  *financial account identifier* means the unique identifying number or reference, available to the platform operator, of the bank account or other payment account to which consideration is paid or credited. (identifiant de compte financier)   
  *goods* means any tangible property or, for civil law, any corporeal property. (bien)   
  *government verification service* means an electronic process made available by a reportable jurisdiction to a platform operator for the purposes of ascertaining the identity and residence of a seller. (service public de vérification)   
  *immovable property* means real or immovable property. (biens immobiliers)   
  *partner jurisdiction* means each jurisdiction identified as a partner jurisdiction by the Minister on the Internet website of the Canada Revenue Agency or by any other means that the Minister considers appropriate. (juridiction partenaire)   
  *personal service* means a service involving time- or task-based work performed by one or more individuals at the request of a user, unless such work is purely ancillary to the overall transaction, but does not include a service provided by a seller pursuant to an employment relationship with the platform operator or a related entity (as defined in subsection 270(1)) of the platform operator. (service personnel)   
  *platform* means a software, including a website or a part of it and applications, including mobile applications, accessible by users and allowing sellers to be connected to other users for the provision of relevant services or the sale of goods, directly or indirectly, to such users (including the collection and payment of consideration in respect of relevant activities), but does not include, in the provision of relevant services or the sale of goods, software exclusively allowing without any further intervention  
  (a) the processing of payments in relation to relevant activities; 
  (b) listing or advertising in relation to relevant activities; or 
  (c) redirecting or transferring of users to a platform. ( plateforme)   
  *platform operator* means an entity that contracts with sellers to make available all or part of a platform to such sellers. (opérateur de plateforme)   
  *primary address* means  
  (a) in respect of a seller that is an individual (other than a trust), the address of the seller’s principal place of residence; and 
  (b) in respect of a seller that is an entity, the address of the seller’s registered office. ( adresse principale)   
  *property listing* includes all immovable property units located at the same street address and offered for rent on a platform by the same seller. (lot)   
  *relevant activity* means  
  (a) a relevant service; or 
  (b) the sale of goods for consideration. ( activité visée)   
  *relevant service* means, if provided for consideration:  
  (a) the rental of real or immovable property; 
  (b) a personal service; 
  (c) the rental of a means of transport; or 
  (d) a prescribed service. ( service visé)   
  *reportable jurisdiction* means  
  (a) for a reporting platform operator described in paragraph (a) of the definition reporting platform operator, Canada and any partner jurisdiction; and  
  (b) in any other case, Canada. ( juridiction soumise à déclaration)   
  *reportable period* means a calendar year during which a platform operator is a reporting platform operator. (période de déclaration)   
  *reportable seller* means an active seller, other than an excluded seller, that is determined by the platform operator based on the due diligence procedures set out in sections 283 to 287 to  
  (a) be resident in a reportable jurisdiction; 
  (b) have provided relevant services for the rental of immovable property located in a reportable jurisdiction; or 
  (c) have been paid or credited consideration in connection with relevant services for the rental of immovable property located in a reportable jurisdiction. ( vendeur soumis à déclaration)   
  *reporting platform operator* means a platform operator, other than an excluded platform operator, if  
  (a) it is resident in Canada; 
  (b) it is resident, incorporated or managed in a partner jurisdiction, facilitates the provision of relevant activities by sellers resident in Canada or with respect to rental of immovable property located in Canada and elects to be a reporting platform operator; or 
  (c) it is not resident in Canada or a partner jurisdiction and it facilitates the provision of relevant activities by sellers resident in Canada or with respect to rental of immovable property located in Canada. ( opérateur de plateforme soumis à déclaration)   
  *seller* means a platform user that is registered at any time during the reportable period on the platform for the provision of a relevant service or the sale of goods. (vendeur)   
  *TIN* means  
  (a) the number used by the Minister to identify an individual or entity, including 
  (i) a social insurance number, 
  (ii) a business number, and 
  (iii) an account number issued to a trust; and 
  (b) in respect of a jurisdiction other than Canada, a taxpayer identification number, including a VAT/GST registration number issued by the jurisdiction of the primary address of the seller, or a functional equivalent in the absence of a taxpayer identification number. ( NIF)  
  
  ### Interpretation
  
  (2) This Part relates to the implementation of the Model Rules set out in the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy approved by the Council of the Organisation for Economic Co-operation and Development and, unless the context otherwise requires, the provisions in this Part are to be interpreted consistently with the Model Rules, as amended from time to time.  
  
  ### Excluded seller
  
  283 (1) For the purpose of determining whether a seller is an excluded seller under paragraph (a) or (d) of that definition in subsection 282(1), a reporting platform operator may rely on its available records.  
  
  ### Excluded seller – entity
  
  (2) For the purpose of determining whether a seller that is an entity is an excluded seller under paragraph (b) or (c) of that definition in subsection 282(1), a reporting platform operator may rely on publicly available information or a confirmation from the seller.  
  
  ### Seller information – individual
  
  284 (1) The reporting platform operator must collect the following information for each seller that is an individual (other than a trust) and that is not an excluded seller 
  (a) the first and last name of the individual; 
  (b) the primary address of the individual; 
  (c) the TIN issued to the individual, including the jurisdiction of issuance; and 
  (d) the date of birth of the individual. 
  
  ### Seller information – entity
  
  (2) The reporting platform operator must collect the following information for each seller (other than a seller described in subsection (1)) that is not an excluded seller 
  (a) the legal name of the entity; 
  (b) the primary address of the entity; 
  (c) the TIN issued to the entity, including the jurisdiction of issuance; and 
  (d) the business registration number of the entity. 
  
  ### Government verification services
  
  (3) Notwithstanding subsections (1) and (2), the reporting platform operator is not required to collect information pursuant to paragraphs (1)(b) to (d) or (2)(b) to (d) in respect of a seller where the reporting platform operator relies on a government verification service to ascertain the identity and residence of the seller. 
  
  ### TIN collection
  
  (4) Notwithstanding paragraphs (1)(c) and (2)(c) and (d), the TIN or the business registration number, respectively, are not required to be collected if 
  (a) the jurisdiction of residence of the seller does not issue a TIN or business registration number to the seller; or 
  (b) the jurisdiction of residence of the seller does not require the collection of the TIN issued to such seller. 
  
  ### Verification of seller information
  
  285 (1) The reporting platform operator must determine whether the information collected under subsection 283(2) and sections 284 and 287 is reliable, using all records available to the reporting platform operator, as well as any publicly available electronic interface to ascertain the validity of the TIN. 
  
  ### Due diligence
  
  (2) Notwithstanding subsection (1), for the completion of the due diligence procedures pursuant to subsection 288(2), the reporting platform operator may determine whether the information collected pursuant to subsection 283(2) and sections 284 and 287 is reliable using electronically searchable records available to the reporting platform operator. 
  
  ### Verifying accuracy
  
  (3) For the purpose of paragraph 288(3)(b), despite subsections (1) and (2), in instances where the reporting platform operator has reason to know that any of the information items described in section 284 or 287 may be inaccurate by virtue of information provided by the Minister, it must verify such information item using reliable, independent-source documents, data or information. 
  
  ### Residence
  
  286 (1) A reporting platform operator must consider a seller resident in the jurisdiction of the seller’s primary address. 
  
  ### Government verification service
  
  (2) Notwithstanding subsection (1), a reporting platform operator must consider a seller resident in each jurisdiction confirmed by a government verification service pursuant to subsection 284(3). 
  
  ### Rented immovable property
  
  287 Where a seller provides relevant services for the rental of immovable property, the reporting platform operator must collect the address of each property listing. 
  
  ### Due diligence
  
  288 (1) A reporting platform operator must complete the due diligence procedures set out in sections 283 to 287 by December 31 of the reportable period. 
  
  ### Previously registered accounts
  
  (2) Despite subsection (1), the due diligence procedures set out in sections 283 to 287 are required to be completed by December 31 of the second reportable period of the reporting platform operator, for sellers that are already registered on the platform 
  (a) as of January 1, 2024; or 
  (b) as of the date on which an entity becomes a reporting platform operator. 
  
  ### Previous due diligence
  
  (3) Notwithstanding subsection (1), a reporting platform operator may rely on the due diligence procedures conducted in respect of previous reportable periods, provided 
  (a) the primary address of the seller has been either collected and verified or confirmed within the last 36 months; and 
  (b) the reporting platform operator does not have reason to know that the information collected pursuant to sections 283, 284 and 287 is or has become unreliable or incorrect. 
  
  ### Active sellers
  
  289 A reporting platform operator may elect to complete the due diligence procedures under sections 283 to 288 in respect of active sellers only. 
  
  ### Due diligence by third parties
  
  290 (1) A reporting platform operator may rely on a third-party service provider to fulfil the due diligence obligations under sections 291 and 292, but such obligations remain the responsibility of the reporting platform operator. 
  
  ### Partner jurisdiction
  
  (2) When a platform operator fulfils the due diligence obligations for a reporting platform operator with respect to the same platform under subsection (1), such platform operator may carry out the due diligence procedures pursuant to substantially similar rules in its partner jurisdiction. 
  
  ### Reporting to Minister
  
  291 (1) A reporting platform operator must report to the Minister the information set out in section 292 with respect to the reportable period no later than January 31 of the year following the calendar year in which the seller is identified as a reportable seller. 
  
  ### Reporting to seller
  
  (2) A reporting platform operator must provide the information set out under section 292 to the reportable seller to which it relates no later than January 31 of the year following the calendar year in which the seller is identified as a reportable seller. 
  
  ### Reporting not required
  
  (3) Notwithstanding subsections (1) and (2), the information in relation to a reportable seller is neither required to be reported to the Minister nor to be made available to the reportable seller in circumstances where the reporting platform operator has obtained adequate assurances that another platform operator has or will fulfil the reporting obligations under this section and section 292 
  (a) with respect to the reportable seller pursuant to the rules in Canada; or 
  (b) with respect to the reportable seller, other than a reportable seller resident in Canada, under substantially similar rules in a partner jurisdiction. 
  
  ### Reporting
  
  (4) A reporting platform operator required to report information under this section shall report the information in prescribed form. 
  
  ### Electronic filing
  
  (5) Information required to be reported under this section shall be filed by way of electronic filing. 
  
  ### Currency
  
  (6) The information with respect to the consideration paid or credited in a fiat currency must be reported in the currency in which it was paid or credited. In case the consideration was paid or credited in a form other than fiat currency, it should be reported in the local currency of Canada, converted or valued in a manner that is determined consistently by the reporting platform operator. 
  
  ### Reporting in respect of quarter
  
  (7) The information with respect to the consideration and other amounts must be reported in respect of the quarter in which the consideration was paid or credited. 
  
  ### Information reported
  
  292 Each reporting platform operator must report the following information: 
  (a) the name, registered office address and TIN of the reporting platform operator, as well as any business names of any platforms in respect of which the reporting platform operator is reporting; 
  (b) with respect to each reportable seller that provided relevant services (other than immovable property rental), rented out a means of transportation or sold goods, 
  (i) the items required to be collected pursuant to section 284, 
  (ii) any other TIN, including the jurisdiction of issuance, available to the reporting platform operator, 
  (iii) any financial account identifiers, insofar as they are available to the reporting platform operator and the jurisdiction of the reportable seller’s residence is specified by the Minister, 
  (iv) if different from the name of the reportable seller, the name of the holder of the financial account to which the consideration is paid or credited, to the extent available to the reporting platform operator, as well as any other identifying information available to the reporting platform operator with respect to that account holder, 
  (v) each jurisdiction in which the reportable seller is resident on the basis of the procedures set out in section 286, 
  (vi) the total consideration paid or credited during each quarter of the reportable period and the number of such relevant activities in respect of which it was paid or credited, and 
  (vii) any fees, commissions or taxes withheld or charged by the reporting platform operator during each quarter of the reportable period; and 
  (c) with respect to each reportable seller that provided relevant services for the rental of immovable property, 
  (i) the items required to be collected pursuant to section 284, 
  (ii) any other TIN, including the jurisdiction of issuance, available to the reporting platform operator, 
  (iii) any financial account identifiers, insofar as they are available to the reporting platform operator and either the jurisdiction of residence of the reportable seller or the jurisdiction in which the immovable property is located is specified by the Minister, 
  (iv) if different from the name of the reportable seller, the name of the holder of the financial account to which the consideration is paid or credited, to the extent available to the reporting platform operator, as well as any other identifying information available to the reporting platform operator with respect to the account holder, 
  (v) each jurisdiction in which the reportable seller is resident on the basis of the procedures set out in section 286, 
  (vi) the address of each property listing, determined on the basis of the procedures set out in section 287, and, if available, the land registration number, 
  (vii) the total consideration paid or credited during each quarter of the reportable period and the number of such relevant services provided with respect to each property listing in respect of which it was paid or credited, 
  (viii) any fees, commissions or taxes withheld or charged by the reporting platform operator during each quarter of the reportable period, and 
  (ix) if available, the number of days each property listing was rented during the reportable period and the type of each property listing. 
  
  ### Production of TIN
  
  293 (1) Every reportable seller shall provide their TIN at the request of a reporting platform operator that is required under this Part to make an information return requiring the TIN. 
  
  ### Confidentiality of TIN
  
  (2) A reporting platform operator required to make an information return referred to in subsection (1) shall not knowingly use, communicate or allow to be communicated, otherwise than as required or authorized under this Act or a regulation, the TIN without the written consent of the reportable seller. 
  
  ### Penalty for failure to provide TIN
  
  (3) Every reportable seller who fails to provide on request their TIN to a reporting platform operator that is required under this Part to make an information return requiring the TIN is liable to a penalty of $500 for each such failure, unless 
  (a) an application for the assignment of the TIN is made to the relevant reportable jurisdiction not later than 90 days after the request was made and the TIN is provided to the reporting platform operator that requested it within 15 days after the reportable seller received it; or 
  (b) the reportable seller is not eligible to obtain a TIN from the relevant reportable jurisdiction (including because the relevant reportable jurisdiction does not issue TINs). 
  
  ### Assessment
  
  (4) The Minister may at any time assess any amount payable under subsection (3) by a reportable seller and, if the Minister sends a notice of assessment to the reportable seller, sections 150 to 163, subsections 164(1) and (1.4) to (7), sections 165 to 167 and Division J of Part I apply with such modifications as the circumstances require. 
  
  ### Record keeping
  
  294 (1) Every reporting platform operator shall keep, at its place of business or at such other place as may be designated by the Minister, records that it obtains or creates for the purpose of complying with this Part, including records of documentary evidence. 
  
  ### Form of records
  
  (2) Every reporting platform operator required by this Part to keep records that does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection (3). 
  
  ### Retention of records
  
  (3) Every reporting platform operator that is required to keep, obtain or create records under this Part shall retain those records for a period of at least six years following the end of the last calendar year in respect of which the record is relevant. 
  
  ### Anti-avoidance
  
  295 If a person enters into an arrangement or engages in a practice, the primary purpose of which can reasonably be considered to be to avoid an obligation under this Part, the person is subject to the obligation as if the person had not entered into the arrangement or engaged in the practice. 
  
  